-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
0
o
0
oo
LU
1— 1
_J
O
1 — 1
I—
o
o
LU
^
0
00
(-/">
0
«
JE;
£r
1
Q_
O
|
r— i
O CO CO «S- CM
O O O O CO
rH rH CM CO
O rH rH CT> CO
•3" *!" CO rH tO
O CM CM ID r^
CM rH OO CO
oo cn r-- LO r-.
CM r~- o co r*-
to CM cn ID co
CM iH co cn
•* cn oo CM rH
Is*- r^- ID co 10
LO^ CM^ CO ID 00
CM rH CO CTl"
to cn ID rH cn
LO 1 — OO OO CM
LO CM CO LO 00
CM rH CO cn"
CM Cn rH CM ID Cn
cn to to r~. o oo
CM CO tO ID 00 •*
•**»•• *. •*
CO rH «^- OO CD
o cn cn o cn >^-
*a- to o r-v oo cn
CM CO to ID OO "3"
CO rH "^- 00 Cn
^s
o cn cn to !->• o
o to to LO o o
o co co LO cn ID
CO rH <3- CO cn
to
to
•— o
re u
1 ^ !__
•r- 03 D5
Q.+J c
LO U Q. !p
•p ro re
LO -a u s- re
O CU CU CU
<-> ^ 05 0. r-
i — re *r— r— "£3 m
re -p m ro r— cu •!-
+j to 3- -P re x s-
•r- c o o 3 -i— re
Q.I-H 31— c u. >
re <—
CJ
c
•i^
•P
OO
lode rate
^L.
0.
oo
C
o
+J
a.
o
to
T>
re
o
ja
ro
o
-P
c
O)
O5
S-
oo
cu
-p
ro
cu
•o
0
s
X
— 1
J-v
i )
>— o
O i-
s- -P
•P C
C 0
0 0
^> CU
1— — J
to o to CM r-»
CO LO CO LO tO
cn «3- oo ro co
rH CO
O O O «3- O
O ID LO IT) "&•
CM «3- tD «3- «*
rH rH oo
rH rH CM CT> O
£-• r^ «3- to ID
rH rH CO
CM rH OO CO LO
ID r-~ CM to «3-
^" ^" cn ^j- to
rH rH CO
LO rH tO CO CM
^J" f^* rH tO ^*
^ **$* cn ^j- to
rH rH CO
£^ LO r^ oo CM co
r** oo ID to r~* f-N.
*J* "^ cn «3- ID to
rH rH CO CO
v— '
CN] ID f^ OO tO CM
ID 00 CO tO !"-. f-.
"=r "=S" cn "vt- ID to
* *• *. V,
f"1 rH OO CO
co LO co r^- LO co
oo co CM to co r-»
•si" «^~ cn ^ ID to
rH rH CO OO
•v. '
CO
-p
uo
ro S
-p 1—
*r"" re 03
Q.+J C
05 U Q. 4J
•p re re
10 -a o s- re
O CD CU CD
U •— O5 Q. r—
i: c ° -Q
i— re -r- i— f T3 re
re -P ^^ 03 r— cu T-
•P w s- -P re x s-
•f- = o o 3 ••- re
CLI-H Si— c u. >
re c
0 <
cu
3
C
•P
C
0
u
8-81
-------
*
<^-\
TJ
O)
3
C
•r-
•P
C
O
u
Sw^
O
CO
1
CO
UJ
_J
CO
^^
J—
(O
(U
c
•f-
r~*
e
(U
TJ
C
ro
f—
to
\ TJ
•P T-
t~~ r '
tt) O
E 10
•p a-s
o o
:r o
rH
j_
(U
•p
ro
3:
c
o
•r™
•P
ro
5-
IV
C
•r-
U
C
t— I
-P
c
O)
CJ1
c
•f"
£-
-p
to
(U
•p
ro
S-
0)
TJ
o
j-'
o.
l-H
to
C
o
•r»
•P
Q.
S-
o
to
TJ
ro
c
o
f*i
o-
ro
0
•p
c ,
o
O)
c:
•r-
s-
•p
to
0)
.fj
ro
£.
0)
TJ
O
E:
Q-
1— «
to
r~™
i— 0
0 S-
S. -P
c o
o u
u
tf—
H— O
o
p—
0) CU
CX >
>» 0)
1— -1
10 en ID to en
co to o r*-- to
rH Cn iH CO CVJ
csj co r^
O rH rH Cn CO
«3- O ^3- CO O
CM O CsJ Cn l£>
#1 «S M M
CO rH <^- t^
ID ID O ID ID
f*^ CO rH O rH
00 CO CM P"*- O
•«««#. •*
CO rH ID O
rH
CM ID f^ CD ^*
en co CM o cr>
r^ co rH (•*•* en
co rH ID en
o ID ID en o
co co rH en to
r^- co rH to cn
M •> »» *,
co rH ID cn
/**^
to cn ID cn rH r--
ID co cn «;j- r~» ID
UD <• CD r^- CO rH
*s *\ *» *> «s
»* rH tO Cn O
rH
^^
/^^
o cn cn co cn «^- o to
ID «3" Cn f^ ^1" rH
r\ f* *• r* e.
