EPA-450/3-80-003a
Pressure Sensitive Tape and Label
    Surface Coating  Industry —
      Background  Information
      for Proposed Standards
          Emission Standards and Engineering Division
          U.S. ENVIRONMENTAL PROTECTION AGENCY
             Office of Air, Noise, and Radiation
          Office of Air Quality Planning and Standards
          Research Triangle Park, North Carolina 27711

                 September 1980

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This report has been reviewed by the Emission Standards and
Engineering Division of the Office of Air Quality Planning and
Standards, EPA,  and approved for publication.  Mention of
trade names or commercial products is not intended to constitute
endorsement or recommendation for use.  Copies of this report
are available through the Library Services Office (MD-35),
U.S. Environmental Protection Agency, Research Triangle Park,
N.C.  27711, or from National Technical Information Services,
5285 Port Royal Road, Springfield, Virginia 22161.
               Publication No. EPA-450/3-80-003a
                               11

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                      ENVIRONMENTAL PROTECTION AGENCY

                          Background Information
                                 and Draft
                      Environmental'Impact Statement
                        for the Pressure Sensitive
                  Tape and Label Surface Coating Industry

                               Prepared by:
Don R. Goodwin  I
Director, Emission Standards and Engineering Division
U. S. Environmental Protection Agency
Research Triangle Park, NC  27711
                                                                 (Date)
1.   The proposed standards of the performance would limit emissions of
     volatile organic compounds (VOC) from new, modified, and reconstructed
     pressure sensitive tape and label surface coating facilities.
     Section III of the Clean Air Act (42 in U.S.C. 7411), as amended,
     directs the Administrator to establish standards of performance for
     any category of new stationary source of air pollution which ".
     causes or contributes significantly to air pollution which may
     reasonably be anticipated to endanger public health or welfare."
     The northeastern and north central regions of the country would be
     particularly affected by the proposed standard.

2.   Copies of this document have been sent to the following Federal
     Departments:  Labor; Health and Human Services; Defense; Transportation;
     Agriculture; Commerce; Interior, and Energy; the National Science
     Foundation; and Council on Environmental Quality; to members of the
     State and Territorial Air Pollution Program Administrators (STAPPA)
     and the Association of Local Air Pollution Control Officials (ALAPCO);
     to EPA Regional Administrators; and to other interested parties.

3.   The comment period for review of this document is 60 days and is
     expected to begin on or about September 15, 1980.

4.   For additional information contact:

     Gene W. Smith
     Standards Development Branch (MD-13)
     U. S. Environmental Protection Agency
     Research Triangle Park, NC  27711
     telephone:  (919) 541-5421.

5.   Copies of this document may be obtained from:
     U. S. EPA Library (MD-35)
     Research Triangle Park, NC
                                 27711
     National Technical Information Service
     5285 Port Royal Road
     Springfield, VA  22161
                                    iii

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                        METRIC CONVERSION TABLE
     In keeping with U.S. Environmental  Protection Agency policy, metric
units are used in this report.  These units may be converted to common
English units by using the following conversion factors:
          Metric Unit
               m
               m
               m

               kg
               Mg
               Gg
               GJ
               GJ
               J/g
          Nm /sec
               m/s
        Metric Name
          LENGTH
          meter
          meter
          VOLUME
          liters
        cubic meters
          WEIGHT
                 "3
     kilogram (10  grams)
     megagram (10  grams)
     gi gag ram (10  grams)
          ENERGY
        gigajoule
        gigajoule
      joule per gram
      VOLUMETRIC FLOW
normal  cubic meters per second
           SPEED
   meters per second
 Equivalent
English Unit
 39.3700 in.
  3.2810 ft.
  0.2642 U.S.  gal.
   264.2 U.S.  gal.


  2.2046 Ib.
  1.1023 tons
  1,102.3 tons
  9.48 X 10° Btu
    277.76 kwh
     0.430 Btu/lb.
  2242 SCFM (ftj/m1n)
  196.86 ft/min
     Temperature in degrees Celcium (°C) can be converted to temperature
in degrees Farenheit (°F) by the following formula:
                         (°F) = 1.8 (°C) + 32

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                           TABLE OF CONTENTS
Chapter                                                               Page

   1     SUMMARY	  1-1

          1.1    Regulatory Alternatives	1-1
          1.2    Environmental  and Energy Impacts.	1-2
          1.3    Economic Impacts	  1-5

   2     INTRODUCTION	  2-1

         2.1    Background and Authority
                  for the Standards	2-1
         2.2    Selection of Categories of Stationary Sources. .  .   .  2-5
         2.3    Procedures for Development of Standards of
                    Performance	2-7
         2.4    Consideration of Costs	2-9
         2.5    Consideration of Environmental Impacts 	  2-10
         2.6    Impact on Existing Sources	2-11
         2.7    Revision of Standards of Performance 	  2-12

  .3     THE PRESSURE SENSITIVE TAPE AND LABEL INDUSTRY  	  3-1

         3.1    General Industry Data	3-1
         3.2    Processes and Their Emissions	3-3
         3.2.1  Solvent-based Coating	3-5
         3.2.2  Waterborne Adhesive and Silicone Release Coatings.   .  3-25
         3.2.3  Hot Melt Adhesive Coatings .  .	   .  3-29
         3.2.4  One Hundred  (100) Percent Solids Silicone
                  Release Coating		3-32
         3.2.5  Solvent-based Precoat Coating. .  . .	3-34
         3.3    References	  3-37

   4     EMISSION CONTROL TECHNIQUES 	  4-1

         4.1    Carbon Adsorption  	  4-2
         4.1.1  Operating Principles		4-3
         4.1.2  Operating Problems 	 .........  4-6
         4.1.3  Existing Applications and Performance of Carbon
                  Adsorption	 .  .	4-9
         4.2    Incineration	4-11
         4.2.1  Operating Principles	4-12
         4.2.2  Operating Problems 	  4-22
         4.2.3  Existing Applications and Performance of
                  Incineration 	  4-24
         4.3    Vapor Collection Systems 	  4-26
         4.4    References	4-33

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                               TABLE OF CONTENTS  (Continued)
Chapter

   5     MODIFICATION AND RECONSTRUCTION
         5.1
         5.1.1
         5.1.2
         5.1.3

         5.2
         5.3
Modifications	
Changes in Web Width 	
Changes in Line Speed   .	
Changes in Hours Available for Operation and/or
  Scheduling Efficiency	
Reconstruction 	
References	
Page

5-1

5-1
5-3
5-3
5-4
5-4
5-6
         MODEL PLANTS AND REGULATORY ALTERNATIVES  	  6-1
         6.1
         6.1.
         6.1.
         6.1.
         6.1.
         6.2
         6.2.
         '6.2.
         6.2.
         6.2.
         6.3
Model Plants	
Design Parameters	
Model Plant Parameters	
Process Alternatives 	
Process Modifications or Reconstructions
Regulatory Alternatives	
Alternative I Control Requirements . . .
Alternative II Control  Requirements  . .
Alternative III Control  Requirements . .
Controlled Model  Plant Parameters  . . .
References 	
         ENVIRONMENTAL AND ENERGY IMPACTS
         7.1    Air Pollution Impact 	
         7.1.1  Primary Air Pollution Impacts  . . ,
         7.1.2  Secondary Air Pollution Impacts  . .
         7.2    Water Pollution Impacts  	
         7.2.1  Environmental  Impacts  .......
         7.2.2  National  Wastewater Emissions  . . .
         7.3    Solid Waste Impacts  	
         7.3.1  Environmental  Impacts  .......
         7.3.2  National  Solid Waste Emissions . . ,
         7.4    Energy Impacts 	
         7.4.1  Electricity and Fossil  Fuel  Impacts
         7.4.2  National  Energy Impacts  	
         7.5    Other Environmental Impacts  . . . .
         7.6    References 	
6-1
6-2
6-4
6-13
6-13
6-13
6-18
6-18
6-19
6-19
6-29

7-1

7-3
7-3
7-7
7-9-
7-10
7-16
7-16
7-19
7-20
7-22
7-22
7-24
7-31
7-32
                                       VI

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                               TABLE OF CONTENTS (Continued)
Chapter
                                                              Page
   8
ECONOMIC IMPACTS ...  	  ........	   8-1
        8.1    Industry Profile	8-1
        8.1.1  Introduction	8-1
        8.1.2  General  Profile .....'	8-1
        8.1.3  Market Structure	8-21
        8.1.4  Market Conduct	8-24
        8.1.5  Market Performance	8-25
        8.2    Cost Analysis of Regulatory Alternatives  ......   8-42
        8.2.1  New Facilities	   8-44
        8.2.2  Modified/Reconstructed Facilities 	   8-67
        8.3    Other Cost Considerations	   8-68
        8.4    Economic Impact Analysis  .	8-71
        8.4.1  Summary	.'	8-72
        8.4.2  Methodology	8-73
        8.4*3  Cost Data and Parameter Values.  ,	8-80
        8.4.4  Economic Impacts on Large Facilities	8-88
        8.4.5  Economic Impacts on Medium Facilities 	   8-97
        8.4.6  Economic Impacts on Small Facilities	   8-106
        8.5    Potential  Socioeconomic and Inflationary Impacts  .  .   8-114
        8.6    References	8-116

APPENDIX A	A-l
APPENDIX B	B-l
APPENDIX C	C-l
APPENDIX D	D-l
                                        vll

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                         LIST OF ILLUSTRATIONS
Figure
Page
  3-1     Schematic diagram of a simple coating line	   3-7
  3-2     Coating head configurations	   3-9
  3-3     Metering type coating heads	   3-10
  3-4     Dip and squeeze coater	   3-11
  3-5     Two zone drying oven	   3-13
  3-6     Tandem coating line with four zone ovens	   3-16
  3-7     Coating line with exhaust recirculation			   3-28
  3-8     Adhesive coating line operated in conjunction with
            a precoat station	   3-35
  4-1     Schematic of two-bed adsorber unit:  adsorber 1
          adsorbing, adsorber 2 regenerating	   4-4
  4-2     Schematic of two-bed adsorber unit:  adsorber 1
          regenerating, adsorber 2 adsorbing	   4-5
  4-3     Schematic of solvent recovery by condensation and
          decanting	• • •   4-7
  4-4     Typical effect of operating temperature on
          effectiveness of thermal* afterburner for
          destruction of hydrocarbons and carbon monoxide	   4-13
  4-5     Incineration with primary and secondary heat
          recovery	   4-14
  4-6     Schematic diagram of catalytic incineration system	   4-15
  4-7     Schematic of an inert recycle incineration system..	   4-19
  4-8     Explosive range of hexane-air mixture	   4-21
  6-1     Typical tape or label solvent coating facility		   6-6
  6-2     Schematic diagram of a model coating facility             ,
          using waterborne  (emulsion) coating or 100 percent
          solid  silicone coating	,	   6-14
  6-3     Schematic diagram of a model coating facility
          using  hot melt adhesive coating	   6-15
  6-4     Schematic diagram of a model coating facility
          controlled  by  carbon adsorption	   6-21
  6-5     Schematic diagram of a model coating facility
          controlled  by  thermal incineration with primary
          and  secondary  heat  recovery	   6-22
  7-1     Predicted trend of solvent-based coating  technologies	   7-2
  7-2     Water  cycle of a  carbon adsorption process	   7-11
  8-1     Hierarchy of the  pressure  sensitive  tapes and
          labels industry	   8~4
  8-2     Geographical  locations of  pressure sensitive tapes
          and  labels  coating  operations  in the United  States	   8-11
  8-3     Production  costs  versus  raw material costs	   8-27
  8-4     Estimated annual  sales of  pressure sensitive tapes
          and  labels	   8-41
  8-5     Estimated  installed  capital  costs  for  carbon
          adsorption  units	   8-52
  8-6     Estimated  installed  capital  costs  for  incineration
          systems with primary and  secondary heat  recovery	   8-53
                                     viii

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                            LIST OF TABLES
           '                                                                Page

1-1       Matrix of Environmental and Economic Impacts of Regulatory
          Alternatives...	   1-3
3-1       Emissions, from a Typical Large, Direct-Fired Coating Line
          Using a Sol vent-Based Coating			   3-19
3-2       Existing State Regulations on Emissions of Volatile Organic
          Compounds Applicable to Pressure Sensitive Coating.	   3-21
4-1       Range of Capture Velocities	   4-28
4-2       Coefficients of Entry for Selected Hood Openings	   4-29
6-1       Matrix of Model Plants Without Controls	   6-5
6-2       Assumptions Used in Calculating Model Plant Material  and
          Energy Balances	....	   6-8
6-3       Model Plant Parameters-Adhesive Coating Lines Without
          Controls	   6-9
6-4       Model Plant Parameters-Si! icone Release Coating .Lines Without
          Controls			   6-10
6-5       Utility Requirements for Model  Plants	,..."	;....   6-12
6-6       Model Plant Parameters-Alternate Coating Technologies for
          Adhesive Coating Lines	...	   6-16
6-7       Model Plant Parameters-Alternate Coating Technologies for
          Sil icone Release Coating Lines	   6-17
6-8       Pressure Sensitive Tapes and Labels Model Plant Matrix	   6-20
6-9       Model Plant Parameters-Adhesive Coating Lines Controlled by
          Carbon Adsorption		;	*.	   6-23
6-10      Model Plant Parameters-Adhesive Coating Lines Controlled by
          Incineration	   6-24
6-11      Model Plant Parameters-Sil icone Release Coating Lines
          Controlled by  Carbon Adsorption.....	   6-25
6-12      Model Plant Parameters-Si! icone Release Coating Lines
          Controlled by  Incineration..	   6-26
6-13      Utility and Land Requirements for Model Plant Control
          Systems	   6-28
7-1       Controlled and Uncontrolled VOC Emissions, from Model  Plants
          Employing Carbon Adsorption Controls..	   7-4
7-2       Controlled and Uncontrolled VOC Emissions from Model  Plants-
          Employing Thermal  Incineration Controls	   7-5
7-3       Expected  National  VOC Emissions from PSTL Manufacturing	   7-8.
7-4       Sol vent Sol ubil ities in Water				   7-12
7-5       Estimated Wastewater Discharges Generated by Carbon
          Adsorption Units	;•...:	   7-13
7-6       National Waterborne VOC Emissions from PSTL Carbon
          Adsorption Control Units	<	   7-15
7-7       National Wastewater Emissions from PSTL Carbon Adsorption
          Control Uni ts	.     7-17
7-8       Estimated Carbon Wastes Generated by Coating Lines Controlled
          by Carbon Adsorption	    7-18
7-9       Estimated National Waste Carbon Emissions from PSTL
          Carbon Adsorption  Units	    7-21

                                        ix

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                       LIST OF TABLES (Continued)
                                                                            Page

 7-10       Electricity Requirements for the Control  Equipment of
           Solvent-Based Coating  Lines	     7-23
 7-11       Fuel  Oil  Requirements  of Carbon Adsorption Control  Units	     7-25
 7-12       Natural  Gas Requirements for the Control  Equipment
           of Solvent-Based Coating Lines	     7-26
 7-13       Estimated National  Electricity  Impacts of VOC Control
           Systems			      7_27
 7-14       Estimated National  Fuel  Oil  Impacts  of VOC Control
           Systems	     7_28
 7-15       Estimated National  Natural Gas  Impacts of VOC Control
           Systems	     7_2g
 8-1        Pressure  Sensitive  Tapes and Labels  Production Facilities
           Potentially Including  Coating Operations  (a)  Except As
           noted	    8_6
 8-2        Major Silicone Release Coating  Companies	     8-13
 8-3        Silicone  Release Sheet Coating  Data  for Companies  Solely
           Involved  in Release Coating	     8-14
 8-4        Percentage  Growth in Value of Shipments,  1958-1S72	     8-16
 8-5        Sales and Usage Figures  for  Specialty  Pressure Sensitive
           Products,  1978	     8-16
 8-6        1978  Pressue  Sensitive Tape  Imports	     8-18
 8-7        U.S.  Imports  of Pressure Sensitive Plastic Backed Tape	     8-19
 8-8        1978  Pressure Sensitive  Tape Exports	     8-20
 8-9*        Historic  Concentration Ratios of Pressure Sensitive  Tapes
           Defined by  Val ue of Shipments	     8-21
 8-10       Ranking of  Firms by Estimated Market Share (smallest to
           1 argest)	     8-22
 8-11       Estimated Regional  Distribution  of Pressure Sensitive Tapes
           and Labels  Shipments (excluding  finished  labels)	     8-23
 8-12       Entry to  the  Pressure  Sensitive  Tapes  and Labels Industry
           Since 1964	,	     8-24
 8-13       Price Trends  of Plastic  Tapes	     8-26
 8-14       Raw Material  Costs  for Pressure  Sensitive  Tape  and
           Label  Products	     8-28
 8-15       Distribution  of Sales  Volume  for Firms  in  Pressure Sensitive*
           Tapes  and Label s  Industry	     8-30
 8-16       Financial Data  for  Coating Firms	     8-31
 8-17       Selected  Financial  Parameters for Firms Grouped by Size
           Classification  (Based  on Sales)	     8-34
 8-18       Financial Data  Used to Calculate  Cost  of  Capital for Firms
           and Industry	     8-37
8-19       Summary of  the  Overall  VOC Control Levels  for Regulatory
          Alternatives  I,  II,  and  III		     8-45
8-20      Model  Cases for Cost Analysis	     8-46
8-21      Low-Sol vent Model Cases for Cost Analysis	     8-47
8-22      Assumptions Used  in Cost Analysis	     8-48

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                      LIST OF TABLES (Continued)
                                                                      Page

8-23      Estimated Installed Capital  and Annualized Costs for Carbon
          Adsorption-Controlled Model  Facilities	     8-54
8-24      Estimated Installed Capital  and Annualized Costs for
          Incineration-Controlled Model  Facilities	     8-57
8-25      Estimated Installed Capital  and Annualized Costs of
          Low-Solvent Model  Facilities	    .8-60
8-26      Estimated Cost-Effectiveness of Carbon Adsorption Control
          Devices on Model  Facilities (With and Without
          Solvent Recovery Credits)	     8-64
8-27      Estimated Cost-Effectiveness of Incineration Control
          Devices on Model  Facilities (With or Without Heat
          Recovery Credits)	     8-65
8-28.      Threshold Limit Values (TLV) and Lower Explosive
          Limits  (LEL) of Typical Adhesive and Release Solvents	     8-70
8-29      Definitions	    8-75
8-30      Capital and Operating Costs of Large Coating Lines	     8-81
8-31      Capital and Operating Costs of Medium Coating Lines	     8-83
8-32      Capital and Operating Costs of Small Coating Lines	     8-85
8-33      Unit Costs and Rankings for Large Facilities	     8-89
8-34      Price Impacts of Regulatory Alternatives on Large
          Facil i ties	l.	     8-90
8-35      Return on Investment Impacts of Regulatory
          Alternatives on Large Facilities	     8-92
8-36  '    Unit Costs and Rankings for Large Facilities	     8-93
8-37      Price Impacts of Regulatory Alternatives on
          Large Facil ities	     8-95
8-38      Return on Investment Impacts of Regulatory Alternatives
          on Large Facilities	     8-96
8-39      Units Costs and Rankings for Medium Facilities	     8-98
8-40      Price Impacts of Regulatory Alternatives on
          Medium Facil ities	     8-100
8-41    •  Return on Investment Impacts of Regulatory Alternatives
          on Medium Facilities	     8-101
8-42      Unit Costs and Rankings for Medium Facilities	     8-102
8-43      Price Impacts of Regulatory Alternatives on
          Medium Facil i ties	     8-104
8-44      Return on Investment Impacts of Regulatory Alternatives
          on Medium Facilities.....	     8-105
8-45      Unit Costs and Rankings for Small  Facilities	     8-107
8-46      Price Impacts of Regulatory Alternatives
          on Smal 1 Facil i ties	     8-108
8-47      Return on Investment Impacts of Regulatory Alternatives
          on Small Facilities	     8-110
8-48      Unit Costs and Rankings for Small  Facilities	     8-111
8-49      Price Impacts of Regulatory Alternatives on Small
          Facil ities	     8-112
8-50      Return on Investment Impacts of Regulatory
          Alternatives on Small Facilities	    8-113

                                          xi

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                              1 .  SUMMARY

 1.1 REGULATORY ALTERNATIVES
     The development of standards of performance for new, modified, or
reconstructed sources of stationary air pollution was dictated by Section
111 of the Clean Air Act (42 United States Code 7411).   The EPA Admin-
istrator is empowered to establish performance standards for all  such
industrial  categories, including pressure sensitive tapes and labels
(PSTL).
     Regulatory Alternative I is defined as baseline control.  It
represents the volatile organic compound  (VOC) emission level that would
be allowed if no new source performance standard (NSPS) was promulgated.
The control level  of this alternative would be equal  to the emission
limits recommended by the May, 1977 Control Techniques  Guidelines (CTG)
entitled Control  of Volatile Organic Emissions from Existing Stationary
Sources - Volume.II:  Surface Coating of Cans, Coils, Paper, Fabrics,
Automobiles, and Light-Duty Trucks.  This control  level  would be  expected
to achieve approximately an 80 percent overall reduction in VOC emissions.
     Regulatory Alternative II is defined as moderate control.  This
alternative would limit the emission of VOC from drying ovens only.  No
fugitive control  would be required.  Overall VOC emissions would  be
expected to be reduced by 85 percent.
     Regulatory Alternative III represents the stringent level of VOC
control.  This alternative would control  both drying  oven and fugitive
VOC emissions.  An overall  VOC emission reduction of 90 percent would be
expected under this alternative.
                                   1-1

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 1.2  ENVIRONMENTAL AND, ENERGY IMPACTS
      The primary environmental impact from the PSTL industry is the
 uncontrolled emission of VOC from coating line drying ovens.  These
 emissions occur in both pressure sensitive adhesive and release coating  -
 operations.  The uncontrolled emission of VOC results from solvent
 vaporization in product drying ovens and as fugitive emissions around
 the product coating areas.   The majority of PSTL coating facilities are
 located in industralized urban areas.  VOC emissions can potentially
 cause an air pollution problem because they are precursors to the
 formation of ozone and oxygenated organic aerosols (photochemical  smog).
      Nitrogen oxide (N0x),  sulfur dioxide (S02),  and carbon monoxide
 (CO) emissions were examined as  potential  air emissions  from drying
 ovens which use direct-fired burners.  These  emissions were determined
 to be negligible when  compared to the VOC emissions.   Nitrogen  oxides
 were also examined as  an emission from an incinerator control  device.
 Tests showed that these  emissions were negligible.
      Steam boilers are another potential  gaseous  pollutant emission
 source  for systems which  use indirect,  steam-heated  ovens  or carbon
 adsorption units.   The boilers were  not  examined  in  this  study  because they
 are  being  investigated in the industrial  boilers  NSPS  study.
      An  overview of the  potential  environmental  impacts  that  could  result
 from the implementation  of  the regulatory  alternatives is  presented in
 Table 1-1.   The  estimated effects shown  in  this table  are  based on
 comparisons  between Regulatory Alternatives II and III and  the  base case
 (Regulatory  Alternative I).   The  impacts  represent changes  above or
 below the  base case.   No absolute impacts are shown for any alternatives.
 Detailed analyses  of the impacts  are  presented in Chapter  7,  "Environmental
 and  Energy Impacts," and Chapter  8,  "Economic Impacts."
      Regulatory Alternative  I represents the base case.  Because of this
 all  of the impact values for  this alternative are zero.  There would be
 no impact  in comparing the baseline with itself.  Under Regulatory
Alternative  II increased reductions in VOC emissions, above that achiev-
able by Alternative I,  would be expected.  The reductions would increase
                                   1-2

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 because  the  control  device  efficiencies  under Alternative  II are  higher
 than  those used  in Alternative  I.  Alternative  II  controls  had a  control
 device efficiency of 96  percent while Alternative  I controls were  rated
 at  only  90 percent efficient.
      Table 1-1 indicates  that Regulatory Alternative  II could cause
 potential water  and  solid waste impacts. Water  containing  dissolved
 organics and  solid carbon wastes are the primary forms in which these
 impacts  occur.   The  operation of carbon adsorption control  devices     ;
 produces the  wastewater  and solid waste carbon  materials.   On a national
 basis the total  quantities  of wastewater and waste carbon  produced would
 be  about 9 percent above that generated by Alternative I.   The magnitude
 of  the organic pollution problem would not be serious.  The severity of
 the problem  is further lessened by the estimated reductions in the use
 of  solvent-based coating.  As solvent use declines fewer carbon adsorption
 controls would be needed, hence lessening quantities of contaminated
 water and carbon would be produced.
     Regulatory Alternative III would have the largest impact on VOC
 emissions of  all  the  regulatory options.  In 1985 VOC emissions would be
 reduced by 4300 metric tons above that achievable under Alternative I.
 This reduction represents a 16  percent decrease in emissions above the
 base case.
     In 1985  the wastewater discharge resulting from Alternative III
 control  would be about 13 percent greater than that occurring under
 Alternative I. The magnitude of the solid waste impact would be similar
 to that of water.  Alternative  III would produce a 14 percent increase
 in solid waste emissions above those of the base case. These environ-
 mental impacts should decrease based on the predicted dec! ine in the use
 of solvent-based coating technologies.
     The extent of energy impacts  under Regulatory Alternatives II and
 III would depend on the time frame considered.   In the short-term time
 frame energy consumption would be  higher than that required by  Regulatory
Alternative I.  Energy in the forms of electricity, natural  gas,  and
 fuel oil  would be needed to power the VOC control  equipment. Nationally
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the PSTL industry would require approximately 3 percent more electricity,
9 percent more natural  gas, and 15 percent more fuel  oil  than required
for Alternative I control.
     In the long-term time frame net reductions in energy consumption
are predicted under Regulatory Alternatives II and III.  In the potential
best case situation for Alternative II, a national net energy savings of
approximately 15,700 barrels  (2.5 million liters) of crude oil  exists.
For Alternative III a national net savings of 27,100 barrels (4.3 million
liters) of crude oil  is predicted.  The best case assumes all new coating
lines use carbon adsorption systems to recover solvent emissions.  The
implementation of either Alternative II or III would provide an incentive
for coaters to switch from solvent-based coating technology to alternative
low-solvent coatings.  Energy could be saved by the increased use of
more energy-efficient coating processes and by the decline in the use of
energy-consuming VOC control equipment.
1.3  ECONOMIC IMPACT
     The proposal of any major legislative regulation requires the
evaluation of all inflationary impacts and the preparation of a regu-
latory analysis.  These analyses would be necessary if any of the
regulatory alternatives being considered could cause either of the
following criteria to be met:
         •Total additional cost of production of any major industry
          service exceeds five percent of the selling price of the
          product.
         •Additional  annual costs of compliance, including capital
          charges  (interest and depreciation), total  $100 million
           (i) within any one of the first five years of implementation,
          or  (ii) if applicable, within any calendar year up to the
          date by which the law requires attainment of the relevant
          pollution standard.
     In the analysis performed on the PSTL industry and Regulatory
Alternatives  I,  II, and III, neither of these criteria were met.  An
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 NSPS based on these regulatory alternatives could not,  therefore,  be
 considered a major action.    The complete,  detailed economic assessment
 is presented in Chapter 8.   The impacts in  this chapter were developed
 on the premise that a firm  (when faced with NSPS compliance) could or
 could not switch to alternate coating  technologies  (waterborne  or  100
 percent solid formulations)  to produce their same product.   This con-
 straint had the effect of altering  the impact of the  regulatory alter-
 natives on the various coating line cases.
      In the unconstrained case (firms  can use alternate  coating technol-
 ogies), none of the regulatory alternatives would have  an  impact on  any
 of the coating line models.   Assuming  the adoption  of proposed State
 Implementation Plan standards,  firms in this category (PSTL) would  have
 already switched to waterborne and  100 percent solids coatings.  Their
 cost burdens  would  have  already been incurred in  attempting  to comply
 with the SIP's.   The promulgation of an NSPS based  on Alternatives  I,
 II,  or III  would not,  therefore, present any additional  cost burdens.
 Since  the alternative  systems  are more  profitable than conventional
 solvent-based  systems, firms  in the  industry have an  economic incentive
 to adopt them  even  in  the absence of a  regulation.
      In the constrained  case  (firms  can  not use alternate coating
 technologies)  the regulatory  alternatives would have minor impacts on
 certain  coating  line situations.  Under Alternative II control, product
 price  increases  of  0.0 to 0.4  percent would  exist.  These figures assume
 that the  producer passes all  costs for  controls on  to the consumer.   If
 all  costs  for  controls are absorbed by  the  producer, the industry's
 baseline  return  on  investment would decrease  by 0.0 to 0.6 percent.
 Under Alternative III control,  with full cost  pass-on, the product price
would  increase by 0.0 to 0.9 percent.   Full   cost absorption under this
alternative would reduce return on investment  by 0.0 to 1.0 percent.
The large-size facilities have  slightly higher impacts than the medium
and small facilities.
     The  regulatory alternatives would  have  little or no impact on  the
industry's growth rate and structure.  The availability  of alternative
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technologies and the small  price and return on investment impacts on the
conventional solvent-based  systems imply that the regulatory alter-
natives would not deter new investment and adversely affect growth.
Although the large facilities would be affected more than the medium and
small  facilities, the difference is not great enough to put the large
facilities at a competitive disadvantage.  Thus* the regulatory alter-
natives would not cause any significant changes in the structure of the
industry.
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                             2.  INTRODUCTION
2.1   BACKGROUND AND AUTHORITY FOR STANDARDS
     Before standards of performance are proposed as a Federal  regulation,
air pollution control methods available to the affected industry and the
associated costs of installing and maintaining the control  equipment are
examined in detail.  Various levels of control based on different technolo-
gies and degrees of efficiency are expressed as regulatory alternatives.
Each of these alternatives is studied by EPA as a prospective basis for
a standard.  The alternatives are investigated in terms of their impacts
on the economics and well-being of the industry, the impacts on the
national economy, and the impacts on the environment.  This document
Summarizes the information obtained through these studies so that inter-
ested persons will be able to see the information considered by EPA in
the development of the proposed standard.
     Standards of performance for new stationary sources are established
under Section 111 of the Clean Air Act (42 U.S.C. 7411) as amended,
hereinafter referred to as the Act.  Section 111 directs the Admin-
istrator to establish standards of performance for any category of new
stationary source of air pollution which ". . . causes, or contributes
significantly to air pollution which may reasonably be anticipated to
endanger public health or welfare."
     The Act requires that standards of performance for stationary
sources reflect ". . . the degree of" emission reduction achievable which
 (taking into consideration the cost of achieving such emission reduction,
and any nonair quality health and environmental impact and energy
requirements) the Administrator determines has been adequately demon-
strated for that category of sources."  The standards apply only to
stationary sources, the construction or modification of which commences
after regulations are proposed by publication in the Federal Register.
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     The 1977 amendments  to  the Act  altered  or  added numerous  provisions
that apply  to the  process  of establishing  standards of  performance.
     1.  EPA is  required  to  list  the  categories  of major stationary  sources
that have not already  been listed and  regulated  under standards of perform-
ance.  Regulations must be promulgated  for these new categories on the
following schedule:
     a.  25 percent of the listed categories by August  7, 1980.
     b.  75 percent of the listed categories by August  7, 1981.
     c.  100 percent of the  listed categories by August 7, 1982.
A governor of a  State  may apply to the Administrator to add a  category not
on the list or may apply  to  the Administrator to have a standard of  perform-
ance revised.
     2.  EPA is  required  to  review the standards of performance every four-
years and, if appropriate, revise them.
     3.  EPA is  authorized to promulgate a standard based on design,  equip-
ment, work practice, or operational  procedures when a standard based on
emission levels  is not feasible.
     4.  The term  "standards of performance" is redefined, and a new term
"technological  system  of continuous emission reduction" is defined.  The new
definitions clarify that the control  system must be continuous and may
include a low- or non-polluting process or operation.
     5.  The time between the proposal and promulgation of a standard under
Section 111  of the Act may be extended to 6 months.
     Standards of performance, by themselves, do not guarantee protection
of health or welfare because they are not designed to achieve any specific
air quality levels.  Rather, they are designed to reflect the degree  of
emission limitation achievable through application of the best adequately
demonstrated technological system of continuous emission reduction,  taking
into consideration the cost of achieving such emission reduction,  any
non-air-quality  health and environmental impacts, and  energy requirements.
     Congress had several  reasons for including these  requirements.  First,
standards with a degree of uniformity are needed to avoid situations  where
some States  may attract industries by relaxing  standards relative  to  other
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cost savings by avoiding the need for more expensive retrofitting wnen
pollution ceilings may be reduced in the future. Fourth, certain types
of standards for coal-burning sources can adversely affect the coal
market by driving up the price of low-sulfur coal  or effectively excluding
certain coals from the reserve base because their untreated pollution
potentials are high.  Congress does not intend that new source performance
standards contribute to these problems.  Fifth, the standard-setting
process should create incentives for improved technology.
     Promulgation of standards of performance does not prevent State or
local  agencies from adopting more stringent emission limitations for the
same sources.  States are free under Section 116 of the Act to establish
even more stringent emission limits than those established under Section
111  or those necessary to attain or maintain the National  Ambient Air
Quality Standards (NAAQS) under Section 110.  Thus, new sources may  in
some cases be subject to limitations more stringent than standards of
performance under Section 111, and prospective owners and  operators  of
new sources should be aware of this possibility in planning for such
facilities.
     A similar situation may arise when a major emitting facility is to
be constructed in a geographic area that falls under the prevention  of
significant deterioration of air quality provisions of Part C of the
Act.  These provisions require, among other things, that major emitting
facilities to be constructed in such areas are to be subject to best
available control technology.  The term Best Available Control  Technology
(BACT), as defined in the Act, means
          ". . . an emission limitation based on the maximum degree  of
          reduction of each pollutant subject to regulation under this
          Act emitted from, or which results from, any major emitting
          facility, which the permitting authority, on a case-by-case
          basis, taking into account energy, environmental, and economic
          impacts and other costs, determines is achievable for such
          facility through application of production processes  and
          available methods, systems, and techniques, including fuel
          cleaning or treatment or innovative fuel  combustion techniques
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          for control of each such pollutant.   In no event  shall  applica-
          tion of "best available control technology" result  in  emissions
          of any pollutants which will exceed the emissions allowed  by
          any applicabletstandard established pursuant to sections 111
          or 112 of this, Act. (Section 169(3))
     Although standards of performance are normally structured in terms
of numerical emission limits where feasible, alternative approaches  are
sometimes necessary.  In some cases physical measurement of emissions
from a new source may be impractical or  exorbitantly expensive.   Section
m(h) provides that the Administrator may promulgate a design or equipment
standard in those cases where it is not  feasible to prescribe or  enforce
a standard of performance.  For example, emissions of hydrocarbons from
storage vessels for petroleum liquids are greatest during tank filling.
The nature of the emissions, high concentrations for short  periods
during filling and low concentrations for longer periods during storage,
and the configuration of storage tanks make direct emission measurement
impractical.  Therefore, a more practical approach to standards of
performance for storage vessels has been equipment specification.
     In addition, Section lll(j) authorizes the Administrator to  grant
waivers of compliance to permit a source to use innovative continuous
emission control technology.  In order to grant the waiver, the
Administrator must find:  (1) a substantial likelihood that the technology
will produce greater emission reductions than the standards require  or
an equivalent reduction at lower economic energy or environmental cost;
(2) the proposed system has not been adequately'demonstrated; (3) the
technology will not cause or contribute  to an unreasonable risk to the
public health, welfare, or safety; (4) the governor of the State where
the source is located consents; and (5) the waiver will not prevent  the
attainment or maintenance of any ambient standard.  A waiver may have
conditions attached to assure the source will not prevent attainment of
any NAAQS.  Any such condition will have the force of a performance
standard.  Finally, waivers have definite end dates and may be terminated
earlier if the conditions are not met or if the system fails to perform
as expected.  In such a case, the source may be given up to 3 years  to
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to meet the standards with a mandatory progress schedule.
•2.2..  SELECTION OF CATEGORIES OF STATIONARY SOURCES
      Section 111 of  the Act directs the Adminstrator  to list categories
of stationary sources.  The Administrator  "...  shall include a category
of sources  in such list if in  his judgement  it causes, or contributes
significantly to, air pollution which may  reasonably  be anticipated to
endanger  public  health or welfare."  Proposal and promulgation of
standards of performance  are to follow.
      Since  passage of the Clean Air Amendments of 1970, considerable
attention has been given  to the development  of a  system for assigning
priorities  to various source categories.   The approach specifies areas
of  interest by considering the broad strategy of  the  Agency for  imple-
menting the Clean Air Act.  Often, these  "areas"  are  actually pollutants
emitted by  stationary sources.  Source categories that emit these
pollutants  are evaluated  and ranked by a  process  involving such  factors
as:   (1)  the level of emission control  (if any) already required by
State regulations,  (2) estimated  levels of control  that might be required
from standards  of  performance  for the source category,  (3) projections
of  growth and  replacement of existing facil ities  for  the source  category,
and  (4)  the estimated incremental  amount  of  air pollution that could  be
 prevented in a  preselected  future year by standards of performance for
 the  source  category. Sources  for which new  source  .performance standards
were promulgated or  under development during 1977,  or earlier, were
 selected  on these  criteria.
      The  Act  amendments  of  August 1977 establish  specific criteria to be
 used in  determining  priorities for all major source categories not yet
 listed by EPA.   These are:   (1)  the quantity of air pollutant emissions
 that each such  category  will emit,  or will be designed to emit;  (2) the
 extent to which  each such pollutant may  reasonably  be anticipated to
 endanger public  health  or welfare; and  (3) the mobility and competitive
 nature of each  such  category of  sources and  the consequent need  for
 nationally  applicable  new source  standards of performance.
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      The Administrator is to promulgate standards for these categories
 according to the schedule referred to earlier.
      In some cases it may not be feasible immediately to develop a
 standard for a source category with a high priority.   This might happen
 when a program of research is needed to develop control  techniques or
 because techniques for sampling and measuring emissions  may require
 refinement.   In the developing of standards,  differences in the time
 required to  complete the necessary investigation for different source
 categories must also be considered.   For example,  substantially more
 time may be  necessary if numerous pollutants  must  be  investigated  from a
 single source category.   Further, even late  in the development process
 the schedule for completion  of a standard may change.  For example,
 inablility to obtain emission data from well-controlled  sources in time
 to  pursue the development process in a"systematic  fashion  may  force  a
 change in scheduling.   Nevertheless,  priority ranking  is,  and  will
 continue to  be,  used to  establish the order in which  projects  are
 initiated and resources  assigned.
      After the  source  category  has  been  chosen,  the types  of facilities
 within the source  category to which  the  standard will  apply must be
 determined.   A  source  category  may  have  several  facilities  that cause
 air pollution,  and  emissions  from some  of  these  facilities may  vary  from
 insignificant to very  expensive  to  control.   Economic  studies  of the
 source  category and  of applicable  control  technology may show  that air
 pollution control  is better served by  applying  standards to the more
 severe  pollution sources.  For  this  reason, and  because there  is no
 adequately demonstrated system  for controlling emissions  from certain
 facilities,   standards  often do  not apply to all facilities at a source.
 For the  same  reasons,  the standards may not apply to all  air pollutants
emitted.  Thus, although a source category may be selected to be covered
by a standard of performance, not all pollutants or fac-'lties  within
that source  category may be ccvured by the standards.
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2.3  PROCEDURE FOR DEVELOPMENT OF STANDARDS OF PERFORMANCE
     Standards of performance must (1) realistically reflect best demon-
strated control  practice; (2) adequately consider the cost, the non-air-
quality health and environmental  impacts, and the energy requirements of
such control ; (3) be applicable to existing sources that are modified or
reconstructed as well as new installations; and  (4) meet these conditions
for all variations of operating conditions being considered anywhere in
the country.
     The objective of a program for developing standards is to identify
the best technological  system of continuous emission reduction that has
been adequately demonstrated.  The standard-setting process involves
three principal  phases of activity:   (1) information gathering,
(2) analysis of the information, and  (3) development of the standard of
performance.
     During the information-gathering phase, industries are queried
through a telephone survey,  letters of inquiry, and plant visits by EPA
representatives.  Information is also gathered from many other sources,
and a literature search is conducted.  From the knowledge acquired about
the industry, EPA selects certain plants at which emission tests are
conducted to provide reliable data that characterize the pollutant
emissions from well-controlled existing facilities.
     In the second phase of a project, the information about the industry
and the pollutants emitted is used in analytical studies.  Hypothetical
"model  plants" are defined to provide a common basis for analysis.  The
model plant definitions, national pollutant emission data, and existing
State regulations governing emissions from the source category are then
used in establishing "regulatory alternatives."  These regulatory
alternatives are essentially different levels of emission control.
     EPA conducts studies to determine the impact of each regulatory
alternative on the economics of the industry and on the national  economy,
on the environment, and on energy consumption.  From several possibly
applicable alternatives, EPA selects the single most plausible regulatory
alternative as the basis for a standard of performance for the source
category under study.
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      In  the  third phase of a project,  the selected regulatory alternative
 is  translated into a standard of performance,  which,  in  turn, is  written
 in  the form  of a  Federal  regulation.   The Federal  regulation, when
 applied  to newly  constructed plants, will  limit emissions  to  the  levels
 indicated  in the  selected  regulatory alternative.
      As  early as  is practical  in each  standard-setting project, EPA
 representatives discuss the possibilities  of a standard  and the form  it
 might take with members of the National Air Pollution Control  Techniques
 Advisory Committee.   Industry representatives  and  other  interested
 parties  also participate in these meetings.
      The information acquired in the project is  summarized in the Back-
 ground Information Document (BID).  The BID, the standard, and a  preamble
 explaining the standard are widely circulated  to the  industry being
 considered for control,  environmental  groups,  other government agencies,
 and offices  within EPA.  Through this  extensive  review process, the
 points of  view of expert reviewers are taken into  consideration as
 changes  are  made  to  the documentation.
      A "proposal  package"  is  assembled and  sent through  the offices of
 EPA Assistant  Administrators  for concurrence before the  proposed standard
 is officially  endorsed  by  the  EPA Administrator.  After  being approved
 by the EPA Administrator,  the  preamble and  the proposed  regulation are
 published  in the  Federal Register.
      As  a  part of  the Federal  Register announcement of the proposed
 regulation,  the public  is  invited to participate in the  standard-setting
 process.    EPA  invites written  comments on the proposal and also holds a
 public hearing to  discuss  the  proposed standard with interested parties.
All  public comments  are summarized and incorporated into a second volume
 of the BID.  All   information  reviewed and generated in studies in support
 of the standard of performance is available to the public in a "docket"
 on file  in Washington, D. C.
      Comments from the public are evaluated, and the standard  of performance
may be altered in  response to the comments.
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     The significant comments and EPA's position on the issues raised
are included in the "preamble" of a "promulgation package," which also
contains the draft of the final  regulation.  The regulation is then
subjected to another round of review and refinement until  it is approved
by the EPA Administrator.  After the Administrator signs the regulation,
it is published as a "final rule" in the Federal Register.
2.4  CONSIDERATION OF COSTS
     Section 317 of the Act requires an economic impact assessment with
respect to any standard of performance established under Section 111
of the Act.  The assessment is required to contain an analysis of
(1) the costs of compliance with the regulation, including the extent to
which the cost of compliance varies depending on the effective date of
the regulation and the development of less expensive or more efficient
methods of compliance,  (2) the potential inflationary or recessionary
effects of the regulation,  (3') the effects the  regulation might have on
small business with respect to competition,  (4) the effects of the
regulation on consumer costs, and  (5) the effects of the regulation on
energy use. Section 317 also requires that the  economic impact assessment
be as extensive as practicable.
     The economic  impact of a proposed standard upon an industry is
usually addressed  both  in  absolute terms and  in terms of the control
costs that would be incurred as a  result of compliance with typical,
existing State control  regulations.  An incremental approach is
necessary because  both  new and existing plants  would be required to
comply with State  regulations in the absence  of a Federal standard of
performance.  This approach  requires a detailed analysis of the economic
impact  from the cost differential  that would  exist between a proposed
standard of performance and  the typical State standard.
     Air pollutant emissions may cause water  pollution problems, and
captured potential air  pollutants  may  pose a  solid waste disposal problem.
The  total environmental  impact of  an emission source must, therefore, be
analyzed and  the costs  determined  whenever possible.
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      A thorough study of the profitability and price-setting mechanisms
 of the industry is essential to the analysis so,that an accurate estimate
 of potential  adverse economic impacts can be made for proposed standards.
 It is also essential  to know the capital  requirements for pollution
 control  systems already placed on plants  so that the additional  capital
 requirements  necessitated by these Federal  standards can be placed in
 proper perspective.   Finally, it is necessary to assess the availability
 of capital  to provide the additional  control  equipment needed to meet
 the standards of performance.
 2.5  CONSIDERATION OF ENVIRONMENTAL IMPACTS
      Section  102(2) (C) of the National  Environmental  Policy Act  (NEPA)
 of 1969  requires Federal  agencies to  prepare  detailed environmental
 impact statements  on  proposals  for legislation  and  other major Federal
 actions  significantly affecting  the quality of  the  human environment.
 The objective of NEPA is  to  build into  the  decision-making  process  of
 Federal  agencies a careful consideration  of all  environmental  aspects of
 proposed actions.
      In  a number of legal  challenges  to standards of  performance  for
 various  industries, the United States Court of  Appeals  for  the District
 of Columbia Circuit has held that environmental  impact  statements need
 not be prepared  by the Agency for proposed  actions  under Section  111  of
 the Clean Air Act.  Essentially,  the Court  of Appeals  has determined
 that the  best system  of emission  reduction  requires the  Administrator to
 take  into account  counter-productive environmental  effects of a proposed
 standard, as  well  as  economic costs to the  industry.  On  this basis,
 therefore, the Court  established  a  narrow-exemption from  NEPA for EPA
 determination under Section  111.
      In addition to these judicial determinations,  the Energy Supply and
 Environmental  Coordination Act (ESECA) of 1974  (PL-93-319) specifically
exempted  proposed actions under the Clean Air Act from NEPA requirements.
According to section  7(c)(l), "No action taken under the Clean Air Act
shall be deemed a major Federal  action significantly affecting the
quality of the human environment within the meaning  of the National
Environmental  Policy Act of 1969."  (15 U.S.C.  793(c)(l))
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      Nevertheless,  the Agency  has  concluded  that  the  preparation of
 environmental  impact  statements  could  have beneficial  effects on certain
 regulatory  actions.   Consequently,  although  not legally  required to do
 so by section  102(2) (C)  of  NEPA, EPA has  adopted  a  policy  requiring that
 environmental  impact  statements  be  prepared  for various  regulatory
 actions,  including  standards  of  performance  developed under section 111
•of the Act.  This  voluntary preparation  of environmental impact state-
 ments, however,  in  no way legally  subjects the Agency to NEPA requirements,
      To implement  this  policy, a separate section in  this  document is
 devoted solely to  an  analysis  of the potential environmental impacts
 associated  with the proposed  standards.   Both  adverse and  beneficial
 impacts in  such areas as air and water pollution, increased solid waste
 disposal, and  increased  energy consumption are discussed.
 2.6  IMPACT ON EXISTING  SOURCES
      Section 111  of the  Act defines a  new source  as ".  . .  any ^stationary
 source, the construction or modification of  which is  commenced  . .  ."
 after the proposed standards  are published.  An existing source is
 redefined as a new source  if "modified"  or  "reconstructed" as defined  in
 amendments  to  the  general  provisions of Subpart A of  40  CFR Part 60,
 which were  promulgated  in  the Federal  Register on December 16, 1975  (40
 FR 53416).
      Promulgation  of a  standard  of performance requires  States to
 establish standards of performance for existing sources  in the same
 industry under Section  111  (d) of  the  Act if the  standard  for new  sources
 limits emissions of a designated pollutant  (i.e., a pollutant for  which
 air quality criteria have  not been issued under Section  10'8 or which  has
                                                           y
 not been listed as a hazardous pollutant under Section 112). If a State
 does  not act,  EPA must establish such  standards.   General  provisions
 outlining procedures for control of existing sources  under Section
 111 (d) were promulgated on November 17,  1975,  as  Subpart B of 40 CFR
 Part  60  (40 FR 53340).
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 2.7  REVISION OF STANDARDS OF PERFORMANCE
     Congress was aware that the level of air  pollution control achievable
 by any industry may  improve with technological advances.  Accordingly,
 Section 111 of the Act provides that the Administrator ". .  . shall, at
 least every four  years, review and, if appropriate, revise  . . .» the
 standards.  Revisions are made to assure that  the standards continue to
 reflect the best systems that become available in the future.  Such
 revisions will  not be retroactive,  but will  apply to stationary sources
constructed or modified after the proposal  of the revised standards.
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           3.   THE  PRESSURE  SENSITIVE  TAPE  AND LABEL INDUSTRY

