A pair of proposed regulations announced by the Environmental Protection Agency Wednesday would set maximum standards for formaldehyde levels in domestic and imported composite wood products on par with standards currently in place in California while tasking the EPA with enforcing their provisions.

While most companies nationwide make and sell compliant goods, some industry experts caution smaller suppliers to prepare to begin keeping track of whether the products they sell meet the proposed regulations.

The first of EPA’s proposals sets emissions standards identical to those in the California Air Resources Board’s Airborne Toxic Control Measure (ATCM), with the rest of the proposal closely tailored to the ATCM standard, the EPA says.

The first of the two proposals would restrict the amount of formaldehyde that may be emitted from hardwood plywood, medium-density fiberboard, particleboard and finished goods sold, made or imported in the U.S. Structural products such as engineered wood are exempt in California's rules. The rule doesn't yet exempt products with only small amounts of formaldehyde.

The EPA's proposals have been in the works since July 2010, when Congress passed the the Formaldehyde Standards for Composite Wood Products Act, known as Title VI of the Toxic Substances Control Act and charged the EPA with setting a formaldehyde limit and finding a way to enforce it. Still, argues Tom Julia, president of the Composite Panel Association, a sponsored of the EPA rules, it will be a "big wake-up call" for firms who haven't yet been keeping track.

The EPA estimates its proposed rules could impact approximately 880,000 small businesses, with the cost to more than 850,000 of them at less than 1% of annual revenues. The net benefit, proposes the EPA, is a 9% to 25% reduction in formaldehyde levels in new or remodeled homes.

The second proposal sets up network of third-party certifiers that report to the EPA and are responsible for keeping track of formaldehyde levels in domestic and imported products.

"The federal rule has been desperately needed to level the playing field," says Kip Howlett, president of the Hardwood Plywood and Veneer Association. The trade group certifies 95% of CARB-compliant hardwood plywood producers in North America and of that group, Howlett says, eight in 10 are exempt from the standard due to their low emission levels.

Still, Julia is concerned that the EPA's enforcement of overseas producers, where he says the key risk lies, will be lax. In its enforcement proposal the EPA notes that 27 of its 36 CARB-certified third-party certifiers are based outside of the U.S.

"It's fine to put a rule out there like that," he says. "We want to know how [they're] going to enforce it and that [they're] not just going to enforce it against U.S. companies."

Correction: An earlier version of this article reported that the EPA's proposals would set minimum standards for formaldehyde levels in domestic and imported composite wood product. The proposals aim to set and enforce maximum standards for formaldehyde levels. We regret the error.