«^- rH ID cn CD
rH
*a- cn co co co «^-
to co o co cn r^
«^- ^f- cn r*- «^- rH
•si- rH ID Cn CD
rH
v~'
to
-p
to
r— O
ro u
•P r—
•r- ro D)
Q.-P C
to O Q. -P
•p ro ro
to TJ u s- ro
O QJ CD O
O r— O) D. r—
r— C O ^3
r~~ ro "r~ r~~ TJ ro
ro -P J>i ro i — o> T-
•p in i. +J a x i.
•i- c o o 3 ••- ro
Q-r-i 3: H- c u_ >
ro c
0 «C
TJ
Ol
OJ
o
U i-
O) O
i. 4-
S- +J
O -i-
4- TJ
0)
•P S-
•r- (J
TJ
CD O)
S- J=
U -P
»— 4—
r— r—
3 ro
f- -C
O) D)
JZ C
•P T-
to
O5 3
C
•r- TJ
10 O)
3 -P
ro
Qi ^
•P U
ro i —
r— ro
3 U
u
r— 0)
ro i.
CJ G)
3
to
ro to
3 Q)
to
^> QJ
I- .G
-P -P
C C
QJ Q)
S-
TJ ro
0) Q.
N
•r- C
tO -r-
0)
.C (O
-P S-
C Q)
OJ J2
S- E
ro 3
a. c
c
3 0)
-C
0) r-
-P
to CM
S- .
0) CO
-g c
0 0
Tj'£
ro o
c to.1
o
^ C
S- T-
ro -P
U TJ C
0) 0)
^r -P >
-P S- r—
•r- O O
3 a. to
QJ
to J- TJ
0) 0)
c -p &-
•r- C 0)
t— OJ >
> o
S- r— U
o o ai
u_ to s-
re
8-82
-------
•fee-
o
0
o
CO
LU
t— 1
0
^
«C
O
O
2:
I-H
Q
LU
2
uu
o
CO
co
o
o
2^
HH
OJ
•P
O
-T-
J_
Ol
-p
re
s
c
0
-p
re
s~
OJ
c
u
c
1—1
c:
o
•P
a
s_
o
to
re
c.
0
S-
o
-p
c
O)
cn
•r—
S-
•p
CO
01
co oo r-i o cn
oo to LO cn «^-
00 rH O CM CO
rH~ i-T
o co co in cn
CD r*** r^ oo r^»
Ln rH tO CO **•
rH rH rH
CM OO O tO «3-
LO r***- co cn CM
l^» rH Cn CO tO
rH rH rH
+J
re
0)
TJ
o
•s-
o_
I-H
CO
^
c
O)
cn
c
S_
-p
CO
O)
-p
s_
CM OO O CO CM
*3- r-«. CM cn CM
r"-- rH cn co to
*» *> ft
rH rH rH
00 00 tO LO O
co r-- rH cn CM
[••» rH Cn CO tD
I-H" rH*1 rn"
— ^
rH rH CM IO CO rH
•st* cn co cn tn *5j-
r^ rH cn co LO to
rH rH rH rH
00 rH CD Lf) CO rH
CM cn rH cn LT> «tf-
f^- rH Cn CO Lf) tD
rH rH rH rH
/^^|
CO rH «^- LO rH CM
CM u a. -P
-p re re
m TJ u t- re
O O CU re x s-
•r- c o o 3 -i- re
0.^ 3S r- C U_ >
re c
o <:
i/
c
^_
C£
CO
in
TJ
r—
O
I/)
O
0
rH
i.
CJ
-P
fO
•*
c
4-3
cn
c_
ncinei
HH
C
•r—
^T
£_"
0
in
re
c
o
•£
ffl
CJ
^^
c
0)
en
c
si
CO
£D
^j
J_
rH CO «^- CTl cn
cn to LO co «^-
to r^ co f~~
CO CO rH O Cn
00 tO LO LO LO
oo cn co r*>
co to cn LO o
rH tO r~- LO CD
o o co oo
r-T r-T
^ to o <^- cn
o to r~-. LO cn
o o co r-.
CM tO 00 Tf 00
o 10 to LO cn
o CD co r~~
rH r-T
LO 00 CO CO 1 — rH
00 tO LO LO 00 O
cn o co r»» oo
, — |
co oo to CM r>- o
r*- to •=*• LO oo CD
cn o co i — oo
rn" ^^
1^. 00 LO CM Cn rH
r-» to <^- LO co o
cn CD co r^ oo
1-1
in
to
r— O
re o
-p i —
•r- re cn
Q.-P C
re T- •.-
in u a. -P
-p re re
to TJ u i- re
o a> aj a;
u •— cn Q. r—
r- C 0 XJ
i — re T- i — TJ re
re -P .*: re «— 01 T-
-t-> in s_ -p re x t-
•"— c o o 3 -i— re
Q-I-H SI— c u_ >
TJ
OJ
3
C
-P
C
O
u
8-83
-------
TJ
0)
3
C
•P
C
0
u
*<•>
r-i
CO
CO
LU
— J
CQ
r?