      The  coating of  pressure  sensitive  tapes  and labels  (PSTL)  is  a
 "converting"  operation,  one in  which  some  backing material  (paper,
 cloth,  cellophane, etc.)  is coated  one  or  more times  to  create  a tape or
 label  that sticks  on contact.   The  term pressure sensitive  indicates
 that  the  adhesive  bond  is formed on contact,  without  wetting,  heating,
 or adding a curing agent.
      The  pressure  sensitive tape and  label  industry is a sub-category of
 paper coating,  or  the even  more general  classification of industrial
'surface coating.   It belongs  in the Standard  Industrial  Classification
 (SIC) 2641.
      Pressure sensitive  adhesive coatings  can be used in the  manufacture
 of a  diverse  range of products.  This includes not only  tapes  and  labels
 but a variety of decorative and architectural  coated  products.   This
 study includes all pressure sensitive adhesive coating operations  and
 also  release  coating operations.  All of these operations are  referred
 to as the pressure sensitive  tapes  and  labels (PSTL)  industry.
 3.1   GENERAL  INDUSTRY DATA
      There is very little information publicly available concerning the
 pressure  sensitive tape  and label  industry.   Product  slates,  production
 rates, types  of processes,  and  solvents used  are all  considered proprietary
 information by most  of  the companies.
      The  information presented  in this  chapter was developed  largely
 from direct contact  with the individual  companies.  The resulting  data
 represents a  summary of the confidential  responses of about 58 percent
 of all companies  involved in the manufacture  of pressure sensitive tapes
 and labels.  Industry-wide figures  are, therefore, an extrapolation from
 this  data base. As  such, they  should be used roughly to identify trends
                                    3-1

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 but not as  an exact representation.   All  the  information  in  this  section
 came from that survey unless  specifically referenced  to the  contrary.
      This study has identified  90  firms  that  are  involved  in the  coatinq
 of pressure sensitive tapes and labels to some  extent.  Most of these
 are either very small  companies, or  large companies with  only a small
 percentage  of their business  devoted to  the production of  pressure
 sensitive products.
      This industry  is relatively concentrated in  nature.   It has  been
 estimated that more than  80 percent  of all pressure sensitive tape pro-
 duction is  accounted for  by the five largest  companies.1   Similarly,
 more than 75 percent of all pressure sensitive  labels are  produced by
 the top six companies.
      The PSTL industry has experienced historical annual growth rates
 ranging from 7 to 10 percent.   This  average growth rate reflects  two
 different effects,  the growth rate for existing products and  for  the
 development of new  products.  The growth  rate for mature existing
 products is comparatively low and is normally in  proportion  to the
 economic growth of  industry in  general.   The  development of  new products,
 however, has  enjoyed rapid growth.   Most  new  product development  in the
 future  will  be in the application of pressure sensitive adhesives to
 miscellaneous  architectural and decorative products, rather  than  in the
 more mature tapes and labels.
      A  recent  market study predicted  growth rates for tapes, labels, and
 specialty products.   The pressure sensitive  tape market was  estimated
 to  be 900 million dollars in 1978, and its growth was projected to 1.6
 billion dollars  in 1985.  That  represents an  average annual growth of
 8.6  percent.   The label market  was forecast to grow from 485 million
 dollars  in  1978 to 923 million  in 1985, or an average annual  growth rate
 of 9.6  percent.  It  was further indicated that labels would enjoy more
 rapid growth until  1981 (about  12 percent per year) and then settle into
 a more  moderate  growth pattern  (about 8 percent per year)  as new markets
 start to  diminish.    In contrast, the  specialty market for pressure
 sensitive adhesives  is forecast to grow at about 13 percent annually
with  only a slight decline over the  period to 1985.
                                   3-2

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     The production of pressure sensitive tapes and labels is accom-
plished in over 100 plants distributed geographically in clusters.   The
largest concentration is in the northeast, representing about 48 percent
of the industry (ranked here according to uncontrolled emissions).   The
next largest concentration is in the midwest (primarily around the Great
Lakes) with about 33 percent of the industry.  The remaining 19 percent
is split evenly between the southeast and the far western states with
very few operations in the southwest or Rocky Mountain area.  Based on
value of shipment data, the north central U.S. represented the greatest
production area.
     For the purposes of this BID, an affected facility will be defined
as a single coating line  (which is composed  of a coating  head, an oven,
and a transport system).   Each of the pressure sensitive  manufacturing
plants will have from one  to thirty such  coating lines, with an overall
average of about three lines per plant.   This would  indicate a total of
about 300 coating  lines in pressure sensitive service.
     The  uncontrolled VOC  emissions from  a single  coating line can  range
from about 10  metric  tons  per year up to  more than 10,000 metric tons
per year, with an  average  of about 1700 metric tons  per year.  The
estimated  total  national  VOC emissions potential from the pressure  sen-
sitive  tapes  and label  industry  is  600,000 metric  tons  per  year.  The
detailed  basis for this estimate  is given in Chapter 7.
      Approximately 20 percent  of  the  companies  responding employed  some
 form of emission  control  equipment.   This can be  further characterized
as about 36  percent of the large  companies  employing emission  control
 and about 16  percent of the medium  companies and  small-sized companies.
 3.2  PROCESSES AND THEIR  EMISSIONS
      There are five basic coating  processes  which  can be used  in  the
 coating of pressure sensitive  adhesives,  those being:
          9 sol vent-based coating,
          • waterborne (emulsion) coating,
          • hot melt coating,
          » calender coating, and
          • p re-polymer coating.
                                  3-3

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     More than 85 percent of the existing pressure sensitive materials
are produced by solvent-based coating.   Because of  its broad applica-
tion, solvent-based coating techniques will be described here in great
detail.
     Waterborne coating and hot melt coating are two promising alter-
nate technologies.  They offer significant advantages over solvent-based
coating in environmental, economic, and energy factors.  They have not
yet, however, been demonstrated to produce equivalent adhesive performance
across the full spectrum of pressure sensitive products.  Each of these
alternative coating methods will be discussed qualitatively and compared
to solvent-based coating.
     The process of calendering is a 100 percent solids coating process
in which the web is impregnated with a granular solid adhesive by
extreme pressure.  This process is applicable to only a few combinations
of coatings and backing materials.  It is not expected that the use of
calendering could be extended to replace a solvent coating, and it will
not be covered further in this document.
     Since many of the coating materials are polymeric in nature, it is
possible to coat the v/eb with an oligomer (a mixture of the monomer and
various polymers) and then cure it to the polymer form.  This type of
coating technique (sometimes call  pre-polymer coating) is still  in the
experimental  stage.   The curing can be accomplished by exposing the
coating to ultraviolet (UV), infrared (IR), or electron beams (EB).
While this process holds considerable promise for the future, much
developmental  work remains to be done.  Pre-polymer coating will  not be
discussed any further here.
     Each of these coating techniques can be used in the application of
several  different types of coating.  Among these are:
        • Adhesives  - This is universal  to all  pressure sensitive
          tapes and labels.   The adhesive is usually the heaviest
          coating on any given product,  and as  such it uses the
          most solvent.
        ® Release agents - Also called "backsize",  this coating  is
          applied to the backside  of tape or the mounting  paper
          for labels.   The function of the release  agent is to
          allow smooth and easy unrolling of the tape,  or removal
          of the label  from the mounting paper.
                                 3-4

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        • Primers  -  A  primer or precoat is a material  which is
          coated  before the adhesive  and improves the 'bond
          between  the  backing material  and the adhesive.
        • Coloring agents - Various pigments and dyes may be
          coated  onto  the backing (or saturate the backing) for
          decorative purposes.
        ©Saturants -  The backing may be saturated with various
          materials to modify its properties.  For instance, a
          paper backing may be saturated with synthetic rubber
          to increase  its tensile strength and flexibility.

     Adhesive coating  is a necessary step in the manufacture of all
pressure sensitive adhesives.  It is generally the heaviest coating, and
therefore results in the highest solvent emissions.  Because of this,
adhesive coating will  be used as the example in most of the following
discussions.  When the coating of other materials causes a unique situ-
ation, it will be noted.
3.2.1  Solvent-Based Coating
     Solvent-based coating is currently the dominant method for manu-
facturing pressure sensitive tapes and labels.  Years of developmental
work have brought solvent-coating techniques a wide range of applica-
tions, which  include many different kinds of coating materials, at
various coating weights, onto many different kinds of backing material s.
Solvent-based coating  is able to produce  superior adhesive  products
across this wide  range of applications.
     Solvent-based coating has several drawbacks,  however,  which may
limit  its growth  in the  future.  The worst  of these drawbacks  is the
emission  problem.  Solvent evaporation from the  coated product results
in two streams of VOC  emissions.  The largest stream  is  the concentrated
exhaust from  the  drying  ovens.   The other is evaporative loss  into  the
work place, or fugitive  emissions.  While  equipment  is available to
reduce these  emissions,  it adds  to the cost and  complexity  of  the coating
operation.
     The  second drawback of  solvent-based coating  technology  is that it
requires  more energy  than  other  coating  techniques.    The  concentration
of VOC  in the oven  must  be  kept  very  low  for safety  reasons.   Large
                                 3-5

-------
 quantities  of dilution air must be circulated through the oven to achieve
 this  low concentration, and large quantities of energy are required to
 heat  this air to oven temperature.  In light of rapidly increasing fuel
 prices,  this  high energy requirement may be a more serious problem in
 the future  than emission control.
      The third problem is economic.   The organic solvents used in this
 coating  process are  derived from petroleum after a high degree of pro-
 cessing  and purification.   In  its uncontrolled form,  solvent-based
 coating  uses  about two pounds  of solvent per pound of coating  material
 on a  once-through basis.   Solvent coating  without some form of recovery
 system may  soon be economically unattractive with rising  petrochemical
 prices.
      The following sections will  describe  the process of  solvent-based
 coating.  Particular emphasis  will be  placed on  the equipment  and opera-
 ting  procedures that affect the emissions  and energy  requirements men-
 tioned above.
      3.2.1.1   Process  Description for  Solvent-Based Coating.   Solvent-
 based coating  is  a simple  process conceptually.   The  web  (a  continuous
 roll  of  backing material)  is unrolled,  coated, dried,  and  rolled  up.
 This  process  is shown  schematically  in  Figure 3-1.  The actual equipment
 to accomplish  this is  large and complex.  Most of the  equipment is
 involved  in the transport  and  protection of  the  relatively  fragile web.
 Only  the  coating  head  and  the  oven are  of  interest in  this  study,  because
 of their effect on emissions.
     The  type  of  coating  head  used has  a great effect  on the quality of
 the coated product,  but only a  minor effect  on emissions.  The viscosity
 of the coating  formulation  must be tailored  to.meet the requirements of
each particular coating head.   Since the viscosity is  controlled  pri-
marily by the amount of solvent  used in the  formulation, the coating
head can affect emission levels.  The fact that the operating viscosity
 range  for each  coating head is wide  (and often overlaps with others)
tends  to minimize  this effect.
                                   3-6

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      The coating head may also affect the level of fugitive emissions.
 Those coaters which use a pan type feed system expose more area to
 evaporative loss than those using a nozzle type of feed.  Similarly, the
 more complex coaters with several coating rollers have a much larger
 exposed area than the simpler designs.
      There are many types of coating heads available, but they can be
 broken down into three basic categories.  The first category works by
-applying excess coating to the web, and then scraping it off to the
 desired thickness.   Examples of this type of coater are the knife coater,
 blade coater, metering rod coater, and the air knife coater.   Diagrams
 of several  of these coating heads are shown in Figure 3-2.
      The second category of coater meters on a predetermined  amount of
 coating.  The two most common types of coaters in this category are the
 reverse roll  and the gravure, shown in Figure 3-3.
      The third category does not actually apply a surface coating,  but
 rather saturates the backing.  The dip and squeeze  coater shown in
 Figure 3-4  is the most common example.
      The second piece of major equipment on a coating line  is  the  oven,
 the major functions  of which are:
          • drying the coating by evaporating  the solvent,  and/or
          ©finishing  the curing  of the  polymer coating.
 The exhaust from the ovens  is by far the largest  source  of  potential  VOC
 emissions.   The oven configuration and  operation  can  have a significant
 effect on the efficiency  of  any  downstream emission  control equipment.
      The important  properties  of a drying/curing  oven include:
          ®the source of heat,
          °the temperature  profile,
          •the residence  time,
          °the allowable  hydrocarbon  concentration, and
          •the oven circulation.
      There  are  two basic types of  heating  used  in drying ovens, direct
 and  indirect.   Direct  heating routes the hot  products of combustion
 (blended  off  with ambient air to the proper temperature) directly into
                                  3-8

-------
COATING KNIFE
  SUPPORT
  CHANNEL
                              TURN
                              ROLL
                  APPLICATOR  ,__.,.,
                     ROLL     LEAD-IN
                               ROLL
          METERING  COATING
            ROD       PAN
  FLOATING KNIFE COATER
             METERING ROD COATER
         NOZZLE
BACKING
  ROLL
APPLICATOR
   ROLL
           BLOW OFF
             HOOD
     COATING
       PAN
                  AIR KNIFE COATER
             Figure 3-2. Coating head configurations.
                            3-9

-------
                  RUBBER
                   ROLL
               ENGRAVED
                 ROLL   -
                                 £\  I
           COATING PAN


                   GRAVURE COATER
                   DOCTOR
                    BLADE
    METERING
      ROLL
BACKING
 ROLL
                              METERING
                                ROLL
TRANSFER
  ROLL
    FURNISH
     ROLL
                                            BACKING
                                             ROLL
                           TRANSFER
                             ROLL
        COATING PAN

       REVERSE ROLL
   COATER-FOUR ROLL TYPE
                                COATING
                                  PAN
                 REVERSE ROLL COATER
                   (3 ROLL PAN FED)
              Figure 3-3.  Metering type coating heads.
                             3-10

-------
            CHILLED IRON
                ROLLS
OVEN
IMMERSION
  ROLLS
   Figure 3-4. Dip and squeeze coater.
              s-n

-------
the drying zone.  The fuels for a direct fired oven are usually limited
to natural gas or liquefied petroleum gas (usually propane), because of
the requirements for clean burning.  Fuel oil, or other heavier fuels,
could potentially produce enough soot and other particulates to
adversely affect the coating.
     In an indirect heated oven, the incoming air stream exchanges heat
with steam or combustion products, but does not physically mix with
them.  This heat transfer may be accomplished in several types  of heat
exchangers, such as shell-and-tube or plate type.
     Direct fired ovens are more common because of their higher thermal
efficiency.  Indirect heated ovens lose efficiency both in the pro-
duction of steam and in the heat transfer from steam to oven air.  As a
result, indirect heating is usually employed only for very small  ovens,
for cases where product contamination cannot be tolerated, and for cases
where surplus steam is already available.  Indirect heating may also be
used in the secondary recovery of heat from the incineration of solvent
in the oven exhaust.
     The  average oven temperature is important to both the process and
any add-on control equipment.  For drying purposes, the oven must be at
a temperature above the boiling point of the solvent.   If any curing is
to be done, even higher temperatures are required.  The resulting
average temperature affects the amount of cooling needed before carbon
adsorption or preheating before incineration.
     In addition to the bulk average temperature, the temperature
profile is very important to product quality.  If the initial drying
proceeds  too fast, coating flaws called  "craters" or "fish-eyes" can
develop.  Yet if the drying step is done slowly at low  temperatures,
much longer ovens would be necessary to  completely dry  the coating.
     The  solution to this trade-off is the multizoned oven, illustrated
in Figure 3-5.  The oven is physically divided into several sections,
each with its own hot air supply and exhaust.  By holding the temper-
ature of  the first zone low, and then gradually increasing in subsequent
zones, uniform  drying can be carried to  completion in a reasonably sized
                                  3-72

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oven.  This system is also compatible with high temperature curing in
later zones.  Figure 3-5 illustrates a two zone drying oven.  A modern
large drying/curing oven may have as many as six zones ranging in
temperature from 43°C (110°F) to 204°C (400°F).
     The multi-zoned oven adds another degree of complexity to the
emission control system.  Most of the solvent is evaporated in the
early zones.  Thus there is the potential to reduce the size of the
emission control equipment by excluding one or more of the later oven
zone exhausts.  This is done at the expense of a decrease in overall
control efficiency.
     The residence time in the oven is determined by the oven length
and the line speed.  Residence time is important in determining the
amount of solvent that  remains in the coating.  Residual  solvent in
the coating from one step may be released during the unrolling phase
or subsequent coating steps or during the slitting phase.  It has been
estimated that from one to five percent of the total  solvent used in
the coating formulation remains in the product. ' '.           :
     The oven circulation is basically set by the allowable VOC con-
centration.  This concentration is usually expressed as a percent of
the Lower Explosive Limit (LEL).  For the solvents typically used in
coating pressure sensitive tapes and labels, the LEL ranges from 0.8
                                                o
to 3.0 volume percent of the organic in the air.   Older coating lines
are usually controlled  to 25 percent LEL, while the newer lines have
increased this to 40 to 50 percent LEL.  The use of continuous LEL
monitors on the ovens (to sound alarms and/or shut down the line if
necessary) has enabled  this advance.  The higher the allowable LEL in
the oven exhaust, the less dilution air is required for any given
solvent loading.  This  not only reduces the energy requirements of the
oven, it also reduces the cost of any downstream emission control
equipment.
     Coating operators  have mentioned special  problems with low oven
LEL on precoat and silicone release coating lines.   With these high-
solvent, low-coating-weight applications, oven turndown is especially
difficult.   Also, most ovens are operated at negative pressures to
                                  3-74

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meet OSHA requirements.  The negative pressure causes air infiltration
and more dilution of the oven off gas.  The problem is particularly
pronounced in tandem or multiple coating operations which coat a wide
variation of adhesive coating weights.  Low coating weights, air
infiltration and poor oven turndown can all combine in multiple coating
units to reduce the oven LEL.
     Figure 3-6 illustrates a tandem coating line.  Each pressure sen-
sitive product typically undergoes a minimum of two coating operations.
These may be done separately on discrete coating lines, or a single
tandem coating line may be used.  A tandem coating line is one in which
the web undergoes a sequence of coating and drying steps without re-
winding between steps.  Since this reduces the flexibility of the
system, tandem coating lines are best used for large volume products
with relatively long run times.
     For this study a facility has been defined as a single coating
line, which effectively means a coating head and the associated drying/
curing oven.  By this definition, a tandem coating line would be con-
sidered as two  (or more) independent facilities.  This is the preferred
treatment since the subsequent coatings applied in a tandem coating
operation often involve radically different solvents and would likely
require different types of emission control equipment.
     3.2.1.2  Emission Points from Solvent-Based Coating.   The only
pollutants emitted in significant quantities from solvent-based coating
of pressure sensitive tapes and labels are the volatile organic com-
pounds resulting from solvent evaporation.  Most of these emissions  (80
to 95 percent) are contained in the drying oven exhaust.  Some solvent
 (1 to 5 percent) remains in the coated product.  The remainder is lost
from a variety of small sources referred to collectively as fugitive
emissions.
     In an uncontrolled facility, almost all of the solvent used in the
coating formulation is emitted to the atmosphere.  Most coating form-
ulations range from 5 to 60 weight percent non-volatile solids in the
coating formulation, and the remainder is solvent.  Using a typical
adhesive formulation containing 35 percent percent solids, solvent
                                   3-15

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emissions will  be 1.86 kg per kg of coating material.  This can further
                                                                  2
be related to production by a typical  coating weight of 0.051  kg/m
(0.094 Ib/sq yd).10  Solvent emissions would then be about 0.094 kg/m2
(0.173 Ib/sq yd).
     Most of these solvent emissions appear in the oven exhaust.  This
stream is relatively concentrated, ranging from 2000 to 5000 ppmv.
Flow rates range from 0.5 Nm3/sec (1000 SCFM) to 50 Mm3 (100,000 SCFM).
The combined oven temperature ranges from 65°C (150°F) to 121 °C (250°F).
     Fugitive emissions may occur at any point in the solvent handling
process, such as:
         • from solvent storage tanks,
         •from coating formulation mixing tanks,
         •from miscellaneous spills,
         •from equipment cleaning,
         •from oven leaks, and
         •from the coating operation itself.
     Fugitive emissions from formulation, storage, and cleanup opera-
tions are not included in this regulation because:   (1) the storage of
hydrocarbons are covered by a separate NSPS,  (2) formulation emissions
are already controlled to low levels due to safety reasons, and (3) the
solvent  cleanup emissions are generally low concentration, low volume
sources  which are very difficult to capture and control.  Since the
primary  emphasis of this study is on the coating operation, losses there
will be  stressed.
     Fugitive emissions during coating come from the unintentional
evaporative loss of solvent around the coating head and on the exposed
web from the coater to the oven entrance.  The magnitude of these losses
is determined by the size of the equipment, the line speed, the vola-
tility of the solvent, the temperature, and the air turbulence in the
coating  area.
     Since the first two factors also determine production rate, an
interesting relationship develops.  Fugitive emissions increase with
increasing web width, but decrease with increasing line speed.  Since
                                 3-17

-------
most production gains are achieved by increasing both web width and line
speed, this results in a small change in the absolute magnitude of the
fugitive emissions.  But since oven emissions increase significantly
with increasing production, fugitive emissions decrease when expressed
as a percent of the total emissions.  Thus a small coater might have
emissions that are 20 percent fugitive and 80 percent oven, while a
large unit would be 5 percent fugitive and 95 percent oven.5
     Fugitive emissions may be collected for treatment by a system of
hoods and/or floor sweeps.  The efficiency of this type of collection
system is highly dependent on system designs.  Some designs call for
total enclosures resulting in a theoretical 100 percent fugitive emission
capture.  The captured gases from the hoods or enclosures can be used as
makeup air for the drying ovens.  The cost of the fugitive capture
system is expected to be a small fraction of the total coating line and
VOC control system installed capital cost.
     The other possible pollutants from a pressure sensitive tape or
label coating facility are particulates, S0?, NO , and CO from direct-
                           •                w    /\
fired drying ovens.  The other major type of drying oven, indirect-
heated, does not have any combustion pollutants from the oven.  Indirect-
heated ovens usually use steam-tube heat exchangers.  The steam is
supplied by an industrial size boiler.  The industrial boiler is being
examined in a separate NSPS study.  A third type of drying oven uses
electrical  heaters and therefore has no potential  emissions.
     As previously mentioned, the major fuel  used in a direct-fired oven
is either natural  gas or liquified petroleum gas.   Alternate fuels such
as fuel oils or coal  can not be used because soot or ash from their
combustion can adversely affect the product quality.  The burning of
natural gas or LPG is a very clean process with respect to the formation
of particulates, S0?, NO , and CO.  Table 3-1 gives an example of a
                   t.    /\
typical large solvent-based coating facility.  The particulate, SO,,,
NO , and CO emission rates are calculated from AP-42 emission factors
  A
for small  industrial  boilers or process heaters.   Because the emission
rates are so small, these pollutants will  not be examined any further in
this study.
                                 3-18

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     3.2.1.3   Existing  Regulations  and  Emissions.  Twenty  states, the
District  of Columbia, and  Puerto Rico have  some  form of  point  source
regulation to  limit  the emissions of VOC.   Most  of the rest of the
states  have an ambient  air quality  standard,  but no point  source emission
limits.   A summary of these  regulations  is  presented as  Table  3-2.
     The  VOC emission limits  fall into  several 'patterns.   The  strictest
form calls for a maximum of  6.8 kilograms per day  (15 pounds per day) or
1.4 kilograms  per hour  (3  pounds per hour)  for "oven emissions". These
oven emissions are defined as any organic material  which has come in
contact with a flame or has  been heat cured,  heat polymerized, or baked.
If these  ceiling values  cannot be met (and  they are so low that no
solvent-based coating facility could meet them uncontrolled),  then
control equipment must  be  provided  to reduce  emissions by  at least 85
percent.  The 85 percent applies only to the  captured emissions and is
not an overall VOC reduction.
     Uncontrolled emissions from pressure sensitive tape and label
coating are estimated to be 600,000 metric  tons per year.  If  the above
regulations were uniformly applied, the resulting controlled emissions
would be  approximately  90,000 metric tons per year.
     The  oldest and probably most well  known VOC reduction regulation is
California's Rule 66 (now known as Rule  442).  Rule 66 was developed by
the County of Los Angeles Air Pollution  Control  District (now the South
Basin APCD) in 1966.   The rule was later amended in November of 1972.
     The  two purposes of the regulation  were:  (1)  to reduce total  VOC
emissions and  (2) eliminate organics that were recognized as photochemi-
cal^ reactive.  The rule defined an organic solvent  as  photochemically
reactive  if the solvent contained greater than 20 percent of its  total
volume or exceeded any of the volume levels  of the  solvents listed
below:
        • no more than 5 percent by volume  of compounds  with
          olefinic or cyclo-olefinic unsaturation,
        •no more than 8 percent aromatic compounds of 8  or
          more carbon atoms (with the  exception  of  ethyl benzene),
        • no more than 20 percent ethyl benzene,  toluene,  tri-
          chloroethylene, or ketones having  branched  hydro-
          carbon  structures.
                                3-20

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Notes for Table 3-2.


a)   Applies to oven emissions  (organic compounds which have been exposed
     to a flame, or have been heat cured, heat polymerized, or baked).
b)   Ambient air standard only.

c)   Maricopa County only.  Rest of the state calls for "no unreasonable
     escape, of solvents and use of control equpiment where needed."
d)   Applies to County of Los Angeles and San Francisco Bay Area APCD.
     County by county regulations, most following this pattern.

e)   Applies to photochemically reactive solvents, as defined in Rule 66.
f)   Shall reduce where feasible by control  methods.

g)   Metropolitan Baltimore and surrounding counties.  Rest of state
     limits new sources to a maximum of 250 kg/day (550 Ib/day).

h)   Applies to New York City Metropolitan area only.

i)   Applies to existing sources in Priority I areas and all  new sources.
j)   Total emissions.

k)   City of Philadelphia only.

1)   Applies to single machine.  Limit of 45 kg/day (100 Ib/day) for all
     operations.

m)   For nonphotochemically reactive, 1361 kg/day (3000 Ib/day) or
     204 kg/hr (450 Ib/hr).
n)   Applies to AQCR 7 only.

o)   Unless equipped with acceptable control.
                                 3-23

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The rule also provided less stringent VOC emission levels for non-
photochenrically reactive solvents.
     Several states adopted the Rule 66 format.  If this type of emissio'i
regulation v/ere universally applicable, current emissions would be in
the range of 300,000 to 500,000 metric tons per year.  This range is
wide because of the uncertainty as to whether manufacturers currently
using a reactive solvent (where control equipment is required) would
switch to an exempt solvent if the local  regulation allowed it.
     The Rule 66 regulation is currently being phased out by the State
Implementation Plan  (SIP) regulations.  SIP regulations are required by
all states that have non-attainment areas for hydrocarbons.  These
generally include all the major pressure sensitive industrial  areas such
as the urban Northeast, Chicago, and Los Angeles.  The U.S. Environmental
Protection Agency has recommended an emission limit specifically for
paper and fabric coating operations.
f ol 1 owi ng:
               Affected Facility
                                    12
This limit is stated as the
  Recommended Limitation
                                   kg VOC per liter  Ibs VOC per gallon
                                        of coating       of coating
                                       (minus water)     (minus water)
                 Coating Line             0.35               2.9
This 'regulation requires about the same level of VOC reduction as Rule
66, however, it excludes the preferential  treatment of non-photochem-
ical ly reactive solvents.  The recommended CT6 limitation is used as the
baseline of comparisons in this study.
     So far all of the states which are developing SIP regulations,
except California, are following the  recommended EPA guidelines.
California performed an independent study on coating facilities within
their state and in August 1978 came up with a separate VOC reduction
     13
rule.    The proposed rule is stated as the following:
     1.  After 2 years from date of adoption a person shall  not
discharge into the atmosphere more than 120 grams of volatile organic
compounds per liter of coating (1.0 pound per gallon of coating)
as applied, excluding water, from any paper and/or fabric coating
application process involving the use of heating ovens.
                                 3-24

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     2.   The provisions of Section 1  of this rule shall  not apply to-
          a. any coating application  process which emits less than
             6.5 kilograms of volatile organic compounds per day;
          b. the use of low-solvent paper or fabric coatings
             which emit or may emit less than 265 grams  of
             volatile organic compounds per liter of coating
             as applied, excluding water.
     3.   Containers for organic solvents and mixing tanks for coatings
containing organic solvents shall  be  free from leaks and shall  be
covered except when adding or removing materials, cleaning, or when
the container is empty.
The California rule applies to all solvent-based coating operations in
the state.  The South Basin APCD has  already adopted this regulation as
the law.
3.2.2  Waterborne Adhesive and Silicone Release Coatings
     Environmental pressure has spurred the search for a coating process
that is intrinsically nonpolluting (as opposed to add-on emission con-
trol equipment).  Waterborne coating  is a good example of such a process
which is  receiving a great deal of attention from coating suppliers,
equipment manufacturers, and the producers of pressure sensitive tapes
and labels.  Already waterborne coating  (or emulsion coating) is being,
used'in applications which were the exclusive domain of solvent coating
as little as five years ago.  Our survey found that 15 percent of the
respondents were using waterborne coating to some degree.
     Since water  replaces the organic solvent as the coating diluent,
there are essentially no volatile organic emissions.  This also results
in a decreased hazard of fire and explosion.  VOC concentrations in the
work environment are likewise  reduced.
     Waterborne coating requires less energy in the drying oven.  This
is due  primarily to a great reduction of the dilution air made possible
by the  lack of explosion hazard.
     The  equipment for waterborne coating is very similar to that for
solvent-based coating.  For some  release coatings, this similarity will
help facilitate the substitution of emulsion coatings for solvent-based.
This added  familiarity  helps promote  operator acceptance.
                                   3-25

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     While the acrylic latex adhesives used in waterborne coating are
more expensive than rubber-based solvent adhesives, this cost is offset
by savings on solvent cost and drying energy.  When compared to solvent-
based coating with add-on emission control equipment, waterborne coating
becomes quite economically attractive.
     Waterborne coating technology is applicable to a wide range of
coating materials.  It has been used successfully to coat both adhesives
and release agents.  The range of adhesives available for waterborne
coating is wider than hot melt, but not as wide as for solvent-based.^4
     The limiting factor on waterborne coating is product development.
Waterborne adhesive formulations have been developed that match solvent-
based adhesive performance for certain products, but much more work must
be done to extend the range of products.  Solvent-based coating may
never be replaced for use in some specialty products (particularly true
with regard to silicone releases), but waterborne coating shows promise
as a substitute for much of the field.
     3.2.2.1   Process Description for Waterborne Coating.  The equipment
and procedures used in waterborne coating are very similar to those
described for solvent-based coating.   The following paragraphs will
highlight the areas where differences occur.
     The hydraulic properties of the aqueous emulsion are quite different
from solvent systems.   The viscosity in a solvent formulation is deter-
mined by the type of coating material, the type of solvent,  and the
percent solids.   For most coating materials, a limit of 35 to 40 weight
percent solids is common.   The viscosity of an emulsion is more dependent
on the physical  properties of the system (degree of mixing and particle
size) than on the properties of the coating material.   Thus  higher
molecular weight polymers  may be used in coating formulations as high as
60 percent solids.
     Most coating heads  used for solvent-based coating  can be used for
aqueous coating.   Some of those particularly well  suited to  aqueous
coating are knife,  blade,  bar,  rod, air knife, and gravure coaters.   For
pan fed coaters,  the pan should be recirculated to maintain  even mixing.
                               3-26

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     The oven operation is also slightly different for waterborne
coating.  Oven temperatures are generally higher because water has a
higher boiling point than most organic solvents.  The heat of vaporation
of water is also higher than that of organic solvents.  These two facts
give rise to a common misconception that more energy is required to dry
an aqueous coating.  This neglects the effect of reduced oven dilution
air  (required to keep solvent level below some specified percent LEL).
Up to 90 percent of the heat used  in a conventional solvent drying oven
is required to heat the dilution air to the oven temperature.  Oven
energy  requirements with an aqueous system range from 10 to 30 percent
of those for a comparable solvent  system.
     To maintain good contacting and turbulence inside the oven at low
dilution air  rates, exhaust gas  recirculation is often employed.  This
feature is  illustrated  in Figure 3-7.  This principle is equally appli-
cable to solvent-based  drying  systems.
     There  are several  operating problems unique to waterborne coating.
One  of  these  is  a  structural deformation of the web when using water
sensitive  substrates.     These  deformations primarily take the form of
curl and cockle.   There are many possible solutions,  including pretreat-
ment of the web, use  of a  different  backing material, changes  in  coating
and  drying  procedures,  and  the addition  of  small amounts of  organic
solvent to the  formulation.  The addition of  organics  to the  formulation
should  be  a short  term solution, while  other  techniques are  being  dev-
eloped.  This is typically limited to  less  than ten  percent  organic
solvent,  so the resulting emissions  are  still  comparable to  the  best
 controlled solvent-based facility.
      Waterborne systems may also exhibit foaming  problems.   These
 problems  can be minimized by  careful  operating  procedures  and by the
                                                      17
 addition of anti-fearning or defoaming  agents  or both.
      It has also been suggested that corrosion  may prove  to  be a long
 term problem with waterborne  systems.   This would be particularly
 important in the retrofit of existing solvent lines  to emulsion coating.
 New designs can specify metallurgy to minimize  corrosion.
                                 3-27

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     3.2.2.2  Sources of Emission.   There are typically no significant
atmospheric emissions from a waterborne coating facility.   If small
amounts of organic solvent are added to counteract operating problems,
the emission points will be the oven exhaust and fugitives.  Since the
use of volatile organics in aqueous formulations is typically very low
 (less than 10 percent), the resulting emissions will be comparable (or
better than) the best controlled solvent-based facility.
     3.2.2.3  Existing  Regulations and Emissions.  The same basic VOC
emission limits that apply to solvent coating also apply to aqueous
coating.   Eleven states give a specific exemption to waterborne coating
as long as  the volatile organics are less than 20 percent  of the total
 volatile material  in the  formulation.
     Emissions from waterborne coating of pressure  sensitive tapes and
 labels  may be  considered  to  be an  insignificant  contributor to the
 overall  industry emissions.
 3.2.3   Hot Melt Adhesive  Coating
      Hot'melt  (or hot  applied) pressure  sensitive adhesives have  been
 the  subject of a  great deal  of development  work  during the last  ten
 years.   The motivating forces  to develop hot melt  systems  in  place of
 solvent-based  systems  are similar to those  for waterborne  coating:
         ©environmental pressure,
          e worker health and safety,
          ©energy shortage, and
          9 raw material cost and availability.
      Where it can successfully meet product specifications, hot melt
 coating is an excellent solution to these problems;   It is an intrin-
 sically non-polluting  process, both in terms of the exterior environment
 and the work place.  Fire and explosion dangers are also minimized by
 the absence of any volatile hydrocarbons.   It has lower energy consump-
 tion than either  solvent-based  or waterborne coating.  The coating  material
 cost  is  in the moderate  range, but the  savings  in  solvent  cost help  to
 lower  that.
       Hot  melt coating  has some very strong  advantages for a small firm
  (or one  for whom  pressure  sensitive coating is  just a sideline).  The
                                   3-29

-------
overall capital requirements are relatively low, and the space require-
ments are very small in comparison to either solvent-based or water-
borne coating.  This is convincing many converters who previously bought
their pressure sensitive base stock to adopt in-house coating.  This
trend could result  in the addition of many new small coating facilities,
especially in the tag and label  fields.
     The greatest obstacle to the development of hot melt pressure
sensitive tapes and labels is the limited range of thermoplastic  (or
thermpsensitive) coating materials.  Hot mel'ts have been used success-
fully for adhesive  coating.  But the range of product properties which
can be achieved is  narrower than with waterborne coating, and much
                                   1 8
narrower than with  solvent coating.
     The key to extending hot melt adhesive applications is the ability
to induce cross!inking after the initial  coating step.   Intensive
development work is underway to perfect this procedure.  If successful,
this would greatly  improve the performance and range of application for
                                      1 n
hot melt pressure sensitive adhesives.    However, current experimental
operations are using electron beam (EB) or ultraviolet (UV) cures which
would mean a much greater capital  cost for a new coating facility.
     Hot melt coating facilities can be expected to continue to grow and
extend their range  of applications in the pressure sensitive tape and
label industry.  The growth can extend to include a significant portion
of the industry.  Detailed estimates of this growth are presented in
Chapter 8.  The speed of growth will  be determined by technical  develop-
ments that allow greater product substitution.   Hot melt coating was
used to some extent by 12 percent of the survey respondents in this
study.
     3.2.3.1   Process Description for Hot Melt Coating.  The process of
hot melt coating is simple in principle.   The solid coating material
must be melted and  delivered to the coating head in the molten state.
There it is metered onto the web generally by a slot-die type coater.
The coated web is then chilled to restore the coating to the solid
state.  The v/eb transport and tensioning  are very similar to conventional
coating, but simpler, due to the shorter length of web  travel.
                               3-30

-------
     Despite the fact that hot melt coating equipment is cheaper and
requires less space, many of its differences must be considered dis-
advantages.  Manufacturers are hesitant to adopt new products and pro-
cesses because of expected major startup and development costs.  The
equipment for hot melt coating is quite different from solvent-based or
waterborne coating, and this difference has probably slowed its imple-
mentation, even in cases where product specifications could be met.
     There are several real disadvantages associated with hot melt
coating.  It can be difficult to accurately control the coating weight.
The coating head is more susceptible to streaking due to plugging or
dirt accumulation.  Cleaning the coating head is more difficult and time
consuming.  A product change is, therefore, more difficult.  This puts
more emphasis on longer runs, and  reduces the flexibility of the coater.
The hot adhesive tends to  change properties over a period of time.  This
can be minimized by inert  blanketing of the system and by limiting the
                                              20
amount of time spent  at elevated temperatures.
     The  range of  applications for hot melt coating is limited by
several factors.   The adhesive coatings are of low to intermediate
performance  in terms  of strength,  heat resistance, and environmental
stress.   Hot melt  coatings  have a  darker color which makes them generally
unsuitable  for transparent  substrates.  Heat  sensitive substrates  (such
as  the plastic materials)  are also difficult  to adapt to hot melt.
Since the  coating  materials must be  thermoplastic, the temperature  range
of  product  applications  is more limited than  with  solvent or emulsion
        on
coating.    Many of these  problems can be solved by developing a cross-
linking methodology.
      The  energy  requirements  for hot melt coating  are the lowest of any
commercially available  system  (some  of the  radiation cured prepolymer
systems promise  even  lower energy  consumption).  The key to this
energy  efficiency  is  that  all the  heat  is concentrated on the  coating.
No  heat is  wasted  on  the large  volumes of oven  air or on the  radiative
heat  losses from the  massive  ovens.  Using  conventional solvent-based
coating as the  basis  for comparison, emulsion coating can  reduce energy
 requirements by  82 percent while  hot melts  can  achieve a 95 percent
 reduction.
           21
                                  3-31

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     3.2.3.2  Sources of Emissions for.Hot Melt Coating.  Hot melt
coating may be considered to be essentially pollution free.  The pos-
sibility exists for the evaporative loss of some of the lighter com-
ponents in the coating formulation.  Most of the applicable coatings are
high molecular weight polymers, which may contain trace amounts of
unreacted monomers and/or lower molecular weight polymers.  Some of
these may be volatized at the coating temperatures experienced in hot
melt coating.  The EPA has conducted limited tests to measure evaporative
losses from hot melt coatings.  Various weights of hot melt smaples were
heated at 320°F for periods of one hour, two and one-half hours, and
five and two-tenths hours.  Weight losses of from 0.1 to 12.6 percent
occurred.  Based on these results, all the samples would comply with a
regulation equal  to Regulatory Alternative III  (stringent case).22
     3.2.3.3  Existing Regulations and Emissions.  Hot melt coating is
governed by the same regulations as solvent-based coating.  Eight states
have included a specific exemption for hot melt coating systems.
Emissions from hot melt coating should be low enough to meet the strict-
est existing regulations, so the exemptions just avoid the .trouble of
source testing to demonstrate compliance.
     No realistic estimation of the current national  emissions from
hot melt coating can be made.  It may be stated that hot melt emissions
are a negligible part of the total emissions from pressure sensitive
tape and label  coating.
3.2.4  One Hundred (100) Percent Solids Silicone Release Coating
     The development of a 100 percent solid si! i cone release formulation
was forced by the same pressures as experienced with the hot melt
adhesive and waterborne adhesive and release coatings.   The first U.S.
commercial  operation was installed in 1975 and is still  operating.23
Both of the major silicone release material  suppliers offer 100 percent
solids silicone release formulations.   '
     The 100 percent solids silicone release materials  have shown good
                                                  oq
release properties even with aggressive adhesives.     Release materials
are not generally subject to wide variations in temperature, solvent
                                  3-32

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resistance and cohesion properties as found in adhesives.   Therefore,
the 100 percent solids formulations can replace a significant portion  of
current solvent-based systems with minimal  adverse effects in product
quality.  There is a very definite trend in the PSTL industry to switch
from solvent-based systems to 100 percent solids  (and also waterborne)
sil icone  release coating.  The conversion will probably be more rapid
than the  conversion of solvent-based adhesives to hot melt or water-
borne adhesive coatings.
     3.2.4.1  Process Description for 100 Percent Solids Silicone
Release Coating.  The coating of 100 percent  solids  release material can
be done on  existing solvent-based coating facilities.  A gravure-type
coater  is recommended for  release applications.   An  oven is required for
curing  the  release  solids.   Oven  temperatures  are required to be as high
as  260°C  (500°F).   It  has  been estimated that if  a  solvent-based coating
line  is converted to  100 percent  solids, it  can  coat three to four  times
the amount of silicone  at  the "same  fuel  supply rate.  This is accomp-
lished  by:
          • eliminating the  drying  cycle,
          • recycling to a maximal  90 percent  of air  without
           explosion hazards,
          •reducing  the amount  of  coating to  be heated  by
           elimination of the solvent carrier, and
          •minimizing the dwell  time to as  low as one (1)
           second at 260°C (500°F).
 It has also been estimated that the overall  annual  operating costs  of a
 100 percent solids  release system is less than a solvent-based  system
                       25
 with solvent recovery.
      3.2.4.2  Sources of Emissions for 100 Percent Solids Silicone
 Coating.  As with the hot melt coating operations,  the 100 percent
 solids systems should produce negligible VOC emissions.  There is a
 potential  for emissions in  the oven when 260°C  (500°F) temperatures are
 experienced.  Residual  silicone monomers and  other  volatile materials
 can vaporize under these  conditions.  Through experience with solvent-
 based  systems, there is a tendency  for  silicone  materials to end up in
 oven exhaust gases.   It is  expected that these concentrations are  very
 low.
                                   3-33

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     3.2.4.3  Existing Regulations and Emissions.  One hundred percent
solids silicone coating  is governed by the same  regulations as solvent-
based systems.  No states specifically exempt 100 percent solids silicons,
however, it can be assumed that emissions from this type of coating should
be low enough to meet the strictest existing regulations.
     No realistic estimation of current national  emissions from 100
percent solids silicone  coating can be made.
3.2.5  Solvent-based Precoat Coating
     Precoat coating is  defined as any coating operation performed on the
web prior to its being coated with an adhesive or release material.
Generally during precoating a primer, tackifier, saturant, lacquer, or
other topcoat is applied to the web to impart certain qualities prior to
adhesive or release coating.  All precoating is  currently applied with
solvent-based technology, therefore, the potential  for VOC emissions
exists.  Although it is  being researched, the use of high solids technology
for precoating is not available yet.  The majority of precoating is per-
formed as a precursor to the coating of an adhesive material.   Not all
tape and label products  require a precoat.  The  desired characteristics
and quality of the final  product would determine the need for precoating.  '
     3.2.5.1  Process Description for Solvent-based Precoatinq.  The
coating of solvent-based precoats generally follows the same principles
developed in Section 3.2.1.1 for solvent-based coating.  Precoat formul-
ations can be applied with the same coating line equipment used to coat
adhesive or release formulations.  The precoat station is located directly
before the accompanying adhesive or release coating line.  A drying oven
is generally used on the precoat line to cure the coated web.   LEL levels
•                                                 ?d
in precoat ovens average between 5 and 10 percent.     A typical arrangement
for a precoat station is shown in Figure 3-8.
     Precoat formulations are typically 5 to 6 weight percent  solids and
90 to 95 weight percent solvent.  The amount of solvent used is small
because these coatings are applied in a very thin,  low weight   (about
0.23 kg per ream) coat similar to that of release coatings.   Solvent
consumption from precoating operations is less than 5 percent  of the
total  solvent used in the overall  production of a pressure sensitive
adhesive product.
                                  3-34

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     3.2.5.2  Sources of Emissions from Solvent-based Precoatinq.  The
primary sources of VOC emissions from solvent-based precoating lines are
the coating applicator, flashoff area, and the drying oven.  The drying
oven exhausts constitute the largest single VOC emission source in
precoating operations.  'Fugitive VOC emissions can occur at both the
applicator and flashoff area.  VOC emissions, particularly those from
the drying oven, are either ducted to the atmosphere or to the adhesive
coating line drying oven.  Generally precoat emissions are subject to
minimal control  efforts.
     3.2.5.3  Existing Regulations and Emissions.   The same basic VOC
emission limits that apply to solvent-based coating also apply to
precoat operations.  Currently no states grant emission exemptions to
precoat lines.   No realistic estimate of current national  emissions from
precoat operations can be made.
                                   3-36

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3.3  REFERENCES
1.   Letter and Attachments from Baum,  B.,  DeBell  and Richardson,  Inc.
     to Mr. David R. Patrick, EPA.   November 10,  1975.
2.   Frost and Sullivan, Inc.  Pressure Sensitive Products and
     Adhesives Market.   Publication No. 614.  New York,  NY  10038.
     Frost and Sullivan.  November 1978.
3.   Rifi, M.R.  Water-based Pressure Sensitive Adhesives, Structure
     vs. Performance.  Union Carbide Corporation, Bound  Brook, NO.
     (Presented at Technical  Meeting on Water Based Systems.   Sponsored
     by the Pressure Sensitive Tape Council.  Chicago,  111.  June  21-22,
     1978)  pp. 28-39.
4.   Carter, T.P.  Emulsion Pressure Sensitive Adhesives:  A Route  to
     Improved Oven Energy Utilization.   Celanese  Corp.   (Presented  at
     Technical Meeting  on Water Based Systems. Sponsored  by the
     Pressure Sensitive Tape Council.  Chicago, 111.  June  21-22, 1978.)
     pp. 60-66.
5.   Letter and Attachments from Phillips,  Frank, 3M  to  Harris, G.E.
     Radian Corporation.  October 5, 1978.   (Docket Confidential  File)
6.   Letter and Attachments from Baxter, R.F., Avery  International  to
     Harris, 6.E., Radian Corporation.   October 16, 1978.   (Docket
     Confidential File)
7.   Harris, G.E.  Trip Report for Pressure Sensitive Adhesives -  Shuford
     Mills in  Hickory, N.C.  Radian Corporation,  Austin, Texas.
     July 28, 1978.
8.   Manzone, R. R. and D. W. Oakes.  Profitably  Recycling Solvents
     from Process Systems.  Pollution Engineering 5(10): 23-24.
     October 1973.
9.   U.S. EPA/Tape and Label  Industry Meeting Notes.   Meeting  held  in
     Durham, North Carolina.  February 28,  1980.
10.  Reference 4, p. 63.
11.  County of Los Angeles.  Rule 66 (Amended November 2,  1972).   Los
     Angeles, California.
                                   3-37

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 12.   Guidelines  Series  -  Control  of  Volatile Organic Emissions from
      Existing  Stationary  Sources  - Volume  II: Surface Coating of Cans,
      Coils,  Paper,  Fabrics, Automobiles, and Light-Duty Trucks.  EPA
      450/2-77-008.   U.S.  Environmental  Protection Agency, Research
      Triangle  Park,  NC, May 1977.  p. vii.
 13.   Lam, J.Y.,  T.  Beutenmuller and  J.A. Pantalone, Consideration of
      a  Proposed  Model Rule for the Control of Volatile Organic Com-
      pounds  from Paper  and Fabric Coating  Operations.  State of
      California  Air Resources Board.  Sacramento, California.  August
      1978.   p. 6.
 14.   Hare, E.F.   Water-based Systems -  Label  Industry Experience
      Avery International.  (Presented at Technical Meeting on Water
      Based Systems.  Sponsored by the Pressure Sensitive Tape Council.
      Chicago.  June  21-22, 1978.)  pp.  75-77.
 15.   Reference 7.
 16*   Reference 14,  p. 76.
 17.   Nielsen, Afa C.  Antifoam Selection - Case Studies Based on
      Several  Resin Systems.  Nalso Chemical .Company.  (Presented at
      Technical  Meeting on Water Based Systems.   Sponsored by the
      Pressure Sensitive Tape Council.   Chicago.   June 21-22, 1978.)
      pp. 40-59.
 18.   Reference 2, p. 77.
 19.   Nelson,  T.P.  Trip Report to Shell  Westhollow Research  Center in
      Houston, Texas.  Radian Corporation.   Durham, North Carolina.
     March 16,  1979.
 20.   Fries,  J.A.   Pros and Cons of Hot Melts.   Paper,  Film and  Foil
     Converter.   (Park Ridge,  Illinois).  May 1977.   pp.  180-182.
 21.  H.B. Fuller Co.  Hot Melt Pressure Sensitive Adhesives  Offer Mew
     Dimensions to Converting.   Advertising brochure.
22.  Memo from Shigehara,  R.T.,  EPA,  to Johnson,  W.  L.,  EPA.
     Tapes and  Labels Hot Melt Samples.
23.  Sol vent!ess  Release System Reduces  Energy Consumption.   Paper
     Film, and  Foil  Converter  (Park  Ridge,  Illinois).   February 1977.
     pp. 65-66.
                                    3-38

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24.   Johns,  S.M.  andM.E.  Grenoble.   Solventless  Silicone  Release
     Coatings:  Two Forms and Two  Methods  of Application.   Paper, Film
     and Foil  Converter (Park Ridge,  Illinois).   September 1975.
     pp. 45-48.
25.   Marriott,  D.P.   100% Solids  Silicone Release Coatings.   Dow
     Corning Corporation.   Midland, Michigan.   (Presented  at  Specialty
     Coatings and Laminations Seminar.   August 11-15,  1975.)
26.   Telecon, Brooks, G. W., Radian Corporation with  Benforado, David,
     3M Company.   January 21, 1980.   Discussion of precoating and
     industry meeting.
27.   Letter from Benforado, David, 3M Company  to  Don  Goodwin, U.S.  EPA,
     January 11,  1980.
                                   3-39

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                    4. . EMISSION CONTROL TECHNIQUES
     The pressure sensitive tape and label  (PSTL) industry has signi-
ficant emissions of only one type of pollutant, that being volatile
organic compounds (VOC).  These VOC are emitted as a result of the
evaporative loss of solvent from two major sources:
         • process emissions (exhaust from the drying/curing ovens)
         •fugitive emissions (unintentional  sol vent evaporation
          from the coating operation itself).
This chapter will review the technology available for the control of
these emissions.
     There are five basic control technologies commonly used to  reduce
VOC emissions.  Those technologies are:
         • adsorption
         • incineration
         • absorption
         • condensation, and
         • process modification.
Of these five technologies, only carbon adsorption and incineration will
be discussed in detail.  Process modifications such as waterborne and
hot melt coatings were  covered in Chapter 3.  Neither absorption nor
condensation appears economically effective in the low VOC concentration
range typical of pressure sensitive product coating.
     Carbon adsorption  and incineration would be considered equivalent
in overall  control effectiveness for reducing VOC emissions from pres-
sure sensitive tape and label  facilities.  The selection of either of
these control methods is dependent upon the specific application.  When
carbon adsorption can be applied without  unusual operating problems, it
usually  holds an economic advantage because of the value of the  recovered
solvent.
                                    4-1

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     There are many applications, however, where the auxiliary equipment
necessary to recover and purify solvent would be so expensive that
incineration becomes a better choice.  The following is a list of general
factors which would favor incineration (the absence or converse of these
factors would therefore favor carbon adsorption):
         • mixture of several  solvents  (which would require
          distillation and reformulation to reuse),
         • coatings that give off relatively high levels of
          entrained particulates (which would foul and
          deactivate a carbon bed),
         • water soluble solvents (which would require water
          treatment or some form of noncondensable regenerant), and
          solvents whose market value approaches their fuel value.
     While both carbon adsorption and  incineration are equally effective
as "add-on" emission controls, they are not as effective as process
modifications.  Modifications such as waterborne emulsion coatings and
100 percent solids coatings hold a distinct advantage because of the
total absence of solvent.  This factor negates the difficult to control
fugitive emission problem.
     These alternate coating techniques have not, however, been suffi-
ciently  developed to replace solvent-based coating in many applications.
For some specialty products, solvent-based technology may never be
replaced.  The use of solvent systems with add-on controls can fill this
gap.  Wherever applicable, alternate coating techniques hold a strong
advantage in environmental, energy, and economic factors.
4.1  CARBON ADSORPTION
     Carbon adsorption is a method of  reducing VOC emissions by ad-
sorption of the organic to the surface of activated carbon.  The VOC are
subsequently desorbed from the bed and recovered.
     Carbon adsorption is a mature technology that has been applied to
the control of VOC emissions from a wide  range of industrial processes,
including PSTL coating.   Its theory and. principles have been exhaustively
covered  in the literature.  A very brief  discussion of the operation of
carbon adsorption units will be presented here, with emphasis placed'on
the specific applications in the PSTL  industry.
                                   4-2

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4.1.1   Operating Principles
      Although there are several  types of continuous carbon adsorption
units, most existing facilities use multiple fixed bed adsorbers which
are cycled in and out of service.  This results in a batch operation on
any one adsorber, characterized by an adsorption mode and a regeneration
mode.   The operating discussion will be divided into these modes (see
Figures 4-1 and 4-2).
     In the adsorption mode, the gas containing VOC is routed to an ad-
sorber containing freshly regenerated carbon.  The VOC is quickly adsorbed
onto the surface of the carbon, and the gas exits at a very low VOC
concentration.  As the capacity of the bed to hold VOC is used up,  the
exit VOC concentration begins to rise.  This is called the breakthrough
point, and it signals the need to switch the adsorber to the regeneration
mode.
     The important parameters during the adsorption mode include:
         • degree of regeneration (or working capacity of carbon),
         •VOC inlet concentration (% LEL),
         •gas flow rate,
         • cycle time,                      .
         • temperature of the inlet gas,
         • type of sol vent,
         •type and amount of carbon,
         •superficial velocity in the bed, and
         ®bed pressure drop.
The first six factors affect the variance of day to day operations, while
the latter factors are generally set by the initial design.
     There are two basic types of regeneration, thermal and low pressure.
Both types are based on increasing the volatility of the adsorbed organic
to the point where it leaves the surface of the carbon.  Low pressure
regeneration is best suited to units with very high VOC loadings, and it
is not used to any extent in this industry.  Thermal regeneration may
be accomplished by either steam or hot air, with steam being almost
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 universally used in PSTL coating applications.   Hot air'regeneration can
 be quite attractive when dealing with water soluble solvents.
      The regeneration cycle is also illustrated in Figures 4-1  and 4-2.
 Steam is introduced to the bed which is loaded  with adsorbed VOC.   This
 results in desorption by both heating the bed and steam stripping.   The
 combined water and organic vapors are condensed in a heat exchanger and
 routed to a decanter (see Figure 4-3).   The organic and water layers
 separate in the decanter and are drawn  off to storage or further treatment.
 The important operating  variables during regeneration include:
    • length of the cycle,
    • pressure and  degree of superheat of the steam,
    • condenser water outlet temperature, and
    • use of cool down,  drying,  or expansion cycles  before
      returning the bed to the  adsorption mode.
 4.1.2    Operating  Problems
       There are several  areas  of operating problems  with  carbon  adsorption
 units  in the pressure  sensitive  adhesive industry.   Among  these  are:
         • nonregenerable  compounds  fouling  the bed,
        • recovered  solvent  contamination,
        • sol vent/water separation,  and
        •corrosion.
     Many  operating  problems are  associated  with high boiling compounds
 fouling  the carbon  bed.   Monomers,  low molecular weight polymers,
 resins,  and tackifiers present in  coatings  tend to be picked up  by the
 collection  system.  Also, it has  been theorized that  iron  (in the form
 of mild  steel)  used  in equipment  construction acts as a catalyst to  form
 high boiling  compounds in the carbon bed.  One manufacturer tested this
 theory in laboratory glassware, and produced more than 20 identifiable
                p
 heavy organics.  These heavy organic compounds foul the carbon beds
 rapidly, and  because of their high  boiling nature are not easily desorbed.
This increases  steam usage and shortens carbon life.
     Vendors suggest that three kg  steam per kg  solvent (three pounds/pound)
should be sufficient to regenerate the bed.  They also indicate that
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 carbon life should be in the range of seven to ten years.   Experience in
 the pressure sensitive adhesive industry indicates that these estimates
 are very optimistic.   Steam requirements of up to six kg per kg of sol-
 vent (6 Ib steam/1 b solvent) were reported, as well  as carbon life as
 short as six months.  ^
      There are several  problems associated with the  use of recovered
 solvents.   Multicomponent systems usually require distillation to separ-
 ate the solvent components.   These must then be reformulated to meet
 specifications.   Even in single component systems,  the recovered solvent
 may not be suitable for reuse.   Trace materials may  alter  the solvent
 properties enough  that it no longer meets specifications.   One source
 reported that only  25 percent of recovered solvent could be  substituted
 for virgin sol vent.
      There are two  options  for disposing  of recovered  solvent that
 cannot  be  reused.   The  first is to sell  this material  back  to the solvent
 supplier or an independent  firm that specializes  in  reclaiming  contaminated
 solvents.   Payment  for  the  spent solvent  usually  takes  the  form of a
 credit  against fresh  solvent purchases,  and it  is typically  only about
 30  percent of the virgin  solvent price.3   Another possibility  is the  use
 of  recovered  solvent  as  a fuel  in  the  boiler or the  coating  ovens.  Many
 of  these devices are  currently  gas  fired,  however, and would  require
 burner  modifications  before  burning  the solvent.  There  is little economic
 incentive  to  burn the solvent since  most  solvents cost a great  deal  more
 than  fuel  oil.  Carbon adsorption  is generally  economically attractive
 only  if the  recovered solvent can  be reused  directly.
      The formation of organic/water  emulsions in the decanter may be a
 problem.   Recovery of the emulsion with the  organic layer has been used
 to avoid the  need for water  treatment facilities.  The emulsified water
 is subsequently removed from solvent storage tanks and recovered by
 steam stripping or distillation.
     Corrosion is often a problem in carbon adsorption systems.  Most of
the solvents used in the pressure sensitive adhesives industry are not
 intrinsically corrosive, but corrosive compounds may  be formed in the
bed. The process is similar to that previously described in the forma-
                                 4-8

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tion of high boiling compounds.  This type of corrosion has resulted
in the replacement of most of the internals and duct work of a carbon
adsorption unit used by one pressure sensitive adhesives manufacturer
                                    2
after only three years of operation.   Also, processes which use direct-
fired heaters may have problems with adsorbed carbon dioxide.  On steam
regeneration, the CCL combines with water to form carbonic acid.
     Another potential problem is the occurrence of bed fires.  These
apparently result from spontaneous ignition of solvent on the carbon
surface.  Since adsorption is an exothermic process, it is possible that
heat liberated in a dead spot  (with no air flow to cool it) could rise
to the auto-ignition temperature.  The occurrence of bed fires is
directly  related to;  (1) the oxidation properties of the particular
solvent,  (2) the air velocity through the bed, and  (3) the design of the
                                     4
tank containing the activated carbon.   Fires are predominantly associated
with the  ketone solvents and are most likely to occur after fresh carbon
is added  to the bed.   PSTL coaters are able to use ketone solvents,
however,  because they have learned how to handle the operational problems
these solvents can cause.  To safely use ketone solvents continuous
monitoring of the following factors is recommended:   (1) the C0/C02
concentration,  (2) the outlet adsorber temperature, (3) the steam
                                                    c
flowrate, and  (4) the performance of the air valves.   Generally, ketone
solvents  are used sparingly.
     While all of these operating problems mentioned above seriously
affect  the economics and ease of operation, they can be overcome.  One
pressure  sensitive adhesives manufacturer reports a carbon adsorption
system which has been in operation 11 years.  Replacements and downtime
have been minimal ; carbon life is averaging four years.  Also, they are
achieving an overall control efficiency near 90 percent.
4.1.3   Existing Applications and Performance of Carbon Adsorption
     The  industry survey found eleven carbon adsorption units in opera-
tion in the  pressure sensitive tape and label coating  industry.  Most of
these units were built during  the last 15 years and, therefore, are
representative of relatively modern technology.  Two of these units will
, be  described in detail to illustrate the applicability of carbon adsorp-
tion to PSTL coating.

                                   4-9

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      PSTL Manufacturer A installed a new carbon adsorption system in
 1977 to control  emissions from a 1.5 m.  (60 inch) solvent based adhesive
 coating line.   The solvent used is pure  toluene, and the recovered
 solvent is recycled to the adhesive formulation process.  The line
 produces a single product.
      The unit is designed to handle 15.5 Nm3/sec. (32840 SCFM) of com-
 bined oven exhaust gas only.   The concentration of the combined inlet
 gas is controlled in the range of 20 to  40 percent of the Lower Explosive
 Limit (LEL).   This results in a bed efficiency well  in excess of the 96
 percent guaranteed by the vendor.   This  unit achieves an overall  efficiency
 of near 90 percent as measured by a solvent material  balance.
      Three fixed bed adsorbers are employed (with one adsorbing,  one re-
 generating, and  one cooling  at any given time).   The  adsorption cycle
 lasts about 35 minutes.   Cycle change  is automatically initiated  when
 the combustible  gas monitor  on the adsorber outlet exceeds  the break-
 through  setpoint or by a preset time  interval.   The carbon  beds  are
 regenerated with steam,  and  the combined steam/sol vent vapors  are
 condensed.  The  sol vent,is decanted, metered,  and pumped  to storage.
 The water layer  is  discharged  to a city  operated  treatment  plant.
      Operating problems'and equipment  replacement have  been minimal,
 both on  the unit described above  and on  a  similar unit  in operation  at
 the same  plant for  about  twelve years.   The  new  unit  is  still   using  the
 original  carbon,  and  a  four year carbon  life is  typical  for the older
 unit.  These units  have  consistently operated  at  a profit, and  the
 economic  incentive  is growing with  rapidly escalating  toluene  prices.8
      PSTL Manufacturer B  is also operating a carbon adsorption unit at
 their coating facility, but under much less  favorable circumstances.
 This  unit was installed in 1973 to  treat 5.66 m3/sec.   (12,000 SCFM) of
 solvent laden air from four coating lines.  These lines produce a wide
 variety of custom coated products, and consequently use a variety of
mixed solvents.
     This unit operates successfully from an environmental viewpoint.
The oven exhausts are routed to the adsorbers at about 10 percent LEL.
                                  4-M

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The system has two fixed bed adsorbers switched on a 30 minute cycle.
It easily achieves the 97 percent bed efficiency guaranteed by the manu-
facturer, and the overall efficiency has been measured to be in excess
of 93 percent.  Even the decanter water is caustic treated for pH control
and recycled to boiler feed water.
     On the negative side, this unit has experienced a variety of opera-
ting problems.  Among these are bed fires, freeze damage, upsets due to
power outages, carbon fouling by high boiling materials, and corrosion
in the water system.  Operating experience has, however, minimized the
effects of these problems.
     A more significant  problem, however, is economic.  The reuse of
recovered solvent has not proved possible because of the wide range of
solvents used.  Recovered solvent is currently  sold to a firm which
distills and reblends the solvents.  Although a small recovered solvent
credit is received,  it  is not enough to cover the unit operating ex-
penses.
     These two examples  illustrate  the range of carbon adsorption
applicability to pressure sensitive tape and label coating.  It is an
acceptable emission  control technology for almost all of the industry.
In many cases, however,  other control options may be more attractive
from an economic viewpoint.  The ability to  reuse the recovered solvent
is the key issue in  the economic assessment.  Although there are a
number of potential  operating problems associated with carbon adsorp-
tion, these  problems have been  overcome in many installations.  Where
carbon adsorption  is economically attractive, it presents a good control
option in terms  of  both environmental factors and resource conservation
factors.
4.2   INCINERATION
     The  process  of  incineration  involves  the oxidation  of organic
pollutants  to carbon dioxide and water.   Incineration has been  used
extensively  as an  emission  control  technology in many industries  in-
cluding  PSTL coating.   It  is a  mature and  well  documented technology.
This  section presents  a brief discussion  of  incinerator  operation with
emphasis  on  those  factors  that  affect  its  application to PSTL coating
emissions.
                                     4-11

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 4,2.1  Operating Principles
      The operating principle of incineration is basically just oxidation
 (or burning) of the pollutants.  In thermal  incineration, this is accom-
 plished by exposing the solvent laden air to high temperature (540 to
 820°C or 1000 to 1500°F) and possibly a direct flame for a period of 0 3
                in
 to 0.6 seconds.     The percent of VOC (solvent) destruction as a function
 of temperature has been well  documented.   Figure 4-4 shows the EPA's
 estimates of VOC reduction versus firebox temperatures.11  Also  on this
 figure are data  from existing incinerators on PSTL  manufacturing facilities,
 The agreement is quite good between the EPA  values  and  the test  values.
 Similar results  can be achieved by catalytic incineration at lower
 temperatures (400° to 540°C or 750° to  1000°F).12
      Typical  thermal  and catalytic incinerators are  shown in schematic
 form in Figures  4-5 and 4-6,  respectively.
      The factors important to incinerator design  and  operation include:
         • type and concentration  of VOC,
         •gas  flow rate,
         •preheat  temperature,
         •firebox  temperature,
         •supplemental  fuel rate,
         • residence  time,
         •efficiency  of flame contact,
         • burner type,  and
         •amount of excess  air.
The first  four factors  are  the primary operating variables, and they
determine  the fifth factor, the rate of supplemental  fuel firing.  The
remaining  factors are design parameters and are subject to only minor
variations on a day to day basis.
     Heat exchange equipment could be considered an  optional  accessory
to the incinerator system, but with rising fuel  prices,  it has almost
become a necessity.  Heat recovery equipment is generally divided into
primary and secondary recovery.   Primary heat recovery is defined as the
                                  4-12

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exchange of heat between the hot incinerator effluent and the relatively
cool process waste stream.  Secondary heat recovery is defined as any
further exchange between the incinerator effluent and another process
stream.
     In describing a heat recovery system, the term efficiency is often
used.  This should be the thermodynamic efficiency of the system, or in
other words, it represents the percent of available energy that is re-
covered.  For a single air-to-air heat exchanger, this thermal efficiency
may be approximated by:
                   Exchanger Efficiency =
                                           T3-T2
                                           Tl -T2
where
               T-, = Inlet Temperature - Hot side
               Tp = Inlet Temperature - Cold side
               T- = Outlet Temperature - Cold side
     Primary heat exchanger efficiency (using standard tube and shell
heat exchangers) is approximately 35 to 45 percent.  The overall  heat
transfer coefficient for this heat exchanger is typically about

                    5.7 J/m2 sec °K (1.0 BTU/hr ft2°F).16
     This system is limited to about 45 percent efficiency not by heat
exchanger design, but by safe operating practice.  At 25 percent of the
LEL,xa temperature rise of up to 380°C (680°F) can occur on combustion.
A maximum operating temperature of 820°C (1500°F) is typically specified
to protect the incinerator and the heat exchangers.    This then limits
the incinerator inlet temperature to about 440°C (790°F).  This incin-
erator inlet limitation then limits the potential primary heat recovery
efficiency.  This also minimizes the possibility of auto-ignition of the
waste stream in the primary heat exchanger.  These primary heat recovery
limitations are based on a concentration of VOC at 25 percent of the
LEL.  For lower concentrations, the safe limit for primary heat recovery
increases.  Below 5 percent of the LEL, 100 percent recovery would be
safe (but, of course, technologically impractical).
                                    4-16

-------
     Primary heat recovery in a catalytic incineration system is limited
to a lower temperature by catalyst sintering and deactivation.  The
available heat in the incinerator exhaust is also lower, however,
because of less sensible heat in the low temperature combustion products.
This results in about the same primary heat recovery efficiency as
thermal incineration.
     A novel system of primary heat recovery has been developed using
stoneware beds as the heat transfer medium.  Incinerator exhaust gas
passes through one stoneware bed, and transfers heat to it.  The gas
flow is then cycled such that incinerator inlet gas flows through that
previously heated bed.  The inlet gas is heated to near its ignition
temperature by contact with the hot ceramic bed.  It then enters an
incineration section where it is exposed to a flame.  The combustion
products exit through another stoneware bed and their heat is recovered.
The gases are periodically cycled (by temperature control) from one bed
to the next.
     Heat recovery efficiencies with this system are vendor guaranteed
to 85 percent.  Equipment to achieve 90 percent recovery is available as
an option.  This means that for concentrations above 5 percent of the
LEL, supplemental fuel is required only to fire the pilot burner.
Reductions of 90 to 97 percent in fuel requirements as compared to a
                                                      18
thermal incinerator with no heat recovery are claimed.    Emission
reduction efficiency  is comparable to-other incineration systems.  If
the inlet concentrations are substantially higher than 5 percent LEL,
the system may be equipped with secondary heat recovery equipment.
     Secondary heat exchange recovers waste heat for use in other pro-
cesses in the plant.  This energy may be used for process air heat re-
quirements or for.plant space heating.  In coating facilities, secondary
heat recovery could be used to heat inlet air to the curing ovens.
     The overall heat recovery efficiency represents the total heat re-
covered from the incinerator exhaust stream compared to that which is
available from the stream.  If only primary heat recovery is used with
an incineration unit, then overall heat recovery equals primary heat ex-
changer efficiency.   With primary and secondary heat recovery, the
                                   4-17

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overall  heat recovery efficiency can be calculated by  the  following  re-
lationship to heat exchanger efficiency:
[overall hcac     1  m
[recovery arficiancyj
[primary heat      1
[exchanger efficiencyj
                                        .  /primary heat      \1  [secondary heat     "'
                                          \ exchanger efficiency/ J  [exchanger efficiency'
      Heat  exchanger efficiencies in secondary heat  recovery are  typically
 in  the  50  to 55 percent range.   Assuming a primary heat  recovery  effi-
 ciency  of  35 percent,  this would yield an overall heat  recovery  effici-
 ency  of 70 to 80 percent.   Typical  overall heat transfer  coefficients  in
 the secondary heat exchanger would be about the same as mentioned  earlier,
                          5.7 J/m2 sec °K  (1.0 BTU/hr ft2°F).
      It is possible for the energy recovered from solvent  incineration
 to  provide all  of the  energy needed for the incinerator and the  drying
 oven, with supplemental  fuel  required only for a small pilot burner  to
 prevent flame-out.   This is,  of course, highly dependent on the  concentration
 of  the  VOC in the oven exhaust.  No supplemental  fuel  will be required
 to  incinerate air streams  at 40 percent  LEL or higher, while a  more
 conventional  concentration of 25 percent  LEL will  almost always require
 supplemental  fuel.   The exact break-even point will  vary with solvent
 type  and the desired firebox  temperature.  The maximum percent- LEL is
 normally dictated by the company insuring the oven.   A modern oven with
 LEL measurement meters can safely operate in the range of 50 to  60
 percent LEL.
      It should  be pointed  out that even for lower concentrations where
 some  supplemental  fuel  is  required, additional  heat is available in the
 stack gases  for further heat  exchange.   This is dependent on the availa-
 bility  of  another heat requirement  in the immediate area.   Some  possibil-
 ities for  additional secondary heat recovery would  include space heating
 for the building,  boiler combustion air preheat,  and oven heat for other
 coating lines.   If  the heat in the  incinerator exhaust were used to the
 fullest extent,  a net  energy  savings  over the uncontrolled situation
would result  even if the incinerator requires supplemental fuel.
     A  novel  form of secondary heat recovery is the  use of oxygen-
 depleted incinerator exhaust  gases  directly in  the  curing  oven.   A
 schematic  of  this system is shown  in  Figure 4-7.   In this  system,
                                     4-18

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incinerator exhaust gases containing about two percent oxygen are
recycled to the oven.  Figure 4-8 shows that gases at this oxygen level
are outside the explosive limit, regardless of the VOC concentration.
As can be seen, the lowest oxygen level which will allow explosion is
about 12 to 13 percent, so a large safety margin exists.  This system
uses oven oxygen monitoring equipment which sounds like an alarm when
oxygen concentration increases past four percent and shuts the operation
                                                         on
down when oxygen concentration increases to five percent.
     The oxygen depleted nature of the exhaust gases allows concentra-
tions of solvent in the oven air to be much higher than 25% LEL.
Because explosion cannot occur at low oxygen levels, solvent concentrations
can be allowed to increase considerably.  Much less dilution air is
required, so fuel costs are significantly reduced.  In conventional
ovens, as much as SO percent of the heat requirement is needed to heat
the dilution air.
     The admission of combustion air to the incinerator is controlled
and limited to only that amount required to maintain stoichiometric
combustion.  The exhaust gases leaving the incinerator are at about ,
870°C  (1600°F).21  This stream is cooled to the desired temperature by
heat exchange and returned to the oven.  A small portion of the gases
exiting the incinerator  (equal to the combustion air volume and oven
filtration) is routed to the atmosphere.
     The overall heat recovery of this system is in the range of 85 to
90 percent, and results in the use of 70 to 90 percent less energy than
a conventional oven.  It should be stressed that this represents a
reduction of process heat requirements, not just incinerator supplemental
fuel.  Here the process drying ovens and the incinerator are combined
into a single system.
     The emission control of the system is comparable to or better than
conventional incineration.  Testing on facilities in a closely related
industry has shown a maximum VOC concentration of 50 parts per million
by volume  (ppmv) in the system exhaust.  This exhaust rate is lower than
on a conventional system because of the reduction in dilution air,
resulting in very low emissions.
                                    4-20

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      The inert air system is also offered as a combined incineration and
 carbon adosorption system.   The highly concentrated VOC gases found in
 inert systems  are ideal  candidates for recovery by carbon adsorption.
 The  carbon adsorber is  run  in-line with the incinerator with  the  exit
 gases from the carbon beds  being  fed  to the incinerator.   This  type of
 arrangement will  allow  maximum solvent recovery and help minimize heat
 losses to the  atmosphere.
 4.2.2  Operating  Problems
       While incinerators  are simple,  reliable,  and not  prone  to extensive
 operating problems,  some  of the potential  problem  areas include:
        •low combustion  efficiency of particulates,
        • fouling  of  heat  transfer surfaces,
        • corrosion,
        • catalyst poisoning,
        • secondary emissions,  and
        •high  operating cost with low LEL  gas  streams.
      The process  waste gas  from adhesive  drying  ovens can  potentially
 contain  non-volatile  organic  particulates.   These  may.include entrained
 particles of adhesive resins,  additives,  release compounds, etc.  An    '
 incinerator designed  to combust volatile  organics  may not  have  suffi-
 cient residence time  to destroy these  particulates.  This  is an insig-
 nificant problem  from an environmental  standpoint,  since the emission
 rate  of  these  particulates  is  usually  very low.
      A related problem is the  fouling  of heat transfer  surfaces by
 deposition  of  these particulates,  as well as others.  Since the pot-
 ential for  this fouling does  exist, regular monitoring  of  the heat
 transfer coefficients and cleaning should be done as required.
     Most solvents used in  the  pressure sensitive adhesives industry
will   not  cause corrosion problems  on combustion.  However, chlorinated
          *
 solvents  (which are seldom  used) will   produce highly corrosive com-
 pounds.   Firing supplemental fuels with high sulfur content can also
 produce a corrosive atmosphere.
     There are more potential problems with catalytic incineration than
with thermal.  The most serious of these problems is catalyst poisoning
                                    4-22

-------
or deactivation.  Some common catalyst poisons include phosphorous,
                                                         22
bismuth, arsenic, antimony, mercury, lead, zinc, and tin.    Caution
should be used in a catalytic incineration system concerning the use of
phosphate metal cleaning compounds and galvanized ductwork.  Also, cer-
tain silicone  release compounds are prepared using an organometallic
complex which  could potentially be a catalyst poison.
     A second,  problem in catalytic incineration is one of particulate
matter.  Combustion efficiency is reduced by inhibited contact between
the catalyst active sites and the pollutant gases due to particulate
buildup on the catalyst bed.  Also, pressure drop is increased which
increases utility requirements of the blower.
     Any combustion source  can potentially cause the emissions of  un-   -
burned hydrocarbons, carbon monoxide, and nitrogen oxides.  The emissioh
levels of these  secondary pollutants should be very low considering that
:an  incinerator is designed  specifically with complete combustion as the
objective.  The  temperatures  typically encountered are not high enough
to  promote significant production of nitrogen oxides.  Therefore the
magnitude of any  secondary  pollutants from incineration is far out
weighed by the benefits of  VOC reduction.
     Low LEL gases  can cause  increased operating costs for incineration
units.  Low LEL  gases  result  from air leakage into the gas ducting
systems, the dilution  of oven gases with  other process gases, or poor
turndown in process  ovens.  Air leakage can be minimized by proper
maintenance of ducts  and ovens.  The dilution of solvent-laden, oven
gases  occurs when low  LEL gas streams, such as  those from  fugitive
control  equipment or curing oven zones, are combined directly with the
drying oven gases.   This problem can  be minimized  through  efficient oven
design where  low LEL  gases  are used  as makeup air  to solvent drying
zones  in  the  oven.   Probably  the greatest cause  of low LEL gases  is the
 inability  of  drying ovens  to  turndown ,burners,  recirculation air,  and
exhaust gases  to meet a  wide  range  of  solvent loadings.   Equipment
manufacturers  report the  oven burners  generally  have a  30  to 1  turn-down
                                                  23
 ratio  while  air flows can,be  turned  down  10  to  1.    Special designs  can
 be made where  turndown is   increased  by shutting  off  oven zones.
                                     4-23

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      The  incineration  unit  operating  costs  are  greatly  increased when
 controls  are  used  on low  LEL  gas  streams.   The  increased  costs  come  from
 added fuel  costs.   As  previously  mentioned,  systems  operating at 40
 percent LEL can  maintain  high incineration  temperatures with no ad-
 ditional  fuels.  However, many  operations coat  a wide variety of coat-
 ings  with different solvent loadings.   The  result  is varied solvent
 concentrations in  the  oven  exhaust  gases.   As a hypothetical example,
 one system coats three different  coatings which .result  in 10, 25, and 40
 percent of the LEL  in  the drying  oven effluent  gases.   If the effluent
 gas flowrate  is  the same  in all cases,  11.2  Nm3/sec  (25,000 scfm); the
 resulting incinerator  fuel  requirements are  no  added fuel for the 40
 percent LEL case,  8.0  liter/minute  (2.1 gallon/minute) of number 2 fuel
 oil for the 25 percent LEL  case and 20.5 liter/minute (3.3 gallon/
 minute) for the 10  percent  LEL case.  If the plant operates 2,000 hours
 per year  for  each  coating,  the added annual   fuel costs are zero for the
 40 percent LEL case, $189,000 for the 25 percent LEL case, and  $297,000
 for the 10 percent  LEL case (for  fuel at 75  cents per gallon).
 4.2.3 Existing Applications  and  Performance of Incineration
      The  industry  survey  has  found  incinerators in use to control  emis-
 sions from PSTL coating lines.  Three of these  will be described in
 detail to illustrate the  range of sophistication in incinerator design
 and operation.
      The  fume incinerator operated  by PSTL Manufacturer C is a good
 example of basic incineration with  no attempt at heat recovery.   This
 unit  treats the solvent laden air stream from the exhaust of an adhesive
 coating line.  This stream  is about 3.3 m3/sec.  (7000 SCFM) at a concen-
 tration in excess of 40 percent LEL.  With the  firebox at 760°C  (1400°F),
 this  unit  achieves  a destruction  efficiency of about 97.5 percent.   No
 estimate  of overall efficiency was available.  This unit did require
 supplemental fuel,   but the  firing rate was not specified.24
      This  unit represents a baseline application of incineration since
 no facilities are provided  for heat recovery.   It should be noted  that
Avery  International has experimented with heat  recovery  on a similar
                                 4-24

-------
unit, and rejected it because of severe fouling problems.  The result is
a unit that meets all environmental requirements but that is expensive
to operate.  The high VOC concentrations in the oven exhaust will help
to minimize supplemental fuel requirements.
     The incinerator used by PSTL Manufacturer D is slightly more soph-
isticated by virtue of the use of primary heat recovery.  This unit
treats a stream of exhaust gases from several  coating lines.  The organics
are mainly toluene, xylenes, and ethyl acetate.  The incinerator is de-
                      o
signed to handle 3.8 m /second  (8000 scfm) of 40 percent LEL exhaust gas
with a 0.6 second residence time and firebox temperature of 788°C (1450°F),
This results in a guaranteed efficiency of 90 percent, but no test data
was available to establish the exact efficiency.
                                                 •"
     This incinerator is equipped with a two-pass preheater exchanger
that would heat the oven exhaust from about 94°C (200°F) to a design
value of 51 7°C  (963°F).  This would result in an energy savings of 6.1
GJ/hr  (5.8 X 106 BTU/hr).  Unfortunately, that savings is seldom fully
realized because of severe fouling problems.  Many of the coated products
produced at this facility are silicone based.   Carry-over of silicones
to the incinerator results in the deposition of a silica scale on the
hot side of the preheat exchanger.  This requires a one day downtime
every three weeks for cleaning and has resulted in a planned replacement
of the preheater after less than five years service.  The new preheater
will be designed to  facilitate cleaning, thus minimizing downtime and
                          25
maintenance labor charges.
     The incinerator operated by PSTL Manufacturer E is a good example
of secondary heat recovery..  This unit treats a 3.3 m /sec  (7000 SCFM)
stream of 20 to 40 percent LEL exhaust gas from a release coating oven.
The solvent used is  a mixture of alcohols.  The incinerator has a
destruction efficiency  of better than 85 percent at a 650°C  (1200°F)
firebox temperature.
     This unit  is equipped for primary and secondary heat recovery.   In
addition to exhaust  gas preheat, the  incinerator effluent is used to
heat the release coating oven and for space heating in the winter.  The
                                   4-25

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 incinerator requires supplemental  fuel  to achieve the high firebox
 temperature,  but a net fuel  savings is  achieved after accounting for
 oven  and space heat recovery.26
 4.3   VAPOR COLLECTION SYSTEMS
      The design of the vapor collection system is very important to the
 overall  emission reduction  from a  given facility.   Control  equipment can
 only  recover  or destroy those  emissions which  are captured and routed to
 it.   Fugitive emissions escape directly.   Only proper collection system
 design can minimize  these fugitive  emissions.
      An  efficient  collection system should maximize  the  capture  of
 fugitive emissions while minimizing the capture of dilution  air.   Since
 these are  opposing functions,  there should be  an optimum degree  of
 collection.   This  section will  identify those  factors  important  in
 collection system  design, and  qualitatively address  the  optimum  degree
 of collection.
      The factors important to  the efficiency of a  collection system
 include:
         • degree of  turbulence,
         • capture  velocity,
         • selectivity  of collection, and
         • degree of  containment.
Although these  factors  are interdependent,  each  one will be discussed
separately.
      It  is obvious that turbulence  in the  air around a fugitive emission
source will make effective collection much  more  difficult.  Sources of
turbulence that should be recognized and minimized  (within operating
constraints) include:
         • thermal air currents,
         • machinery motion,
         • material  motion,
         • operator movements,
         • room air currents,  and
         • spot cooling and  heating  of equipment.
                                    4-26

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     The velocity necessary to collect contaminated air and draw it Into
an exhaust hood is called the capture velocity.  At capture velocity,
the inflow of air to the hood is sufficient to overcome the effects of
turbulence and thereby minimize the escape of contaminated air.  Empir-
ical testing of operating systems has been used to develop the guidelines
                                            27
for capture velocity presented in Table 4-1.
     The selectivity of a collection system is as important as its over-
all efficiency.  Selectivity describes the abil ity of the collection
system to capture pollutants at their highest concentration by minimizing
the inflow of clean air.  A highly selective system will  require less
power to,achieve a given collection efficiency, and the higher concentra-
tions can have a great benefit in the subsequent treatment of the  collected
vapors.
     One method of improving selectivity  is the use of flanges in  hood
design to minimize air flow from areas of low  concentration.  This
                                                           28
technique can  reduce dilution air by as much as 25 percent.
     Flanges  can  also lower the  pressure  drop  at the  hood by altering
its coefficient of entry  (C  ).   The  value of C  is a  measure of  the
                           C                   C
degree of turbulence caused by the  shape  of the opening.  A perfect  hood
with no  turbulence losses  would  have a C  equal to one.   Table 4-2 gives
                                                 29
coefficients  of  entry  for  selected  hood  openings.
     The final  and potentially the  most  important  factor  is  the  degree
of containment that  the  collection  system has  around  the  source  of emis-
sions.   Ideally  that  source  should  be  isolated in  an  air  tight  container
with  an  exhaust into  the collection system.  A practical  example that
comes  close to this  ideal  would  be  an  automatic  paint spray  booth.
Operating  constraints  require  a  higher circulation through  the  spray
booth  than  would be  optimal  for collection  selectivity,  but  the  booth
does  provide a total  containment of the  pollutants.
      The area between  the  coating  head and  the oven  may  be  difficult to
 totally contain because of the need for operator access.   Several  types
 of hoods have been used with mixed results  to  collect fugitive emissions
 from the coating head area.   One of the most common  is the canopy hood.
                                    4-27

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             Table 4-1.   RANGE  OF  CAPTURE  VELOCITIES
Condition of dispersion of
contaminant
Capture velocity m/s (fpm)
Released with little velocity
into quiet air

Released at low velocity into
moderately still air

Active generation into zone of
rapid air motion

Released at high initial velocity
into zone of very rapid air motion
.25 - .51 (50-100)



.51 - 1.02 (100-200)


1.02 - 2.54 (200-500)


2.54 - 10.2 (500-2000)
                                4-28

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Table 4-2.   COEFFICIENTS OF ENTRY FOR SELECTED HOOD OPENINGS
    Hood Type
Description
                             PLAIN OPENING
                       .72
                            FLANGED OPENING
                       .82
    r
                             BELL MOUTH  INLET
                        .98
                           4-29

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 This  is  a  hood  whose opening  is about the same shape as the exposed web
 and is suspended  at 0.3  to 1.5 meters (1.0 to 4.5 feet) above the web.
 This  large  opening  would require a tremendous flow rate to achieve good
 capture  velocities,  but  this  can be improved by blanking off most of the
 center section.   The large distance from hood to web makes it easy for
 turbulence  to scatter some of the fugitive emissions.   This hood is
 really effective  only for solvent vapors that are considerably lighter
 than  air.
      Several alternate hood designs are  available for vapors heavier
 than  or  about the same specific gravity  as air.   The first of these is
 the floor sweep,  which,  as the name implies,  is  a hood that takes  suction
 near  the source at  floor level.   Here again the  web  to hood distance is
 too large for very  efficient  collection.   The slotted  hood design  remedies
 that.  Here a slotted duct is  run along  each  edge of the exposed web and
 draws air across  the web into  the hood.30  An additional  VOC capture
 device is the vacuum belt,  which  draws air down  through  the web  to a
 hood  underneath the  web  transport mechanism.   In  both  the  slotted  duct
 and vacuum blanket  controls,  the  captured VOC can be  routed back into
 the drying ovens.
     Much of this discussion  of hood  efficiency  has  centered on  selec-
 tivity,  collecting  fugitive emissions  at  the  highest possible  concen-
 tration.  This is very important  if the  collected streams  are  routed
 directly to a control  device,  but several  coaters  are  using  what appears
 to be a  better alternative.  They are  using the  air  from  the  hoods  as
 the combustion air  for the  drying  ovens.   By  this  method,  some of  the
 collected fugitive emissions may  be  consumed  in  the  oven  burner.   Those
 not consumed exit from the  ovens  to  the  control device without introducing
 any additional  dilution  air.   No  increase  in  the  size of the control
 device is necessary  because no  additional  dilution air was  introduced.
This technique is also applicable  to ovens  using  indirect  heat sources
 such as steam or electricity.
     There are limitations on  this option  as  well.  The amount of makeup
air required by the  oven may be too low to  provide a high enough capture
velocity for an extensive collection system.  Oven burners currently
                                    4-30

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using natural  draft induction for combustion air could encounter this
problem.  Such burners would require the addition of a blower to success-
fully implement the fugitive collection system.  Potential fluctuations
in the VOC concentration of the collected gas also limits the degree to
which the hood gases can be used as makeup air.  Variations in oven
temperature (caused by concentration fluctuations) can affect the
overall  drying operations of the oven.  A sophisticated burner control
system,  equipped with concentration monitors, would be required to
compensate for any temperature anomalies.  Despite these operational
problems, this option appears to be one of the most promising methods of
fugitive emission control.
     One PSTL manufacturer has extended this concept to include total
containment.  The coating lines are enclosed in a room which is main-
tained at a slight vacuum by drawing all oven combustion air from
inside the room.  A booster blower is used to move the oven exhausts to
the carbon adsorption unit, resulting in the ovens running at a slight
negative pressure with respect to the coating room.  The  result is  a
totally contained collection system that can approach 100 percent
collection efficiency without diluting the solvent-laden air stream to
                      31
the control equipment.
     In contrast to totally enclosing the coating line  (or coating
room), some coating firms only enclose their coater to contain fugitive
emissions.  This study identified and examined two such firms,,  One of
these companies is involved in coil coating operations and the other  in
zinc oxide paper coating.  Each operation uses a totally enclosed
structure around their coater.  The structure itself contains the
majority of escaping  fugitives.  Fans and hoods inside the enclosure are
used to vent  the fugitive emissions  (trapped by the structure) to the
ovens and from there  to a control device.  In both of these cases
                                     32 33
control was achieved  by incineration.   '
     The enclosures at these two plants presented no problems to the
operation of  the coating  lines.  In addition to capturing the fugitives,
the  enclosure also acts as a safety mechanism.  It minimizes the pot-
                                    4-31

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ential  for explosions and other hydrocarbon-related work  area  problems.
Both operators expressed satisfaction with the  enclosure  method.
Through proper technology transfer,  PSTL coaters  should be  able to
capture their fugitive emissions in  a similar manner.
                                  4-32

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4.4  REFERENCES
 1.  Breed, L.W.   Report for Pressure Sensitive  Adhesives  -  3M,
     Saint Paul,  Minnesota.   Midwest Research  Institute.   Kansas City,
     Missouri.   EPA Contract No.  58-02-1399.   October 15,  1976.
2.   Harris, G.E.  Trip Report for Pressure Sensitive Adhesives -
     Anchor Continental  in Columbia, South Carolina.   Radian Corpora-
     tion.  Austin, Texas.  July  27, 1978.
3.   Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
     Adhesives  Research in Glen Rock, PA.   Radian  Corporation.  Durham,
     North Carolina.   February 16, 1979.
4.   Letter and attachments from  Schwab,  R.F., Allied Chemical Cor-
     poration,  Morris town, N.J.,  to J. Farmer  of U.S.  Environmental
     Protection Agency, December  27, 1979
5.   Ostojic, N.   Evaluation of the Impact of  the  Proposed SIP for
     Massachusetts on Paper Coating Industry.  TRC,  Wethersfield,
     Connecticut.  March 7, 1979.    (Appendix)
6.   Chapmen, M.J. and D.L. Field, Lessons from  Carbon Bed Adsorption
     Losses.  Scott Graphics, Inc. South  Hadley, Mass.  1978.
7.   Harris, G.E.  Trip Report for Pressure Sensitive Adhesives -
     Shuford Mills in Hickory, N.C.  Radian Corporation.   Austin,  Texas,
     July 28, 1978.
8.   Harris, G.E.  Trip Report for Pressure Sensitive Adhesives -
     Manufacturer A.   Radian Corporation.   Austins Texas.   (Docket
     Confidential File).
9.   Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
     Manufacturer B.   Radian Corporation.   Durham, N.C.   (Docket
     Confidential File).
10.  Control of Volatile Organic  Emissions from  Existing Stationary
     Sources - Volume 1: Control  Methods  for Surface Coating Operations.
     U.S. Environmental Protection Agency.  Research Triangle Park,  N.C,
     EPA-450/2-76-028.  November 1976.  p. 39.
11.  Reference 10, p. 42.
12.  Reference 10, p. 51.
                                    4-33

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 13.  Sidlow, A.F.  Source Test Report Conducted at Fasson Products,
     Division of Avery Corporation.  Cucamonga, California.  San
     Bernardino County Air Pollution Control District.  San Bernardino,
     California.   Engineering Evaluation Report 72-5.  January 26, 1972.
 14.  Hilner, R., W.L. Oaks, and S. Banerjee.  Test Conducted at Avery
     Label Co.  1616 South California Avenue, Monrovia, California.
     Air  Pollution Control District.  Los Angeles, California.   Source
     Test Section Report No. C-2236.  March 18, 1975.  (Issued May 30,
     1975).
 15.  Milner, R. and Y. Fushimi.  Test Conducted at Avery Label  Co.
     1616 South California Avenue, Monrovia, California.   Air Pollution
     Control District.  Los Angeles, California.  Source Test Section
     Report No. C-2273.  August 20, 1975.   (Issued November 20, 1975).
 16.  Perry, R.H. and C.H. Chilton  (Editors.  Chemical Engineer's
     Handbook (fifth Edition).  McGraw-Hill Book Company,  Inc.
     New  York, NY.  1973.  p.  9-10.
 17.  Reference 10, p. 44.
 18.  Reeco-Regenerative Environmental  Equipment Co.,  Inc.   Vendor
     Information.
19.  Report of Fuel Requirements,  Capital Cost and Operating Expense
     for Catalytic and Thermal  Afterburners.  CE Air  Preheater, Stanford,
     Connecticut.   EPA-450/3-76-031.   September 1976.  p.  241.
20.  Grenfell, T.N.  What's New in Oven Designs?  Inertair Systems.
     (Presented at Technical Meeting on Water-Based Systems.  Sponsored
     by the Pressure Sensitive Tape Council.  Chicago,  111.   June 21-22,
     1978.) pp.  138-149.
21.  Ross Inertair Oven Systems.   Reduce Fuel  Consumption  by Up to
     90 Percent.   Midland-Ross Corp.   1977.
22,  Reference 10,  p.  55.
23.  Telecon.   Albert,  Bob,  Black-Clawson (Fulton,  New  York)  with
     Nelson,  T.P.,  Radian Corporation.   August  9,  1979.  Discussion
     on oven  turndown  ratios.
                                    4-34

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24.  Contact Report for Pressure Sensitive  Adhesives  -  Manufacturer C.
     Radian Corporation.   Austin, Texas.   (Docket Confidential  File).
25',  Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
     Manufacturer D.   Radian Corporation.   Durham,  North  Carolina.
     (Docket Confidential  File).
26.  Harris, G.E.  Trip Report for Pressure Sensitive Adhesives -
     Manufacturer E.   Radian Corporation.   Austin,  Texas.   (Docket  Confidential
     File).
27.  Industrial  Ventilation, A Manual  of  Recommended  Practice  (14th
     Edition).   American Conference of Governmental  Industrial
     Hygienists.  Committee on Industrial Ventilation.  Lansing,
     Michigan.   1976.   p.  4-5.
28.  Reference   27, p. 4-1.
29.  Reference   27, p. 4-12.
30.  Telecon.  North,  Charles, Avery-Fasson (Painesville, Ohio) with
     Nelson, Thomas,  Radian Corporation.  May  2,  1979.  Discussion  on
     VOC controls used at Fasson.
31.  Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
     Adhesives  Research in Glen Rock,  PA.   Radian Corporation,
     Durham, North Carolina.  February 16,  1979.
32.  Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
     Precoat Metals in St. Louis, MO.   Radian  Corporation.  Durham,
     North Carolina.   August 28, 1979.
33..  Brooks, G.W.  Trip Report for Pressure Sensitive Adhesives -
     E.J. Gaisser, Inc.,  in Stamford,  CT.   Radian Corporation.  Durham,
     North Carolina.   September 12, 1979.
                                   4-35

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                 5. '•  MODIFICATION AND RECONSTRUCTION

     While New Source Performance Standards  (NSPS) are intended pri-
marily for newly constructed facilities, existing sources can become
subject to an NSPS through either "modification" or "reconstruction."
These terms are defined in detail in the Federal Register (40 CFR 60.14
and 40 CFR 60.15).  A modification is any change'in an existing
facility that results in increased emissions.  A reconstruction is any
change in an existing facility to the extent that the fixed capital  cost
of the new components is 50 percent or more of the fixed capital cost of a
comparable entirely new facility.   To qualify as a reconstruction, the
Administrator must demonstrate that it is technologically and econom-
ically feasible for the facility to reduce emissions to the level  of the
NSPS.  Examples of possible modification and reconstruction in  the
pressure sensitive tapes and labels  (PSTL) industry are also discussed in
this section.
5.1  MODIFICATIONS
     A modification is defined as any physical or operation change to an
existing facility  that causes an increase in emissions.  An affected
facility is defined here as a single coating line.  Whether or  not an
increase in emissions has  occurred can be determined by:
         ® Application of emission factors from AP-42 or other
          emission  factors determined to be  satisfactory by the
          Administrator.   These  factors must demonstrate that
          emissions "clearly increase" before an existing source
          is  considered to be modified.

         ® If  emission factors are unavailable or do not give a
          clear indication of emission changes, material balances,
          monitoring, and/or emission testing may be  required.
          This  procedure  requires three test  runs before modifi-
          cation  and  three after, with all operating  parameters
          held  as  constant as possible.
                                 5-1

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      A number of exemptions and exceptions to the modification provisions
 are listed.  It is stated in 40 CFR 60.14 that the addition or modifica-
 tion of one facility at a source will  not cause other unaffected facilities
 at that source to be subject to NSPS provisions.   Other provisions
 include:
         • routine maintenance,  repair and replacement,
         • production increases  achieved without any capital
         • expenditure,
         • production increases  resulting from an  increase  in the
         • hours of operation,
         • addition or replacement of equipment for emission
         • control  (as long  as  the replacement does not  increase
         • emissions), and
         • relocation or change  of ownership  of an  existing  facility.
      The  following paragraphs will  list potential  modifications  in the
 pressure  sensitive tape and label  industry,  and how they relate  to the
 proposed  NSPS.
      The  productivity of a  coating-line used  to produce pressure  sen-
 sitive  adhesive products is  determined  by  the web  width, the line  speed,
 the  hours  of operation,  and  the  efficiency of scheduling.  This  industry
 has  historically  experienced a  steady growth.   Production increases to
 accommodate that  growth  can  be accomplished  by two  methods.  In  the
 first method,  the  operation  of the  existing  equipment is pushed  to  its
 capacity  by debottlenecking, more efficient  scheduling, and  increasing
 the  hours  of operation.   When no more capacity  can  be achieved in  this
 manner, new coating  lines are built  or  existing lines are upgraded.
Most  of the production  increases  (and the associated emission increases)
 from  method one activity  are specifically exempted  from NSPS compliance.
Most  of the equipment modifications  in method  two  involve totally new
 sources, or investments  so large as  to qualify as  reconstruction.
Specific examples  are given below, with emphasis on the few cases where
 the modification clause might apply.
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5.1.1   Changes in Web Width
     Changes in the width of web (backing material  or substrate for the
tape or label) would increase both production and emissions.   The maxi-
mum web width that any given coating line can handle is an integral  part
of the basic design of the line.  This cannot be increased without in-
stalling essentially all  new equipment.   If an increase in web width was
desired, it would normally be more attractive to build a totally new
line than to modify an existing line.  If such a modification were to be
made, the cost would very likely be high enough to fall under the
reconstruction provisions.
5.1.2  Changes in Line Speed
     An increase in line speed is the most likely change that could con-
                       1  ?
stitute a modification.  '   The maximum line speed for a given facility
depends on both the basic design of the coating line and on the speci-
fications for each product coated.  The factors which might constitute a
line speed limitation  include:
        • a limitation on the available power and/or speed of the
        '  motors which drive the web,
        • drying limitations based either on the amount of heat
          available or on residence time in the oven,
        • a limitation on oven circulation which causes the
          Lower Explosive Limit  (LEL) to be exceeded,
        • a limitation on the maximum speed at which a smooth
          coating can  be achieved with a given coating head/type
          of  coating combination, and
        • a limitation due to fragility of the web.
     For a given coating line, the maximum line speed will differ be-
tween  products, and the  limiting equipment factor may differ also.  Any
equipment changes  (such  as larger/faster drive motors, higher capacity
burners for the ovens, higher capacity oven circulating blowers, LEL
sensors with  alarm/shutdown  capacity, or a change in coating head)
which  might be made to increase  line speed, would require capital ex-
penditure and  result  in  increased emissions.  As such, they would be
modifications  which would  require that facility to comply with NSPS.
                                   5-3

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     Many  changes  in  product specifications  (such as type of backing,
 type of  coating, coat weight) could alleviate an equipment limitation
 resulting  in  a  production  increase.   Some  combinations  of these changes
 could  also result  in  increased emissions.  They  would not be termed
 modifications,  however,  since no  capital expenditure would be required.
 5.1.3  Changes  in  the Hours  Available for  Operation  and/or
       Scheduling  Efficiency
     A typical  pressure  sensitive coating  plant  runs coating operations
 from 120 to 140 hours per  week.   Significant  increases  in production and
 emissions  could result from  extending the  working  hours,  but this  is
 specifically  exempted under  the modification  clause.
     Even  during the  hours of operation, a coating line must often be
 shut down  or  slowed down.  This might be done  to remove a finished roll
 of product and  add a  fresh roll of backing, to splice a broken  web, or
 to make  an adjustment at the coating  head.  Each time a change  is made
 in the type of  product to  be coated  on a given line,  time must  be
 allowed  to clean up the equipment and to reset the controls  to  the new
 product  specifications.  Any given  pressure sensitive product potenti-
 ally receives several  different coats  in its  production  (adhesive,
 release  coat, primer,  pigment, and  saturating  agent).  All  of these
 factors  indicate that careful  scheduling can  increase production which
will result in  increased emissions.   This  process would not  be  a mod-
 ification  because it  requires  no  capital  expenditures.
 5.2  RECONSTRUCTION
     An  existing facility is  subject  to NSPS upon reconstruction regard-
less of  any change in  the rate of emissions.    Reconstruction  is defined
as the replacement of  components  of an existing  facility  to  the extent
that the fixed  capital cost  of new components  is greater  than 50 percent
of the fixed capital   cost of a comparable entirely new facility.  To
qualify  as a reconstruction,  the Administrator must  demonstrate that it
is technologically and economically feasible  for the  facility to reduce
to the level  of the NSPS.  Fixed  capital  cost  is defined as  the cost of
all  depreciable components.  If an owner or operator  intends a modifi-
                                    5-4

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cation whose budget might cause it to be termed a reconstruction, he
should notify the EPA at least 60 days before construction begins.
Based on the information in that notification, a judgment as to the
applicability of NSPS will  be made considering the following factors:
        • a fixed capital cost of the modifications planned versus
          the fixed capital cost of a comparable entirely new facility,
        • the estimated life of the revisions relative to that
          of a comparable entirely new facility,
        • the extent to which the components being replaced cause
          or contribute to the emissions from the facility, and
        • any economic or technical limitations in complying with
          applicable standards of performance.
     Many of the changes mentioned in the section on modifications woul d
likely be high enough in cost to qualify under reconstruction.  Any
change of equipment to increase web width would require such massive
equipment replacement that it would certainly be termed construction.
It is doubtful that this would occur, however, since the plant could
build a totally new line almost as cheaply and still retain the capacity
of the old line.  Only in  the case of a severe space limitation,  or  if
the existing line were totally inoperable, would this type of recon-
struction be considered.
     Several of the equipment changes to increase line speed could con-
ceivably be costly enough  to be termed a reconstruction.  This would be,
most likely  in the case  of a severe drying limitation which might
require the addition of  one or more oven zones.  Many of the smaller
investment options  (such as higher capacity  burners, larger circulating
blowers, high speed drive  system, or  instrumentation to allow operation
at a  higher  percentage of  the LEL) would not meet the guideline of
greater than 50 percent  of new construction  cost.  Combinations of these
items  could  conceivably  be costly  enough to  be termed reconstructions.
                                   5-5

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5.3  REFERENCES
     Harris, G.E.  Trip Report for Pressure Sensitive Tapes and Labels-
     Anchor Continental in Columbia,  SC.   Radian Corporation,  Austin*
     Texas.  July 27,  1978.

     Harris, G.E.  Trip Report for Pressure Sensitive Tapes and Labels-
     Snuford Mills in  Hickory, NC.  Radian Corporation,  Austin, Texas.
     July 28, 1978.
                                5-6

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           6.  MODEL PLANTS AND REGULATORY ALTERNATIVES

     The main purpose of this chapter of the BID is to define the model
plants and the regulatory alternatives that can be applied to them.  For
this study, a facility is designated as a single coating line.  A single
coating line consists of a coating head and thermal drying oven and the
area in between.  Other pieces of equipment such as wind and unwind
stations may be included but are not VOC emission sources.  For systems
which have more than one coating line in series, each coating line will
be considered as a single facility.  The model  plants will consist of
various types and sizes of single coating lines or lines with two or
more coating operations in series.  The regulatory alternatives represent
various courses of action the EPA could take towards controlling the VOC
emissions from tapes and labels manufacturing facilities.  Because the
alternatives apply to release coating and adhesive coating operations,
both types of technology are examined.  The release coating operations
are represented by silicone-sol vent systems, while the adhesives systems
would be typical of  rubber resin-solvent or acrylic-solvent systems.
The model plants derived in this Chapter are used later  in Chapters 7
and 8 to determine ultimate environmental, economic, and energy impacts
associated with applications of regulatory alternatives.
     No model plants were specifically developed for solvent-based
precoat coating lines.  Because precoat lines are very similar physically
and operationally to silicone  release coating lines, a complete precoat
model plant  study would have been essentially a duplication of effort
and information.  Silicone release and precoat lines have similar
coating weights  (about 0.23 Kg per ream) and similar coating  formu-
lations  (5-10 weight percent solids and 90-95 weight percent  solvent).
The technical model  plant assessment and the economic analysis  (Chapter
8) for  silicone  release lines would generally be true for precoat
coating lines.
                                     6-1

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 6.1  MODEL  PLANTS
     A  complete  characterization  of an  industry  as  complex  as  the  pres-
 sure sensitive tape  and  label  coating  industry would  require many  cases.
 However,  the  models  presented  here  are  an  attempt to  find a limited, yet
 workable  and  meaningful  set  of cases.   This  resulted  in  a case  matrix
 keyed to  the  following factors:
    • web width  (3 variations),
    • line  speed  (3  variations),
    • solvent type  (2 variations),
    • streams controlled  (2  variations), and
    • type  of coating  (2  variations).
 The uniform application  of all  these factors  results  in  a total of 72
 cases.  By  judiciously trimming out meaningless  cases and emphasizing
 those cases that illustrate  some  important points,  the matrix was reduced
 to 12 model plants without significant  loss in meaningful content.  The
 next section  describes in more  detail each of the parameters.
 6.1.1   Design Parameters
     The  major design parameter for a tape or label  coating facility is
 production  rate.  The production  rate is dependent  on the line width and
 the line  speed.  Line widths are  based  on widths standard to the tape
 and label  industry with 0.381 m (15 inch), 0.61  m (24 inch), 0.91  m (36
 inch), 1.22 m (48 inch), 1.52 m (60 inch), and 1.83 m (72 inch) coating
 facilities  being typical  nominal  values.  For this  study the 0.61  m (24
 inch), 0.91 m (36 inch), and 1.52 m  (60 inch) coaters were chosen to be
 representative as small, medium,  and large width coaters, respectively.
 From observations of industry, the 60-inch coater is a very common large
 coater.
     Line speeds in the industry  vary quite substantially.   Speeds from
less than 0.05 meters per second  (10 feet per minute) up to 5.1  meters
per second  0000 feet per minute)  can be found.   In  solvent-based  systems
line speeds are generally determined by the oven design.   The ovens are
designed to handle only a certain  amount of solvent  due  to lower ex-
plosive  limit (LEL) requirements.   Once the LEL  levels have  reached a
                                   6-2

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certain maximum level, the solvent removal, and thus the line speed, has
been maximized.  The line speeds used in the model  plants study are
assumed to be 0.13 m/sec  (25 fpm), 0.3 m/sec (53 fpm), and 1.2 m/sec
(230 fpm).  These speeds are based on an average production speed which
includes shutdowns, startups, and changeovers.   For this study, the fast
speed will be applied to the large-sized line,  the moderate speed to the
medium-sized line, and the slow speed to the small-sized line.  This
situation is representative of a large-sized line producing a high-
volume product, while the medium and small-sized lines are more represen-
tative of the short run specialty coater operations.
     Two solvent systems were chosen to roughly represent the wide  range
of solvents used in the industry.  Toluene was chosen as the most common
example of a solvent  system using a single component solvent with a
relatively high price.  This type of system should strongly favor carbon
adsorption.  Varnish  makers and painters  (VM&P) naphtha was chosen  as an
example of a less expensive solvent, such  as is commonly used  in compli-
ance with several SIP's  in  regard to photochemical  reactivity.  This
type of solvent may tend  to favor incineration, since its market price
is only slightly  higher  than its  fuel value.   The naphtha solvent has a
LEL value of 0.81 volume  percent while  toluene  is 1.27 volume  percent.
Since  it  is assumed that  the ovens operate at  25 percent LEL  in all
cases,  the amount of  dilution air will  vary with solvent.  This variance
has a  significant effect  on the size of control equipment.
     The  model  plant  control strategies offer  two methods for controlling
VOC emissions  from  coating  operations.  The first method  is to  control
oven emissions  only.   In  this case the  gases normally emitted  directly
to  the atmosphere  from  the  ovens  would  be  routed  through  a control
device.   The  second method  is to  attempt  to capture fugitive  VOC emissions
around the  coating  head  and route  those emissions with  the oven emissions
to  the control  device.   In  the  model  plants  it is assumed  that the
captured  fugitive  VOC emissions  are  used  as either  oven  burner makeup
air in the  systems  controlled by  carbon adsorption  units  or  as oven
makeup air in  systems controlled  by  incineration  units.  More discussion
 of  equipment layout is  given  in Section 6.2.2.
                                    6-3

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     The amount of fugitive solvent that is able to be captured by hoods
is a very difficult number to quantify. Fugitive solvent is defined as
any VOC which vaporize and are emitted to the work area before entering
the oven.  The fugitive solvent problem is also complicated by the
possibility of slower lines producing more fugitive VOC per square meter
of product than faster lines.  If one assumes that the distance from the
coater to the oven is the same for all sized lines, the web on a faster
line is exposed to the outside environment for a shorter period of time
than a slower line.  Therefore, the total  emission rate may be the same
from fast and slow lines.  But the production is higher for a larger line
which results in a lower relative percentage of fugitive solvent loss.
A further discussion of this point along with a quantitative estimate of
the expected VOC emissions is given in the next section on model  plant
parameters.
     The two types of coatings examined for the model  plants are adhesive
coatings and silicone release coatings.  The adhesive coating is based
on a 33.3 weight percent solid formulation with the remainder being
solvent.  In a 1978 survey of California tape and label  manufacturers,
this was the approximate average solids content of adhesives being used
at that time.  The adhesive coating thickness is assumed to be 0.047
kilograms per square meter (28 pounds per 3000 square feet) based on the
weight of the coated adhesive solids.  The silicone release coating is
based on a formulation containing 5 weight percent solids and 95 weight
percent solvent.  A 1979 Radian survey of silicone release sheet coaters
indicated that this weight percent is typical of present solvent silicone
                   p
release operations.   The weight of the coated silicone release is
assumed to be 0.00081  kilogram per square meter (0.5 pound per 3000
square feet) based on the weight of the coated release solids.
6.1.2  Model Plant Parameters
     Table 6-1 illustrates the combinations of variables for the 12
model  plants.  In this section material and energy balances are calcu-
lated for each model  plant.  Figure 6-1 shows a typical  tape or label
coating facility without a control  device.   This coating facility can be
                                    6-4

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for either adhesive or release coating.  The material  balances in this
section are based on this type of coating configuration.
     To calculate the material and energy balances around a coating
facility several  assumptions need to be made.  Table 6-2 lists the
assumptions used in this study.  The major assumption concerns the
ultimate fate of the solvent.  The solvent retained in the product is
expected to be low.  Industrial sources indicated it will be from one to
five percent of the solvent in the original  applied coating. ''  For
this study the value is assumed to be one percent.
     The quantitative estimates for the fugitive solvent emission rates
are made from theoretical estimates of solvent evaporation effects and
also on the performance of existing controlled PSTL coating lines.  As
mentioned earlier, when compared to fast line speed facilities, the
coating lines with slow line speeds may have a greater percentage of the
total applied solvent result in fugitive solvent emissions.  Industrial
sources have mentioned this effect.   To quantify the fugitive emission
rates, existing coating lines controlled by carbon adsorption systems
are examined.  Based on solvent in the coating and solvent captured in
the carbon adsorber, the overall VOC capture performance of existing
controlled coating lines ranges from 80 to 93 percent. ''    These same
sources indicate that the amount of solvent in the carbon adsorber
effluent gas ranges from less than one percent to near five percent of
the total solvent used.  Combining all of this data, and the data on
solvent remaining in the coated product, the fugitive solvent emission
rates can be estimated to be from 1 to 18 percent of the solvent applied
in the coating.  For the model plants, the percent of the total solvent
applied which results in fugitive VOC  is estimated at 15 percent for the
slow line speed, 13 percent for the medium line speed, and 10 percent
for the fast speed.  The values are assumed the same for the adhesive
and silicone release lines.
     Using the assumptions  in Table 6-2 and the design parameters in
Table 6-1, the material balances for each of the 12 model plants can be
calculated.  Tables 6-3 and 6-4 represent the results of these calcula-
                                    6-7

-------
             Table  6-2.   ASSUMPTIONS USED  IN CALCULATING
              MODEL PLANT MATERIAL  AND ENERGY BALANCES
(1)   The  adhesive  formulation  is  66.7  weight percent  solvent  and  33.3
     weight percent solid  adhesive.  The  specific  gravity  of  the
     formulation  is 0.935,  the solvent is 0.863, and  the adhesive
     is 1.14.

(2)   The  silicone  formulation  is  95  weight percent solvent and  5 weight
     percent silicone.   The specific gravity of  the formulation is
     0.870, the solvent is  0.863,  and  the silicone is  l.oi

(3)   The  weight of the  adhesive coat is 0.051  Kg/m2 (0.094 lb/yd2) and
     the  weight of the  silicone coat is 0.00081  Kg/m2  (0.0015 lb/yd2).

(4)   The  LEL for  toluene is 1.27  volume percent  and for VM&P  naphtha
                            o
     is 0.81  volume percent.   "The ovens  operate at 25 percent  LEL.

(5)   All  heat  requirements  can be  met  by  heating the  cool  makeup  air
     to 65.5°C (150°F)  above the  ambient  condition (i.e. 27°C to
     92.5°C).4

(6)   One  percent  of the solvent remains in the coated  product.

(7)   The  relative  amount of fugitive VOC  decreases with increasing line
     speed.  For  this study, the  percent  of total  solvent  applied which
     results in fugitive VOC is 15 percent for the slow line  speed, 13
     percent for  the medium speed, and 10 percent  for  the  fast  speed.

(8)   The  fuel  used in the  oven burners is natural  gas.
                                  6-8

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tions.  The stream numbers indicated on these tables correspond to t.iose
shown in Figure 6-1.  The process rates in Tables 6-3 and 6-4 are for
the coated web and the resulting gaseous emissions.  Streams 1, 2, and 4
represent the weight of the uncoated, wet coated, and dry coated web,
respectively.  The other streams represent the gas streams and VOC
flovyrates in and around the oven.  The model  plant flowrates are used in
Section 6.2 to determine the size of the control equipment.
     6.1.2.1  Land and Utility Requirements.   The land requirements for
the large coater can be estimated assuming that the oven is 91.4 meters
(300 feet) long with the unwind, coater, and the wind requiring an
additional 9.1 meters (30 feet) on either end.  This makes the entire
unit 110 meters (360 feet) long.  The width of the coating machine is
approximately 6.1  meters (20 feet) including area for the recirculation
fans.  Therefore,  the total  coater machine area is 670 square meters
(7,200 square feet).  A significant amount of additional  area is required
for formulation, slitting, packaging, and storage.  The coater area
requirements for the small  and medium size coater will  be approximately
proportional to the relative size of web width when compared to the
large facility.  The sil icone release coating machines will be smaller
than the adhesive coaters because they require smaller ovens.
     The utilities for the coaters consist of electricity for motors and
natural gas for oven heat.  Electric motors are used on the wind roll,
unwind roll, coater, recirculation fans, and exhaust fans.  .In the model
plants the ovens are assumed to be heated with direct-fired natural  gas
furnaces.  The heat requirements are larger in the naphtha solvent cases
because the naphtha has a lower LEL and thus requires more oven gas
throughput.  Table 6-5 lists the electricity and natural  gas require-
ments for the model  plants.
     6.1.2.2  Raw Materials and Products.  The raw materials for the
coating operations consist of two items:  (1) the web and  (2) the coating
material.  For the silicone release coating model  plants the web is
considered to be an uncoated sheet.  For the adhesive coating model
plants, the web is assumed to be a silicone release coated sheet.
                                    6-11

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     The coatings are assumed to be mixtures of solids and-either pure
toluene or pure VM&P naphtha solvents.  The adhesive formulation is 66.7
weight percent solvent, while the silicone formulation is 95 weight per-
cent sol vent. •
6.1.3  Process Alternatives
     Some solvent adhesive and silicone release coatings can be replaced
by commercially available nonsol vent formulations.  The alternatives are
either water emulsion silicone and adhesive coatings or hot melt adhesive
coatings and 100 percent solids silicone release coatings.  A discussion^
of these alternatives is given in Chapter 3.
     Figures 6-2 and 6-3 show schematic diagrams of waterborne  (or 100
percent silicone solids) and hot melt coating operations,  respectively.
Material balances are estimated for both cases based on the design para-
meters and production rates used with the solvent coating model plants.
Tables 6-6 and 6-7 present the  results of the material balances for both
the adhesive and silicone release coating operations, respectively.
These model plants are used in Chapter 8 as a cost comparison to controlled
solvent-type coating operations.
6.1.4  Process Modifications or Reconstructions
     Process modifications and  reconstructions are defined in Chapter 5.
There are no model plants in this chapter that specifically represent
process modifications or reconstructions.   If installations have modifi-
cations or reconstructions that result in coming under the NSPS guide-
lines, they will probably install control devices exactly  the same as in
new  facilities.  The only difference  comes  from added retrofitting costs
for  longer ducts.  However, many new  facilities will be under the same
constraints  as modified or reconstructed facilities because they will be
located in the same buildings as existing coating lines.   This will mean
the  capital  and  operating costs will  be nearly identical.

6.2  REGULATORY  ALTERNATIVES
     In this section three control levels are discussed:  (1) Alternative
I  (baseline  control),  (2) Alternative II  (moderate control), and  (3)
Alternative  III  (stringent control).  In Chapter 4 past and current
                                    6-13

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state and federal regulations are discussed.  As mentioned in that
chapter, the recommended CTG guidelines are used as the baseline control
level.  This baseline level represents the level of control that would
probably result  if the NSPS was not promulgated.  The moderate and
stringent control cases represent two potential NSPS control  levels
which will  be examined for their environmental, economic, and energy
impacts in subsequent chapters.
6.2.1 Alternative I Control Requirements
     As previously mentioned the Alternative I control level  is assumed
to be represented by the recommended EPA CTG control levels of 0.35
kilogram VOC per liter of coating  (2.9 Ibs per gallon of coating)
excluding water.   For the adhesive model plants the  required control
level can be calculated based on the physical  properties of the adhesive
formulation.  The adhesive formulation is 66.7 weight percent solvent
and 33.3 weight  percent solid adhesive.  The specific gravity of the
formulation is 0.935 and the solvent is 0.863.  Applying these numbers
to the conversion method described in Appendix D of the EPA Guideline
Document  the required VOC reduction is approximately 78.3 percent of
the total  solvent in the coating.  This control level  is used as the
baseline control alternative for comparison of the other adhesive model
plants' control  alternatives.
     A calculation identical  to that for adhesive formulations was
performed on a typical silicone release formulation to determine the
overall VOC reduction necessary to meet the control level of the regu-
latory alternative.  It was determined that a 97 percent overall VOC
reduction would  be required to achieve Alternative I control.  This VOC
reduction level  was higher than any demonstrated by best available
control technology.  Consequently, for the silicone release model plants,
an Alternative I control level  equivalent to that of adhesive plants was
assigned.   The required VOC reduction for both would be 78.3 percent of
the total  solvent in the coating.
6.2.2 Alternative II Control  Requirements
     The Alternative II level of control  for adhesive and silicone
release coating lines is meant to represent the case where only the oven
                                  6-18

-------
exhaust emissions are controlled on a new coating facility.  This means
there is no (or very little) attempt to control  fugitive VOC emissions
around the coater.  As mentioned before, there is some indication that
there may be a higher relative percentage of fugitive VOC loss in slow
coating lines as compared to fast coating lines.5  The Alternative II
control levels for the model plants reflect this assumption.  The level
of overall VOC emission reduction is estimated at 86 percent for
large, fast lines; 85 percent for medium lines; and 84 percent for
slower, small  lines.  All of these levels of control  are based on a 96
percent VOC emission reduction across the control  device.
6.2.3 Alternative III Control Requirements
     The Alternative III control  level  is defined as optimum capture and
control of oven exhaust gases and fugitive VOC emissions around the
coating area.   In both the adhesive and silicone release model  plants
with carbon adsorbers, it is assumed that the hood exhaust gases are
used as makeup air for the oven burners.  In the model  plants with
incinerators, the hood exhaust gases are first ducted to the secondary
heat exchanger and again are used as the oven makeup air.  Incinerator
controls have larger makeup air requirements than carbon adsorber controls,
The larger requirement is due to the lower LEL for VM&P naphtha than for
toluene solvents.  The greater hood gas flow allows for greater VOC
capture potential.  The estimated Alternative III overall VOC reduction
for the model  plants  is 90 percent.  The overall  VOC reductions are
based on a 96 percent VOC reduction across the control  devices.
6.2.4  Controlled Model  Plant Parameters
     When the three control  level  variations-are applied to the twelve
uncontrolled model plants, the result is 36 controlled model plant var-
iations or cases.  Table 6-8 illustrates all 36 control  cases.   Figures
6-4 and 6-5 show the njodel plant configurations for a facility con-
trolled by carbon adsorption and incineration, respectively.
     Material  balances, are calculated for all  36 control  cases.   The
results of these calculations are shown in Tables 6-9 through 6-12.  The
stream numbers in these tables relate to the stream numbers shown in
                                    6-19

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Figures 6-4 and 6-5.  The control  case numbers relate to the controlled
model  plants listed in Table 6-8.   The calculations assume that the
control device is 96 percent efficient in recovering or destroying VOC
emissions.  The 96 percent control  level  is based on the performance of
                         111? 13 id.
existing control  systems.11'1^'1'3'14
     The carbon adsorption systems are assumed to consist of three
vertical beds in all cases.  One bed is used for adsorption, one for re-
generation, and one for cool down.  The bed depth is approximately 1.2
meters  (4 feet) with a pressure drop of 6 kPa  (24 inches of water).  The
unit is constructed of carbon steel .  The activated carbon is assumed to
be changed every two years for the adhesive cases and every year for the
               15
silicone cases.    The steam requirements are estimated based on four
kilograms of steam per kilogram of recovered solvent (4 Ibs steam/1 b
solvent recovered).  The major electricity user is the adsorber fan.
     The incinerators are designed with primary and secondary heat
recovery.  At 25 percent LEL, the combustion of the oven off gas will
not supply all the heat energy required for the drying and curing ovens.
A fuel  energy requirement of from 0.7 to 66 Nm /hr of natural gas exists.
Once again the major electricity user is the incinerator fan.
     Table 6-13 lists all the utility requirements and estimated land
requirements for the 36 model plant control systems.
     The process flow rates and utility requirements shown in Tables 6-
9 through 6-13 are used in later sections to estimate the environmental,
economic and energy impacts of the three control alternatives.
                                   6-27

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-------
6.3  REFERENCES
1.   State of California Tape and Label  Coaters  Survey.   California  Air
     Resources Board, Sacramento, California.   Questionnaire  submitted
     as part of the State Implementation Plan  regulations development.
     (Docket Confidential  File.)
2.   Silicone Release Questionnaire.   Radian Corporation.  Durham, NC.
     Questionnaire submitted to determine the  size  of and solvent  use  in
     the silicone release sheet industry.  Questionnaire  submitted on
     May 4, 1979.  (Docket Confidential  File.)
3.   Manzone, R.R. and D.W.  Oakes.   Profitably Recycling  Solvents  from
     Process Systems.  Pollution .Engineering,  5  (10):  23-24,
     October 1973.
4.   Carter, J.P.  Emulsion Pressure  Sensitive Adhesives: A Route  to
     Improved Oven Energy Utilization.   In:  Technical  Meeting  on
     Water Based Systems.   Chicago, Pressure Sensitive Tape Council.
     June 21-22, 1978.  pp.  60-66.
5.   Guideline Series - Control  of Volatile  Organic Emissions  from
     Existing Stationary Sources - Volume II:  Surface Coating  of Cans,
     Coils, Paper, Fabrics,  Automobiles, and Light-Duty Trucks.  Office
     of Air Quality Planning and Standards,  U.S.  Environmental  Protection
     Agency.  Research Triangle Park, North  Carolina.   May 1977.
6.   Letter and attachments from Phillips,  Frank,  3M Company,  to
     G. E. Harris, Radian Corporation,  October 5,  1978.   (Docket
     Confidential File.)
7.   Harris, G.E.  Trip Report for Pressure  Sensitive Adhesives -
     Shuford Mills in Hickory, N.C.  Radian  Corporation.   Austin,
     Texas.  July 28, 1978.
8.   Letter and attachments from Baxter, Ralph F.,  Avery  International,
     to G.E. Harris, Radian Corporation, October 16, 1978.   (Docket
     Confidential File.)
9.   Letter and attachments from Miller, Ronald  E., Adhesives  Research,
     Incorporated, to T.P. Nelson,  Radian Corporation, June 18, 1979.
     Discusses the overall performance  of the  AR carbon adsorption
     system.
                                  6-29

-------
10.
11
12,
13,
14.
15,
Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
Fasson Company in Painesville, Ohio.  Radian Corporation.
Durham, North Carolina.  July 26, 1979.
Nelson, T.P.  Trip Report for Pressure Sensitive Adhesives -
Adhesives Research in Glen Rock, PA.  Radian Corporation.
Durham, North Carolina.  February 16, 1979.
Sidlow, A.F.  Source Test Report Conducted at Fasson Products,
Division of Avery Corporation.  Cucamonga, California.  San
Bernardino County Air Pollution Control District.  San
Bernardino, California.  Engineering Evaluation Report 72-5.
January 26, 1972.
Milner, R., W.L. Oaks, and S. Banerjee.  Test Conducted at
Avery Label Co., 1616 South California Avenue, Monrovia,
California.  Air Pollution Control  District.   Los Angeles,
California.  Source Test Section Report No. C-2236.   March 18,
1975.  (Issued May 30, 1975).
Milner, R. and Y. Fushimi.   Test Conducted at Avery  Label  Co.
1616 South California Avenue, Monrovia, California.   Air
Pollution Control District.   Los Angeles,  California.  Source
Test Section Report No. C-2273.   August 20, 1975.  (Issued
November 20, 1975).
Telecon.   North, Charles, Avery-Fasson (Painesville,  Ohio) with
Nelson, T.P.,  Radian Corporation.   May 2,  1979.   Discussion on
VOC controls used at Fasson.
                                    6-30

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              7.  ENVIRONMENTAL AND  ENERGY  IMPACTS

     The major environmental problem in the pressure sensitive tape and
label  (PSTL) industry is the emission of large volumes of organic sol-
vents.  Presently, over 80 percent of all PSTL products are coated with
solvent-based adhesive or release materials.1   However, in the next ten
years a dramatic decrease in the use of organic solvents is expected.
Figure 7-1 illustrates the predicted decline of solvent use in the
pressure sensitive adhesive  (PSA) industry.2'3  This prediction assumes
an average 10 percent annual increase in PSA use.
     Even though there is a predicted dramatic decrease in solvent use,
there is a definite possibility of new solvent-based coating facilities
being installed over the next ten years.  This is especially true in the
riext few years when hot melt and waterborne technology will  not be able
to match the quality of some solvent-based adhesives and releases.  In
the absence of regulations,  operators would tend to build more solvent-
based coating lines, even in the face of increasing solvent costs.  The
promulgation of a regulation would put more force on operators to convert
to low-solvent or solventless technology.
     In this chapter the air, water and solid waste pollution impacts
are examined for the regulatory alternatives described in Chapter 6.
These impacts are examined for individual  plants and for the U.S.  as  a
whole.  The three regulatory alternatives can be summarized as follows:
        •  Regulatory Alternative I (Baseline Control) -
          The VOC control  level  expected if no NSPS regulations
          are adopted.   The  control  level  represents the recommended
          CTG control  level .
        •  Regulatory Alternative II   (Moderate Control)  - This
          represents the first NSPS  control  choice of attempting
          to control  oven VOC emissions only.
                                   7-1

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                                               7-2

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         ©Regulatory Alternative III  (Stringent Control)  - This
          represents the second NSPS  control choice of attempting to
          control oven and fugitive VOC emissions
The model plants are used as the basis of comparison for  all of the
environmental and energy impacts.
7.1  AIR POLLUTION  IMPACT
     'As previously  mentioned, the primary adverse impact  of solvent-
based pressure sensitive adhesive, release, and precoat coating operations
is volatile organic compound (VOC) emissions.  In uncontrolled facilities,
these emissions are emitted directly  from the drying ovens and as fugi-
tive emissions from around the coating areas.  VOC emissions can be
controlled by the addition of control  equipment such as incinerators,
carbon adsorbers, and hooding systems.  Tables 7-1 and 7-2 give the
calculated controlled and uncontrolled VOC emissions for  the model
plants.
7.1 .1  Primary A.ir  Pollution Impacts
     The primary impacts of overall  VOC reductions are dependent on the
facility location.  For the majority of the facilities in heavily in-
dustrialized areas, the primary impact is the reduced potential  of
ambient hydrocarbon levels and thus a reduction in ozone  formation.
This will also result in a reduction in hydrocarbon aerosol  formation.
The transformation of hydrocarbons to aerosols involves reactions between
the hydrocarbons, ozone, and nitrogen oxides (NOV).   The  hydrocarbons
                                                /\
react to produce oxygenated compounds  which form aerosols by either
nucleation or condensation.    The nitrogen oxide levels required for
smog formation are generally only encountered in industrial  or urban
areas.   The majority of PSTL coating operations are located  in urban
areas.
     For plants in rural  areas  or areas of low ambient nitrogen  oxide
and ozone concentrations, the primary  environmental  impact is  merely a
reduction in overall ambient hydrocarbon  levels.   However, hydrocarbons
from these areas can be transported  in the atmosphere to locations  where
ozone and smog are problems.   Hydrocarbon reductions will  help reduce these
impacts.
                                     7-3

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     To quantify the reductions of national  VOC emissions  due to NSPS,

the following assumptions are made with respect to adhesive and release
use:

     1)   The overall  effect of Regulatory Alternative  I  (CTG guide-
          lines) will  be to reduce existing  VOC emissions  by 78 percent.

     2)   The anticipated effect of Regulatory  Alternative  II (moderate
          NSPS regulations) is a decrease  in VOC emissions  of 85 percent
          from new PSTL coating sources.

     3)   The anticipated effect of Regulatory  Alternative  III  (stringent
          NSPS regulations) is a decrease  in VOC emissions  of 90 percent
          from new PSTL coating sources.

     4)   The NSPS will  go into effect  in  January 1981.

     5)   All  new coating facilities  will  be built in the same  pro-
          portion as existing  facilities  (i.e.  in 1982, 55  percent of
          new coating  lines will  be_solvent-based; in 1985,  20  percent:
          and in 1990,  10 percent).

     6)   The current  growth rate of  tapes  is 8 percent/year;  for labels,
          12 percent/year; for specialty products,  10 percent/ year; and
          for silicone  release sheets,  10  percent/year.

     7)   The label  market will  grow  at 12 percent/year until 1982 when
          growth will  decline  to 8 percent/year.   This is also  true for
          specialty and  silicone release products.

     8)   The specialty  market is estimated  at  about 83 percent  of the
          label  market  (Frost  and Sullivan).  The specialty market will
          grow at the  same rate as the  label market.

     9)   The average.weight percent  solvent for adhesive formulations
          in 1978 is 66.7 weight percent.  By 1982  the average should
          decline to 50  weight percent  and remain.
                                                          The average
10)  The average adhesive coating is 30Jb/3000 ft
     silicone coating is 0.5 lb/3000 ft .

11)  The average solvent in silicone coating  is 95 weight  percent
     for 1978.   It drops to 85 weight percent for 1982  and 1990.
                                   7-C

-------
Table 7-3 shows the effect of a NSPS on national  VOC emissions from PSTL
manufacturing.  In general, the NSPS will  result in a greater and
greater effect as more sources are installed.  As shown in Table 7-3, by
1990 the most- stringent NSPS is predicted to show a 28 percent reduction
in VOC over what would be expected if only the recommended CTG limits
were in existence.
7.1 .2  Secondary Air Pollution Impacts
     Secondary environmental impacts are defined as those impacts which
are not normally associated with an uncontrolled facility but result
after the addition of pollution control  equipment.   In the case of PSTL
coating facilities, the added controls are incinerators, carbon ad-
sorption units, and hooding equipment.
     The addition of incinerators to a PSTL facility can potentially
result in the formation of carbon monoxide (CO) and nitrogen oxides.
Carbon monoxide results from incomplete combustion of the VOC materials.
As discussed in Chapter 4, the amount of CO in the incinerator effluent
gas is dependent on the incineration temperature and the residence time.
At temperatures above 760°C  (1400°F), an incinerator should oxidize over
90 percent of all VOC to carbon dioxide.   Higher firebox temperatures
are required for aromatic fuels than aliphatic fuels because they are
more resistant to combustion.
     Nitrogen oxide formation in combustion units is primarily dependent
on two variables:  (1) excess oxygen levels and  (2) firebox temperatures.
The formation of NO  results from the oxidation of fuel  (sol vent)-bound
                   X
nitrogen and from thermal fixation of nitrogen in air.  The concentration
of oxides of nitrogen  (NO ) in incinerator stack gases is about 18 to 22
                         /\
ppm for natural gas-fired noncatalytic incinerators and 40 to 50 ppm for
oil fired noncatalytic incinerators at a temperature of 815°C (1500°F),
                                                          P
assuming no nitrogen containing compounds are incinerated.   For most
solvents the nitrogen content is very low, and therefore, the emission
rate should be low.  One test on an incinerator-controlled pressure
sensitive tape line measured the NO  concentration in the stack gas at
                                   A
                                    7-7

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16  to  28  ppm with an average of 20 ppm.  This  concentration equates  to
approximately 0.009 kg of N0x per kg of VOC destructed  in  the  incin-
erator (0.009 1b NO /Ib VOC.)
                   A
     The  major  secondary air pollution impacts of carbon adsorption
systems are the emissions from the boiler used for producing steam.  The
steam  is  used to strip the carbon bed of the adsorbed VOC  which  is then
recovered  in a  condenser.  If one assumes the  boiler uses  fuel oil and
the  regeneration of the beds require 4 kilograms of steam  per  kilogram
of  recovered solvent (4 Ib steam/1 b solvent),  estimates can be made on
the  relative levels of secondary emissions.  For particulates  the emission
rate is approximately 0.01 kilogram per kilogram of solvent recovered.9
Sulfur dioxide  emission rates are dependent on the sulfur  level  in the
fuel.  For a 0.3 weight percent sulfur fuel oil, 0.002  kilogram  SOp per
kilogram  of solvent recovered  (0.002 Ib S02/lb solvent) are emitted.
The magnitude of the secondary pollutants generated by  the control
system is  much  smaller than the magnitude of the VOC emissions recovered.
     Cooling towers may be an additional  source of secondary air pollu-
tion with  a carbon adsorption unit.  Particulates in cooling towers
result from dissolved solids emitted to the atmosphere  by  cooling tower
.drift.  This particulate emission is generally not a problem in  cooling
towers of  the size found on carbon adsorption  units.
7.2  WATER POLLUTION IMPACTS
     There are  no wastewater effluents from an uncontrolled PSTL coating
facility.  The only wastewater problems arise  from the  use of VOC
pollution  control  equipment, and more specifically the  use of carbon
adsorption control  equipment.  The incineration controls have no waste-
water  discharges.   The discussion in this section centers on the waste-
water  discharges of carbon adsorption systems.
     In carbon adsorption, water is principally used to produce  steam.
which  is  then used to strip adsorbed solvent from the carbon beds.  Upon
completion of the stripping operation, the solvent-steam vapors  are fed
                                  7-9

-------
 to  a  condenser.   The  condensed  product  is  then  allov/ed  to  separate  into
 layers  of solvent and water.  The  organic  solvent  is  decanted  and either
 reused  in the  coating operation or sold to a  reclaimer.  Three alternatives
 exist for reusing the decant water:   (1) use  the water  for boiler feed;
 (2) use the water for cooling tower purposes; or  (3)  discharge the  water
 into  the local sewer  or wastewater treatment  facility.   In  the model
 plants  developed  for  this  study, the  assumption was made to  recycle 90
 percent of the water  as boiler  feedwater.   Ten  percent  of  the  total
 water quantity is left  as  wastewater.
      Although  recycle is highly practical,  some problems may be encountered
 in  trying to execute  it successfully.   The recycle water may possibly be
 too contaminated  by organics to be  used directly as boiler  feed.  The
 boiler  system can be  fouled and corroded by substances  formed  from
 chemical  reactions between the  organics  and other process compounds.
 Treatment of the  water  prior to its use  as  boiler feed  may  be  required.
 The severity of this  problem can not  be generalized industrywide, instead
 it  is more plant-specific,
     A  schematic  view of the total  water cycle  is shown in Figure 7-2.
 7.2.1   Environmental  Impacts
     The  wastewater,  discharged after the  solvent has been decanted,
 poses a  potential   adverse  environmental  impact.  The potential   impact
 results  from possible organic contamination of the water.  Trace concen-
 trations  of solvent may become  fixed  in the.water during, the operation^ of
 the condensation  stage, even though the solvents are considered immiscible
 in water.  The water  solubilities of  the more commonly used solvents are
 given in  Table 7-4.10' 1]   The  effect that the effluent will have on
 natural  water systems is dependent on the  size of the system and its
 sensitivity to these  pollutants.
     The  total  environmental  impact from the wastewater discharges  will  be
minimal  because:    (1) the total  volume discharge of water is small  and (2)
 the total emission of organics  is relatively low.   The estimated waste-
water discharges  of the individual  model plant coating lines are presented
 in Table  7-5.   These  figures reflect the implementation of 90 percent
 recycle.  In the  event recycling was not possible,  the correct  model
 plant totals would be ten times  the figures shown  in Table  7-5.

                                   7-10

-------
         CLEAN GAS TO
          ATMOSPHERE
                         FROM
                       COOLING
                        TOWERS
              t
	1

 SOLVENT-STEAM VAPORS
                  I
                                           CONDENSER
    CHARGING
      BED
                  CARBON
                ADSORPTION
                   UNIT
             >r
         STRIPPING
           BED
                                            DECANTER-
SOLVENT-LADEN
     GAS
    STEAM @ 50 psig
        (sat'd)
                                TO BOILER (90%)
                                  -MAKEUP WATER
                     BOILER
   TO
COOLING
TOWERS
                                       RECOVERED
                                         SOLVENT
                                       WASTEWATER
                                          (10%)
                Figure 7-2.  Water cycle of a carbon adsorption process.
                             7-n

-------
            Table 7-4.  SOLVENT SOLUBILITIES IN WATER
       Solvent
  Solubility in 100 Parts Water
Acetone
n-Butyl Acetate
Carbon Tetrachloride
Cyclohexane
Ethyl Acetate
Ethanol
Methyl Acetate
Methyl Ethyl Ketone
Methanol
n-Hexane
n-Heptane
Toluene
Xylene
s.
0.7
0.097 (@ 0°C); 0.08 (@20°C)
i.; s. act.
8.5 (@15°C)
s.
33 ((322°C)
37
s.
i.; s. chl.
0.0052 (@ 18°C)
0.05
i.
s: soluble in all proportions
i: insoluble
s. act.: soluble in acetone
s. chl.: soluble in chloroform
                        7-12

-------
      TABLE 7-5.  ESTIMATED WASTEWATER DISCHARGES GENERATED BY CARBCH
                              ADSORPTION UNITS*
                  (Based on model plants presented in Chapter 6)
Facility
(line size, 1
Control
Large (1 .5m, 1
Alternative
Alternative
Alternative
Medium (0.9m,
Alternative
Alternative
Alternative
Small (0.61m,
Alternative
Alternative
Alternative
Size
ine speed)
Levels
.2m/s)
I
II
III
0.3m/s)
I
IT
III
0.13m/s)
I
II
III
Adhesive Coating Model
Plants
liters/year
1,250,000
1,380,000
1,440,000
172,000
185,000
185,000
54,500
58,700'
62,500
(gallons/yrT)
(330,000)
(364,000)
(380,000)
( 45,300)
( 48,900)
( 48,800)
( 14,400)
( 15,500)
( 16,500)
Silicone Release
Coating Model Plants
liters/year
186,000
202,000
214,000
26,000
28,000
30,000
8,300
8,300
9,100
(gallons/yr.)
(49,100)
(53,300)
(56,500)
( 7,000)
( 7,400)
( 7,800)
( 2,200)
( 2,200)
( 2,400)
* Figures represent emissions from a single coating line.
                                    7-13

-------
      The  total  organic  emission  load  for all  plants  on a  national basis
 is  given  in  Table  7-6.   Due  to of  the assumption  that all  plants use
 carbon  adsorption  controls,  the  numbers  given  represent a  worst case
 situation.   The data  in this  table was based  on the  solvent solubilities
 presented in Table  7-4.  A representative solvent, in this case toluene,
 was used  to  make the  calculations.  Toluene was chosen because of its
 widespread use  in  the industry and its favorable  response  in carbon
 adsorption systems.   The organic emissions shown  in  Table  7-6 are small,
 especially when compared to  the air-borne VOC  emissions shown in Table
 7-3.  In  all  cases  the  waterborne organic load is less than 0.1 percent
 of  the  air total.   A  water pollution  problem  is not  being  created by the
 controls  applied to air pollution.
      The  potential  impacts of the organics are further lessened because
 of  the  availability of  an ample number of effective water  pollution
 control  technologies.   These treatment technologies  include aqueous
 phase carbon  adsorption, activated sludge treatment,  oxidation of the
 organics, and sewer discharge to a municipal  treatment facility.   Of
 these alternatives, sewer discharge or treatment by activated carbon are
 the most  likely ones  to be used.   The use of either adsorption or sludge
 treatment creates a solid waste problem.   This small  amount of solid
waste would  have to be landfilled or  incinerated in an environmentally
 acceptable manner.
     The  responsibility for treatment of the wastewaters  is generally
case  (or  plant) specific.  The existence  and applicability of any  local,
state, or federal water laws  to the water pollution situation will
greatly influence the direction of the treatment procedures.   The  industry
and the  particular  community  will  generally work out  the  problem  of
treatment to the degree that  the  law is satisfied. Municipalities  will
often absorb the burden of treatment in order to attract  the  industry.
However, water laws which.expressly prohibit  the discharge of any
organics-contaminated water to any source will  force  the  burden of
treatment on the industry.
                                   7-14

-------
           TABLE 7-6.  NATIONAL WATERBORNE VOC EMISSIONS FROM PSTL
                       CARBON ADOSRPTION CONTROL UNITS
Control Level s
Facility Type
Regulatory Alternative I
Adhesive
Silicone Release
Regulatory Alternative II
Adhesive
Silicone Release
Impact on Baseline
Adhesive
Silicone Release
Regulatory Alternative III
Adhesive
Silicone Release
Impact on Basline
Adhesive
Silicone Release
Annual VOC Emissions
metric tons (tons)
1982
11.0(12.1)
1.6(1.8)
12.2(13.4)
1.8(2.0)
1.2(1.3)
0.2(0.2)
13 (14)
1.9(2.1)
2.0(1.9)
0.3(0.3.)
1985
7.6(8.4)
1.1(1.3)
8.4(9.3)
1.2(1.3)
0.8(0.9)
0.1 (neg*)
8.7(9.6)
. 1.3(1.4)
1.1(1.2)
0.2(0.1)
1990
4.2(4.6)
0.62(0.68)
4.63(5.1)
0.67(0.74)
0.43(5.1)
O.;05(0.06)
4.8(5.3)
0.71(0.78)
0.6(0.7)
0.09(0.10)
Assumptions:  (1)  All  solvent-based coating facilities employ adsorption
                   systems.
              (2)  The  NSPS  go into effect in January 1981.
              (3)  The  representative solvent is toluene.
              (4)  The  solubility of toluene is 0.05 in 100  parts  water.
*neg - negligible
                                   7-15

-------
7.2.2  National Wastewater Emissions
     The national wastewater discharges resulting from the implemen-
tation of carbon adsorption emission controls are presented in Table 7-
7.  In calculating these totals, it was assumed that every plant using a
solvent-based coating technology employed carbon adsorption controls.
Because of this assumption, the figures given represent a worst case
situation for water discharges.  The difference in wastewater discharge
levels from Alternative I  (Baseline) to Alternative II (Moderate) and
Alternative III  (Stringent) is not great.  The percent increase from the
baseline to the moderate control level  in 1985 is 9 percent.   The increase
from the baseline to the stringent case in 1985 equals 13 percent.   The
additional wastewater is due to a higher percent of solvent recovery
required for the stricter emission levels.
     The combination of Tables 7-6 and 7-7 results in an overview of the
national  water impact in terms of water quantity and quality.   The
projected decline in the use of solvent-based coating is the primary
factor that influences the extent to which national  water quality levels
will be impacted.  The decline in solvent use will dictate a lessening
need for carbon adsorption controls, thereby reducing both the total
organics discharge and the total water effluent which would result from
the controls.
7.3  SOLID WASTE IMPACTS
     The only expected sol id wastes from the add-on control  systems come
from the carbon adsorption units.  The activated carbon in these units
gradually degrades during normal operation.  The efficiency of the
carbon eventually drops to a level  such that replacement is necessary,
thereby creating a solid waste load.  The amounts of waste generated
annually by these beds for various sized coating facilities are presented
in Table 7-8.  The waste levels represent a worst case situation because
all lines were assumed to be using a carbon adsorber.  Additional  carbon
v/astes will be present, but on a smaller scale, if carbon adsorption
technology is used to treat the organics-contaminated wastewater.
Disposal  of this waste material poses minimal  environmental  problems.
                                   7-16

-------
         TABLE 7-7.  NATIONAL WASTEWATER EMISSIONS FROM PSTL CARBON
                          ADSORPTION CONTROL UNITS
Control Level s
Facility Type
Regulatory Alternative I
Adhesive
Silicone Release
Regulatory Alternative II
Adhesive
Silicone Release
Impact on Baseline
Adhesive
Silicone Release
Regulatory Alternative III
Adhesive
Silicone Release
Impact on Baseline
Adhesive
Silicone Release
Annual Wastewater Discharge
106 liters (106 gallons)
1982

22.1(5.84)
3.28(0.87)

24.3(6.42)
3.56(0.94)

2.2 (0.58)
0.28(0.07)

25.3(6.68)
3.78(1.00)

3.2(0.84)
0.50(0.13)
1985

15.2(4.02)
2.26(0.60)

. 16.7(4.41)
2.45(0.65)

1.5(0.39)
0.19(0.05)

17.4(4.60)
2.60(0.69)

2.2(0.58)
0.34(0.09)
1 990

8.40(2.22)
1.23(0.32)

9.25(2.45)
1.33(0.35)

0.85(0.23)
0.10(0.03)

9.63(2.54)
1.41(0.37)

1 .23(0.32)
0.18(0.05)
Assumptions:
(1)  All  solvent-based  coating  facilities  employ  carbon
    adsorption  system.
(2)  The  NSPS go into effect  in January  1981.
(3)  Four kilograms  of  steam  per kilogram  of  solvent  recovered,
(4)  Ninety (90) percent  of the condensed  steam is  returned
    to the boiler.
                                    7-17

-------
        TABLE 7-8.  ESTIMATED CARBON WASTES GENERATED BY COATING LINES
                       CONTROLLED BY CARBON ADSORPTION*
                 (Based on model  plants developed  in  Chapter 6)
Facility Size
(line size, line speed)
Control Levels
Large (1.5m, 1 .2m/s)
Alternative I
Alternative II
Alternative III
Medium (0.9m, 0.3m/s)
Alternative I
Alternative II
Alternative III
Small (0.61m, 0.13m/s)
Alternative I
Alternative II
Alternative III
Adhesive Coating
Model Plants
metric tons/yr

23.2 .
25.6
26.8

3.19
3.45
3.44

1.02
1.09
1.16
(tons/yr)

(25.6)
(28.2)
(29.5)

( 3.51)
( 3.79)
( 3.78)

( 1.12)
( 1.20)
( 1.27)
Silicone Release Coating
Model Plants
metric tons/yr

6.92
7.52
7.95

0.99
1.04
1.10

0.30
0.31
0.34
(tons/yr)

(7.61)
(8.27)
(8.75)

(1.08)
(1.14)
(1.21)

(0.33)
(0.34)
(0.38)
*Figures represent emissions for a single coating line.
                                     7-18

-------
   .   The  major solid  waste  problem in PSTL  facilities  is  not a result of
 the  air emission  control  options.   The major problem concerns  the  large
 quantity  of  solid waste  produced  by the normal  daily operation of  a  PSTL
 facility, especially  if  slitting  operations  are practiced.   The wastes
 consist of flawed coated  products,  imperfect face  stock,  substandard
 release paper,  and empty  cartons,  spools, etc.   It has  been  estimated
 that 10 percent of all raw  materials  used in a  coating  operation end up
 as waste.     Therefore,  for the large  model  plants,  the waste  Carbon
 would represent approximately  five  (5)  percent  of  the total  solid  waste
 load.
 7.3.1   Environmental  Impacts
      The environmental effects related  to the disposal  of waste  carbon
 (and  sludges) are classified as secondary.   Three  alternatives  are avail-
 able  for handling  the waste  carbon  material.  The  three procedures involve:
 (1)  landfilling the carbon,  (2) recycling the carbon, and  (3)  using  the
 carbon  as fuel.
      The implementation of the landfill method will  be  simple and effi-
 cient because the  technology for the operation  is  considered common
 practice.   No environmental  problems should  occur  provided the landfill
 site  has been properly constructed.  If the  site is  not secured  by a
 lining  of some  type (natural or artificial), possible leaching can occur.
 The leachate  itself may contain traces of organics that are left on  the
 carbon  as residues.  Transmission of this leachate into ground and surface
 waters  can represent an adverse environmental impact.
     The same type of pollution problem can  occur  if the waste carbon is
 contained in storage piles instead of landfills.  The runoff from rain
 flowing over the piles may pick up traces or organics.   The degree to
which residue organics would exist on the carbon is uncertain.   The
 carbon  of each different  plant would have varying quantities  depending on
 the operational  efficiency of its  control  process.   If storage  piles  are
 used, they too should  be  lined by  an impervious  material and  drainage
channels should surround  the entire structure.   These measures  will
contain the possibly contaminated  water so that  it may be  treated before
 release into  natural  systems.
                                    7-19

-------
      The  second treatment procedure involves  recycling  the waste carbon
 so  that  it can  be  reused.  In this  method,  the spent activated carbon
 undergoes  reactivation treatment.   Once  treated the carbon may be re-
 inserted  into the  adsorption  bed  and used.
      The  third  disposal  method involves  selling the waste  carbon as
 fuel.  The physical  and chemical  structure  of the  carbon  in combination
 with  the  hydrocarbon residues make  the wastes a fuel  product similar to
 other solid fuels  such as coal.   Potential  users of this  fuel  include
 industrial  and  small  utility  boilers.  The  revenues from  selling the
 waste carbon may potentially  help offset part of the costs of buying new
 activated  carbon.
      Since activated carbon generally contains  little sulfur,  furnace
 S02 emissions resulting  from  combustion  will  be negligible.   Particulate
 and NOX emissions  from the burning  of activated carbon  will  be  com-
 parable to those of  coal-fired furnace operations.
 7.3.2 National  Solid  Haste Emissions
      The estimation  of the national  solid waste impact  as  a  result of
 NSPS  is presented  in Table 7-9.  The assumptions used to calculate the
 results of each emission  alternative correspond to  the  assumptions
 developed  in Section 7.1.1.   In addition, it  was assumed that all
 solvent-based coating  facilities use carbon adsorption  control  systems.
      The estimates in  Table 7-9 predict  an overall   reduction  in  the
 emission of carbon wastes with time.  Projected  declines in  the  use  of
 solvent-based coating  are  responsible for these  reductions.   Fewer
 solvent processes will  require fewer carbon adsorption  controls.
     As shown in Table  7-9, the NSPS will have  a small  impact on  base-
 line  solid waste emissions.   In 1985 Alternative II control will  result
 in increased solid waste  emissions of about 9 percent above  that  gener-
 ated  under Alternative  I  control.  The more stringent Alternative II
 control will result  in  increased emissions of about 14  percent above  the
Alternative I level.    Overall, the NSPS  poses no substantial environmental
 hazards.
                                    7-20

-------
           TABLE 7-9.   ESTIMATED  NATIONAL  WASTE  CARBON  EMISSIONS
                     FROM PSTL  CARBON  ADSORPTION UNITS
Control Levels
Facility Type
Regulatory Alternative I
Adhesive
Si li cone release
Regulatory Alternative II
Adhesive
Silicone release
Impact on Baseline Emissions
Adhesive
Silicone release
Regulatory Alternative III
Adhesive
Silicone release
Impact on Baseline Emissions
Adhesive
Silicone release
Annual Solid Waste Emissions
metric tons (tons)
1982
410(450)
122(134)
452(497)
132(145)
42(46)
10(11)
471(518)
140(154)
61(67)
18(20)
1985
281 (309)
84(92)
310(341)
91(100)
29(32)
7(8)
324(356)
96(106)
43(47)
12(13)
1990
156(172)
46(51)
172(187)
49(54)
16(18)
3(3)
179(187)
52(57)
23(25)
6(7)
Assumptions:  (1) The NSPS goes into effect in January 1981.
                                   7-21

-------
 7.4  ENERGY IMPACTS
      The air emission control  equipment for the PSTL industry utilizes
 two forms of energy:   electrical  energy and fossil  fuel  energy.  The
 electrical  energy is  used in both the carbon adsorption and incineration
 control  systems.   Its primary  function is to power the motors and fan
 used to convey gases  to different sections of a control  system.  The
 fossil  fuels are  used in steam generation for carbon adsorption units
 and for supplemental  fuel  in incineration units.
  7.4.1   Electricity and Fossil  Fuel  Impacts
      The annual electricity consumptions  calculated for the adhesive and
 silicone release  model  plants,  using both carbon  adsorption and inciner-
 ation  controls, are given in Table  7-10.
      The generation of  electricity  for this purpose also causes sec-
 ondary  pollution  effects.   Whether  the utility  power plant is fossil
 fuel-fired  or nuclear,  some form  of pollution will  be emitted.   Fossil
 fuel-fired  plants  will  generate air emissions consisting of SCL,  NO ,
 and  particulates.   In addition, they can  generate a solid  waste problem
 involving the  disposal  of residual  bottom ash and flyash.   Nuclear
 plants will  produce thermal  water pollution as  a  result  of their cooling
 water disposal practices.
     Natural gas  and  fuel  oil  (and  sometimes liquid propane gas)  are  the
 types of fossil fuels used  in  the emission  control  equipment of the PSTL
 industry.   Incinerator  control  systems  use  either fuel oil  or natural
 gas  as a supplementary  fuel.  As  discussed  in Chapter 4, the amount of
 supplemental fuel   is  dependent  on the  LEL  in the gas  to  be  incinerated.
 In the model plants developed for this  study -the ovens are  assumed  to
 operate at  25  percent LEL.   At  this  level  some  supplemental  fuel  is
 required by  the incinerators.  A  small  amount is needed  to  maintain the
 pilot flames.
     Natural gas,   number 2  fuel oil, or coal can be used to fire  the
carbon adsorption  unit  boilers.   In  the model plants  of  this  study,
number 2 fuel  oil   is  used.   The fuel oil  requirements for boilers  installed
                                  7-22

-------
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 on each variety of coating lines are given in Table 7-11.  The natural
 gas requirements of each model  coating line are given in Table 7-12.
 Most operators  will  want to burn liquid or gas fossil  fuels over solid
 fossil  fuels.   The oil  and gas  fuels are much easier to store, handle
 and fire when  compared  to solid fuels.  Also, because of the relatively
 low fuel  requirements,  it is expected that very few operators will  use
 solid fossil  fuels as an energy source.
 7.4.2  National  Energy  Impacts
      The national  energy impacts from the institution of emission control
 technologies  in the  PSTL industry are presented in Tables 7-13,  7-14,
 and 7-15.   In  the  calculations  for these tables,  it was assumed  that all
 solvent-based  coating systems are controlled  by either carbon adsorption
 or incineration depending  on the particular case.   A reduction in the
 demands  for electricity  and fossil  fuels is projected  in every instance.
 These declines  are due primarily to the continual  shift away  from solvent-
 based coating technology towards waterborne and 100 percent solids
 processes.  As  solvent-based coating  decreases,  fewer carbon  adsorption and
 incineration systems will  be needed,  thereby  lessening  the  demand for
 fuel  oil and natural gas.   The  electricity  consumption  of solvent emission
 controls will also decrease for the same reason.
      The impact  of NSPS  controls on the baseline energy requirements  are
 minor.   In  1985  Alternative II  control  would  increase  industry electricity
 consumption by  about 2 percent  above  that  required  by Alternative I
 control.  Alternative III would  increase consumption by about  3  percent.
      The fuel  oil  and natural gas  impacts are  of a  similar  magnitude.
 In  1985 Alternative II control would  increase  fuel  oil  use  by  about 10
 percent and natural gas  use by  about  9  percent  above that required by
Alternative I control.   Alternative  III  would  result in  a 15 percent
 increase in fuel oil  consumption and  about  a 14 percent  rise in  natural
gas use above baseline Alternative  I  levels.
     Considering the national energy  situation, the total additional
energy used for  VOC control  devices  is  negligible  (about three thou-
sandths of one percent).   This is the worst case estimate.  The  basis
for this calculation is   a national annual energy consumption of  76 x
1015 BTU's.13
                                  7-24

-------
   TABLE 7-11.  FUEL OIL REQUIREMENTS OF CARBON ADSORPTION CONTROL UNITS
                (Based on model  plants developed in Chapter 6) *
Facil ity Size
(line size, line speed)
Control Level s
Large (1 .5m, 1.2 m/s)
Alternative I
Alternative II
Alternative III
Medium (0.9m, 0.3 m/s)
Alternative I
Alternative II
Alternative III
Small (0.61m, 01.3 m/s)
Alternative I
Alternative II
Alternative III
Liters (Gallons) of Number 2 Fuel Oil per Year
Adhesive Coating

885,600 (234,000)
976,300 (258,000)
1,022,000 (270,000)

121,000 (32,000)
131,700 (34,800)
131,700 (34,800)

38,900 (10,300)
41,000 (10,800)
43,200 (11,400)
Silicone Release Coating

132,000 (34,900)
143,000 (37,800)
151,200 (40,000)

19,400 (5,100)
19,400 (5,100)
21,600 (5,700)

6,500 (1,700)
. 6,500 (1,700)
6,500 (1,700)
*Figures represent fuel  oil  requirements of a single coating  line.
                                     7-25

-------
           TABLE 7-12.
NATURAL GAS REQUIREMENTS  FOR  THE  CONTROL
EQUIPMENT OF SOLVENT-BASED COATING  LINES*
          Facility Size
    (line size, line speed)
        Control Levels
                 Adhesive
               Coating Lines
                 (NraVyr)
Silicone Release
  Coating Lines
   (NmVyr)
Large
  (1.5m, 1.2 m/s)
Alternative I
Alternative II
Alternative III

Medium
  (0.9m, 0.3 m/s)
Alternative I
Alternative II
Alternative III

Small
  (0.61m, 0.13 m/s)
Alternative I
Alternative II
Alternative III
                 2,304,000
                 2,496,000
                 2,646,000
                   315*600
                   332,400
                   337,200
                    99,600
                   180,000
                   114,600
    343,200
    371,400
    395,400
     49,800
     51,600
     54,000
     15,000
     15,000
     17,400
* Is used in incineration systems only
                                  7-26

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                                               7-27

-------
 TABLE 7-14.  ESTIMATED NATIONAL FUEL OIL IMPACTS OF VOC CONTROL SYSTEMS*
Control Levels
Facility Type
Regulatory Alternative I
Adhesive
Si li cone Release
Regulatory Alternative II
Adhesive
Si li cone Release
Impact on Baseline
Adhesive
Si li cone Release
Regulatory Alternative III
Adhesive
Si li cone Release
Impact on Baseline
Adhesive
Si li cone Release
Annual Consumption of Number 2 Fuel Oil-
10° liters (10° qallons)
1982

15.6(4.1)
2.3(0.61)

17.2(4.5)
2.5(0.66)

1.6(0.42)
0.2(0.05)

18.0(4.8)
2.7(0.71)

2.4(0.63)
0.4(0.11)
1985

10.7(2.8)
1.6(0.42)

11.8(3.1)
1.7(0.45)

1.1(0.29)
0.1(0.03)

12.3(3.2)
1.8(0.48)

1.6(0.42)
0.2(0.05)
1990

6.0(1.6)
0.88(0.23)

6.5(1.7)
0.94(0.25)

0.5(0.13)
0.06(0.02)

6.8(1.8)
1.0(0.20)

0.8(0.21)
0.12(0.03)
*Is used in carbon adsorption systems only
                                  7-28

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         TABLE 7-15.  ESTIMATED NATIONAL NATURAL GAS IMPACTS OF
                               VOC CONTROL SYSTEMS*
Control Level s
Facil ity Type
Regulatory Alternative I
Adhesive
Sil icone Release
Regulatory Alternative II
Adhesive
Sil icone Release
Impact on Basel ine
Adhesive
Sil icone Release
Regulatory Alternative III
Adhesive
Sil icone Release
Impact on Basel ine
Adhesive
Sil icone Release
Annual Natural Gas Consumption (106Nm3) '
1982

40.7
6.1

44.0
6.5

3.3
0.4

46.5
7.0

5.8
0.9
1985

27.9
4.2

30.2'
4.5

2.3
0.3

31.9
4.8

4.0
0.6
1990

15.5
2.3

16.7
2.4

1.2
0.1

17.7
2.7

2.2
0.4
* Is used in  incineration  systems  only
                                  7-29

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     There is a potential  in the PSTL industry for a net national  energy
savings.  This savings would be possible if many or all  solvent-based
coating lines used solvent recovery control systems.  The net recovered
solvent could be translated into barrels of oil, consequently equaling
barrels of oil that would not then have to be imported.
     In 1985, Regulatory Alternative II would have an increased energy
requirement of about 7,900 barrels (1.26 million liters) of crude  oil
per year above that required by Regulatory Alternative I.  If all
solvent-based lines were controlled by carbon adsorption to the Alter-
native II level  (a best case situation) gross energy savings of about
23,600 barrels (3.75 million liters) of crude oil  are  estimated.   By
deducting the required energy for controls, a potential  net national
energy savings of 15,700 barrels (2.5 million liters) of crude oil
                                                            f
exists.
     If all solvent-based coating lines were controlled  by incineration
to the Alternative II level  the worst case national  energy impacts
result.  Because no solvent is recovered, there are no credits to  offset
the increased energy used by the VOC control  systems.  Annually 17,700
barrels (2.8 million liters) of crude oil may be consumed by the PSTL
industry.
     Under Regulatory Alternative III an incremental (above Alternative I)
energy demand of approximately 12,000 barrels (1.9 million liters)  of crude
oil is projected.   Assuming all  solvent-based coating lines are controlled
to the Alternative III level  by carbon adsorption, a gross national  energy
savings of about 39,100 barrels (6.2 million liters) of  crude oil  is
predicted.  This gross savings equates to a potential net national  energy
savings of 27,100 barrels (4.3 million liters) of crude  oil.   This  estimate
reflects the best case energy impact.
     The worst case energy situation would occur if incinerators were used
to control all solvent-based coating lines.  All  solvent would be  destructed
and no recovery value could be obtained.  Under Alternative III incineration
controls would require approximately 31,000 barrels   (4.9 million liters)
of crude oil  per year.
                                    7-30

-------
     No total carbon adsorption or  total  incineration  control situation  is
anticipated  in this industry.  The  actual energy  impact will be  determined
by the availability of price of solvent,  the applicability of alternative
fuels, the rapidity with which low-solvent technologies replace  solvent-
based ones, and the stringency of environmental regulations.
7.5  OTHER ENVIRONMENTAL IMPACTS
     The impact of increased noise levels is not a significant problem
within the emission control systems of the PSTL industry.   No noticeable
increases in noise levels occur as a result of increasingly stricter
regulatory alternatives.   Fans and motors, present in the majority of
the systems,  are responsible for the bulk of the noise in the control
operations.
                                 7-31

-------
7.6  REFERENCES
1.   Rifi, M. R., Water-Based Pressure Sensitive Adhesives Structure vs.
     Performance, Union Carbide.  Bound Brook, NJ.   (Presented at the
     Technical Meeting on Water-Based Systems, PSTC, Chicago, Illinois,
     June 21-22, 1978.)  p. 29.
2.   Frost and Sullivan, Pressure Sensitive Products and Adhesives
     Market, Frost and Sullivan, Inc., New York, NY, November 1978,
     p. 128.
3.   Letter and Attachments from Azrak, R. 6., Union Carbide Corporation,
     New York, NY, To Nelson, T. P., Radian Corporation.  April  23,  1979.
     Outlining economic data done with Union Carbide.
4.   Liptak, B. G. (editor).  Environmental Engineers  Handbook,  Volume  II,
     Air Pollution.  Radnor, Pennsylvania, Chilton Book Company.  1974.
     pp. 82-85.
5.   Reference 2, p.  128.
6.   Control of Volatile Organic Emissions from Existing Stationary
     Sources - Volume 1: Control Methods for Surface Coating Operations.
     U.S. Environmental Protection Agency.  Research Triangle Park,  N.C.
     EPA-450/2-76-028.  November 1976.  p. 42.
7.   Reference 4, p.  892.
8.   'Reference 6, p.  50.
9.   Devitt, T., P. Sparte and L. Gibbs.  Background Study in Support of
     New Source Performance Standards for Industrial Boilers.  PEDCo
     Environmental, Inc.  Cincinnati, Ohio.  PN 3310-S.  March 1979.
     p. 96.
10.  Dean. J. A.  (editor).  Lange's Handbook of Chemistry, llth edition,
     McGraw-Hill Publishing Company.  New York, NY.  1973, p. 7-54.
11.  Perry, R. H., C. H. Chilton  (editors).  Chemical  Engineer's
     Handbook, 5th edition, McGraw-Hill Publishing Company.  New York,
     NY.  p. 3-6.
                                  7-32

-------
12.
13.
No man, A.  W.   Total  Delivered  Cost/Performance Analysis As Applied
to Hot Melts.   Paper,  Film,  and Foil  Converter.  MacClean-Hunter
Publishing  Company.   Chicago,  Illinois.  November, 1975.  p. 43.
Environmental  Quality,  9th Annual  Report of the Council on
Environmental  Quality,  December, 1978.  p. 346.
                                  7-33

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-------
                          8.  ECONOMIC IMPACT
8.1  INDUSTRY PROFILE
8.1.1 Introduction
     Pressure sensitive adhesives  (PSA's) are technically defined as
those in which a dry film is agressively and permanently tacky at room
temperature and which will bond firmly to a large variety of untreated
surfaces with only minimal finger pressure.  The pressure sensitive
adhesives industry generally includes those producers of the adhesive
components, formulators of the adhesive compounds, and manufacturers of
products coated with PSA's.   The segment of the industry treated in this
document is limited to manufacturers of PSA-coated materials.  There are
three major categories of PSA-coated products:   tapes, labels, and
specialty items.
     The major difficulty in accurately profiling the pressure sensitive
tapes and labels (PSTL) industry is a lack of data.   The industry is
classified under Standard Industrial Classification (SIC) 26414, a part
of SIC 2641, paper coating and glazing.   Since  data are not as readily
available for five-digit industries as they are for four-digit industries,
it is impossible to supply quantitative information for certain parts of
this profile.
8.1 .2  General  Profile
     8.1.2.1   Supply.   The objective of this section is to examine ele-
ments of the supply of PSTL.   This involves a description of the product,
the process by which it is produced, and identification of firms in the
industry.
     Product description.   Pressure sensitive tapes  and labels are found in
 a wide variety of forms and  have an enormous range  of uses.   The tapes
and labels produced may be used directly by the consumer as mending tape
or unprinted labels; however,  pressure sensitive tapes and labels are
                                   8-7

-------
often used as an intermediate good.  In such products tapes may be used
as fasteners, as on disposable diapers, while preprinted labels may
decorate and identify the product.  Therefore, the market is not only
influenced by direct consumer demands for the tapes and labels, but also
by consumer demand for the final  product of which tapes and labels are a
part.  Pressure sensitive tapes and labels have found uses in a wide
variety of markets, such as the automotive industry, building construction,
electronics, graphic arts, general manufacturing, and everyday consumer
needs in business and at home.
     There are  nearly 600 different types of pressure sensitive tapes
produced.   The major categories are established according to the
backing material used:  paper, film, fabric, foam, nonwoven fabric, and
foil  tapes.  The largest volume of tapes produced are paper backed
tapes, estimated to account for approximately 40 percent of the tape
               2
market in 1974.   The three major uses of paper tape are listed according
to volume usage:  masking, packaging, and surface protection.  Masking
tape has its largest market concentrated in the automotive industry, but
is further used in home painting, drafting, and other general applications.
Packaging tapes are thicker and stronger than masking tape and are used
throughout many industries.  Surface protection of highly polished
product surfaces or surfaces which are easily scratched is a major
market for saturated paper tape.
     Film tapes, which are backed by different polymer films, are second
in volumetric production and use.  Plastic backed tape has been estimated
                                                     3
to control from 24 to 31 percent of the total market.   Cellophane was
the most important backing material used and provided us with the first
household/office pressure sensitive tape; however, other improved polymer
films, such as cellulose acetate, are gaining the lead.  Films such as
polyester film are used for general household tape, but more importantly
in glass reinforced tape.  Poly vinyl chloride is used in both rigid and
plasticized forms.  Rigid poly vinyl chloride tape has become popular for
packaging and box sealing and placticized poly vinyl chloride is used for
electrician tape, pipe wrap tape, and hospital bandage tape.
                                    8-2

-------
 Polypropylene and polyethylene are used for tape backing for a variety
 of uses,  but not nearly to the extent of the other four films.
      Fabric tapes made with cotton cloth backing are useful  for surgical
 and athletic applications  because of their high  strength and bulk and
 flexibility.   Polymer coated cloth tapes are also produced for use in
 duct insulation  and carpet pad splicing.  Other  cloth tapes  include
 acetate  cloth and glass fiber cloth.
      Other pressure sensitive tape backing materials are foam,  nonwoven
 fabric,  and foil .   Foam tapes are useful  in gasketting  and weather
 stripping.   Nonwoven fabric tapes are important  as  hospital  tapes.   Foil
 tapes  are  commonly made of aluminum,  lead,  and copper foils  and  find
 uses in  packaging  and sealing,  heat shielding, insulating, and  sound and
 vibration  damping.
     Tapes  may be  either double  or single  sided  and  may  also  come  in
 other  forms  such  as  embossible  tape  or photoprintable tape.   Some  tapes
 may  be mounted on  release  liners,  others may  just receive  a  release
 coat,  and  then some  may  not be  release  coated at all.  Coating and
 marketing  of  release backing  is  another large, closely associated business,
     Labels  are all  provided  with release  liners and  are primarily made
 from castcoated paper.   Other papers  are also used,  and  many  are clay
 coated to  provide  a  better printing surface.  Labels  are categorized
 primarily as  printed  or unprinted.  Pressure sensitive labels have
 gained tremendously  in  use  on  product containers and  as decorative
 decals.
     Production process.   The production stages for  the PSTL  industry
 are  shown in  Figure  8-1.   The chemical  industry manufactures  the raw
 materials used in  compounding the adhesive and the polymer web materials.
 The  paper web materials  are supplied by the pulp and paper industry.
 Often, the adhesive  component materials are sold to adhesive formulators
who  compound  the raw materials into bulk adhesives appropriate for
manufacturing different  products.  Tape and label  manufacturers then buy
the  compounded adhesives from formulators,  or in  the case of most larae
manufacturers, the adhesive raw materials are bought directly from the
chemical  firms and formulated in-house.  Release  papers  or release
coated webs may be bought from companies who are  solely involved in

                                    8-3

-------
    MANUFACTURERS OF
       ADHESIVE RAW
        MATERIALS
        MANUFACTURERS OF
          WEB MATERIALS
  ADHESIVE
FORMULATORS
                  BASE STOCK MANUFACTURERS
                TAP ES& LAB ELS
BASE STOCK
                                                 V
                                             CONVERTER
                       MANUFACTURER OF
                        OTHER PRODUCTS
                           CONSUMER
                           RELEASE
                           COATERS
               Figure 8-1. Hierarchy of the pressure sensitive tapes and
                        labels industry.
                                8-4

-------
 release  coating  operations  or they  may  be  coated  in-house.   The  ba?e
 stock  materials  for the  tapes and labels are manufactured  in a wide sheet
 or web,  and  either further  processed  into  tapes or labels  on site  or  sold
 to converters  to be further processed at another  site.   The  web  or base
 stock  is processed into  tapes, labels,  or  similar products and sold as a
 final  product  or sold  to manufacturers  as  an intermediate good.
     The manufacturing of labels involves  higher  volume  and  lower  tech-
 nology than  that found in the pressure  sensitive  tape business.  As-a
 result,  the  two  segments of the industry have  in  general remained  sep-
 arate, even  though the basic  production processes  are similar.
     Current industry  technology is based  upon hydrocarbon  (solvent)
 application  of the adhesive.   Solvent-based coatings account  for 60-70
 percent  of pressure sensitive  tape  production, waterborne coatings
 account  for  20 percent,  and hot melt for 10 percent.4  This  distribution
 of production methods could easily  change  depending upon the  availability
 of factors of production.   Much of  the natural  rubber used in the  pro-
 duction  of solvent adhesives  comes  from Malaysia and Indonesia,  two
 relatively unstable  political structures.  As a result of dollar devalua-
 tion and  heavy demands for  more natural  rubber in  the production of
 other products,  these countries have raised the price of their shipments
 by  15-20  percent.   Toluene, which is used  as a solvent,   is a  petroleum
 derivative and subject to OPEC supply constraints.
     Firms in the  industry.   In this study nearly 90 firms with
 production coating  lines  for  pressure sensitive tapes and labels were
 identified.  Table  8-1  provides a list of  these firms,  their location,
 the principal product categories,  and the  number of workers employed by
each.  Sixty individual  firms operate these facilities.   The distribution
of  firms  is  shown  graphically in Figure 8-2.
     Silicone release sheet coating.  Release coating operations  are an
 integral  part of the total  pressure sensitive tape and  label  industry.
Nearly all tapes or labels  have some release coating associated with
them.  While most  tapes are back-side coated with  a release coating,
most labels and some tapes  require  a separate piece of  coated substrate
known as a release.  The following  paragraphs discuss the release sheet
coating industry.
                                   8-5

-------
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      The  production  growth  of  the  release  sheet  industry  is  near  10
 percent annually.    This  growth  rate  is  closely  associated with the
 growth of the  label  industry.  The  total volume  of  silicone  release
 paper coated in  1978 was  approximately two  and one-half billion square
 meters  (3 billion  square  yards).6   Silicone  release  sheet coating  is
 done  by two types  of firms:  (1)  pressure sensitive  tape or label manu-
 facturers who  operate  the release coaters  in-line with their adhesive
 coating equipment  and  (2) independent coaters whose  only business  is
 coating silicone release  sheets.  The majority of silicone release
 coating is done  for  captive  uses.   The largest purchasers of the release
 coatings  include 3M  Company, Avery-Fasson, Dennison Manufacturing
 Company,  and Morgan  Adhesives.   Of these, Avery-Fasson, Dennison, and
Morgan are major label  and label  stock manufacturers.
      In May 1979 a survey was made  of operations which coat only silicone
 release sheet  materials and  then sell the  release sheets to pressure
 sensitive tape or  label manufacturers.   Nine companies were identified
 that  strictly  coat release sheets.  Of these nine only seven actually
 coat  materials used  in the pressure sensitive tapes and labels industry.
These seven operate  nine  plants and seventeen organic, solvent-based
coating lines.   Only two  plants operate more than one coating line.  The
companies  identified as release sheet coaters are given in Table 8-2.
     The  results of  the silicone release coater survey are outlined in
Table 8-3.  In 1978, companies coating just release materials produced
about 441,000,000 square meters  (527,000,000 square yards) of release
coated webs.  Of this total , approximately 243,000,000 square meters
 (291,000,000 square yards),  or 55 percent,  were sold to manufacturers of
pressure  sensitive tape and label products.  This production represents
9.7 percent of all  silicone release coated sheets for the industry.
     For  operations which strictly coat 'release sheets, the coating is
generally a high volume operation with few small  specialty lines.
Release coaters operate at high speeds with large web widths.   Line
speeds range from 45 to 366 meters per minute (150 to 1200 feet per
minute) with an average speed of 144 meters per'minute (470 feet per
minute).   Web widths in the industry range  from 102 to 223 centimeters
                                   8-12

-------
   TABLE 8-2.   MAJOR SILICONE RELEASE COATING COMPANIES
Pressure Sensitive Release Coater
    Plant Location
 Akrosil  Division
 ARHCO, Inc.
 Daubert Chemical Co.

 Eastern Fine Paper
 H.P.  Smith

 James River-Massachusetts,Inc,
 Ludlow Papers & Flexible Pkg.
 Rhinelander  Paper Co.
 St.  Regis Paper Co.
Menasha, Wisconsin
West Chicago, Illinois
Dixon, Illinois
Cullman, Alabama
McKinney, Texas
Brewer, Maine
Chicago, Illinois
Iowa City, Iowa
Fitchburg, Massachusetts
Chicago, Illinois
Rhinelander, Wisconsin
Attleboro, Massachusetts
                           8-13

-------
        TABLE 8-3.  SILICONE RELEASE SHEET COATING DATA FOR COMPANIES
                    SOLELY  INVOLVED IN RELEASE COATING
PRODUCTION
Total Release Coating Production
Total Release Coating Related to PSTL
Percent of Total Production Related to PSTL -
441,000,000 m2
243,000,000 m2
55%
OPERATING CONDITIONS
Range of Web Width - 1.0 to 2.2 m (40 to 88 inches)
Average Web Width  - 1.5 m (61 inches)
Range of Line Speeds: 0.76 to 6.1 m/sec (150-1200 feet/minute)
Average Line Soeed - 2.4 m/sec (470 feet/minute)
Percent of Production that is Solvent-Based - 78%
Percent of Production that is Waterborne - 19%
Percent of Production that is 100 Percent Solids-Based .- 3%
Average Weight Percent Solvent - 91.8%
                                    8-14

-------
 (40  to  88  inches) with an  average width  of  155  centimeters  (61  inches).
 Paper,  paperboard,  polyolefin  paper,  clay coated  paper,  plastic coated
 paper,  superealendered kraft,  and unsupported films  (polyester, poly-
 ethylene,  polystyrene) constitute the majority  of materials used in the
 webs.
     The silicone release  survey showed  that 78 of all si! icone release
 sheet coatings are  solvent-based.  Toluene, heptane, xylene, naphtha,
 and  alcohols are the  preferred solvents.  Current solvent-based silicone
 release coatings have an average weight  percent solvent  of 91.8.  None
 of the  surveyed coaters employed any  type of solvent control technology.
     Of the  remaining coatings 86 percent are waterborne and 14 percent
 are  100 percent solids.  Industry-wide the  trend is to go to low-solvent
 technologies rather than solvent systems with VOC controls.  By 1982
 predictions  indicate  that  silicone release  coating will be performed by
 one-third  solvent, one-third waterborne, and one-third 100 percent
 solids technology.  Most of the conversions will occur in larger firms,
 while smaller companies will remain solvent-based.  The move towards low
 solvent systems will  reduce the impact of the independent release  sheet
 coaters on the PSTL source category.
     8.1.2.2  Demand.  This section examines factors relevant to the
 demand side of the PSTL market, such as sales,  imports and exports,  and
 substitutes and complements.
     Growth of sales.  The sale of pressure sensitive tapes and labels
 totals approximately $1.3 billion per year.   Pressure sensitive tape
 shipments account for $900 million and pressure  sensitive labels account
 for $360 million.    Growth for the industry is  high  when  compared  to
 both a broader industrial  classification and to  industry  in general, as
 shown in Table 8-4.   In the 5 years  since 1973,  sales of  pressure  sensitive
 tapes and labels  have increased by over 50 percent,  the largest growth
 of any sector in  SIC 2641 .9  On the  average, the PSA market has grown at
 10 percent annually, while  labels  have increased at  12  percent.10 Typically,
the demand for pressure sensitive  tapes  and  labels  follows  general
business activity  fairly  closely.   This  is due to its use as  an inter-
mediate good by major industrial  users,  e.g.,  the  automotive  industry.
11
                                  8-15

-------
             TABLE 8-4.   PERCENTAGE GROWTH IN VALUE OF SHIPMENTS
                                 1958-1972
Pe n" od
1958-1963
1963-1967
1967-1972
SIC 264143
70
41
31
SIC 264la ,
44
7
22
All industry13
29
33
35
a U.S. Bureau of Census, Census of Manufactures, 1972.  Industry Series:
  Converted Paper and Paperboard Products. Except Containers and Boxes,
  GPO, 1975, p. 30.

b U.S. Bureau of Census, Census of Manufactures, 1972, Vol. 1, Subject and
  Special Statistics. GPO, 1976, p. 3.

     There appears to be no data on production in terms of square yards
or pounds, nor present percentage of production capacity being utilized.
     Demand for specialty pressure sensitive products are presented in

Table 8-5.
     For most firms demand does not exhibit any seasonal variations, as sales
                                                 1 p
figures are roughly constant throughout the year.    This contributes to

fuller capacity utilization.


              TABLE 8-5.  SALES AND USAGE FIGURES FOR SPECIALTY
                    PRESSURE SENSITIVE PRODUCTS, 1978
      Tape Type  or Major Use
Sales,    Usage, mm ra
(mm$)         (mm yd )
Health  and  first  aid  tape
      Fasteners  for disposable  diapers
      Fasteners  for feminine  napkins

Pipe  wrap tape

Hospital tape

Narrow  slit drafting  tape
 40

 30
               10(12)
               38(45)
             0.25(.3)
                                    8-16

-------
      Imports and exports.   Imports, until  recently,  have not been
 considered a threat by domestic manufacturers.   However, one particular
 area of concern is the volume of rigid polyvinylchl oride tape imported
 from some European countries.  In the other pressure sensitive market
 areas there appears to be  only a small  percentage of import competition.
 Table 8-6 shows 1978 pressure sensitive tape imports by various  categories.13
 Plastic backed tapes are the  largest import item in  volume  and in
 dollar value.   Table 8-7 shows a time trend for imported plastic backed
 pressure sensitive tape.14   The major exporting countries  of pressure
 sensitive tapes are Italy,  West Germany, and Taiwan.
      The impact on the pressure sensitive  tapes  market  by imports was
 first realized several  years  ago when several West German and Italian
 operations  unloaded large  quantities  of unplasticized  (rigid)  PVC box
 tape  on the market.15   More recently, manufacturers  have  become  concerned
 over  possible  dumping  by Taiwan.  Thus,  the  potential for imports to
 pose  a  significant threat  to  the U.S. market for pressure sensitive tape
 exists.
      Exports of PSTL are an important part  of the industry.    For example,
 in  1S77 approximately  60 percent  of Morgan Adhesives1 sales were outside
 the United  States.      Recent  export  statistics  for pressure  sensitive
 tape  are  presented  in  Table 8-8 J 7
      Additional  import  and export data  is available through  the U.S.
 Trade Commission;  however, product classifications have changed from
year  to year and it  is  difficult  to determine what products  were included
 for a given year.   '     it is impossible to draw any correlation due  to
 the incongruity encountered.  Projections of imports and exports are not
 available.
      Substitute and complementary goods.  There has been a great deal  of
competition between pressure sensitive labels and those that are heat  or
water activated.  Pressure sensitive labels are more expensive, but  they
are less expensively applied and capital equipment costs are less.20
These factors,  coupled with advancement in  new pressure sensitive adhesives
and compatible  application rates with production lines,  have made them
                                  8-17

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          Table 8-7
U.S. IMPORTS OF PRESSURE  SENSITIVE  PLASTIC  BACKED TAPE
	 Type of tape
Unplasticized PVC
1000 m2
(1000 yd2)
$1000
Polypropylene
1000 m2
(1000 yd2)
$1000
Polyester
1000 m2
(1000 yd2)
$1000
Dther Plastic
1000 m2
(1000 yd2)
$1000
otal
1000 m2
(1000 yd2)
$1000
1973

18,802
(22,487)
4382

34
(41)
32
23
(28)

38
(45)
16
18,897
(22,601)
4431
1974

28,373
(33,935)
7581

218.
(261)
53
12
(14)
19

18
(21)
9
28,621
(34,231)
7662
1975

32,081
(38,370)
7133

784
(938)
179
0
(9)
12

44
(53)
25
32,918
(39,370)
7349
1976

53,440
(63,915)
12,079

6,060
(7,248)
1241

19
(23)
23

'no
(132)
61
59,630
(71,318)
13,404
.
                                       8-19

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 very competitive for use in the labeling of commercial  products.   Some
 of the recent growth of pressure sensitive adhesives has come at the
 expense of substitutes.   For example, the adhesives1 share of the fastener
• market has grown from 37 percent in 1965 to 45 percent in 1977.21
      Demand for PSTL has also been affected by the demand for complementary
 commodities.   Disposable diapers and feminine napkins are examples of
 new products  using tapes and fasteners.   Foam tapes similar to those
 used as automobile body side moldings are also being used in new  markets
 such as acoustics and insulation.   In addition to new complementary uses
 of PSTL,  increased demand for existing complements, e.g.,. automobiles,
 also increases demand.
 8.1.3  Market Structure
        This section presents information on the organization of the
 pressure  sensitive tapes and labels industry.   Data on  industry size and
 geographic concentration, vertical  and horizontal  integration,  and entry
 and exit  of firms in the industry  will  be presented.   An attempt  is made
 to estimate the size distribution  of firms in  the industry,  but reliable
 data on pressure sensitive tapes and labels sales by firm are unavailable.
      8.1.3.1   Concentration Characteristics.   Traditional  indicators of
 industry  concentration  show a relatively high  degree of concentration.
 As shown  in Table 8-9 the industry has become  less  concentrated over
 time.
22
        Table  8-9.   HISTORIC  CONCENTRATION  RATIOS  OF  PRESSURE  SENSITIVE
                     TAPES  DEFINED  BY  VALUE OF  SHIPMENTS


Year
1972
1967
1963
1958
1954
Total
Shipments
(mi 1 1 i ons of dol 1 a rs )
574.5
438.3
311,7
183.4
148.9

4-Fi rm
Ratio
.59
.68
.65
.76
D

8- Firm
Ratio
.74
.81
.76
.88
.95

20- Firm
Ratio
.90
.94
.92
.97
.98

50-Fi rm
Ratio
.98
.99
.99
.99
NA
 D:   Withheld  to  avoid  disclosing  figures  for  individual companies.
                                  8-21

-------
     To characterize the PSTL industry as highly concentrated may be
somewhat misleading.  As discussed above, output of the industry is not
homogenous.  For example, paper tape is different from foil tape.  Thus,
in most cases they do not represent substitutes for each other.  In some
markets within the paper tapes and labels classification, high concentra-
tion ratios may be the norm, while in others product sales may be more
evenly distributed.  For example, the production of masking tape is
dominated by a few large firms such as Minnesota Mining and Manufac-
turing and Tuck Industries.   This results from the production process
in which large batch production runs enable the producer to take advantage
 of large economies of scale.  However, with specialty tapes the runs
are smaller, often custom ordered, suggesting the existence of numerous
smaller firms with sales more evenly distributed.  In spite of the above
qualification, it should be  noted that concentration ratios have on the
whole fallen through time.   This would indicate that this market is
becoming more competitive.
     Reliable statistics of firm sales of PSTL are unavailable.   Thus it
is difficult to obtain individual  market shares of the sales leaders.  .
Listed below in Table 8-10 are sales leaders for tapes and labels in  ;
estimated order of market share.23
           TABLE 8-10.
   RANKING OF FIRMS BY ESTIMATED MARKET SHARE
      (largest to smallest)
          Pressure Sensitive Tapes
                             Label  Stock
1.  Minnesota Mining
2.  Permacel
3.  Nashua Corp.
4.  Mystik Tape
5.  Tuck Industries
and Manufacturing
1.  Avery/Fasson
2.  Morgan
3.  Dennison
4.  S. D.  Warren
5.  Fitch burg
6.  Coated Products Inc.
     Geographic concentration.   Geographically,  production for paper
tapes is concentrated in the North Central  region of the United States  as
                                 8-22

-------
 indicated in Table 8-11.  This distribution probably best describes the
 distribution of production and sales for the entire industry.  Based on
 this distribution and the present estimates of total  industry product
 sales,  the regional  value of shipments for all  pressure sensitive tapes
 and labels manufacturers would approximate the figures presented in Table
 8-11.
      24
          Table 8-11.   ESTIMATED REGIONAL DISTRIBUTION OF
              PRESSURE SENSITIVE TAPES AND LABELS SHIPMENTS
                       (excluding finished labels)
U.S.
Production Shipment
Northeast
North Central
South
West
Percentage of Total
U.S. Shipment Value, 1972
28%
61%
8%
3%
Estimated Present
Value of Shipments
$300 mm
670 mm
90 mm
30 mm
      Those  states with  pressure  sensitive  tapes  and labels shipments  in
the  top  tier  by  dollar  value are  Illinois  and Minnesota, according to
                                  9 £
1972  Department  of Commerce data/0   States which rank in the second
tier  are Massachusetts, New York, New Jersey, Pennsylvania, Ohio, Mich-
igan, and Kentucky.   Pressure sensitive tapes became less geographically
concentrated  between  1967 and 1972, with both the North Central and
Northeast losing market shares to the South and West.26
      Integration.  Again a deficiency of information prohibits a rigorous
treatment of  vertical and horizontal  integration within the industry.  A
few observations can  be advanced that may  be suggestive.  As noted in the
discussion of the production process the potential  for vertical  integra-
tion exists, especially in the acquisition of inputs.   For example,
converters have begun to install  their own coating  lines instead  of
buying the base stock elsewhere  (e.g., Werby Industries, S.D.  Warren.).
Vertical  integration also exists at the output stage.   For example,
Presto Adhesive Paper Company produces pressure  sensitive  adhesive  paper,
over 50 percent of which is sold to its parent company,  Monarch Marketing
                                  8-23

-------
Company.
        24
            In another instance, Arno Adhesive Tapes sells 20 percent of
                                       28
its output to Scholl, Inc., its parent.     Thus it appears that the
potential for vertical integration to contribute toward more efficient
operation exists, although the extent of such integration in the industry
is unknown.  Integration of various other adhesive applications, for
example heat sensitive, exists within firms producing pressure sensitive
adhesives  (e.g., Deccofelt Corp., Shawseen Rubber, and Werby Industries).
The extent of such horizontal  integration is unknown.
     8.1.3.2  Entry and Exit of Firms.  The pressure sensitive tapes and
labels industry is roughly 20 years old.  Much of the initial  entry
occurred when existing firms established pressure sensitive adhesive
coating operations.   It is difficult to obtain concrete information
about such diversification.  From the available data, it can be seen
that new entrants are relatively few, as shown in Table 8-12.
the exit of firms from the PSTL industry is unavailable.
                                                             29
                                                                 Data on
           TABLE 8-12.  ENTRY TO THE PRESSURE SENSITIVE TAPES AND
                        LABELS INDUSTRY SINCE 1964a

Time Period
1977-1979
1974-1977
1964-1974
Number of Firms
2
1
8
a Firms included in this table were selected from those of Table 8-1.
8.1.4  Market Conduct
       The intent of this section is to characterize the PSTL industry
with respect to economic decision variables, particularly its pricing
behavior.  Due to the variety of products included under pressure
sensitive tapes and labels, it is difficult to specify a price that is
representative of the industry's output.  For example, in 1972 the price
of various tape products ranged from $1.00 to $9.00 per square meter
 ($0.85 to $7.50 per square yard).
                                 30
                                  8-24

-------
      From the available information it is however difficult to suggest
 on what basis price is determined.  In some segments of the market,
 where there are numerous competitors and relatively low barriers to
 entry, it is expected that price closely reflects factor costs.  If
 this is the case, then a competitive model  of price determination is
 appropriate.  In others where only a few firms produce the1 goods and
 capitalization costs are high, an oligopolistic model  better represents
 pricing decisions.   In general, the competitive pricing model  yields
 lower profit margins and more efficient use of plant and equipment.
 For example, firms  in a market characterized by a competitive  pricing
 model  are more likely to exploit any economies of scale that may exist.
      The available  information is insufficient to permit a  characteri-
 zation  of price  determination of the pressure  sensitive tapes  and
 labels  industry  or  any of  its submarkets.   The type  of  information
 necessary  for specifying a  model  would  include:
         • the degree to which various submarkets  are technical  sub-
           stitutes,  and                         .
         • cost and  price information for specific firms  in  the  various
           submarkets of the industry.
     While it  is  difficult  to suggest a model  of price  determination,
 limited  information  on  price  trends  is available.  Recent prices  for
 various  plastic tapes  are shown  in Table 8-13.31'32  The relationship
 of output  price to factor prices  is shown in Figure 8-3.33   It suggests
 that output  price is sensitive to costs of inputs but a clear pattern
 is not discernable.   Finally,  prices of inputs are given in Table 8-14.
 The cost of  petroleum based inputs, such as toluene, have risen to
 reflect increased prices of crude oil.
 8.1.5  Market Performance
       The objective of this section is  to examine specific  indicators
 of performance.  In  large part, this involves an examination of the
 financial  characteristics  of the firms  in  the industry.   Specific
variables constructed below will  be employed in the  quantitative analysis
of the impacts of the regulatory options  presented  in Section 8.4.
                                 8-25

-------
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                 	  ADHESIVE             —
                 —••  RELEASE PAPER
                 	FACE PAPER           ~~
           1970    1971
1972    1973   1974   1975
    CALENDAR YEARS
                                                        1976   1977
                 Figure 8-3. Production costs versus raw material costs.
                  Note: Costs for 1976 and 1977 are projected costs.
                                8-27

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       Table 8-14. RAW MATERIAL COSTS FOR PRESSURE SENSITIVE TAPES

                          AND LABEL PRODUCTS
Web  Materials
1979 Price (dollars/unit)
     Crepe paper
     Flat back paper
     Release control paper tape stock
     Release coater paper label stock
     Mylar
     Cellophane
     Polypropylene
     Import Rigid PVC
     Aluminum foil

Silicone Release

Toluene

Tackifying Resins

     Petroleum hydrocarbons
     Resin Esters
     Polyterpenes

Elastomers

     Natural rubber
     Kraton ©
     Acrylics  (dry)
     Hot melt formulations
     Purchased acrylic  solvent
        (per pound of dry acrylic)
     Acrylic emulsion
        (per pound of dry acrylic)
  0.036/sq yd
  0.018 - 0.048/sq yd
  0.060 - 0.15/sq yd
  0.060 - 0.10/sq yd
  0.046 - 0.084/sq yd
  0.074 - 0.16/sq yd
  0.064 - 0.079/sq yd
  0.042/sq yd
  0.067 - 0.172/sq yd

  2.00 - 4.00/lb

  1.00 - 1.25/galIon
  0.26 - 0.48/lb
  0.35 - 0.40/lb
  0.35 - 0.44/lb
  0.50 - 0,70/lb
  0.75/lb
  0.75 - 0.80/lb
  0.75 - 0.80/lb
  1.60/lb

  0.85/lb
      Cost Data  comes  from the following sources: Akrosil, Mosinee Paper,
      DuPont,  Hercules,  Kaiser Aluminum, Shell, Union Carbide, and Frost
      &  Sullivan
                                   8-28

-------
      8.1.5.1  Financial Profile.
      Size distribution of firms.  A variety of parameters are  relevant
 in evaluating the financial status of a firm or  industry.  A broad  in-
 dicator of firm size is sales.  The sales data presented in Table 8-15.
 are not specific to pressure sensitive tapes and labels but rather are
 total  sales for firms in the PSTL industry, many of whom produce other
 products.  As this table indicates, many of the firms in the industry
 are quite large; nearly 40 percent have sales in excess of $100 million
 annually.  Another characteristic of the industry is the broad range of
 firm sizes,  varying from total  sales of less than $3 million to well
 over $1 billion.
      Table 8-16 presents selected financial  data for firms  in the indus-
 try.   These  data  include sales, .number of employees, total  assets,  and
 net worth.  The results illustrate the diversity of firms  in the industry,
      Balance  sheet indicators.   The balance  sheet ratios presented  in
 Table  8-17 are of  greater analytic interest  than  the sales  data.  The
 table  shows  for each  firm,  grouped by  sales  class size  (see  Table 8-16),
 its return to  assets,  return to  net  worth, and  the  ratio of  cash to
 assets.   Return to  assets  is the  firm's  net  income  after taxes  divided
 by  total  assets.   It  indicates the productivity  of  a firm's  assets.   In
 comparison to  the  paper  and forest products  industry, of which  the PSTL
 industry  is a  part, many firms perform favorably.   The PSTL  industry
 mean is 6.8 percent, while the paper and forest products group  mean  is
 7.0 percent.
     Return to net worth is net income after taxes  divided by the equity
 of  common  stock holders.  It is a  good guage of earnings ability across
 firms or industries.  A composite  of 400 industrial  firms has a  return
 to  net worth ratio of 14.0 percent.35  The average for the firms in
 Table 8-17 is 19.0 percent.  If the small size firms are excluded the
 average falls to 12.8 percent.   Including the small  firms may bias the
 ratio upward, since the data were often unverified estimates supplied by
 the firms  themselves.   This contrasts with the data for the  larger
 publicly traded firms, which have been verified by an audit.   In spite
of this qualification, the PSTL industry has an earnings  ability at
least equal to the  industrial  average and possibly above  it.
                                  8-29

-------
     TABLE 8-15 .   DISTRIBUTION OF SALES VOLUME FOR FIRMS IN PRESSURE
                   SENSITIVE TAPES AND LABELS INDUSTRY3

1.
2.
3.
4.
5.
6.
7.
8.

Sales volume
in million $
Less than 3
3-4.9
5-9
10-49
50-99
100-499
500-999
1000 +

Number of
f i rms
8
8
8
6
4
9
3
10
56
% of
total
14.3 •
14.3
14.3
10.7
7.1
16.1
5.4
17.9

Based on this distribution firms (e.g., cost of capital values) were
divided into three sizes:  Small, 0-4.9 million dollars of sales; Medium,
5-499 million dollars; and Large, 500 million dollars and more.
                                    8-30

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                                                              8-33

-------
TABLE 8-17,, SELECTED FINANCIAL  PARAMETERS  FOR  FIRMS GROUPED
         BY SIZE CLASSIFICATION  (BASED ON SALES)*
Firm
A. Small (less than 5 million dollars)
1. Custom Coating and Laminating
2. General Formulations
3. Kent Mfg.
4. Mask- Off
5. October Co.
6. Odell Co.
7. Syntac
8. T & F Ind.
Weighted Mean
B. Medium (5-499 million dollars)
1. American Bil trite
2. American White Cross
3. Arlon Products
4. Arno Adhesives (Scholl, Inc.)
5. Avery
6. Chemplast, Inc.
7. Coated Products, Inc.
(Essex)
8. Dennison
9. Dymo
10. Fuller Paste and Adhesive
(Fuller H. B.)
11. Ideal Tape (Chelsea Ind.)
12. Label Master
13. Ludlow Corp.
14. Morgan Adhesives (Bemis)
15. Nashua
16. Norwood Industries (Seton)
17. Plymouth Rubber
18. Rexham Corp.
19. Sheldahl
20. Tuck Industries (Technical Tape)
Weighted Mean
C. Large (500 million dollars and more)
1. Armak (Akzona)
2. Brown Bridge Mills
(Kimberly Clark)
3. Central Paper Co. (Alco Standard)
4. Connecticut Hard Rubber (Armco)
5. Fitchburg Coated Products Div.
(Litton)
Return
to
Assets

.148
NA
NA
.037
NA
NA
.067
.141
.110

.105
.065
.048
.061
.055
.121

.091
.090
.039

.061
.019
NA
.007
.048
.077
.055
.004
.081
.017
.074
.067

.011

.079
.079
.042

.027
Return
to
Net Worth

.864
NA
NA
.667
NA
NA
.521
.580
.665

.263
.204
.148
.114
.116
.167

.190
.143
.086

.159
.047
NA
.013
.106
.150
.150
.008
.109
.059
.156
.122

.025

.144
.190
.083

.065
Cash
to
Assets

.135
.041
.221
NA
.064
.297
.011
.023
.096

.009
.003
.033
.063
.029
.117

.019
.011
.083

.093
.033
.150
.021
.015
.032
.019
.020
.030
.029
.020
.037

.014

.015
.020
.007

.036
(con.)
                            8-34

-------
TABLE 8-17 (continued).


Firm
6. Kendall (Colgate Palmolive)
7. Monarch Marketing Syst.
(Pitney Bowes)
8. Mystik Tape (Borden)
9. Norton Specialties (Norton)
10. Parmacel (Johnson & Johnson)
11. Scott Graphics, S. D. Warren
(Scott)
12. Minnesota Mining & Manufacturing
Weighted Mean
"
In some cases financial data represent those
the parent is listed with the subsidiary, in
Return Return
to to
Assets Net Worth
. 081 . 155

.072 .193
• 067 . 124
• 088 . 178
. 122 . 167
. 062 . 110
.177 .182
. 082 . 135
for a parent firm. If
parentheses.
Cash
to
Assets
027
• uc. /
m R
• U J.3
D7T
• \J / _L
.011
.033
.004
.in?
.043
=====
so,
      8-35

-------
     Cash to assets,  the  third  ratio  in Table 8-17,  is defined  as  cash
to total assets.   It  indicates  a  firm's or  industry's ability to  invest
in plant or equipment.  Firms in  the  PSTL industry  have an  average  ratio
of 4.8 percent; the average for the paper and forest products group was
6.7 percent in 1976.36
     Cost of capital.  The cost of capital  is the cost of financing
investment projects.  It  is an  important financial  parameter for two
reasons.  First, in purely a descriptive sense, it  reflects the capital
structure of a firm or industry,  that is, the distribution  of capital
between debt and equity sources.  It  is an  indicator of the target  rate
of return that firms  must receive on  new investment  if the  value of the
firm is to increase over time.  Second, the information presented in
this section is used  in the economic  impact analysis in section 8.4.
     Table 8-18 presents cost of  capital data for 27 firms  in the PSTL
industry.  In general, the firms  listed represent only the larger ones
found in Table 8-16.  Data for  the smaller  firms were insufficient to
estimate the cost  of  capital.   Investment is financed out of either debt
or equity.  Equity is the sum of  retained earnings, common  stock at par
value, and other stockholder equity, e.g.,  paid in  surplus.   Debt
capital  is the sum of long-term bonds and notes.
     When debt and equity sources are compared, the majority of capital
expenditures are financed out of  equity.  The weighted average for
equity finance is  85  percent, with only 15  percent debt financed.  This
suggests that debt finance plays  only a minor role  in the firm's cost of
capital.
     The cost of equity capital  is the cost to the firm of financing an
investment by increasing equity in the firm.37  In theory, this involves
computing the rate of return paid to common stockholders.   Two methods
have been developed to measure this rate of return, depending upon what
assumptions are made  regarding the future growth of the firm.   The first
is the dividend method.   It assumes that dividend payments remain con-
stant over time and that there will  be no growth.   Mathematically, it is
calculated as the dividend price  ratio:
                                  D
                            \e '   = —P-
                            Ke    P
                                     8-36

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 where     k^ = dividend method cost of equity capital
           DQ = dividend per share common stock
           PQ = price per share common stock.
 The second method is the growth model which incorporates growth in
 future earnings to estimate the cost of equity capital.  Two growth
 models were examined.  One is the Gordon-Shapiro growth model in which
 growth is financed out of retained earnings so that the basic cost of
 equity capital  (the dividend price ratio) is increased by the ratio of
 retained earnings to book value:

                                   Eo-°o
             V
 where     kg  = Gordon-Shapiro cost of equity capital
            EQ = earnings  per share common stock
            BQ = current book value of stock per share.
 Another method of capturing the growth component is  given by the Solomon
 model.   The difference between this and the Gordon-Shapiro model  is  that
 the  denominator of the growth term is the current market value  of the
 firm's  stock, PQ,  rather  than the  book value:

       '    ke3 = -°  +  Eo  "  °o = £p_
                 Po     po       Po

 where      k£3 = Solomon cost of equity capital.

     While  any  one of  the three cost  of capital  estimates  could  be used,
 the conservative  approach would be to  use  that measure which yields  the
 highest  cost  of equity capital.  This  approach is  followed  in the
 economic analysis  in Section  8.4.   For  the  firms  in the  sample the
 Gordon-Shapiro  method most  often yields  the highest cost of equity
 capital.  For 14 of the 22  firms for which data were available, the
Gordon-Shapiro  estimate is  greater  than  the Solomon estimate.  The
weighted means, however, are  not that different; the Gordon-Shapiro
method yields a cost of equity  capital of 16.0 percent and the Solomon
method 14.2 percent.
                                 8-39

-------
      3.1.5.2  Outlook.  In general  the outlook for the pressure sensi-
 tive tapes and labels industry is good.  Innovation on the supply side
 and continued growth in demand suggest that sales will continue to grow
 at roughly the same pace of the last 6 years through 1985.38
      Supply.   The industry has recognized for some time that increased
 government regulations for pollution control  and protection of employee
 health would create a need for controlling  the solvent emissions  from
 solvent-based coating lines.   It has only recently been considered an
 economically strategic move to convert to other technologies such as
 waterborne adhesive systems and hot melt  systems.   The reasons for this
 consideration are:   increased  cost  and availability of energy (solvent
 systems require  a great deal of energy),  availability  of raw materials
 necessary  for solvent based PSA's,  and the  advancement of the state-of-
 the-art of alternate technologies.
      The change  away from  solvent systems  has  been gradual,  but should
 increase in future  years as government emission  standards  are promulgated,
 and  as  energy and raw material  prices  increase.  There will  never be  a
 complete move away  from solvent-based  systems; however,  they  will  no
 longer  dominate  the industry.
      In  1978  solvent-based  adhesives accounted for 85  percent of  all
         39
 coatings.     However,  it is projected  that  by  1982  solvent-based  coating
will  account  for 55 percent of  the market,  by  1985  20  percent, and by
 1990  only  10  percent.40'41  Different  reports suggest  varying  projections
as to what  percentage  of which  technology will take the lead,  but all
seem  to  agree  that  waterborne coatings  and  hot melt systems will account
for the  bulk  of  the  production.
     As  has been  the  case historically, it  is expected that  increased
supply will result  from existing  plant  expansion rather than  new firm
      4.?
entry.
     Demand.   Projected growth  of pressure sensitive tapes and labels   is
shown in Figure 8-4.43'44   Overall growth of pressure sensitive tapes
and labels sales are expected to continue up through 1985.  The growth
of the labels market is expected to continue at a rate in excess of that
                                    8-40

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for tape until about 1981, and then it will taper back to about the same
                                            45
growth rate as the more mature tapes market.
     Growth of the pressure sensitive labels market may come at the
expense of the gummed products industry.  The replacement of water
activated and heat activated labels systems with pressure sensitive
labels is especially advantageous for production involving short runs.
The pressure sensitive labels market has increased at 10-15 percent per
year in contrast to 6-7 percent per year for the label industry as a
whole.    Pressure sensitive tapes will be used in more items as fast-
eners and pressure sensitive labels will be used more on glass bottles,
metal cans, and other commercial  containers.  It is estimated that by
1982 about 25 percent of all such containers will  have pressure sensi-
tive labels.47
8.2  COST ANALYSIS OF REGULATORY ALTERNATIVES
     This section analyzes three regulatory alternatives which v/ere
developed in Chapter 6:   (I) the recommended  CTG limits, (II) oven
emissions control, and  (III) oven and fugitive emissions control.  Each
of these levels are defined in later paragraphs.  The regulatory alter-
natives are applied to the new facility model plants  (Chapter 6) and
then are costed for installed capital and operating costs.  A cost
effectiveness analysis is presented for the added levels of control.  A
short discussion is also given on the capital and operating costs of
modified or reconstructed facilities.
     Regulatory Alternative  I
     When developing regulations for their  implementation plans, states
generally follow the guidelines documents  issued by the U.S. Environ-
mental Protection Agency.  The guideline document that covers coating of
pressure sensitive tapes and labels is entitled Control of Volatile
Organic Emissions from Existing Stationary  Sources -  Volume II; Surface
Coating of Cans, Coils, Paper, Fabrics, Automobiles,  and Light-Duty
Trucks.
       48
           The coating of pressure sensitive tapes and labels  comes
under the heading of paper coating.   The recommended EPA limit is:
                                     8-42

-------
                Affected Facility
                Coating Line
 Recommended  Limitation
 kg  per liter  Ibs.  per gal .
  of coating     of  coating
(minus  water)  (minus  water)
     0.35            	
      The EPA Guideline goes on to say that "these levels are for all coatings
      put on paper, pressure sensitive tapes regardless of substrate  (including.
      paper, fabric, or plastic film) and related web coating processes on
      plastic film such as typewriter ribbons,  photographic film, and magnetic
      tape".  States such as Ohio, Illinois, Massachusetts and Pennsylvania
      are currently developing a regulation for coating operations which
      follows this guideline.   (California is the only state which is proposing
      their own rule for VOC emissions from coating facilities).49
           The model  plants shown  in  Chapter 6  use an adhesive mixture which
      is 33.3 weight percent solids and  66.7 weight percent  solvent.   If one
      assumes:  (1) the  solvent has a  specific gravity of 0.863,  (2)  the
      coating formulation has  a specific  gravity  of 0.935, and (3) the control
      device is down  five percent  of  the  time that the coating line  is operating
      (conservative estimate); the required  solvent removal  to meet  the  CTG
      recommendation  is  78.3 percent  of  the  solvent in the formulation (including
      water).   The CTG control  level   is used  as the baseline for  comparisons
      done  in this chapter,  and represents  the most likely level  of  control
      for adhesive,  release, and precoat  coating  lines  if no national  New
      Source  Performance  Standards were developed.
      Regulatory Alternative II
          Regulatory Alternative II  is defined in  this study  as  control of
      oven emissions only.   In  this situation, the  coater is making no attempt
      to  recover fugitive emissions from around the coating area  or oven exit.
      In  the adhesive and release model plants,  the level of control  varies
     with the size of the unit because it is assumed that line speed and line
     size have effects on the amount  of fugitive emissions.50  The level of
     VOC emission reduction which  represents moderate control  is  estimated at
     86.4 percent for large, fast  lines; 82.5 percent for medium  lines/ and
     80.8 percent for slower,  small lines.   All  of these levels of control
_
                                        8-43

-------
are based on a 96 percent VOC emission reduction across the control
device.
Regulatory Alternative III
     Regulatory Alternative III is defined as capture and removal of
oven off gas and collectible fugitive emissions.  This represents the
best available control technology.  For this study it is assumed that
most fugitive emissions are generated in the area from the coater to the
oven entrance.  It is also assumed that a hood is used over this area to
capture the emissions.  For the carbon adsorption model  facilities, the
hood gases are ducted to the oven furnaces.  For the incineration model ,
the hood gases are ducted to the secondary heat exchangers where they
are used for makeup air to the ovens.  For the medium and small coating
lines, the hood gases exactly make up the air requirements for the
ovens.  The estimated overall VOC reduction for model facilities under
this regulatory alternative is 90 percent.  A summary of the required
VOC control levels for Regulatory Alternatives I, II, and III is given
in Table 8-19.
8.2.1   New Facilities
     Table 8-20 outlines all of the adhesive and silicone coater model
plants that are examined in the cost analysis.  Basically, two control
technologies  (carbon adsorption and incineration) are examined at three
different control  levels on three different line sizes (production
rates).  For comparative purposes, waterborne and 100 percent solids
technologies were costed out in this analysis.  Table 8-21 summarizes
the model plants developed for these alternative coating technologies.
A more detailed description of the model  plants is given in Chapter 6.
8.2.1.1  Installed Capital and Annual ized Costs
     The costs presented in this section are based on an order-of-
magnitude estimate.  The probable accuracy of the absolute cost values
is ± 30 percent.  The results are used more as a comparative basis to
document the economics which may face a coater if a regulation goes into
effect.
     Table 8-22 lists the assumptions used in calculating the capital
and operating costs of a "typical" coating facility.   The raw material
                                   8-44

-------
TABLE 8-19.  SUMMARY OF VOC CONTROL LEVELS FOR
   REGULATORY ALTERNATIVES I,  II, and  III
Model Plant Size
(line width, line speed)
Small
(0.61m, 0.13 m/sec)
Medium
(0.9m, 0.3 m/sec)
Large
(1.5m, 1.2 m/sec)
Required Overall VOC Control Level
Alternative I
78.3
78.3
78.3
Alternative II
85
85
86
Alternative III
90
90
90
                   8-45

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-------
               TABLE 8-22.   ASSUMPTIONS USED IN  COST  ANALYSIS
 The following assumptions are used in the cost  analysis:
 1.  Plant operates 6000 hr/year.
 2.  The adhesive formulation is 66.7 wt% and  33.3  wt% adhesive.  The specific
     gravity of the formulation is 0.935  and the solvent  is 0.863.  The sili-
     cone formulation is 95 wt% solvent and 5  wt% silicone.  The specific
     gravity of the formulation is 0.870  and the silicone  is 1.0.
                                              2
 3.  Adhesive weight on web equals 0.094  Ib/yd , the  silicone weight is
     0.0015 Ib/ydZ.
 4.  The ovens operate at 25% LEL.
 5.  The oven burners use natural  gas priced at  $3.00/1O6  Btu.
 6.  Operating labor costs are $10/hr/man.
 7.  Electricity costs are $0. 05/kwhr
 8.  Cooling water is $0.50/1000  gallons
 9.  Steam for the carbon adsorption unit is supplied by  a low pressure
     (15 psig) boiler.
10.  The carbon adsorber, steam-use rate  is 4  Ibs.  of steam per pound of
     solvent recovered.
11.  The primary and secondary heat recovery systems  capture 35% of
     the heat from the incinerator for the SIP and  moderate control
     cases and 47% from the stringent control  case.
12.  Toluene cost is $1.25/gallon  and naphtha  cost  is $0.75/gallon.
13.  Naphtha supplies 128,000 Btu/gallon  (or 6590 Btu/SCF).
14.  Indirect capital costs include engineering  and start-up costs.
     They are estimated at 10% of the total installed equipment costs.
15.  Contingency is estimated at 10% of the total installed equipment costs.
16.  Maintenance labor is 4 percent of the process  capital.
17.  Maintenance materials are 2 percent  of the  process capital.
18.  Interest is 12 percent.
19.  Working capital is not estimated for this study.
20.  Carbon adsorption unit and incineration unit are 96%  efficient.
21.  Activated carbon is $1.00/lb and the bed  is replaced  every two years.
22.  Fuel oil cost is $0.80/gallon (No. 2 Fuel Oil).
                                    8-48

-------
      TABLE 8-22 (continued).  ASSUMPTIONS USED IN COST ANALYSIS
23. The following raw material costs are used:
    a. solvent-based adhesive resin - $0.70/lb (without solvent)
    b. hot melt resin - $0.80/lb
    C. acrylic waterborne resin  - $0.85/lb (formulated)
    d. prerelease-coated paper web - $0.10/sq. yd,
    e. silicone release - $3.50/1b
    f. uncoated paper web - $0.06/sq. yd.
    The incinerator pilot flames are fired on natural  gas.  About 20 scfh is
    required for this operation.
    The capital charge rate is estimated at 21.7 percent of the total
    capital investment.  This assumes the capital  is recovered at 12
    percent interest over 10 years.  The total of general  and administra-
    tive costs, taxes, and insurance are estimated at 4 percent of the
    total capital investment.
    Plant overhead is estimated at 50 percent of the operating labor,
    supervision, and maintenance labor.
27. Administrative overhead is estimated at 50 percent of the operating
    labor.
24
25
26
28.

29.
30.
    Building use fee is estimated at $116,000/year for the large coating
    line and $87,000/year for the medium and small  coating lines.
    Equipment is depreciated by straight-line depreciation over ten  years.
    Labor to operate control equipment is estimated at one-half man  per
    shift.  Maintenance labor is based on a percent of the capital  invest-
    ment (see item 16).
                                  8-49

-------
costs are meant to  represent mid-1979 costs although they may  in some
cases be high.  Raw material, utility, labor and equipment costs are
highly dependent on location.  A detailed study of these variations will
not be presented in this  report.
     The capital costs for the coating lines (without control equipment)
are based on an average of vendor and manufacturer sources.51'52'53'54'
   *  '  *   '    The cost  of a coating line is highly dependent on the
degree of automation and  line speed.  A 1.5 meter  (60 inch) to 2.0 meter
(80-inch) coating line can cost from $400,000 to $2,500,000 installed.
High cost items are the oven, the coater, the unwind/wind.equipment and
the beta gauge controls.
     The installed capital cost of the 1.5 meter (60-inch) solvent-based
model plant coating system is estimated at $1.7 million.  The installed
capital  costs of the 1.2  meter  (48-inch) and the 0.9 meter (36-inch)
model plant coating lines are estimated at $1,250,000 and $980,000,
respectively.  All  costs  for this study are mid-1979 dollars and are
expected to reflect installed costs for average facilities.
     The waterborne coating facility is estimated to cost about the same
as a solvent-based coating system.  Waterborne systems use coaters and
unwind/wind equipment nearly indentical  to the solvent-based system's.
     The hot melt system  is expected to cost less than a solvent-based
or waterborne system.     The reduced capital  cost primarily comes from
the absence of a drying oven in a hot melt coating  system.   The reduced
cost resulting from not having a drying oven may be partially offset by
more expensive adhesive feeding equipment.  The hot melt is  usually fed
through a slot die extruder.  As mentioned in Chapter 3, the performance
of present day hot melt adhesives is limited.  Hot melt adhesives are
not good in terms of strength, heat resistance,  and environmental  stress.
To eliminate these problems researchers are examining the use of cross-
linking agents with the hot melt.  The cross! inking reactions are caused
to occur through electron beam or UV radiation  of the material.   The
cost of this added irradiation equipment is estimated at $500,000 for a
full  scale unit.
                                    8-50

-------
           The capital costs for the carbon adsorption and incineration con-
      trol equipment are derived from industry and vendor data and EPA reports.
      Figures 8-5 and 8-6 show the installed capital  costs used in this study
      for carbon adsorption units and incineration units, respectively.
      Estimation of smaller sized units (less than 10,000 acfm) required
      extrapolation of the data into regions where very little, if any, data
      existed.
           Industry cost data for carbon adsorption units tended to be higher
      than the vendor or EPA estimates.   The industry data is felt to be a
      better estimate of the actual  new installed costs.   Therefore,  the cost
      curve is drawn to represent more of the industry data than the  vendor or
      EPA data.   The cost curve for incineration units with primary and
      secondary  heat exchangers is based on two EPA studies and a single
      industry data point.   Very  few  existing- incineration systems on pressure
      sensitive  tapes and labels  coating lines  use more than  primary  heat
      recovery systems.
           The capital  costs for  the  hood  and  hood ducting are estimated  from
      an EPA  study  done  by  CARD,  Inc.62   The hood's estimated dimensions  are
      five feet  long and  as  wide  as the  web width.  The ducting  for the carbon
      adsorption  system  is  estimated  to  be  30 feet long with  3 bends  and  one
      damper.  The  incinerator  hood ducting is  estimated  to be 75  feet  long
      with 4  bends  and one  damper.  The  hood duct of  the  incinerator-controlled
      line is  longer because it is assumed  that  the incinerator  and secondary
      heat exchanger are  located  outside the building.  Each  ducting  system  is
      equipped with  one fan.
      8.2.1.2  Cost  Analysis  and  Cost Effectiveness
           The costs in Tables  8-23, 8-24,  and 8-25 represent  three different
      types of VOC control.   The  model plant numbers across the top of  each
      table correspond to the model plants  outlined in  Tables  8-20 and  8-21.•
      These numbers  also  correspond with all model  plant numbers given  in
      Chapter  6.  The calculated  installed  capital  and  annualized costs of
      the  carbon adsorption-controlled coating facilities are  presented in
      Table 8-23.  Model   plant  numbers 1  through  9  represent adhesive coating
_
                                         8-5]

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      References for Figure 8-5.


      Industry data-60,61,62,63,64,65,66,67,68,69,70

      Vendor data—71,72

      EPA estimates—73,74
                                   8-52

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                        with primary and secondary heat recovery.
                                   8-53

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lines and numbers 19 through 27 are silicone release lines.  Table 8-24
presents the capital and annualized costs for incineration-controlled
facilities.  Model plant numbers 10 through 18 represent adhesive facilities
and 28 through 36 silicone release facilities.   The capital and annual izerJ
costs for the low-solvent coating facilities are given in Table 8-25.
The following coating lines are represented by the model  plant numbers
in this table:  37 through 39 are waterborne adhesives, 40 through 42
are waterborne releases, 43 through 45 are 100 percent solids adhesives,
and 46 through 48 are 100 percent solids releases.
       An examination of these costs produces the following general
conclusions:
     (1)  The installed capital costs for a carbon adsorption system
          become increasingly greater than an incineration system
          as the size of the unit increases.
     (2)  The annual ized costs for large coating  facilities are
          dominated by the raw materials costs.   In small  units
          labor and indirect costs also become  major factors.
     (3)  Even with the large credit for recovered solvent, the
          annualized cost of a carbon adsorption-controlled
          coating facility is comparable to a facility  with an
          incineration system..  The major equalizing  forces
          are the large fuel  charge for the steam generator,
          the higher annual ized costs  (i.e., capital  charge
          rate and maintenance) due to the  higher capital  costs
          for the carbon adsorption system,  and the less expensive
          solvent used in incineration models.
     (4)  The hot melt system appears  to have a definite capital
          cost advantage over a system that coats  solvent  or
         waterborne  adhesives.   However, the expected  higher
          raw material  costs  make  the  final  product costs  comparable
          to the  solvent-based  systems.
     (5)  The higher costs  of acrylic  formulations  make them less
         attractive  to comparable  solvent-based or hot melt
          rubber/resin formulations.   These  cost differences may
                                    8-62

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           diminish if coating is done on smaller coaters where labor and
           indirect charges become more of a factor.
       (6)  The operating  (both direct and indirect) costs for the
           control  equipment represent approximately 1 to 7 percent
           of the annualized costs in adhesive coating systems
           and 1 to 10 percent in the silicone coating systems.
       (7)  The capital  cost for the hood and ducting system is
           small  in comparison to the total  capital  cost of the
           coater and control  device.
      The line speed of the coating  equipment has a large effect on the
 overall  economics.   Line speeds  vary from a few feet per minute to 1,000
 feet per minute  for new  latex and hot melt  coaters.79'80  The higher
 line speeds  mean a  higher percentage of the operating  costs  are associ-
 ated with the raw material.   Therefore,  the percentage of operating
 costs attributable  to  control  equipment  is  lower.   Also,  higher line
 speeds make  smaller, less capital  intensive  equipment  more attractive.
 One  industry  source indicates  that while  there  is an economy  of scale
 from 60-inch  width  hot melt coaters,  most organizations will  evaluate
 hot  melt  machinery  in  the 30-inch width  range.81
      The  cost effectiveness of the control  units in  the model plants can
 be estimated  by  comparing  the  operating costs associated with the
 control device to the amount of solvent recovered or destroyed.   The
 control costs include the  control device  utilities and operating labor
 and  the maintenance and  indirect costs associated with the control
 device.  Table 8-26 shows  the calculated cost-effectiveness values for
 the adhesive and release  model plants controlled by carbon adsorption
with  and without credits  for solvent  recovery.  The same cost-effective-
ness  analysis for the incineration-controlled model  plants is given in
Table 8-27.  Without credits,  the control  of solvent emissions results
 in an operational charge for all  model facilities.
     When credits are given for the recovered solvent or heat, the
situation turns  completely around.   For carbon adsorption systems,  the
recovered solvent is credited  at the price of the solvent (for toluene
it would  be $1.25 per gallon).   For the incineration systems,  credit is
                                  8-63

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    TABLE 8-26.  ESTIMATED COST-EFFECTIVENESS OF CARBON ADSORPTION CONTROL
                DEVICES ON MODEL FACILITIES (WITH AND WITHOUT
                           SOLVENT RECOVERY CREDITS)
Coating Line Type
Control Level
Without Recovery .Credit
Adhesive Coating Lines
Alternative I
Alternative II -
-• • Alternative III- 	
Silicone Release Coating Lines
Alternative I
Alternative II
Alternative III
With Recovery Credits
Adhesive Coating Lines
Alternative I
Alternative II
Alternative III
Silicone Release Coating Lines
Alternative I
Alternative II
Alternative III
Facility size
Large
$/MT($/ton)

235(214) •
244(222)
241(219)
451(410)
434(395)
425(387)

[147] (033])
[137](p25])
[141HQ29])
68(62)
53(48)
44(40)
Medium
$/MT($/ton)

436(396)
415(377)
420(382)
1525(1398)
1464(1329)
1409(1270)

54(49)
33(30)
37(34)
1146(1050)
1073(974)
1025(924)
Small
$/MT($/ton)

861(786)
812(736)
782(709)
4236(3851)
4052(3715)
3894(3583)

479(437)
428(388)
402(364)
3836(3487)
3689(3382)
3503(3223)
Note:  [  ] indicates that there is a credit and not a cost for these cases.
       MT = metric ton
                                     8-64

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TABLE 8-27.
                         ESTIMATED COST - EFFECTIVENESS OF INCINERATION
                        CONTROL DEVICES ON MODEL FACILITIES
                     (WITH AND WITHOUT HEAT RECOVERY CREDITS)
	 1 	 — — 	 	 	 	 • 	 _ —
Coating Line Type
control Level
Without Recovery .Credit
Adhesive Coating Lines
Alternative I
Alternative II
Alternative III
Silicone Release Coating Lines
Alternative I
Alternative II
Alternative III
tfith Recovery Credits
Adhesive Coating Lines
Alternative I
Alternative II
Alternative III
Silicone Release Coating Lines
Alternative I
Alternative II
Alternative III
	 	 	 • 	 — 	 	 1
Facility size
Large
$/MT($/ton)
•"


164(149)
162(148)
157(143)


409(371)
387(351)
376(342)


[87J ([79])
[94] ([85])
[94] ([86])

157(143)
135(123)
125(114)
Medium
$/MT($/ton)
- ——————____


415(377)
402(365)
401(364)


1611(1457)
1545(1405)
1478(1350)


165(150)
151(137)
140(127)
Small
$/MT($/ton)



921(834)
856(777)
820(748)


4519(4108)
4148(3803)
3986(3667)


669(606)
618(561)
583(532)

1354(1224)
1288(1171)
1234(1128)
	 	 	 	
4268(3880)
3875(3553)
3724(3427)
Note:  [  ] i
       MT =
                                         a C°St  f°r  these  cases-
                                                              t,
                                                               V
                         8-65

-------
 only given for the recovered heat which is used in heating the ovens.
 In this report the credit is based on the cost of heating the adhesive
 and silicone ovens with natural  gas.  After the credits are applied, the
 cost-effectiveness values show that carbon adsorption systems are more
 cost-effective than incineration.  In fact for the large model  facil-
 ities,  the carbon adsorption unit has an actual  payout.
      8-2.1.3  Emission Monitoring and Compliance Testing Costs.   Emis-
 sion monitoring of the exit gases should not be a major added cost for
 carbon  adsorption or incineration.   Most carbon adsorption units  come
 equipped with hydrocarbon (LEL)  monitors on the stack outlets.  These
 monitors are used to measure hydrocarbon breakthrough during  routine
 equipment cycling.   They are also used to monitor the performance life
 of the  carbon bed.   The hydrocarbon  monitor should be equipped with  a
 chart/recorder to document the  performance of  the  unit.
      The incineration unit generally does  not  monitor outlet  hydro-
 carbons, but  does monitor incinerator temperatures.   The incinerator
 temperature  can  be  used as a reliable  indicator of hydrocarbon destruc-
 tion.   Studies  have shown  that 90 percent  reduction in  hydrocarbon can
 occur at a temperature  of  1250°F.  A 95  percent  hydrocarbon reduction
 can  be  expected  at  1300°F.82 A  chart/recorder would  also  be  needed  here
 to document  incinerator performance.
      Compliance  testing  may  also  be  required to  prove the  performance of
 the  control system.   Compliance  testing will generally  occur  only one
 time  during the lifetime of  the  unit.  A detailed  compliance  test con-
 sisting  of three  inlet  and three  outlet tests  will cost  between ten and
 twenty  thousand dollars.
     Appendix D gives more information on  emission measurement and
 continuous monitoring of controlled coating facilities.
     8.2.1.4  Cost Associated with Increased Hater Pollution or Solid
 Waste Disposal.  The incineration control system will  add no additional
wastewater or solid wastes to the existing coating facility.   Carbon
 adsorption has both a solid waste and a water waste.  The solid waste is
 spent carbon.  The spent carbon is usually sold back to processors for a
much lower price than originally purchased.  The processor will  reacti-

-------
  vate the carbon and sell  it back to operators with carbon adsorption
  systems.   Therefore,  there is no disposed solid waste cost.
       There are two*potential  water wastes from a carbon adsorption unit:
  (1)  steam condensate  separated from the organic phase and (2)  cooling
  tower blowdown.   The  steam condensate can be  recycled as boiler feed-
  water.   Sometimes  the condensate must be treated to control  PH.83
  However,  due  to  dissolved  solids buildup there will  have to  be  a blow-
  down  of  the  recycled  steam condensate.   The boiler blowdown  and cooling
  tower blowdown are  expected to be  small  streams  (less  than 10 gpm) and,
  therefore, can be disposed  of  in a municipal  sewer system if available.'
  If not, the water will have to be  treated  so  it  will  not decrease  the '
  quality of water into which it is  being  mixed.   A  carbon adsorption unit
  could be  used to treat these wastes.
 8.2.2  Modified/Reconstructed  Facilities
      The definitions of a modified or reconstructed plant are given in
 Chapter 5.  Modifications and  reconstructions  will  generally occur in
 existing facilities.  The cost analysis presented in Section 8.2.1  can
 be applied to modification or  reconstruction with the following quali-
 fications:
        •   The capital  cost of  a modification or reconstruction  will
           generally  be less than a new facility.   Therefore,  the
           capital  recovery  factor will  be less.   This  becomes more
           important  in the  smaller size  facilities.
        •   Land requirements for control  equipment may  be  critical
           for an  existing facility.   For a  10,000 acfm  gas stream
           a carbon adsorption  unit  requires approximately 400 to
           500  square feet for  the adsorbers, not  counting the
           boiler and cooling tower.84  An  incinerator  requires
           less space than the carbon adsorber.
       •   Ducting costs may become more expensive if control   equipment
           has  to be located far from the coating lines.
Other cost items such as loss of  production, installation labor and
engineering costs should be examined with respect to how they would  be
different from new facility costs.
                                 8-67

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 8.3   OTHER  COST  CONSIDERATIONS
      The  pressure  sensitive  tapes  and  labels  industry  comes  under
 Federal  regulation through several  governmental  agencies.  There  are  six
 major areas  of regulation85:
     • environmental,  involving  air and water,
     • health and safety  of employees,
     •transportation  of  raw  materials,
     • food  additives  (if the products  are  to  be  used in  the
     • food  industry),
     • skin  contact (if the products will be used in direct
     • contact with human skin),  and
     • consumer product safety.
 This  study  is only concerned  with  control  of  airborne  VOC emissions and
 their associated problems.   Therefore, the remainder of  the  discussion
 concerns  only items  (1)  and  (2).
      The  responsibility  of regulating  environmental problems as they
 impact areas outside  an  affected facility  is  designated  to local, state,
 and Federal   environmental protection groups.  The Federal Agency  in this
 situation is the U. S. Environmental Protection  Agency.  The responsi-
 bility of regulating  levels  of emissions within  the plant working area
 belongs to NIOSH (National Institute for Occupational   Safety and  Health)
 and OSHA  (Occupational Safety and  Health Administration).  OSHA is a
 part  of the  United States Department of Labor and its  responsibilities
 include final adoption of occupational  exposure  standards and enforce-
 ment  of the  standards through inspection of work places.86  NIOSH is an
 agency of the United States Department of  Health, Education,  and Welfare,
 and part of  its  charter  is to provide  regulation support information to
 OSHA.
     At the  present the U. S. Environmental Protection Agency has no air
emission regulations for the operation of  pressure sensitive  tapes and
label coaters.   The EPA has issued a guideline document 87 for control
 of coating operations, which the states are using to develop  SIP regula-
tions.  The EPA also has authority to regulate chemical manufacturing
                                 8-68

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 through  the Toxic  Substances  Control Act  (15  U.S.C.  2601 ; October 12,
 1976). As  a rule this  regulation  applies  only to  operators who  mix or.
      OSHA  has worker area  standards  for nearly  500 chemicals.   These
 standards  are very  similar to the Threshold Limit Values  (TLV's)  desig-
 nated by the American  Conference  of  Governmental  Industrial Hygienists
 (ACGIH).   The ACGIH define  TLV as "concentrations of air-borne  substances
 which represent conditions  under  which it  is  believed that nearly all
 workers may be repeatedly  exposed day after day without adverse effect-
 ... TLV's  refer to  time-weighted  concentrations for  a seven or  eight
 hour workday and a  forty hour work week."  This same definition may be
 used  for OSHA exposure standards.  The TLV's  for  typical solvents used
 in the pressure sensitive  tapes and  labels industry  are shown in Table
 8-28.
     Control of worker area solvent  concentrations is accomplished
 through containment, isolation, substitution, general ventilation, local
 exhaust ventilation, change of operating procedures, and administrative
        QQ
 control.    When local  exhaust ventilation is used, a canopy fume hood
 is commonly used.   However, this  is  usually a poor choice for removing
 airborne contaminants  from the work  place and specifically from the
 breathing zones of  employees.    Many other hooding techniques can be
 used and are discussed in the ACGIH  Industrial Ventilation Manual.
Around a coating area,  a hooding system combined with a containment
 system can be  very  effective  in limiting employee solvent exposure
levels.   The cost of a hood, ducting, and a fan is expected to be a
 small  percent  of the total  capital cost of a new coating line (see
Tables 8-23 or 8-24).
     Another emission level constraint affecting the tape ,or label
coater is the  lower explosive limit  (LEL)  of solvents.   Solvent  explo-
sions  are not  only a health and safety concern to the worker,  they are
a great concern to  insurers of coating equipment.   Insurance  companies
 require strict monitoring of LEL levels  in equipment areas where the  LEL
is high.
                                 8-69

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                TABLE 8-28.  THRESHOLD LIMIT VALUES  (TLV) AND  LOWER
       EXPLOSIVE LIMITS  (LEL)  OF TYPICAL  ADHESIVE AND  RELEASE  SOLVENTS

Solvent
Toluene
Xyl ene
n-Hexane
n-Heptane
Cyclohexane
Naphtha (VM &P)
Methyl Acetate
Ethyl Acetate
n-Butyl Acetate
Acetone
Methyl Ethyl Ketone (MEK)
Methyl Isopropyl Ketone
Carbon Tetra chloride
Methanol
Ethanol
TLV39
Mq/m3
375
435
(1800)b
(2000)b
1100
NA
610
1400
710
2400
590
700
65C
260C
1900
ppm
100
100
(500)b
(500)b
300
NA
200
410
150
1000
200
200
10C
200C
1000
LE
Vol.%
1.27
1.0
1.3
1.0
1.31
0.81
4.1
2.2
1.7
2.15
1.81
1.4
NA
6.0
3.3
1 90
Ib/103ft3a
2.37
2.32
2.75
2.40
2.8
2.16
7.45
4.74
4.83
3.04
3.20
3.54
NA
4.70
3.72
a Calculated at 100°F.

b In the process of being changed.

c Can be potentially absorbed by the body through skin,  eyes,  or mucous
  membranes.

NA - not available
                                  8-70

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       The highest LEL levels are found in the drying ovens.   Most coatings
  systems are designed to maintain a 25 to 40 percent LEL level  in the
  ovens.   Table  8-28 lists LEL values for typical  solvents used  in the
  pressure sensitive tapes and labels industry.   Meeting LEL  levels  is a
  design  concern rather than  an added cost due to Federal  regulation.
  8.4   ECONOMIC  IMPACT ANALYSIS
   •    The purpose  of this section is to  analyze  the  economic  impacts  of
  the  regulatory alternatives  for new production  facilities in the pressure
  sensitive tapes and labels  industry.  Three  types of production  facil-
  ities are examined.   One is  an  adhesive  coating  (PSA)  line that  coats
  a prerelease-coated web.  A  second  is a  silicone release coating (SR)
  line whose output  is  a silicone  release-coated web.   The third is a
  tandem line, that  is, one that  applies a  release coating on one side and
 a pressure sensitive adhesive to the other side of a paper web.  VOC
 emissions from these facilities can be controlled by using one  of four
 control  techniques:  carbon adsorption  (solvent recovery), incineration
  (solvent destruction), waterborne coatings,  or 100 percent solids
 coatings.
      These techniques can be used to meet one of three  levels of  control,
 which correspond to the regulatory alternatives  described in  Chapter 6.  '
 Under the "no regulation" alternative,  production  facilities  have to
 meet  the requirements of the State Implementation  Plans (SIP's);  for the
 purposes  of  this analysis this alternative would  have no  impact.  The
 remaining two alternatives correspond  to the  moderate  (Regulatory Alter-
 native II) and  stringent  (Regulatory Alternative III) levels of control
 (These alternatives  are discussed  in detail in Chapter  6.)  Waterborne  '
 coatings  and  100 percent  solids  coatings  can  meet the stringent control
 level  not by  employing add-on  control equipment but by  avoiding the use,
 and thus  the  emissions, of solvents  in the coating process.
     Three types of  impacts are estimated.  Price impacts are calculated
assuming that all additional  costs of the alternatives are passed
foward to the consumer. 'Return on investment (ROI) impacts assume that
these  additional costs are absorbed by the producer,  that is,  that the
                                    8-71

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 product  price  does  not change  when costs  increase.   Finally,  incremental
 capital  requirements  attributable  to the  regulatory  alternatives  are
 estimated.
      In  addition,  impacts  on the growth and  structure  of the  industry
 are  treated  qualitatively  based on the price,  ROI, and capital  require-
 ment impacts.  Section 8.4.1 summarizes these impacts.   Section  8.4.2
 describes  the  methodology  used to  estimate the impacts.   Section  8.4.3
 presents the cost data and parameter values  used  in  the analysis.
 Sections 8.4.4,  8.4.5, and 8.4.6 contain  the estimated impacts  for
 large-, medium-, and  small-scale facilities,  respectively.
 8.4.1  Summa ry
     The regulatory alternatives would have  an insignificant  impact  on
 the  industry.  When alternative technologies  (waterborne coatings  and
 100  percent  solids  coatings) are available,  they  can meet the require-
 ments of either  the moderate or the  stringent  alternative.  Since  these
 systems are  more profitable than conventional  solvent-based systems,
 firms in the industry have an  economic incentive  to  adopt them  even  in
 the  absence  of a regulation.   Thus,  the regulatory alternatives would
 not  force firms  constructing new facilities  to deviate from the invest-
 ment behavior  they would exhibit in  the absence of those alternatives.
     In some cases, technological   constraints  preclude the use  of  these
 alternative  technologies,  that is, firms  investing in  new  facilities
 must use a conventional sol vent->based coating.  The  regulatory  alter-
 natives would  have minor impacts in  these cases.  Under  the moderate
 control  level, price  increases ranging from 0.0 to 0.4 percent would
 result.  If  the additional  costs of  control  were  absorbed  by the producer,
 the  baseline return on  investment  of 16 percent would  decline from 0.0
 to 0.6 percentage points.  The impacts are slightly larger for  the
 large-scale  facilities  than for the medium- and small-scale ones.
Meeting the  stringent  control   level  by passing on all  additional costs
would raise  prices by  0.0 to 0.9 percent.   Full cost absorption would
 reduce the ROI by 0.0  to 1.0 percentage points.  Again,  the impacts on
 the small and  medium  facilities are smaller than  those for the large-
 scale coating  lines.
                                   8-72

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       The regulatory alternatives would have little or no impact on the
  industry's growth rate and structure.  The availability of alternative
  technologies and the small price and ROI impacts on the conventional
.  solvent-based systems imply that the regulatory alternatives would not
  deter new investment and adversely affect growth.   Although the large
  facilities would be affected more than the medium and small facilities,
  the difference is not great enough to put the large facilities at a
  competitive disadvantage.   Thus,  the regulatory alternatives would not
  cause any significant changes in  the structure of the industry.
  8.4.2  Methodology
       The methodology used  to estimate the impacts  of  the  regulatory
  alternatives  is  described  in this section.   A discounted  cash flow (DCF)
  approach is  used to  evaluate the  profitability of  investing in new
  production  facilities  and,  more specifically,  to determine  which  one  of
  several  alternative  facilities is the most  profitable  for the  firm.   For
  each  type and  size of  production  facility,  the firm can choose one of
  several  possible  configurations,  which correspond to  the control options
  (including the SIP options)  for which  cost  data were  provided  in Section
  8.2.  Using the  DCF  approach, the most profitable configuration can be
  selected.  The resulting choices  show which facilities would be con-
  structed by the  industry in the absence of  the  regulatory alternatives
  and thus constitute  a baseline from which the  impacts of those alter-
  natives can be measured.
      The remainder of this section is organized as follows.   A general
 description of the DCF approach is provided in Section 8.4.2.1.  This
 background is needed in order to understand the particular application
 of the DCF approach which is used  to estimate the economic impacts and
 which is presented in Section 8.4.2.2.  Finally, how the impacts are
 calculated using  this method is discussed in Section 8.4.2.3.
      8'4-2-1  Discounted Cash Flow Approach.  An investment  project
 generates cash outflows and inflows.   Cash outflows  include  the initial
 investment,  operating expenses, and interest paid  on borrowed  funds.
 Cash inflows  are  the  revenues from the sales of the  output produced by
                                    8-73

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the project, depreciation of the capital equipment, and recovery of the
working capital at the end of the project's life.  Cash outflows and
inflows can occur at any time during the project's lifetime.  For this
analysis, it is assumed that all flows take place instantaneously at the
end of each year.  Furthermore, it is assumed that all investments are
conventional investments, that  is, they are represented by one cash
                                             no
outflow followed by one or more cash inflows.    This assumption insures
                                                                   Q-D
the existence of a unique internal rate of return for each project.
For a project with a lifetime of N years, there are N + 1 points in time
at which cash flows occur:  at  the end of year zero, the end of year
one, and so on through-the end  of the Nth year.
     The initial (and only) investment is assumed to be made at the end
of year zero.  This cash outflow comprises the sum of the fixed capital
cost and the working capital.   It is offset by an investment tax credit,
which is calculated as a percentage of the fixed capital  cost and
represents a direct tax saving.  The cash flow in year zero can be given
by the following equation:
          -Y
-(FCC + WC) + (TCRED x FCC)
(8-1)
The variables for this and subsequent equations are defined in Table 8-
29.
     The project generates its first revenues  (and incurs further costs)
at the end of year one.  The net cash flows in this and succeeding years
can be represented by the following equation:
          Yt =  (Rt - Et - It)  (1 - T) + DtT      t = 1, ..., N    (8-2)
The first term of Equation 8-2 represents the after-tax inflows of the
project generated by sales of the output after netting out all deductible
expenses.  Revenues are given by:
          Rt = P " Q " U                                          (8-3)

Deductible operating expenses, Et, are the sum of the fixed and variable
operating costs and can be represented by:
          Et = VU + F
                                               (8-4)
                                   8-74

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                         TABLE 8-29.  DEFINITIONS
Symbol
              Explanation
  DFt
   DF
 DSL
   F
 FCC
  lt
   N
 NPV
   P
PDEBT
    Q
   Rt
   rD
    r
    T
  TCC
TCRED
    U
    V
   WC
    X
 depreciation  in year  t
 discount  factor =  (l+r)~t'
 sum  of  the  discount factors over the  life df the project =
 N
 I   (l+r)"1
 t=0
 present value of the  tax savings due  to straight line depreciation
 N
 I   D.TCl+r)"0            ,                                   ,:
 t=0 .                                                  •
 operating expenses in year t  ,
 annual  fixed costs
 fixed capital costs
 interest paid on borrowed funds in year t
 project lifetime in years
 net present value
 price per unit of output
 proportion of investment financed by borrowing
 annual plant capacity
 revenues in year t
 interest rate on borrowed funds
 discount rate, or cost of capital
 corporate tax rate
 total capital cost
 investment tax credit
 capacity utilization rate
 annual variable operating costs
working capital
minimum [$2000,  .2xFCC]
net cash flow in year t
                                   8-75

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Variable costs include expenditures on raw materials, labor (operating,
supervisory, and maintenance), utilities, and any credits for solvent or
heat recovery.  Fixed costs include expenditures for facility use,
insurance, administrative overhead, etc.  Interest paid on borrowed
funds is a function of the proportion of the project financed by borrowing,
the total capital  cost of the project, and an interest rate and can be
given by:
               PDEBT • TCC '  rr
                                                                  (8-5)
For income tax purposes, E. and I. are deductible from gross revenues,
R..  Hence, the after-tax cash inflow to the firm can be determined by
netting out these expenses and multiplying the result by (1 - T).
     Federal income tax laws also allow a deduction for depreciation of
the capital equipment  (not including working capital).  Although depre-
ciation is not an actual cash flow, it does reduce income tax payments
(which are cash outflows) since taxes are based on net income after
                                     94
deducting the depreciation allowance.    The expression in Equation 8-2,
D.T, represents the annual tax savings to the firm resulting from deprec-
iation; it is treated as a cash inflow.  In the analysis in this section,
the straight line method of depreciation is used.  The salvage value of
the facility is assumed to be zero, so the annual depreciation expense
is simply given by  (FCC - X)/N, where N is the lifetime of the project
and X is $2000 or 20 percent of the fixed capital costs, whichever is
smaller.
     The net cash flows represented by Equation 8-2 occur at the end of
the first through the Nth years.  Additional cash inflows occur at the
end of the first and Nth year.  The additional cash inflow at the end of
the first year is the tax savings attributable to the additional first
year depreciation deduction of 20 percent of the fixed capital cost or
$2000, whichever is smaller.  By law, the basis for calculating normal
depreciation allowances must be reduced by the amount of the additional
first year depreciation.    The additional cash inflow at the end of the
Nth year occurs when the working capital, initially treated as a cash
outflow, is recovered.
                                    8-76

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      Because these cash flows occur over a future period of time, they
 must be discounted by an appropriate interest rate to reflect the fact
 that a sum of money received at some future date is worth less than if
 that sum were received at the present time.  This discount factor, DF
 can be given by:
           DF  = (1 +
     t = 0, 1,
   (8-6)
 The sum of the discounted cash flows from a project is called the net
 present value of that project.  That is,
                   N
           NPV  =  S  Y  '  DF,
                       t*    1
                  t=0
or
(8-7)
                   N
           NPV   =   S   Yt  (1  +  r)"*.
                  t=0
The  decision criterion  is to  invest  in  the  project  if  it  has  a  positive
NPV  at  a  discount  rate equal  to  the  weighted  average cost of  capital.
     8-4.2.2   Project Ranking Criterion.  The specific  application  of
DCF  used  in the economic analysis  is discussed  in this  section.  What  is
needed  is  a criterion for ranking  alternative investment  projects in
terms of  profitability.  It is assumed  that,  in  the absence of  the
regulatory alternatives, any  firm  building  a  new production facility
would invest in the most profitable  configuration of that  facility.
This choice can be compared with the  one that would have  to be  built to
comply with the regulatory alternative; this  forms the  basis  for cal-
culating  price and rate of return  impacts.
     Equation 8-7 can be rearranged  and used  as the ranking criterion.
The  procedure begins  by substituting  the expressions for R, E, and  I
(given by Equations 8-3, 8-4, and 8-5,  respectively) in Equation 8-2.
Next, the expressions for YQ in Equation 8-1  and Y  in Equation 8-2 are
substituted for Yt in Equation 8-7.  NPV in Equation 8-7 is then set
equal to zero and the unit price, P, is solved for by rearranging the
                                   8-77

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terms in Yt so that the price is on the left hand side of the equal sign
and all  other terms are on the right hand side:
                     Z         ,   VU + F + I
          P =
                                                               (8-8)
          Z = YQ - DSL - WC(l+r)~N - Xfl+r)'1*! and all other variables
               DF'(1-T)-Q'U           Q'U
 where
are defined in Table 8-29.  The resulting expression for P has two
terms.  The first, or "capital cost," term is that part of the unit
price accounted for by the initial capital outlay (adjusted for the tax
savings attributable to depreciation, recovery of working capital, etc.)
and including the return on the invested capital.  The second, or "oper-
ating cost," term is a function of the fixed and variable operating
costs.  Hence, for any configuration, the price given by Equation 8-8
can be interpreted as the one that just covers the unit operating costs
and yields a rate of return, r, over the project's lifetime on the
unrecovered balances of the initial investment.
     For each type and size of facility, Equation 8-8 is used to calculate
the unit cost of the product from each configuration.  The results are
then ranked in order of cost, from lowest to highest.  The most profitable
configuration is the one that can produce a square meter of tape or
label stock for the lowest cost.  This ranking method yields the optimal
solution to a simple form of the "constrained project selection problem."*
     *The selection of investment projects by a firm is unconstrained if
the projects are independent and indivisible and if there is sufficient
capital to invest in all projects with positive net present values.  (A
set of projects is economically independent if the acceptance of one
project does not affect the acceptance or rejection of other projects in
the set.)   If one of these conditions is violated, the project selection
process is said to be constrained.  The configurations confronting the
typical firm represent a set of mutually exclusive projects, that is,
each line produces an identical product, namely, tape or label  stock.
Thus, the selection of one project automatically excludes the remaining
projects.  Since mutual  exclusivity is a form of economic dependence
among the projects in the set, the selection of investment projects by
the firm is constrained.
                                   8-78

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      Several assumptions are implicit in this  ranking procedure.   First,
 it is assumed that the objective of the firm is to maximize the future
 wealth of the firm's shareholders, which is the same as maximizing'the
 firm's present value in a perfect capital  market.98  Second, the existence
 of a perfect capital  market is assumed.   This  implies that the activities
 of the individual  buyer or seller of securities has no effect on prices
 and that the individual  firm can raise or invest as much cash as it
 desires at the market rate of interest.   It also implies that market
 transactions are costless.   A further implication of the perfect capital
 market assumption  is  that the rate of return to the firm's last
 investment (the marginal  investment rate)  is equal  to the firm's marginal
 cost of capital.   Third,  it is  assumed that investment outcomes are
 known with complete certainty.   Fourth,  an  investment project  is in-
 divisible, that is,  it must be  undertaken  in its entirety or not at all.
      8-4.2.3  Determining  the  Impacts  of the Regulatory  Alternatives.
 This  section describes  how  the  impacts of the  regulatory alternatives
 are  estimated using the price  ranking  method discussed  in Section  8.4.2.2.
 The  estimated impacts  are presented  in Sections 8.4.4, 8.4.5, and  8.4.6.
 Three categories of impacts  are  estimated:   price,  return on investment,
 and  incremental capital requirements.
      Price impacts are calculated directly  from Equation  8-8.   The
 profit-maximizing line configuration is  compared with the  control  require-
 ment  of the  regulatory alternative  (moderate or stringent).  If  it  meets
 the  requirement, there is no impact.   If it  does not, the  unit  cost of
 this  configuration is used as the base price for calculating the price
 impacts.   The unit cost associated with the  highest ranked configuration
 that  also  meets the control  requirement is compared with the base price
 to determine  the magnitude of the price impact.
     Whereas price impacts are calculated by assuming that all  of the
 incremental costs associated with a given control option are passed
 forward to the consumer, return on investment (ROI) impacts are estimated
by assuming that the producer absorbs all of the incremental  costs,, thus
lowering the ROI.   In  this case,  the price  facing the consumer would not
                                   8-79

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 change.   For any control  option, there exists a discount rate that would
 enable the producer to maintain the price at its baseline level.   The
 baseline price is the price associated with the most profitable line
 configuration and is determined from the procedure described in Section
 8.4.2.2.
      The baseline price was calculated from Equation 8-8 using a  specific
 value of the discount rate, r.   The calculation of the rate of return
 impact would begin by setting  P = P in Equation 8-8, where P is the
 baseline (lowest) price and then iteratively solving for the value of r
 that equates the right hand side of Equation 8-8 with P.   This value,
 say  r*,  will  always be less than r, the baseline rate of return.   The
 difference between r* for each  control  option and r constitutes the rate
 of return impact.
      The incremental  capital  requirements are calculated  from the  cost
 data presented in Section 8.2.   The additional  capital  required'to meet
 the  standards  is used as  a partial  measure  of the financial  difficulty
 firms  might face in attempting  to conform to the standard.  Incremental
 capital  requirements  also constitute  a  barrier for firms  entering  the
 industry. .  The magnitude  of the  additional  capital  relative  to  the
 baseline capital  requirements is  a  measure  of the size  of this  barrier.
 8.4.3  Cost Data and  Parameter Values
      This  section  presents  the cost data  and  the values of  key  parameters
 used  in  the analysis.   It also describes  the  format  of  the  analysis
whose  results  are  given in  Sections 8.4.4,  8.4.5,  and 8.4.6.
     The four  basic control  techniques  can  be  applied to  each type  of
 facility.   Hence,  for each  type and size  of  facility  the  firm is con-
 fronted  with a set  of eight line  configurations:   three using carbon
adsorbers,  three employing incinerators,  a waterborne coating line, and
a hot melt  or  100 percent solids  coating  line.   Tables 8-30, 8-31, and
8-32 present the costs used in the economic analysis for the large,
medium,  and small coating facilities, respectively.  Each table shows
the costs for the pressure sensitive adhesive  (PSA) coating operation,
the silicone release  (SR) coating operation, and the tandem coating
operation for each of the eight possible  control options.  These costs
                                    8-80

-------








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  include expenditures for pollution control  equipment.  The capital
  investment required for each line is divided into the installed capital
  cost and the working capital,  which was estimated at 15 percent of the
  raw materials cost.   Annual  operating costs, classified as fixed and
  variable,  are also shown.   The operating costs  do not include  the
  annual ized capital  charge,  since  the DCF approach explicitly accounts
  for depreciation  of equipment  and recovery  of the initial  capital  invest-
  ment.   Two variable  operating  costs  are shown for coating  lines  using
  carbon  adsorption  as  the control  technique.   The  first  allows  the full
  credit  for the  recovered solvent  as  reported  in Section 8.2.   The second
  cost  in  parentheses  is  calculated  by  allowing only one-half the  credit.
  Two credits  are used  because the  relative profitability of lines fitted
  with  carbon  adsorbers is directly  related to  the  value of the  recovered
  sol vent.
      The costs of each configuration were inserted into Equation 8-8 to
 determine the unit cost of producing tape or label stock.   It was
 assumed that capital equipment was depreciated over 10 years using the
 straight line method; that the corporate tax rate  was 46 percent; that
 the investment tax credit was 10 percent; and that the discount rate was
 16 percent (this was the most conservative estimate of the  cost of
 equity capital  presented in  Section 8.1.5.1).   It  was also  assumed that
 the investment was  financed  out of equity or retained earnings  (the  cost
 of capital  is the  same for both sources").   Since there is  no  borrowing,
 the proportion of  the investment financed by issuing  debt,  PDEBT,  is
 zero;  consequently,  the  interest paid  on borrowed  funds  in year t of  the
 investment  project,  it,  is also zero.   This  assumption,  while unrealistic
 does  produce  "worst  case" results,  since  the after-tax cost of  debt
 capital,  which  is around 5 to 6  percent,  is  less than  the cost  of equity
 capital  for the  industry.  In general,  any given investment project
would  be  more attractive if a portion of  the investment were financed by
 issuing debt.  Two utilization  rates were used in the analysis,  100
percent and 75 percent.  Data on actual utilization rates were not
available, so these two rates were arbitrarily chosen to provide an idea
of the sensitivity of the results to changes in capacity utilization.
                                    8-87

-------
      Sections 8.4.4, 8.4.5, and 8.4.6 present the estimated impacts for
 large, medium, and small coating facilities, respectively.  Impacts are
 estimated for two cases.  In one case, it is assumed that the firm can
 select a line configuration from the complete set of eight; this is the
 unconstrained case, labeled A in the following analysis.   The second,  or
 constrained, case eliminates the 100 percent solids and waterborne
 coatings configurations from the project selection set, which is labeled
 B, under the assumption that the resulting product is not perfectly
 substitutable for tape and label  stock produced  by conventional  solvent-
 based coating lines.
 8.4.4  Economic Impacts on Large Facilities
      The economic impacts of the regulatory  alternatives  on large-scale
 coating facilities are presented in this  section.   The  impacts ,in Section
 8.4.4.1 are  based on  the costs  reported  in Table  8-30 that include  the
 full  credit  for recovered solvent  for the carbon  adsorption lines.
 Those in Section  8.4.4.2 were also  estimated  from  the costs in Table 8-
 30, except that only  one-half the  credit  for  recovered  solvent was  used
 in calculating  the operating costs  for the carbon  adsorption  lines.
 Section 8.4.4.3 summarizes  the  results.
      8.4.4.1   Impacts  Based  on  Full  Credit for Recovered  Solvent.
 Table  8-33 presents the unit costs  and the associated rankings of the
 large-scale  PSA,  SR, and tandem  facilities.   Two costs  are  given  for
 each  facility,  one based on a capacity utilization  rate of  100 percent
 (Scenario 1), the other on a rate of 75 percent  (Scenario  2).  Each unit
 cost  is  ranked  twice.   The first set of rankings, labeled A, assumes
 that  firms can  invest  in the alternative  coating technologies (water-
 borne  coatings and 100  percent solids coatings) as well  as  in the conven-
 tional solvent-based coating technologies.  The second set, labeled B,
 assumes  that firms are  restricted to  conventional solvent-based coating
 lines whose emissions are controlled  by incinerators  or carbon adsorb-
 ers.
     The price impacts  shown in Table 8-34 are based on these rankings.
The impacts for each affected facility were estimated for two regulatory
alternatives  corresponding to moderate and stringent levels of control.
                                   8-88

-------
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                                                        8-89

-------
             TABLE 8-34.  PRICE IMPACTS OF REGULATORY ALTERNATIVES
                           ON LARGE FACILITIES (%)a
                               Moderate
                        Scenario 1   Scenario 2
                                 Stringent
                          Scenario 1   Scenario 2
PSA line
   Project set A
   Project set B

SR line
   Project set A
   Project set B

Tandem line
   Project set A
   Project set B
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.80
0.00
0.00
 Calculated from the costs and rankings in Table 8-33.   In the absence of a
 regulation, the firm is assumed to invest in the line configuration with a
 rank of one.  If this configuration meets the control  level  under consider-
 ation, there is no impact.  If it does not, the unit cost associated with
 the configuration is used as the base from which the price impact is calcu-
 lated.
                                    8-90

-------
  A  requirement that all affected facilities meet the moderate level of
  control would have no impact. Firms confronted with project set A would
  invest in either the hot melt (or 100 percent solids) process  (rank - 1)
  or a waterborne coating line  (rank = 2), both of which rr*et the requirements
  of the moderate regulatory alternative.   Finns confronted with project
  set B would invest in a carbon adsorption line that met either the
  moderate or stringent level  of control,  depending  on the facility  and
  the scenario (see  Table  8-33).  Since  these choices are assumed to be
  made  in the absence  of a  regulation,  imposition  of the moderate regulatory
  alternative would  have  no  impact.   Under the  stringent regulatory  alternative
  there  would be  no  price  impact for the PSA  and tandem  facilities   The
  only  impact of  this alternative  shown in  Table 8-34 is  a  price  increase
  of  0.8  percent  for the SR facility when  capacity is  not  fully utilized.
      Table  8-35 shows the return on investment (ROI) impacts of the
  regulatory  alternatives.  (These are calculated by  assuming that the
  firm absorbs any cost increase rather than passing  it on to the consumer )
 The moderate control  level  would have no impact on the baseline ROI of
 16 percent for the reasons  given above for the price impacts.   Under the
 stringent alternative the SR facility would have  to accept a 0 6 per-
 centage point decline (from  16.0  to 15.4  percent) in its ROI to maintain
 the  baseline price  in Scenario 2; if capacity  were  fully utilized,  there
 would  be no impact.   The  PSA and  tandem facilities  would not be  affected
 under  either scenario.
     The only incremental capital outlay  called for by  the  regulatory
 alternatives occurs under Scenario  2 of the  stringent control level    m
 this case,  a  fim investing  in  a  SR facility would  have  to expend an
 additional  $20 thousand, a one  percent increase in  the baseline  capital
 investment,  to bring the facility into compliance.
     8-4-4-2  impacts Based on Half Credit for Recovered Solvent
Table 8-36 presents the unit costs and rankings for the large-scale  PSA
SR, and tandem facilities that were calculated  using the other set
of operating costs for all  carbon  adsorption facilities.  The unit costs
of the  incineration,  waterborne, and hot melt (100 percent solids)
                                   8-91

-------
                 TABLE 8-35.  RETURN ON INVESTMENT IMPACTS OF
                 REGULATORY ALTERNATIVES ON LARGE FACILITIES3
                               Moderate
                        Scenario 1   Scenario 2
                                  Stringent
                           Scenario 1   Scenario 2
Baseline ROI

PSA line
   Project set A
   Project set B ,

SR line
   Project set A
   Project set B

Tandem line
   Project set A
   Project set B
16.00
 0.00
 0.00
 0.00
 0.00
 0.00
 0.00
16.00
 0.00
 0.00
 0.00
 0.00
 0.00
 0.00
16.00
 0.00
 0.00
 0.00
 0.00
 0.00
 0.00
16.00
 0.00
 0.00
 0.00
-0.61
 0.00
 0.00
 Table entries represent percentage point decreases in the baseline ROI.
 Impacts are calculated from the costs and rankings in Table 8-33.   In
 the absence of a regulation, the firm is assumed to invest in the line
 configuration with a rank of one.   If this configuration meets the con-
 trol level under consideration, there is no impact.   If it does not,  the
 table entry is the amount by which the baseline ROI of 16 percent must
 decline to allow the firm to meet the price associated with the line
 configuration of rank one.
                                       8-92

-------
8-93

-------
facilities are the same as those reported in Table 8-33, but the rankings
are different.  In general, the incineration facilities become more
profitable than the carbon adsorption facilities when the value of the
recovered solvent is halved.
     Price impacts of the regulatory alternatives are given in Table 8-
37.  Under the moderate alternative, there would be no impact on any
facility for firms that could invest in the alternative coating techno-
logies  (project set A).  Firms choosing from project set B Would have to
raise prices by approximately 0.3 percent on the output of the PSA and
tandem facilities; there is no price impact on the SR coating facility.
The impacts are slightly larger under the stringent regulatory alternative
if the waterborne coating and hot melt lines cannot be used.  Price
impacts for the PSA facilities range from 0.4 to 0.7 percent and from
0.7 to 0.9 percent for the tandem lines.  Again, the SR coating lines
are not affected.  There is no impact on any facility if the alternative
coating technologies can be used.
     Table 8-38 shows the ROI impacts of the regulatory alternatives.
The moderate control level would decrease the baseline ROI of the PSA
and tandem lines by 0.3 to 0.6 percentage points; the SR lines would not
be affected.  The stringent control level would  result in a one percent-
age point decrease for the PSA and  tandem facilities.  These impacts
occur only for project set B, that  is, when firms cannot use the water-
borne coating and hot melt technologies.
     The  incremental capital  requirements associated with these impacts
are not severe.  PSA facilities would require additional outlays of $18
thousand  and $72 thousand  to  comply with the moderate and stringent
control levels, respectively.  These amounts represent 0.5 and 1.9
percent of the baseline investment.  Tandem facilities would need an
additional $12 thousand and $95 thousand to bring them  into compliance
with the  moderate and  stringent control levels,  respectively.  This  is
0.2 and 1.9 percent of the  baseline capital investment.
     8.4.4.3  Summary  of  Economic  Impacts.  Firms that  can  use the
alternative coating technologies  (project set A) would  suffer  no  impact
under either  of the  regulatory alternatives.  The profitability of  the
                                    8-94

-------
          TABLE 8-37.
PRICE IMPACTS OF REGULATORY ALTERNATIVES ON
     LARGE  FACILITIES (%)a
                             Moderate
                       Scenario 1   Scenario 2
                                                         Stringent
                            Scenario 1   Scenario 2
                          0.00
                          0.36
                         0.00
                         0.00
               0.00
               0.34
               0.00
               0.00
0.00
0.36
0.00
0.00
0.00
0.68
0.00
0.00
PSA line

   Project set A
   Project set B

SR line

   Project set A
   Project set B

Tandem line

   Project set A
   Project set B
Calculated  from the costs and rankings  in Table 8-36.  In the absence of a
   -/V;h
                              8-95

-------
                 TABLE 8-38.  RETURN ON INVESTMENT IMPACTS OF
                 REGULATORY ALTERNATIVES ON LARGE FACILITIES3
                               Moderate
                        Scenario 1   Scenario 2
                                  Stringent
                           Scenario 1   Scenario 2
Baseline ROI

PSA line
   Project set A
   Project set B

SR line
   Project set A
   Project set B

Tandem line
   Project set A
   Project set B
16.00
 0.00
-0.36
 0.00
 0.00
 0.00
-0.31
16.00
 0.00
-0.53
 0.00
 0.00
 0.00
-0.55
16.00
 0.00
-0.93
 0.00
 0.00
 0.00
•0.96
16.00
 0.00
-1.02
 0.00
 0.00
 0.00
-1.11
 Table entries represent percentage point decreases in the baseline ROI.
 Impacts are calculated from the costs and rankings in Table 8-36.   In
 the absence of a regulation, the firm is assumed to invest in the line
 configuration with a rank of one.   If this configuration meets the con-
 trol level under consideration, there is no impact.  If it does not,  the
 table entry is the amount by which the baseline ROI of 16 percent must
 decline to allow the firm to meet the price associated with the line
 configuration of rank one.
                                    8-96

-------
  waterborne coating  and hot melt (100 percent solids) lines insures that
  firms would invest  in them over the conventional  solvent-based coating
  lines in the absence  of a  regulation.   Since these facilities  meet the
  requirements of  the moderate  and stringent  control  levels,  there  would
  be  no impact if  either regulatory  alternative  were imposed.
       If  firms  cannot  use the  alternative  technologies  (project set B),
  some  small  impacts  would result.   Under the  moderate regulatory alter-
  native,  the  price impacts  for the  PSA and tandem  facilities would  range
  from  0.0  to  0.4  percent; there  is  no impact  for the  SR facilities.  The
  baseline  ROI for these  facilities  would decline by 0.0 to 0.6  percentage
  points.   Under the  stringent  control level,  the price increases range
  from  0.0  to 0.9  percent; the  corresponding ROI decreases range from 0.0
  to 1.0 percentage points.  The  incremental capital requirements of the
  regulatory alternatives range from 0.0 to 1.9 percent of the baseline
  investment.
      The  impact on the growth rate of output from large-scale  facilities
 attributable to the  regulatory alternatives  would be minor.   The existence
 of alternative technologies that not only  meet the control  level  require-
 ments  but also are more profitable  than  conventional  coating technologies
 is one factor that leads to this conclusion.   Another factor is the
 small  size of the price and ROI impacts  when  they  do  occur.  Finally,
 the  magnitude of  the additional  capital  outlays should not  preclude in
 investment in any of the affected facilities.
 8.4.5   Economic Impacts  on  Medium Facilities
     The  economic impacts of the regulatory alternatives on  medium-scale
 coating facilities are  presented in this section.   Following the format
 used for  the  large facilities  in Section 8.4.4, the impacts  in  Section
 8.4.5.1 are based on the cost  data  reported in Table  8-31 that  include
 the full credit for  recovered  solvent for the carbon  adsorption lines.
 Those  in Section  8.4.5.2 were  estimated from the same cost data, except
 that the value of the recovered  solvent from the carbon adsorption lines
was halved.  Section  8.4.5.3 summarizes the results.
                                    8-97

-------
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                                                              8-98

-------
       8-4-5-1   Impacts  Based  on Full  Credit for Recovered Solvent.
  Table  8-39  presents  the  unit costs  and associated  rankings  for the  PSA,
  SR,  and  tandem facilities  under two  scenarios.   As  with  the large-scale
  facilities  each  line configuration  is  ranked  twice  to  simulate the  two
  project  sets  from which  firms  choose the  most profitable investment.
  All  price,  ROI,  and capital  requirement  impacts  are based on  these  costs
  and  rankings.
      The price  impacts of  the  moderate and  stringent regulatory alter-
  natives are given in Table 8-40.  No increase  in price from any affected
  facility would be required to  meet the moderate  control  level  even  if
  firms could not use the alternative technologies.   Firms that  can invest
  in a line configuration from project set A would not have to  raise
 prices to meet the stringent control  level.  If firms had to select from
 project set B, price impacts of 0.2 percent would result for the PSA and
 tandem facilities and would range from 0.0 to 0.3 percent for the SR
 coating lines.
      The ROI impacts of the moderate and stringent  control  levels  are
 shown in Table 8-41  as  percentage point decreases in a  baseline ROI  of
 16 percent.   No impact  on any facility  would result  under the moderate
 regulatory  alternative.   To meet the  stringent control  level  without
 raising  prices,  firms would have to  accept a drop in the  ROI ranging
 from  0.1  to  0.2 percentage  points for PSA  lines,  from 0.0 to 0.3 percentage
 points  for SR  lines, and  of 0.1 percentage points for tandem facilities.
 If the  firm  could choose  from project set  A, there would  be  no ROI
 impacts.
      No additional capital  is  required  to  comply  with the moderate
 control level.  The incremental  capital  requirements  of the stringent
 regulatory alternative are  $13  thousand for a PSA line, $7 thousand  for
 a  SR  line, and $16 thousand for a tandem line.  Each amount  represents
 about 0.7 percent of the capital  investment that would have been needed
 in the absence of the regulation.  Additional capital would be  required
only  if firms cannot use the alternative coating technologies.
     8-4.5.2  Impacts Based on Half Credit for Recovered Solvent.
Table 8-42 presents  the  unit costs and rankings for  the  PSA,  SR, and
                                    8-99

-------
           TABLE 8-40.  PRICE IMPACTS OF REGULATORY ALTERNATIVES ON
                            MEDIUM FACILITIES (%)a
                               Moderate
                        Scenario 1   Scenario 2
                                 Stringent
                          Scenario 1   Scenario 2
PSA line

   Project set A
   Project set B

SR line
   Project set A
   Project set B

Tandem line
   Project set A
   Project set B
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.22
0.00
0.00
0.00
0.18
0.00
0.20
0.00
0.33
0.00
0.16
 Calculated from the costs and rankings in Table 8-39.   In the absence of a
 regulation, the firm is assumed to invest in the line configuration with a
 rank of one.  If this configuration meets the control  level  under consider-
 ation, there is no impact.  If it does not, the unit cost associated with
 the configuration is used as the base from which the price impact is calcu-
 lated.
                                   8-100

-------
        0.00
        0.00
        0.00
        0.00
 0.00
-0.22
 0.00
 0.00
 0.00
-0.13
 0.00
-0.25
PSA line

   Project set A           0.00
   Project set B           0.00

SR line

   Project set A           0.00
   Project set B           0.00

Tandem 1i ne

   Project set A           0.00
   Project set B
  ==         ==:
a                                     ~"	~™—:——  '—•  . -   •    --   _       ..    	
Table entries represent percentage point decreases in  the baseline-ROI
 Impacts  are  calculated from the costs and rankings in  Table 8-39   In '
the  absence  of a  regulation,  the firm is assumed to invest in the line
conjuration with a rank of one.   If this configuration meets the con-
trol  level under  consideration,  there is no impact.  If it does not  the
table entry  is the amount by which the baseline  ROI of 16 percent must
decline  to allow  the firm to  meet  the price associated with the line
configuration  of  rank one.
8-101

-------
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                                             8-102

-------
  tandem facilities.   Only half the credit for the recovered solvent was
  allowed for the carbon adsorption lines compared with the full  credit
  allowance for these facilities  in Section 8.4.5.1.   This increased the
  profitability of the incineration facilities relative to those  using
  carbon adsorbers, as it did  for the  large-scale  facilities  (see Section
•  8.4.4).
       Price  impacts  are shown  in Table  8-43.   Given  the  availability of
  the alternative  technologies, no impact  would result  under  the  moderate
  regulatory  alternative.   Firms  confronted with the  constrained  project
  set  (B) would  incur nominal  impacts  on the PSA and  tandem facilities
  ranging from 0.0 to 0.2  percent.  The SR  coating  lines would not  be
 affected.   Under the stringent  control level, there would be no  price
 impact on firms able to  utilize  the waterborne coating and hot melt
 technologies.  Firms restricted  to investments in conventional  solvent-
 based coating techniques  (project set B) would have to raise prices from
 0.2 to 0.4 percent on the output of PSA lines, from 0.0 to 0.4  percent
 on the output of SR lines, and 0.3 to 0.4 percent on that of tandem
 1ines.
      Table 8-44 gives the ROI impacts of the  regulatory  alternatives.
 Firms  choosing from  project set  A would not suffer a decrease in ROl'
 under either the moderate or the stringent control  levels.   Minor
 impacts occur when the  alternative coating techniques  cannot be  used.
Meeting the  moderate control  level  would  entail a loss of 0.0 to 0.1
percentage points  in the ROI  on  investments in PSA and tandem facilities;
there  are  no impacts on SR lines.   To comply  with the  stringent  alternative
reductions of  0.2 to 0.3,  0.0  to 0.3, and 0.3 percentage  points  for the
PSA, SR and  tandem lines,  respectively, would  be  necessary.
     The additional  capital investment needed  to  meet  the control levels
is also insignificant (and  are called for only when  the firm must choose
a project  from set B).  Under the moderate alternative, the maximum
additional  outlay of $5 thousand  (for a tandem facility) represents only
0.2 percent of the baseline investment.   The maximum incremental  invest-
ment required by the stringent control  level  is $23 thousand (also for
the tandem line), or 0.8 percent  of the initial outlay.
                                   8-103

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           TABLE 8-43.   PRICE IMPACTS OF REGULATORY ALTERNATIVES ON
                            MEDIUM FACILITIES (%)a
                                Moderate
                       Scenario 1
            Scenario 2
                                  Stringent
            Scenario 1
           Scenario 2
PSA line
  Project set A
  Project set B

SR line
  Project set A
  Project set B
Tandem line
  Project set A
  Project set B
0.00
0.00


0.00
0.00


0.00
0.17
0.00
0.19


0.00
0.00


0.00
0.00
0.00
0.21


0.00
0.38


0.00
0.35
0.00
0.38


0.00
0.00


0.00
0.30
 Calculated from the costs and rankings in Table 8-42.   In the absence of a
 regulation, the firm is assumed to invest in the line configuration with a
 rank of one.   If this configuration meets the control  level  under consideration,
 there is no impact.  If it does not, the unit cost associated with the con-
 figuration is used as the base from which the price impact is calculated.
                                   8-104

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TABLE 8-44.   RETURN ON INVESTMENT IMPACTS 0[
          ALTERNATIVES ON MEDIUM FACILITIES*
                    Moderate
           Scenario 1
                   REGULATORY
                                                Stringent
Scenario 2
Scenario 1    Scenario 2
                            16.00

                             0.00
                            -0.12

                             0.00
                             0.00
                 16.00

                  0.00
                 -0.22

                  0.00
                 -0.26
                 16.00

                  0.00
                 -0.28

                  0.00
                  0.00
Baseline ROI             16.00
PSA line
  Project set A           0.00
  Project set B           0.00
SR line
  Project set A           0.00
  Project set B           0.00
Tandem line
  Project set A           0.00
  Project set B
 =========           	.===—————	
 Table entries represent percentage point decreases  in the baseline ROI
 Impacts are calculated from the costs and rankings  in Table  8-42    In the
 absence of a regulation,  the firm is  assumed to  invest  in the  line configu-
 ration with a rank of one.   If this configuration meets  the  control  ?Jve?
 under consideration,  there  is no impact.   If it  does  not,  the  table  entry  is
 the  amount by which the baseline ROI  of  16 percent  must  decline to allo7
 the  firm to meet the  price  associated with the line configuration  of rank  one
                      8-105

-------
     8.4.5.3  Summary of Economic Impacts;  The impacts on the medium-
scale coating lines are minor and would have little, if any, adverse
effects on the growth of the industry attributable to output from these
facilities.  Neither regulatory alternative would have an impact on new
production facilities if firms could invest in the alternative technologies;.
Firms confronted with project set B would have to raise prices by 0.0 to
0.2 percent to meet the moderate control level and by 0.0 to 0.4 percent
to meet the stringent control level.  Absorbing all  additional  costs
would reduce the baseline ROI of 16 percent by 0.0 to 0.1 percentage
points under the moderate alternative and by 0.0 to 0.3 percentage points
under the stringent alternative.  The incremental  capital  required to
meet the control levels ranges from 0.0 to 0.8 percent of the baseline
investment.
8.4.6  Economic Impacts on Small Facilities
     This section presents the economic impacts of the regulatory alter-
natives on small-scale PSA, SR, and tandem production facilities.  The
impacts in Section 8.4.6.1 are based on the cost data in Table 8-32 with
the full credit for recovered solvent allowed for all carbon adsorption
lines.  Those in section 8.4.6.2 are based on the same data except that
only half the recovered solvent credit is allowed.  Section 8.4.6.3
summarizes the results.
     8.4.6.1  Impacts Based on Full  Credit for Recovered Solvent.  Table
8-45 presents the unit costs and their associated rankings for all configu-
rations of the small-scale PSA, SR,  and tandem facilities.  These were
used to calculate the price impacts of the regulatory alternatives which
are reported in Table 8-46.  As this table shows,  the availability of
alternative technologies (project set A) implies that neither regulatory
alternative would have an impact on any production facility.
     Restricting the firm's choices  to the conventional  coating techno-
logies (project set B) would result  in some minor impacts.  Under the
moderate alternative, the tandem facility woul d have to raise prices by
0.1 percent to maintain the baseline ROI; the PSA and SR facilities would
not be affected.  The stringent alternative would cause price increases
                                   8-106

-------
8-107

-------
           TABLE 8-46.
PRICE IMPACTS OF REGULATORY ALTERNATIVES ON
     SMALL FACILITIES (%)a
                                Moderate
                                    Stringent
                       Scenario 1
              Scenario 2
            Scenario 1
           Scenario 2
PSA line
  Project set A
  Project set B

SR line
  Project set A
  Project set B

Tandem line
  Project set A
  Project set B
  0.00
  0.00


  0.00
  0.00


  0.00
  0.10
0.00
0.00
0.00
0.00


0.00
0.08
0.00
0.13


0.00
0.19


0.00
0.19
0.00
0.22


0.00
0.33
0.00
0.16
 Calculated from the costs and rankings in Table 8-45.   Int the absence of a
 regulation, the firm is assumed to invest in the line configuration with a
 rank of one.   If this configuration meets the control  level  under consideration,
 there is no impact.  If it does not, the unit cost associated with the con-
 figuration is used as the base from which the price impact is calculated.
                                 8-103

-------
  ranging  from  0.1  to  0.2  percent  for PSA  lines,  from  0.2  to  0.3  percent
  for SR lines,  and 0.2  percent  for  tandem lines.
      Table 8-47 shows  the ROI  impacts  as  percentage  point decreases  in a
  baseline ROI  of 16 percent.  Again,  firms  confronted with project set A
  would not be  affected  by the regulatory  alternatives, since they would
  invest in the alternative technologies even in  the absence of a regulation.
  The impacts on the conventional coating lines are minor.  Under the
  stringent alternative, the ROI for the PSA and  tandem lines would decline
  by 0.1 percentage points and that for  the SR line by 0.2 percentage
  points.
      The incremental  capital  requirements are also modest.   For the
 stringent control  level,  they range from $5 thousand for the SR facility
 to $15 thousand for the tandem line, or about 0.7 percent of the baseline
 capital  investment.  No additional  capital  outlays are  required if the
 firm is  able  to use one of the  alternative coating technologies.
      8-4-6-2   Impacts Based  on  Half Credit for Recovered  Solvent.   Table
 8-48 gives  the unit costs and rankings  for all  configurations  of the  PSA,
 SR,  and  tandem facilities.   Table 8-49  shows  the price  impacts  of  the
 regulatory  alternatives based on  these  costs  and rankings.   Firms  choosing
 a project from set A  would not  be affected  by  the  moderate or  stringent
 alternatives.   If  waterborne  coatings or  the  hot melt process  cannot  be
 used, the moderate control level would  cause price  increases ranging  from
 0.1  to 0.2 percent for  the tandem facilities;  the  PSA and SR lines would
 not  be affected.   Under the stringent alternative, price  increases of 0.2
 percent would  result  for  the  PSA and SR facilities and of 0.3 to 0.4
 percent for the tandem  facilities.
     Table 8-50 gives the ROI impacts of the moderate and stringent
 alternatives.  There is  no impact under  either control  level  if firms can
 use the alternative technologies.   Meeting the moderate  control  level  by
 absorbing all  additional costs would decrease the ROI of the tandem
 facility by 0.1 percentage points.   The stringent alternative would
 decrease the baseline ROI  by 0.1 to  0.2 percentage points  for the PSA
line, by 0.1 percentage points for the SR 1ine, and by 0.2 percentage
points for the tandem line.
                                  8-109

-------
            TABLE 8-47.  RETURN ON INVESTMENT IMPACTS OF REGULATORY
                      ALTERNATIVES ON SMALL FACILITIES3
                                Moderate
                                   Stringent
                       Scenario 1
             Scenario 2
             Scenario 1    Scenario 2
Baseline ROI
PSA line
  Project set A
  Project set B
SR line
  Project set A
  Project set B
16.00


 0.00
 0.00


 0.00
 0.00
16.00


 0.00
 0.00


 0.00
 0.00
16.00


 0.00
-0.09


 0.00
-0.22
16.00


 0.00
-0.13


 0.00
-0.19
Tandem line
Project set A
Project set B

0.00
-0.04

0.00
-0.03

0.00
-0.11

0.00
-0.11
 Table entries represent percentage point decreases in the baseline ROI.   Impacts
 are calculated from the costs and rankings in Table 8-45.  In the absence of
 a regulation, the firm is assumed to invest in the line configuration with a
 rank of one.  If this configuration meets the control level  under consideration,
 there is no impact.   If it does not, the table entry is the  amount by which
 the baseline ROI of 16 percent must decline to allow the firm to meet the price
 associated with the line configuration of rank one.
                                    8-110

-------
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-------
            TABLE 8-49.
PRICE IMPACTS OF REGULATORY ALTERNATIVES
 ON SMALL FACILITIES (%)a
                               Moderate
                                  Stringent
                      Scenario 1
            Scenario 2
Scenario 1
Scenario 2
PSA line
Project set A
Project set B
SR line
Project set A
Project set B
Tandem line
Project set A
Project set B

0.00
0.00

0.00
0.00

0.00
0.19

0.00
0.00

0.00
0.00

0.00
0.08

0.00
0.25

0.00
0.19

0.00
0.37

0.00
0.22

0.00
0.16

0.00
0.32
Calculated from the costs and rankings in Table 8-48.   In the absence of a
regulation, the firm is assumed to invest in the line configuration with a
rank of one.   If this configuration meets the control  level under consideration,
there is no impact.  If it does not, the unit cost associated with the con-
figuration is used as the base from which the price impact is calculated.
                                 8-712

-------
           TABLE 8-50.  RETURN ON  INVESTMENT  IMPACTS OF  REGULATORY
                      ALTERNATIVES ON SMALL FACILITIES3
Moderate

Baseline ROI
PSA line
Project set A
Project set B
SR line
Project set A
Project set B
Tandem line
Project set A
Project set B
Scenario 1
16.00

0.00
0.00

0.00
0.00

0.00
-0.09
Scenario 2
16.00

0.00
0.00

0.00
0.00

0.00
-0.07
Stringent
Scenario 1
16.00

0.00
-0.19

0.00
-0.11

0.00
-0.24
Scenario 2
16.00

0.00
-0.13

0.00
-0.11

0.00
-0.20
Table entries represent percentage point decreases in the baseline ROI.
Impacts are calculated from the costs and rankings in Table 8-48.  In the
absence of a regulation, the firm is assumed to invest in the line configu-
ration with a rank of one.   If this configuration meets the control level
under consideration, there is no impact.  If it does not, the table entry is
the amount by which the baseline ROI of 16 percent must decline to allow
the firm to meet the price associated with the line configuration of rank one.
                                8-113

-------
     The incremental  capital  requirements  to meet  the stringent  control
level are $8 thousand for the PSA line, $5 thousand  for the SR line, and
$15 thousand for the  tandem.  These figures represent approximately 0.7
percent of the baseline  investment.
     8.4.6.3  Summary of Economic Impacts.  The  regulatory alternatives
would have an insignificant impact on the  small-scale PSA, SR, and tandem
facilities.  If firms can use waterborne coatings  or,the hot melt  (100
percent solids) process  (project set A), there would be no impact on
these facilities.   If firms are restricted to the  conventional solvent-
based coatings (project set B), the moderate alternative would cause
price increases ranging from 0.0 to 0.2 percent.   The corresponding ROI
decreases range from 0.0 to 0.05 percentage points.  Price increases
ranging from 0.1 to 0.4 percent would result under the stringent alter--
native.  The corresponding ROI impacts would range from a 0.1 to a 0.2
percentage point decline.  These impacts are too small  to adversely
affect the grov/th of industry output attributable  to these sources.
8.5  POTENTIAL SOCIOECONOMIC AND INFLATIONARY IMPACTS
     Executive Order 12044 requires that the inflationary impacts of
major legislative proposals, regulations, and rules be evaluated.  The
regulatory alternatives would be considered a major action (thus requir-
ing the preparation of an Inflation Impact Statement) if either of the
following criteria apply:
     1.   Additional annual ized costs of compliance, including capital
          charges (interest and depreciation), will total  $100 million
          within any calendar year by the attainment date, if applicable,
          or within five years of, implementation.
     2.   Total  additional  cost of production is more than 5 percent of
          the selling price of the product.

     The regulatory alternatives for the pressure sensitive tapes and
labels industry would not qualify as a major action by the second crite-
rion, since the largest price increase was estimated to be 0.9 percent
(Table 8-37).   The remainder of this section is devoted to estimating the
total  additional  cost of compliance with the regulatory alternatives.
                                  8-H4

-------
      The calculations are based on the facility that was most affected by
 the regulatory alternatives.   It was assumed that all  future industry
 output from new sources would come from this facility; thus, if the
 incremental  annualized cost of compliance does not exceed the $100 million
 threshold,  then the regulatory alternatives would not  qualify as a major
 action,  since the worst possible impact has been calculated.  The facility
 in question is the large tandem line using an incinerator as the control
 technique.   The incremental  annualized cost of compliance for the stringent
 control  level  was calculated  from the cost data in Table 8-30.   The
 incremental  capital  investment of $95 thousand was multiplied by a capital
 recovery factor of 0.207 (based on an interest rate of 16 percent and  a
 10 year  project life)  to determine the annualized capital  cost.   This
 result,  $19.7 thousand,  was added to the  incremental fixed and  variable
 operating costs of $61  thousand to calculate  the incremental  annualized
 cost of  compliance,  $80.7  thousand per facility.
     Next,  the  difference  between forecasted  sales  in  1980 and  1985 of
 $1.2 billion  was  translated into model  line equivalents  using the  follow-
 ing method.   The  price  per square meter of $0.33 (taken  from Table 8-36,
 Scenario 2, tandem  incineration  facilities) was  divided  into the  projected
 growth in sales  to  determine growth  in  physical  output.   This quantity
 was then divided  by  the  capacity  of  the tandem  line  (39 million m2
 times the capacity  utilization  rate  of  75  percent) to determine the
 number of lines  that would have  to be constructed  to produce the total
 projected output.  This  result,  121 lines, is the  transformation of
 growth in output  into "model  line equivalents."   It was multiplied by the
 incremental  annualized cost of meeting  the stringent control  level  ($80.7
 thousand) to estimate the  inflationary  impact.  The incremental  cost of
compliance was estimated to be $9.8 million, well under the $100 million
threshold.  Thus, the regulatory alternatives do not meet the criteria
specified in the Executive Order and are not a major action  requiring  the
preparation of an Inflation Impact Statement.
                                  8-115

-------
8.6  REFERENCES
1.   Frost and Sullivan,  Inc.  Pressure Sensitive Products and Adhesives
     Market.  New York, NY.  November 1978.  p. 165.
2.   1972 Census of Manufacturers, MC72  (2) - 26B.  U.S. Department of
     Commerce.  Washington, DC.  April 1975.
3.   Reference 2.
4.   Milazzo, Ben.  Pressure Sensitive Tapes.  Adhesives Age.  Atlanta,
     GA.  pp. 27-28.  March 1979.
5.   Reference 1, p. 214.
6.   Reference 1, p. 213.
7.   Silicone Release Questionnaire.  Radian Corporation.  Durham, NC.
     Questionnaire submitted to determine the size of and solvent use
     in the silicone release sheet industry.  Questionnaire submitted
     on May 4, 1979.  (Docket Confidential File).
8.   Reference 1, p. 231.
9.   U.S. Industrial Outlook, 1979.  U.S. Department of Commerce.
     Washington, DC.  1979.  p. 70.
10.  Reference 1, p. 192, 231.
11.  Reference 6, p. 70.
12.  Dun and Bradstreet financial  reports.
13.  U.S. Department of Commerce^ Bureau of Census.   U.S. Imports for
     Consumption and General  Imports.  FT 246/Annual  1978.
14.  Telecon.  Katlin, Charles, International  Trade  Commission with
     Hunt, D., Radian Corporation.   April  25,  1979.   Discussion on
     international  tape trade.
15.  Reference 11.
16.  Reference 1, p. 226.
17.  U.S. Department of Commerce,  U.S. Exports,  Schedule E,  Commodity
     by Country.   FT 410/Annual  1978.  p.  2-198,  2-217.
18.  Reference 10.
19.  Reference 14.
20.  Reference 1,  p. 186.
                                   8-116

-------
 21.
 22.

 23.
24.
25.
26.
27.
28.
29.
30.

31.
32.
33.
34.

35.
36.
37.

38.
39.
40.
 Reference 1,  p. 1 64.
 Concentration Ratios  in Manufacturing.  1972 Census of Manufacturers.
 U.S. Bureau of the Census,  p. 84.
 Letter and  attachments from Baum, B., DeBell Richardson, Inc., to
 David R. Patrick, U.S. Environmental Protection Agency.
 November 10, 1975.
 Reference 2.
 Reference 2.
 Reference 2.
 Reference 9.
 Reference 9.
 Reference 9.
 King, Harry A.  Taking a Look at Tape and Film Adhesives.
Adhesives Age.  February 1972.
 Reference 11.
Minchew,Ui niel , et. al .   Pressure Sensitive Tapes from West
Germany.  United States International  Trade Commission.
Washington, DC.   Pub!ication 831 .  September 1977.
Norman, A.W.  Total  Delivered Cost/Performance Analysis as  Applied
to Hot Melts.   Paper Film and Foil  Converter.   Chicago, IL.
November 1975.
Energy and Environmental  Analysis,  Inc.   Manual  for the Preparation
of NSPS Economic Impact Statements,   p.  25.
Standard and Poor's, Inc.   Analysts  Handbook,   p.  1.
Reference 31 ,  p.  24.
Bussey, L.E.  The Economic Analysis  of Industrial  Projects.
Englewood Cliffs,  NJ,  Prentice-Hall, Inc., 1978.   pp.  160-165.
Reference 1, p.  231.
Rifi, M.R.   Water-Based  Pressure  Sensitive Adhesive  Structure  vs.
Performance.  Union  Carbide Corporation,  Bound Brook,  NJ.   (Pre-
sented at the  Technical Meeting on Water-Based Systems,  Sponsored
by the PSTC, Chicago,  IL.   June 21-22, 1978.)
Reference 1, p.  128.
                                   8-717

-------
 45.
 46.
47.
48.
41.  Letter and attachments from Azark, R.G., Union Carbide Corporation,
     New York, NY, to T.P. Nelson of Radian Corporation.   April  23,
     1979.  Outlining economic data done within Union Carbide.
42.  Telecon. Wangman, Carl, Pressure Sensitive Tapes Council with
     D. B. Hunt, Radian Corporation.  March 28, 1979.
43.  Reference 1, p.  231 .
44.  Annual  Survey of Manufacturers, M 76 (AS)-2.   Department of
     Commerce, Bureau of Census.   December 1977.   p.  11.
     Reference 1, p.  231.
     Lindmark, Richard.   Pressure-Sensitive Adhesive  Products —
     A Burgeoning Market for Converters.   Paper Film  and  Foil
     Converter,   pp.  37-39, April  1975.
     Reference 1, p.  139.
     Guideline Series -  Control of Volatile  Organic Emissions from
     Existing Stationary Sources  - Volume  II:  Surface Coating of Cans,
     Coils,  Paper,  Fabrics, Automobiles,  and Light-Duty Trucks,
     Office  of Air Quality Planning  and Standards, U.S. Environ-
     mental  Protection Agency,  Research Triangle Park, North
     Carolina, May  1977.
     Consideration  of A  Proposed Model  Rule  For the Control of Volatile
     Organic Compounds from Paper  and  Fabric Coating  Operations,
     State of California Air Resources Board,  August  1978.
     Letter  and  attachments from Phillips,  Frank, 3M  Corporation to
     G.  E. Harris,  Radian  Corporation.  October 5, 1978.   (Docket
     Confidential  File)
     Coker,  George  T., Jr.,  An  Economic Analysis of Pressure-Sensitive
     Adhesive  Systems: Hot melt, Solvent,  Emulsion.   Shell Chemical
     Company,  Technical Bulletin SC: 148-77,  no date  available.
     Telecon.  Albert, Bob,  Black  and Clawson with T.P. Nelson,
     Radian  Corporation.   February 21, 1979.
     Telecon.  Zink,  Stan,  Black and Clawson with T.P. Nelson,  Radian
     Corporation.   February  2, 1979.
     Telecon.  Carlson, Alton, Bolton-Emerson with-T.P. Nelson,
     Radian  Corporation.  March 26, 1979.
49
50.
51
52.
53.
54.
                                   8-118

-------
 58.
 59
 60.
 61.
 62.
55.  Telecon.  Gynberg, Daniel,  Egan Machinery with T.P.  Nelson,  Radian
     Corporation.  March 8,  1979.
56.  Nelson, T.P., Radian Corporation.   Trip Report for Pressure
     Sensitive Adhesives—Adhesives  Research,  Inc., Glen  Rock, PA..
     Dated February 16, 1979.
57.  Oge,  Margo T., DeBell  & Richardson,  Inc.   Trip Report—Scott
     Graphics, South Hadley, MA, #139.  Dated July 19, 1976.
     Oge,  Margo T., DeBell  & Richardson,  Inc.   Trip Report—Brown
     Bridge Mills, Troy,  Ohio, #140.  Dated July 20,  1976.
     Letter and attachments  from Boyd,  Gerald  C.3 Dow Corning,
     Midland, Michigan, to William L. Johnson  of the U.S.
     Environmental  Protection Agency  in answer to questions concerning
     silicone release  coating.  Dated October  7, 1979.
     Reference 49.
     Reference 48.
     Kinkley,  M.L.  and  R.B. Neveril .  GARD,  Inc., Capital  and
     Operating Costs of Selected Air Pollution Control  Systems.
     Prepared  for U.S.  Environmental  Protection Agency,  1976.
     EPA Publication No. EPA-450/3-76-014.  p.  4-20
     Reference 52.
     Oge, Margo T., DeBell & Richardson, Inc.  Trip  Report—Fasson
     Company,  Painesville, Ohio,  #141, Dated  July 21, 1976.
     Johnson,  W.L. , U.S. Environmental  Protection Agency.   Trip
     Report—Anchor Continental ,  Inc., Columbia, South Carolina.
     Dated November 11, 1975.
     Harris, G.E., Radian Corporation.   Trip  Report—Tuck  Industries,
    Beacon, New York,  report dated  February  15,  1979.
    Johnson, W.L., U.S. Environmental  Protection Agency.  Trip
    Report—Dennison Manufacturing Company,  Framingham, MA.
    Dated October 14,  1975.
    Reference 54.
    Reference 55.
    Letter and attachments from North,  Charles, Avery-Fasson to
    Nelson, T.P., Radian Corporation.   June  20, 1979.   Response
    to 114 request of  cost information  on Avery's control systems.
63.
64.

65.
66.
67.
68.
69.
70.
                                   8-119

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71.   Grandjacques,  Bernard,  Calgon Corporation,  Pittsburgh,  PA, Air
     Pollution Control  and Energy Sayings  with  Carbon Adsorption
     Systems, Report No.  APC 12-A.  July 18,  1975.
72.   Letter and attachments  from Worrall,  Michael J., American Ceca
     Corporation, Oak Brook, Illinois,  to  Theresa J. Andersen of
     Radian Corporation in answer to inquiry  about  carbon  adsorp-
     tion systems.   Dated October 19,  1978.
73.   Reference 62.   P.  4-22.
74.   OAQPS Guideline Series  - Control  of Volatile Organic  Emissions
     from Existing  Stationary Sources  - Volume  I: Control  Methods
     for Surface-Coating  Operations, Office  of  Air  Quality Planning
     and Standards, U.S.  Environmental  Protection Agency,  Research
     Triangle Park, North Carolina, November 1976.   EPA  Publication
     No. EPA-450/2-76-028.
75.   CE Air Preheater.   Report of Fuel  Requirements, Capital Cost
     and Operating  Expense for Catalytic and  Thermal After-Burners.
     U.S. Environmental  Protection Agency, Research Triangle Park,
     North Carolina, 1976.  EPA Publication  No.  EPA-450/3-76-031.
76.   MSA Research Corporation.  Hydrocarbon  Pollutant Systems
     Study, Volume  2.  PB-219 074.  1973,  Appendix  C.
77.   Reference 67.
78.   North Carolina Environmental  Management  Commission  Permit to
     Construct and  Operate Air Pollution Abatement  Facilities and/or
     Emission Sources,  November 10, 1976 filed  by Shuford  Mills,
     Inc., Tape Division, P.O. Box 1530, Hickory, North  Carolina
     28601 .
79.   Reference 48.
80.   Reference 28.
81.   Reference 30.
82.   Reference 71.
83.   Reference 53.
84.   VIC Air Pollution Control Systems, Equipment Brochure,  Vic
     Manufacturing  Company,  Minneapolis, Minnesota.
                                8-120

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 85.
 86.
 87.
 88.
 89.
90.
91.
92.

93.
94.
95.
96.
97.
98.
99.
 Fries,  John.   Federal  Regulations  Affecting Manufacture  and  Use
 of PSA's.   Adhesives  Age  (Atlanta).   22(3): p.  19.
 March  1979.
 Socha,  G.E.,  NIOSH, OSHA,  and  EPA  Impacts  on  the Adhesives
 Industry,  for presentation  at  the  Clinic for  Adhesives in Modern
 Industries, sponsored  by the Society  of Manufacturing Engineers,
 Chicago,  Illinois.  September  15,  1977.
 Reference  45.
 Reference  83.
 Industrial Ventilation, American Conference of Governmental
 Industrial Hygienists, Committee on Industrial Ventilation,
 Lansing, Michigan, Second Printing, 1977.
 Manzone, R.R. and D.W. Oakes, Profitably Recycling Solvents
 from Process Systems; Pollution Engineering, Technical  Publishing
 Company, 5(10) p. 23-24.  October 1973.
 Reference 83.
 Bussey, L. E.   The Economic Analysis of Industrial  Projects.
 Englewood Cliffs, NJ,  Prentice-Hall, Inc.,  1978.  p.  220.
 Reference 92,  p. 222,  footnote 13.
            ,  p. 73.
            ,  p. 78.
            ,  p. 245.
            ,  pp. 266-276.
            ,  p. 153.
Reference 92
Reference 92
Reference 92
Reference 92
Reference 92
Reference 92,  pp.  165-167.
                                   8-121

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            APPENDIX A





EVOLUTION OF THE PROPOSED STANDARDS

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            Appendix A - Evolution of the Proposed Standards

      The purpose of this study was to develop new source performance
 standards (NSPS) for the pressure sensitive tapes and labels (PSTL)
 industry.  Primarily the study involved gathering and analyzing relevant
 data in such  detail  that a reasonable performance standard could be
 developed,  proposed, and defended.   To accomplish the objectives of this
 program,  technical  data was  acquired on the following aspects  of the
 PSTL industry:   (1)  coating  operations and  processes, (2)  the  release
 and  controllability  of organic emissions  into the atmosphere by this
 source,  and  (3)  the  types  and  costs  of demonstrated  control  technologies.
 The  bulk  of this information was  retrieved  from  the  following  sources:
     • open technical  literature
     • meeting with  specific companies,  trade  associations,  and
     • regulatory authorities
     • plant visits
     • emission source  testing
      EPA  began studying  the pressure  sensitive tape  and label  industry
 in July 1975 as  part of  a  larger  study  of paper  coating operations.
Mr.  William L. Johnson  of  EPA made several  trips  to  tape and label
manufacturers during the Fall of 1975  and early  part  of 1976.   This work
contributed to the 1977  publication of  "Control  of Volatile Organic
Emissions from Existing Stationary Sources  - Volume  II:  Surface Coating
of Cans,  Coils,  Paper, Fabrics, Automobiles and  Light-Duty Trucks," EPA-
450/2-77-008.   This  control technique guide!ines  defined Reasonably
Available Control Technology (RACT) for existing  paper coating  lines. '
Pressure  sensitive tape and label  lines were included in this category.
     EPA contracted with Springborne Laboratories, Inc. to study major
surface coatfng operations and to determine which operations would be
most suitable  for NSPS.  Springborne visited several  paper coaters
including one  pressure sensitive tape manufacturer in mid 1976.  They
recommended that industrial paper coating would be an appropriate area
for an NSPS.
                                  A-3

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      In May  1976, Midwest  Research  Institute  (MRI) was  hired by  EPA  to
 study  organic  solvent  emissions  from  adhesives  users.   MRI  reported  that
 almost half  of the  solvent emissions  from  adhesive use  came from the
 manufacture  of pressure  sensitive tapes  and labels.  MRI's  study con-
 tinued until January 1977.   It focused on  gathering  information  on the
 other  smaller  sectors  of the adhesive  industry.
     Based on  the above  studies, EPA  concluded  that  paper coating was a
 major  source of solvent  emissions and was  a source for  which control
 techniques were available.   Pressure  sensitive  tapes and labels made up
 the largest  percentage of  emissions of any product within the paper
 coating category.   PSTL  was  also a distinct group of products for which
 a well defined  economic  impact analysis  could be performed.  For these
 reasons EPA decided to develop NSPS for  the PSTL industry.
     In May 1978, Radian Corporation was retained by the EPA to study
 the PSTL industry in depth  and develop an NSPS.  The study was performed
 under  EPA Contract Number  68-02-3058.  Mr. William L. Johnson functioned
 as the EPA lead  engineer.  Mr. G. E. Harris of  Radian Corporation
 assumed primary  contractor  responsibilities.  In January 1979, Mr.  T. P.
 Nelson, also from Radian,  took over Mr.  Harris1 duties.  Table A-l
 presents the historical  progression and  major milestones of the project
 from May 1978 to the present.
     In addition to Radian, two other companies also has input to this
 study'.  They were Research Triangle Institute (RTI) and Monsanto Research
 Corporation.  RTI, under the EPA direction of Mr. Neil   Efird of the
 Economic Analysis Branch (EAB), prepared the economic impact analysis.
Monsanto Research, under the EPA direction of Ms. Nancy McLaughlin  of the
 Emission Measurement Branch  (EMB), performed all the emission source
 testing.   At the end of  Phase II, Mr. William Tippitt of the Standards
 Development Branch  (SDB) directed the preparation of the regulation and
 the preamble package for presentation at the Working Group,  NAPCTAC,  and
 Steering  Committee meetings.
                                  A-4

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                                TABLE A-l
 DATE
                                                   ACTIVITY
 May 1978
 June 21-22,  1978


 June 29,  1978

 July 27,  1978


 July 28,  1978


 July 31,  1978

 August  29, 1978


 October 17,  1978

 November, 1978

 November  30,  1978


 December, 1978
January 2, 1979
January 8, 1979

January 15, 1979
January 16, 1979

January 17, 1979
January 30, 1979
January 30, 1979
 1.
 2.
 3.

 .4.

 1.
      Radian work  on  Pressure Sensitive Adhesives BID begun.
      A work plan  was  formulated and transmitted to EPA.
      A kick-off meeting was held to discuss the technical
      approach, staffing, schedule, and budget.
      The literature  search was initiated.

      6.E. Harris  of  Radian attended PSTC Technical  seminar
      on the Use of Emulsion Coating Systems for PSTL
      Coating.
2.    Work on data base is complete.

1.    Inspection trip made to Anchor Continental ,  Inc.
      in Columbia, S.C. to discuss their coating and
      control  operations.
2.    Inspection trip made to Shuford Mills, Inc.  in
      Hickory, N.C. to discuss their coating and control
      operations.
3.    Contacts with control  equipment vendors completed.

1.   Meeting  with 3M Company in St. Paul, Minn,  to
   •   discuss  their input  to the PSTL study.

1.   Submitted draft BID  Chapters  2,  4,  and 5  to  EPA.

1.   Draft version of Chapter 3 and two  technical memornada
     describing the model  plants  and  test plan were issued
2.   Meeting  was  held with  EPA/OAQPS  to  discuss transition
     of PSTL  BID  from 6.E.  Harris  to T.  P.  Nelson.
                    2.
                    3.
1.
2.

3.
4.

5.
6.
7.
     Work completed under EPA  contract  68-02-2608 Task  40
     was reviewed.
     Phase I  data base  was analyzed.
     Technical  memoranda  concerning  a Model  IV calculation
     and the  basis  for  NSPS were  issued.

     T.P.  Nelson  takes  over as Lead  Engineer on PSTL BID
     Final  Work Plan  submitted to EPA/OAQPS  for Phase II
     work.
     Final  revised  Work Plan submitted  for Phase II work.
     Kick-off meeting held at EPA offices for Phase II
     work.
     ESED  Project Test  Plan submitted to EPA/OAQPS.
     Initial  test request  submitted  for Shuford Mills site.
     Meeting  held to  determine need  for EAB  and their
     contractor Research Triangle Institute.
                                    A-5

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                         TABLE A-l  (continued)
Date
                              ACTIVITY
February 2, 1979

February 8, 1979

February 9, 1979

February 14, 1979
February 15, 1979
February 16, 1979

February 28, 1979

March 1, 1979

March 5, 1979
March 7, 1979
March 16, 1979

March 28, 1979
March 31, 1979


April 30, 1979


May  4, 1979

May  14-18, 1979

May  31, 1979


June 4-6, 1979

June 13-14, 1979

June 15, 1979
June 30, 1979


July 12, 1979


'July 19, 1979
1.

2.

3.

4.
5.
6.
2.
3.
4.

5.
6.
1.

2.

3.
3.
4.
Meeting was held with EPA to discuss and review final
test request for Shuford Mills.
Visit to Avery International Offices in San Marino,
Cal ifornia.
Visit to California Air Resources
proposed California rules and the
Plant visit to Hard Rubber Co.  in
Plant visit to Tuck
Plant visit to Adhesives
Pennsylvania.
Submit preliminary 8.1 data to RTI.
Industries  in
     Research,
Board to discuss
PSTL coating industry.
New Haven,  Connecticut.
Beacon, New York.
 Inc. in Glen Rock,
Meeting with T.N. Grenfell  of Midland-Ross Air Systems
to discuss ovens and air control  devices.
Submitted revised work plan schedule to ESED.
Pretest visit to Shuford Mills, Inc. in Hickory,  N.C.
Visit to Shell in Houston,  Texas  to discuss hot melt
technology.
Visit to Mystic Tape in Northfield, Illinois.
Final model plants and final  model  plant parameters
submitted to EPA.

Complete cost analysis submitted  to EPA (Sections
8.1, 8.2, 8.3).

Questionnaire submitted to si!icone release sheet
manufacturers.
Monsanto Research Corporation testing of Shuford  Mills
facil ity.
Revised cost analysis submitted with the inclusion of
silicone release sheet coating model plants.

T.P. Nelson attended TAPPI  Conference on Hot Melt Coating
technology.
T.P. Nelson attended PSTC Conference on Water-Based
Coating technology.
Received preliminary Shuford Mills  tests results.
Draft BID Chapters 6 and 7 completed and submitted along
with the revisions to Chapters 2, 3, 4, and 5.

Meeting with American Paper Institute representatives  to
discuss the involvement of silicone release sheet coaters
in the NSPS.
Drafts of Chapters 2 through 7 and  Sections 8.1,  8.2,  and
8.3 are submitted to industry for a technical  review.
                                    A-6

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                         TABLE A-l  (continued)
DATE
July 23, 1979
August 2, 1979
August 8, 1979
August 10, 1979
August 17. 1979
August 22, 1979
August 28, 1979
September 7, 1979
September 12, 1979
October 5, 1979
October 25, 1979
                              ACTIVITY
1.
2.
A meeting was  held  at OAQPS  in  Durham  to discuss pre-
paration of BID  Chapter 9 and the  preamble package.
Radian  and EPA personnel were present.  A schedule of
milestones for project completion  was  established.

Radian  submitted draft Sections 9.1 and 9.2 for review.
A meeting was held  at OAQPS  in  Durham  to discuss the
standard concurrence memo.   Radian and EPA personnel
were present.  Agreement was reached on an initial form
of  the  standard.
Radian  submitted draft Section  9.6 for review.
Radian  submitted draft Section  9.7 for review.
A meeting was held  at OAQPS  to  reexamine the decision
reached on the initial standard.   EPA and Radian
personnel were present.  Discussions centered on
changing the standard from an equipment or percent
reduction standard  to an emission limitation.  Methods
for compliance testing were also discussed.
T.P. Nelson of Radian Corp.  visited the Precoat Metals
coil coating plant  in St.  Louis, Mo.  The purpose 'of
the trip was to see the total enclosure concept for
coil coating operations.

A meeting was held at OAQPS to finalize the  content and
form of the concurrence memo for the PSTL standard
of  performance.  The lower emission limit exemption
was dropped.
T.P. Nelson and G.W. Brooks  of Radian Corp.  visited
the E.J. Gaisser, Inc. zinc oxide paper coating plant
in Stanford,  Conn.   The purpose  of this trip was to see
the total  enclosure concept for paper coating and
evaluate its  applicability in adhesive coating.

A meeting was held at OAQPS  between Radian and SDB
personnel.   It was announced by  SDB that  Chapter 9
would probably be dropped  from the BID.  Radian agreed
to incorporate all  Chapter 9 material  into the preamble.

A meeting was held at OAQPS  with Radian,  CPB,  SDB,  EMB,
and EAB personnel present.   Final  comments on the
preamble and  regulation were received.  The  dates  for
the Working  Group and NAPCTAC meetings  were  given.
Radian agreed to  have the  completed packages  finished
by November 2,  1979.
                                    A-7

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                         TABLE A-l  (continued)
DATT
                              ACTIVITY
November 5, 1979

November 15, 1979


November 20, 1979



December 13, 1979


December 19, 1979


December 20, 1979


December 26, 1979

December 27, 1979

December 28, 1979

January 11, 1980



February 28, 1980




 May 27,  1980


 June 2,  1980
1.   Radian delivered the Working Group and NAPCTAC packages
     to EPA.
2.   The Working Group meeting was held in Durham,  N.C.  at
     OAQPS.  Radian presented the development of the NSPS for
     pressure sensitive tapes and labels.
3.   Radian delivered initial  docket materials to the EPA.
     Materials were sent to the EPA Central  Docket  Section
     in Washington, D.C.

1.   The NAPCTAC Committee meeting was held in Raleigh,  N.C.
     Radian presented the draft NSPS developed for  thd pressure
     sensitive tape and label  industry.
2.   A briefing was held with Mr. Don Goodwin of ESED to
     explain the Steering Committee package.   Radian,
     CPB, SDB, EMB, and EAB personnel  were present.
3.   A briefing was held with Mr. Walter Barber of  OAQPS to
     explain the Steering Committee package.   Radian, CPB,
     SDB, EMB, and EAB personnel  were present.
4.   Radian submitted a draft Action and Transmittal  Memo to
    .EPA.
5.   Radian submitted revised Action and Transmittal  Memos
     to EPA.
6.   The Steering Committee packages were mailed out by  EPA.

1.   The Steering Committee meeting was  held  in Washington,
     D.C.  Radian presented an overview  of the NSPS  for
     pressure sensitive tapes and labels.

1.   A meeting between Radian,, EPA, and  pressure
     sensitive tape and label  manufacturers was held
     in Durham, North Carolina.  Issues  raised by
     industry at the NAPCTAC meeting were discussed.

1.   Draft package for. AA Concurrence was submitted
     to the EPA Lead Engineer.

2.   Final  AA Concurrence package was delivered to  EPA
     Lead Engineer.  The preamble and regulation for
     proposal, the Action Memo, the Information Memo,
     and Volume 1 of the BID were included in the
     package.
                                    A-8

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                              APPENDIX B

             INDEX TO ENVIRONMENTAL IMPACT CONSIDERATIONS

     A reference system cross-indexed with the October 21, 1974, Federal
Register (39 FR 37419) containing the Agency guidelines concerning the
preparation of Environmental  Impact Statements for regulatory actions
is presented.  With this index, anyone interested in reading those sections
of the Background Information Document that contain discussions of any
data and information germane to any portion of the Federal Register
guidelines is directed to the appropriate subsections and pages within
the document.  An example of this cross-indexed reference system is
included in this outline.

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       APPENDIX C



EMISSION SOURCE TEST DATA

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                               APPENDIX C
                        EMISSION SOURCE TEST DATA

      The  emission  source  test data for the pressure sensitive tape and
 label  (PSTL)  BID comes  from three sources:
      (1)   Existing test data on PSTL coating facilities,
      (2)   U.  S. Environmental  Protection Agency sponsored testing, and
      (3)   Material  balance  data from solvent-based  coating lines
           equipped with carbon adsorption VOC control  units.
 The  following sections  discuss this  data.
 Existing  Test Data on PSTL  Coating Facilities
      The  only source test data on controlled PSTL coating facilities
 came from the state of  California.   These tests  were performed  at  Avery
 Label  Company, in Monrovia,  California,  and Fasson Products  Division of
 Avery  Corporation  in Cucamonga,  California.   Table  C-l summarizes  the
 data from these tests.  Testing  was  only completed  around the control
 device  (as specified by California law).   There  were no attempts to
 complete  material  balances.
 U.S.  Environmental  Protection  Agency Testing
      In May 1979,  the U.S.  Environmental  Protection Agency  sponsored
 testing of a  1.52 meter (60-inch) wide  tandem pressure sensitive tape
 coater.   The  facility was totally  dedicated to the  production of masking
 tape.  The machine  coated in series a release  backside and  an adhesive
 front side on a continuous  crepe  paper  backing.  The coating line  has  a
 separate  coating applicator and  drying/curing oven  for each coating
 operation.  Figure  C-l   illustrates the  tandem coater.
     The  VOC emissions   from the  release coating oven are  controlled by
 an incineration unit, while emissions from the adhesive oven are con-
 trolled by a carbon adsorption unit.  The incinerator supplies all  the
 heat energy required in  the release drying/curing oven.  At full capacity
 the  solvent burned in the incinerator supplies approximately 50 percent
of the total  system heat load.  The remaining fuel  requirements are
supplied by number 2 fuel  oil.  The carbon adsorption unit recovers
                                 C-3

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    Recovered
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Carbon
Adsorption
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                                       C-5

-------
 nearly  90 percent of the solvents  used in  the applied  adhesives.   All  of
 the  recovered solvent is reused  on-site.   For fugitive solvent  control
 there is  a hooding system over and under the  release coater  area,  over
 the  exit  of the  release  drying/curing  oven, and  over the  adhesive
 coating area.  All  of these  hooding systems are  vented directly to the
 atmosphere.
     Separate tests  were performed around  the release/incinerator  line
 and  the adhesive/carbon  adsorption line.   The release  coating contains
 approximately 42 weight  percent  solids and the applied coating  weight is
 0.0071  kg per square meter (0.21 ounce per square yard).  The adhesive
 coating contains approximately 57  weight percent solids and  the applied
 coating weight is  0.039  kg per square  meter (1.15 ounces  per square
 yard).  The  results  of the source  tests are presented  in  Table  C-2.
 (Note:  At the  time of this printing the results  have not  been finalized.)
     A  material  balance  could  not  be completed around  either the release/
 incinerator  system nor the adhesive/carbon adsorber system.  Inaccur-
 acies in  flow  measurements and VOC analyses are  considered the  major
 problems.  One of the major  results  of the study was the  verification
 that hooding systems  can  effectively collect  fugitive  solvents  around
 the coater areas.  The concentration of solvents in the hood gases
 around  the coating applicator  ranged from  3,000  to 14,000 vppm  (measured
 as c, by  Reference Method  25).
 Material  Balance Data  for  Carbon Adsorption Controlled Facilities
     Carbon adsorption controlled  coating  lines  provide a unique oppor-
 tunity  to examine the  overall  VOC  control  performance  of  a total system
without requiring testing.  The metering and measurement  of  the total
 solvents  used  in formulations  and  the  total solvent recovered from the
 carbon adsorption system give  an exact measurement of  the overall  VOC
 capture.
     One such  facility was examined  over a four week period of time
 (January 15, 1979 to  February  9,  1979).  The facility consists of four
adhesive coating lines controlled  by a single carbon adsorption system.
The four lines consist of  three 28" wide lines and one  56" wide line.
The plant operation is characterized by many short runs at slow line
                                   C-6

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 speeds.   Table C-3 summarizes the operations of each line and the total
 system.   This facility is a good example of a hard to control  facility
 in that  this study has indicated that slow coating lines are the most
 difficult to control  (e.g., they have the greatest potential  for fugi-
 tive solvent emissions).
      During the four week test period,  the controlled facility used
 7,589 gallons of solvents in their adhesive formulations and recovered
 7,065 gallons from the carbon adsorption facility.   This represents an
 overall  VOC control  of 93.1  percent.   The system performed 140 separate
 runs and used the following solvents:  toluene,  acetone,  hexane,  ethyl
 acetate, methyl  ethyl  ketone, rubber solvent,  heptane, mixed  solvents,
 recovered pro lam solvents,  xylene,  ethyl  alcohol,  and  isopropanol.
      The excellent performance of this  system  can be potentially attri-
 buted to the unique way the system is  operated.   The makeup air for the  ovens
 is pulled directly from the work area.   The building which houses  the
 coaters  is tight enough to allow a slight negative  pressure in the  work
 area as  compared to the outside  of the  building.  Also,  the coater  ovens
 are operated with a slight negative  pressure with respect to  the room
 air.   With a fully enclosed,  tight system,  the  overall result  is for all
 makeup air to flow into the  building,  through  the oven,  and out  to  the
 carbon adsorption system.   This  means essentially 100 percent  capture  of
 all  solvent emissions.   The  facility also  uses  hoods over the  coater
 areas to capture fugitive  solvent  emissions  near the coating applicator.
 The hood gases  are ducted  into the drying  oven.
      A second pressure  sensitive  tape coating facility controlled by
 carbon adsorption reported  to EPA  historical solvent recovery  data  for the
 entire year of  1979.  Total solvent use, total solvent recovery, and
 the overall  recovery  percentage were reported on  a weekly  basis.  A
 summary  of the  control  percentages is given  in Table  O4.   For most  of
 the year the solvent  recovery  percentage  is  90 percent or  better in
 both  the weekly  and monthly  (4 week) bases.  In  the  latter third of  the
year the  overall  control percentage starts  to go  down below 90 percent.
 This  decline is  directly attributable to the old  carbon  in  the carbon
 adsorption  system.  The carbon had originally been installed in
                                   C-8

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-------
           TABLE C-4.  OVERALL CONTROL  EFFICIENCY  FROM TAPE
                     PLANT USING CARBON ADSORPTION
Week of
Overall Control Efficiency
                                                       4 Week Average
1/6/79
1/13/79
1/20/79
1/27/79
2/3/79
2/10/79
2/17/79
2/24/79
3/3/79
3/10/79
3/17/79
3/24/79
3/31/79
4/7/79
4/14/79
4/21/79
4/28/79
5/5/79
5/12/79
5/19/79
5/26/79
6/2/79
6/9/79
6/16/79
6/23/79
94.9
97.8
95.5
95.0
96.0
91.3
91.0
93.8
92.6
94.4
95.5
94.1
91.9
98.9
84.4
96.1
90.3
87.0
89.5
98.9
81.6
95.1
88.7
93.0
81.1

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                                   C-10

-------
           TABLE C-4. (Cont.)  OVERALL CONTROL EFFICIENCY FROM TAPE
                     PLANT USING CARBON ADSORPTION
Week of
Overall  Control  Efficiency
4 Week Average
7/7/79
7/14/79
7/21/79
7/28/79
8/4/79
8/11/79
8/18/79
8/25/79
9/1/79
9/8/79
9/15/79
9/22/79
9/29/79
10/6/79
10/13/79
10/20/79
10/27/79
11/3/79
11/10/79
11/17/79
11/24/79
12/1/79
12/8/79
12/15/79
12/31/79
89.6
96.9
97.0
94.8
92.0
87.2
87.0
78.7
81.8
91.1
88.0
86.7
77.3
89.9
88.3
85.3
89.0
86.0
85.0
88.0
90.1
92.1
79.9
87.2
87.2
.
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91.2
_
_
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90.3
-
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84.9
-
-
. -
85.6
-
-
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86.3
-
-
-
87.5
-
—
                                   c-n

-------
March of  1977.  The expected life  of  the  carbon  bed was estimated at
2 to 2Jg years.  Consequently, new  carbon  should  have been added  in
mid-1979.  Because it was not, the control percentages started to degrade,
     In January of 1980 new carbon was  installed  in the carbon adsorption
system.   The overall control percentage went up  immediately upon installa-
tion of the new carbon.  Ninety percent control and greater has been
attained consistently since the changeover.  Recovery data since the new
carbon was added is given in Table C-5.   The model plant analysis in
Chapter 6 assumed a carbon life of two years.  This data supports that
assumption and the contention that ninety percent overall  control is an
attainable control  level  for this industry.
                                  C-12

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 TABLE C-5.  OVERALL CONTROL EFFICIENCY SINCE CHANGEOVER TO NEW CARBON
Week of
Overall  Control  Efficiency
4 Week Average
  1/7/80
  1/14/80
  1/21/80
  1/28/80
  2/4/80
  2/11/80
  2/18/80
  2/25/80
  3/3/80
  3/10/80
  3/17/80
  3/24/80
  3/31/80
  4/10/80
          90.8
          99.9
          92.5
          88.0
          94.4
          99.2
          86.1
          96.3
          98.3
          96.4
          96.2
          92.8
          91.2
          93.1
     92.8
     94.0
     95.9
                                  C-13

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APPENDIX D:  EMISSION MEASUREMENT AND MONITORING

-------

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               APPENDIX  D  -  EMISSION MEASUREMENT AND
                             MONITORING

  D.I   EMISSION MEASUREMENT METHODS
      During the  standard support  study for the pressure sensitive tapes
and labels  (PSTL)  industry,  the Environmental Protection Agency conducted
tests  for volatile organic compounds.  (VOC) at one plant.  Two lines were
tested, one controlled by  a  carbon adsorber and the other by an incinerator.
There  were several purposes  for the testing:  determination of the
control efficiency across  the carbon adsorber and incinerator: deter-
mination of the  effectiveness of  the hooding by measuring the amount of
fugitive VOC captured and  vented  by each hood; and determination of a
solvent material  balance for each coating line.
     Stack tests were performed at ten sites to measure the VOC mass flow
rate.  The sampling locations were selected according to EPA Reference
Method 1.  Reference Method  2 was used to determine the volumetric flow
rate.  Molecular weight of the gas stream was determined according to
Method 3, and moisture was determined by either Method 4 or a standard
wet bulb/dry bulb procedure.   Methods 2,  3, and 4 were combined to
calculate the dry standard volumetric flow rate.
     The VOC concentration in each stack  was determined using two  of
three different methods:
     1.  Proposed Reference Method 25,  "Determination of Total  Gaseous
         Nonmethane Organic Emissions as  Carbon (TGNMO)."
     2.  Integrated bag  samples  analyzed  by a flame  ionization  analyzer
         (BAG/FIA)1.
                                  D-3

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     3.   Continuous concentration measurements using direct extraction
                                          p
     and a flame ionization analyzer  (FIA) .
     At eight sites, the TGMNO and BA6/FIA methods were run simultaneously.
These testing sites were either in explosive atmospheres or remote
locations.  At the other two sites, carbon adsorber inlet and outlet, the
TGMW and the direct extraction FIA methods were used.  The direct FIA
was used instead of the integrated bag sample FIA method because these
sites were not in hazardous areas, and with the continuous FIA minor
process variations could be noted.  The results from the two FIA methods
should be equivalent.  The FIA was calibrated with propane.
     At each site, the VOC measurements were performed for three 45-
minute runs with volumetric flow measurements being made before and after
each VOC run.  As much as possible, the three replicate runs were made
when the same tape product was being produced, and when the process was
operating normally.  During the testing period, several  process parameters
were recorded including amount of solvent used, amount of solvent recovered
by the carbon adsorber, and incinerator temperature.
     Periodically, intermediate and final  tape samples were collected and
analyzed for residual solvent, using ASTM F 151-72 "Standard Test Method
for Residual  Solvents in Flexible Barrier Materials."  This method provided
only an index for comparing solvent levels and was inappropriate for the
true measurement of residual  solvent.
     Samples of the solvents were obtained and analyzed for speciation by
direct injection into a gas chromatograph.  Samples of the coatings were
obtained and analyzed for weight percent solvent.   The samples were
diluted with more solvent and analyzed by direct injection into a gas
chromatograph.
D.2  PERFORMANCE TEST METHODS
     For the standard for the pressure sensitive tapes and labels industry,
performance test methods are needed in two areas:  determination of the
solvent content of the coating; and determination of the overall  control
efficiency of the add-on pollution control system.  Furthermore,  the test
method for control  efficiency is different depending  on the type  of add-
on control  device used.
                                  D-4

-------
 D.2.1   Analysis of Coatings
      D.2.1.1   Volatile Organic Compound Content of the Coating.   For the
 proposed PSTL regulation the organic content of the coating needs to be
 determined in units of mass of volatile organic compounds per mass of
 coating solids.   This  value may be obtained either from the coating
 manufacturer's  formulation or from a modified version of proposed Reference
 Method 24, "Determination of Volatile Organic Content (as Mass)  of Paint,
 Varnish, Lacquer,  or Related Products."
      Reference Method  24 combines  several  ASTM standard methods  which
 determine the volatile matter content,  density,  volume of solids,  and
 water content of the paint,  varnish,  lacquer,  or related coating.   From
 this  information,  the  mass of volatile  organic compounds (VOC) per unit
 volume of coating  solids  is  calculated.  A detailed description   of the
 rationale leading  to the  selection of this method  is  presented in  another
 EPA document.3
      Because  the proposed PSTL  regulation  for coatings  is  in  different
 units,  Reference Method 24 must be modified  so its  results  are in  the
 same  units as the  standard.   This  actually simplifies  the  test method by
 eliminating some steps.   For non-aqueous coatings  (solvent-reducible
 coatings),  the procedure  to  be  used  is  ASTM  D  2369-73,  "Standard Test
Method for Volatile  Content  of  Paints."  For coatings with  water  (water-
 reducible  coatings), the  previously mentioned  procedure  (ASTM D 2369-73)
 is combined with another  procedure which determines the  water content of
 the coating.  There  are two  acceptable  procedures for  this, ASTM D  3792,
 "Standard  Test Method  for Water in Water Reducible  Paint by Direct
 Injection  into a Gas Chromatograph," and as ASTM draft  "Standard Test
Method  for Water in  Paint or Related Coatings  by the Karl Fischer Titration
Method."   The results  from these procedures are the non-aqueous volatile
content  of the coating  (as a weight fraction) and the water content  (as a
weight  fraction).  From these procedures the weight fraction solids
content  in the coating  can also be determined.  To obtain the VOC content
of the  coating in the  units specified in the regulation, the weight
fraction non-aqueous volatiles  is divided by the weight fraction  solids,
giving  the result in mass of VOC per mass of coating solids.
                                   D-5

-------
     The estimated cost of analysis per coating sample is $50 for the total
volatile content procedure (ASTM D 2369-73).  For aqueous coatings, there is
an additional $100 per sample for water content determination.  Because the
testing equipment is standard laboratory apparatus, no additional
purchasing costs are expected.
     D.2.1.2  Density of the Coating.  For the proposed PSTL regulation the
density of the coating may need to be determined.  This value may be obtained
either from the coating manufacturer's formulation or from a procedure in
proposed Reference Method 24.  The procedure to be used is ASTM D 1475-60,
"Standard Test Method for Density of Paint, Varnish, Lacquer, and Related
Products."
     The estimated cost of analysis per coating sample is $25.  Because
the testing equipment is standard laboratory apparatus, no additional pur-
chasing costs are expected.
D.2.2  Efficiency of the Pollution Control System
     If the amount of solvent in the coatings exceeds the standard, then
the overall efficiency of the entire vapor control system must be determined.
The overall efficiency is determined by comparing the amount of solvent
controlled  (either recovered or destroyed) to the potential amount of
solvent emitted with no controls.  It should be noted that the overall system
control efficiency is not the same as the efficiency of the individual vapor
control device, because the overall efficiency considers the fugitive
emissions that are not routed to the device.
     D.2.2.1  Carbon Adsorber Test Procedure.  For carbon adsorbers, per-
formance is demonstrated by comparing the solvent used versus the solvent
recovered.   In using a solvent inventory  system, it is necessary to
monitor two things:  the amount of solvent used; and the amount
of solvent  recovered by the carbon adsorption system.  To determine
the efficiency of the carbon adsorber system, these data should
be collected over a period of one month.  This time interval allows  the
test to be  run using a representative variety of coatings and tape
products3 as well as reducing the impact  of variations in the process
that would  otherwise affect the representativeness of a short-term test.
It should be noted that this procedure determines the overall control
                                    D-6

-------
efficiency based on the original amount of solvent used, not the
amount entering the carbon adsorber, and fugitive emissions are allowed
as long as the overall control efficiency meets the standard.
     The cost of such a performance test should be minimal because the
solvent inventory data would  probably be monitored anyway by the plant.
If not, the estimated purchase cost of two accurate liquid weight meters
is $1400.
     D.2.2.2  Incinerator Test Procedure.  Because incinerators destruct
the solvent rather than recover it, a different type of performance test
is needed.  The recommended procedure measures the mass of VOC  (as carbon)
in the incinerator system vents (incinerator  inlet, incinerator outlet,
and fugitive emission vents), and determines  the overall control efficiency
of the system.
     The recommended procedure for determining the mass of VOC  (as carbon)
in the incinerator system vents uses a combination of several standard
methods.  EPA Reference Method 1 is used to select the sampling site.
Reference Method 2 measures the volumetric flow rate in the vent, while
Methods 3 and 4 measure the molecular weight  and moisture content to adjust
the volumetric flow to dry standard conditions.  The VOC concentration in the
vent is measured by proposed  Reference Method 25, "Determination of Total
Gaseous Nonmethane Organic Emissions as Carbon (TGNMO)."  The results from
these methods are combined to give the mass of VOC (as carbon) in the vent.
     Three one-hour runs of Reference Method  25 are recommended for a
complete test, with Reference Methods 2, 3, and 4 being performed at
least twice during that period.  Measurements at the inlet, outlet, and
fugitive emission vents should be performed simultaneously.  Although the
actual  testing time using Reference Method 25 is only 3 hours, the total
time required for one complete performance test is estimated at 8 hours,
with an estimated overall  cost of $4,000, plus $2,000 for each fugitive
vent measured.  During the performance test,  the process should be
operating normally.  Because  this is a short-term test, the enforcement
agency should consider the solvents and coatings being used to ensure
representativeness.
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      The  TGNMO  method was  selected  to measure the  VOC  concentration
 instead of one  of the other methods  discussed in Section  D.I  "Emission
 Test Methods."   It is simpler to use,  especially  in  explosive  atmospheres
 or when sampling  high-temperature, moist  streams.  Also,  because  the
 detector  used in  Reference Method 25 measures all  the  non-methane organics
 as  methane,  all carbon atoms give an equivalent instrument  response.
 Therefore,  the  problem of  varying response  ratios  for  different organic
 compounds  (typical  of all  flame  ionization  units)  is avoided.  A  more
 detailed  discussion of the TGWO method and its advantages  is  presented
 in  another EPA  document3.
      0.2.2.3  Comparison of Test Procedures.   The  decision  to  recommend
 two  different performance  test methods was  made after  considering  several
 factors.   It is usually preferable to  have  the same performance test
 method regardless  of the type of control  device.   In this case, the stack
 sampling  procedure  described for incinerators  is also  applicable  to carbon
 adsorbers.  However,  the solvent inventory  method  is a far  more practical
 and  accurate procedure.  It is very  inexpensive, requires no special
 technical   sampling  and analytical procedures, and  has  a test period of one
 month, so  that  a  representative  variety of  coatings can be  tested.  Un-
 fortunately, an inventory-type method cannot  be applied to  incinerators.
 The  one-day TGN-10  inlet and outlet stack  test procedure is  the best method
 for  testing incinerators,  but this method would become exorbitantly
 expensive  and impractical   if a longer test  period were required.   Thus, it
was  decided that the  advantages  of the solvent inventory-type test for
 carbon adsorbers outweigh  the disadvantages of having two different
 performance test methods with two different test periods.
     There are  important differences between the carbon adsorber and
 incinerator test procedures  that  should be  noted.   The test procedure for
the  carbon adsorber system  relates the original amount of solvent used at the
coating head to the amount  of solvent controlled,  i.e.  recovered,  by  the
adsorber.   It is possible  to compare the two amounts  because the  same
measurement method  is used,  (liquid  solvent used versus liquid solvent
 recovered).  However, for  incinerator systems, the amount of solvent  used
should not be directly related to the amount of solvent controlled, i.e.
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destructed, because different measurement procedures are used, (solvent
used is measured as a liquid, while solvent destructed is measured as
gaseous VOC).  Thus, for incinerators, the amount controlled is determined
by using the amount of VOC measured in the inlet vent versus the outlet vent.
The overall incinerator system control efficiency is determined by relating
the amount destructed to all the potential uncontrolled emissions.  To make
the incinerator test procedure equivalent to the carbon adsorber test pro-
cedure, one must be able to measure all the potential emissions, both
fugitive emissions and oven emissions ducted into the incinerator.  That
is, all fugitive VOC emissions from the web coating area must be captured
and vented through stacks suitable for testing.  The alternatives are to
completely enclose the coating area within the plant, or to construct the
facility so that the building ventilation system captures all the fugitive
emissions and ducts them into a testable  stack.
D.3  MONITORING SYSTEMS AND DEVICES
     The purpose of monitoring is to ensure that the emission control
system is being properly operated and maintained after the performance test.
One can either directly monitor the regulated pollutant, or instead,
monitor an operational parameter of the emission control system.  The aim
is to  select a relatively inexpensive and simple method which will indicate
that the facility is in continual compliance with the standard.
     For carbon adsorption  systems, the recommended monitoring test is
identical to the performance test.  A solvent inventory record is
maintained, and the control efficiency is calculated every month.  Excluding
reporting costs, this monitoring procedure should not incur any additional
costs  for the affected facility, because  these process data are normally
recorded anyway, and the liquid weight meters were already installed for
the earlier performance test.
     For incinerators, two  monitoring approaches were considered:
 (1)  directly monitoring the VOC content  of the inlet, outlet, and fugitive
vents  so that the monitoring test would be similar to the performance test;
and  (2) monitoring  the operating temperature of the  incinerator as an
indicator of compliance.  The first alternative would require at least two
continuous hydrocarbon monitors with  recorders,  (about $4,000 each), and
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frequent calibration and maintenance.  Instead, it is recommended that a
record be kept of the incinerator temperature.   The temperature level  for
indication of complicance should be related to the average temperature
measured during the performance test.  The averaging time for the temperature
for monitoring purposes should be related to the time period for the
performance test, in this case 3 hours.  Since a temperature monitor is
usually included as a standard feature for incinerators,  it is expected
that this monitoring requirement will not incur additional costs for the
plant.  The cost of purchasing and installing an accurate temperature
measurement device and recorder is estimated at $1,000.
D.4  REFERENCES
     1.  Feairheller, W. F., "Measurement of Gaseous Organic Compound
Emissions by Gas Chromatography," Monsanto Research Corporation, prepared
under EPA Contract No. 68-02-2818, January 1978.
     2.  "Alternative Test Method for Direct Measurement of Total Gaseous
Organic Compounds Using a Flame lonization Analyzer," in "Measurement of
Volatile Organic Compounds," OAQPS Guideline Series, EPA Report No.
450/2-78-041, October 1978.
     3.  "Automobile and Light-Duty Truck Surface Coating Operations -
Background Information for Proposed Standards," EPA Report No. 450/3-79-030,
September 1979.
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                                   TECHNICAL REPORT DATA
                            (Please read Instructions on the reverse before completing)
  EPA-450/3-80-003a
                                                            3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
  Pressure Sensitive Tape and  Label  Surface Coating
  Operations - Background Information for Proposed
  Standards
                                 5. REPORT DATE
                                  August 1980
                                 6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
                                                           8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
                                                            10. PROGRAM ELEMENT NO.
  Radian Corporation
  3024 Pickett Road
  Durham, North Carolina
27705
11. CONTRACT/GRANT NO.

 68-02-3058
12. SPONSORING AGENCY NAME AND ADDRESS
  DAA for Air Quality Planning and Standards
  Office of Air, Noise,  and  Radiation
  U.  S.  Environmental Protection Agency
  Research Triangle Park,  North Carolina  27711
                                 13. TYPE OF REPORT AND PERIOD COVERED
                                  Final
                                 14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
  Standards of performance for the control of emissions from pressure sensitive tape
  and label surface coating operations are being  proposed under the authority of
  Section ill of the  Clean Air Act.  These standards  would apply to release,  precoat,
  and adhesive coating  lines which emit more than 15  megagrams (16.5 tons)  of volatile
  organic compounds per year and for which construction or modification  began on or
  after the date of proposal of the regulations.   This document contains background
  information and environmental and economic impact assessments of the regulatory
  alternatives considered in developing proposed  standards.
17.
                                KEY WORDS AND DOCUMENT ANALYSIS
                  DESCRIPTORS
                                              b.lDENTIFIERS/OPEN ENDED TERMS
                                               c. COS AT I Field/Group
  Air pollution
  Pollution control
  Pressure sensitive  adhesives
  Pressure sensitive  tape and label coating
  Release coatings
  Standards of performance
  Volatile organic  compound emissions
                     Air Pollution  Control
                    ines
18. DISTRIBUTION STATEMENT
  Unlimited
                    19. SECURITY CLASS (ThisReport)
                     Unclassified
              21. NO. OF PAGES
                328
                                              20. SECURITY CLASS (Thispage)
                                                Unclassified
                                                                         22. PRICE
EPA Form 2220-1 (Rev. 4-77)
                      PREVIOUS EDITION IS OBSOLETE

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