U)
O)
c
•r-
i—
E
O)
TD
C
IT)
r-
0}
•P T-
r— r—
QJ O
E W
•4-5 ^-P
0 0
zn o
rH
t-
QJ
4->
to
3:
c
o
•r-
•P
(0
i.
O)
c
; "r-
U
C
1—)
4-J
C
OJ
0)
c
•r-
S-
CO
(U
•4-^
to
S—
0)
•o
o
^r*
Q.
1— 1
CO
c
0
•r*
-P
j_
O
in
TJ
(O
c
o
.Q
£.
to
0
-P
C
D)
C
'tl
4^
co
(U
4-}
(O
J-
CL)
-a
0
s:
Q-
1— )
CO
r—
r— O
O I-
J- -P
-P C
c o
o u
0
If—
^- o
o
p—
O)
>5 0)
r- -J
«tf- in en in co
f~- co c> o co
in I-H r^ m co
r-T rH~ rH*"
CO 0 00 CM CO
CO «* CM in rH
co rH in m «3-
** •% *,
CM CM rH
co CD cn r-- in
co co ^d- co in
co I-H co in co
^ ^ ^
CM CM rH
in CO rH CO CM
«3- co co co in
CD rH CO in CO
CM CM i-H
O CD CO CD CO
«3- CO CM CO «tf-
CO rH CO in CO
ft ft ft
CM CM rH
^•^
•=*• o **• CD co m
co CD CD co r^ r^
vo CM co in r~- co
CM CM rH i-H
N^,/
s-*>
CO O CO CO CM CO
*^t* c j ^3" co i^^ r^^
co CM co in r^ co
•* *t *, f\
CSJ OsJ !-H rH
x^^X
/**\
LO o to i^ co h^
co o co co oo r^
UD CM oo in r^ oo
MM A *%
CM CM rH i-H
~~~*
If)
4^
U>
r— O
to o
4-J r—
*r- fO D)
CL4-> C
03 T- •!-
WOO. 4->
4-> 10 fO
U5 T3 U J- to
O O) (U (U
O i— O> Q. r—
>— C 0 ^J
r— 10 •!— r— "D fO
to 4J -^ IO i — O) T-
4J 0) t- 4-3 CO X S-
•r- C O O 3 -r- (0
Q-rH 3 r- C U_ >
03 C
0
0) 0
S- (J
ai oj
> s-
0
u s-
OJ O
J- •<-
t« [ ^
O -r-
H- TJ
OJ
P S-
•r- U
T5
0) 0)
S- J=.
U 4-5
i— M-
r— r—
3 fO
(U D)
4-> T-
CO
D) 3
C
•r- -O
U> (1)
3 4->
ta
OJ 3
P 0
IO r—
i — tO
3 U
O
r— OU
tO i-
(J OJ
(O in
3 > a3
?^ f—
4-> 4->
C C
O) 0)
T3 tO
OJ Q.
N
•r- C
O)
JZ LO
4-> i-
C 0)
(U ^2
S- S
IO 3
QL C
C
3 0)
0) \-^
JC.
,
U) CM
i.
O) CO
S- C
0 0
U) •!-
TJ P
to u
O)
c co
o
J3 C
S- •!-
to
o ~a
-c: P
4-> i-
•i- O
3 D.
OJ
in s-
O)
C P 4-J
•r- C C
i — QJ 0)
J- 1— .—
o o o
u_ m at
03
8-84
-------
O>
•P
O
J-
0)
•P
re
oo oo co
cn in «tf-
co «3- o
f^ ID co
rH CM
00 CO
r~» co
CM in
co oo
o o
00 CO
•w-
o
o
o
OJ
OJ
c
co
CM CO CO
«*• LO Cn
ro ro
co r-^
rH r-.
CO CO
o
to
i.
OJ
re
OJ
o
o
CD
LU
Q-
O
Q
Z
-a
o
C\J ID 00
oo LO co
OO CO
r^ to oo
C\J LO 00
CO CO
CsJ LO
rH f^
OO 1C
c\j un
r-i r-.
oo to
-P
c
OJ
O5
C
co
-p
re
01
u
LO O LO
O CD ID
CO CO
Q.
O
OJ
P
re
a>
JD
re
p» o
en CD
co
co o co
CTl CO LO
CM CO
^ #s
tH r-i
rH O OT
rH LO f^-
OO CD CO
O rH 0>
rH LD 1^.
CO CD CO
rH oo CTl
rH LO F--
CO CD CO
o
S-
4J
C
O
u
4-
O
O)
Q.
.>>
re
+J r—
•i— re
re -r-
in u a.
-P re
m -a cj
o aj
O r- OJ
i— C
i— re -I— p
re
^. re
•f-* in &. .p
•r- C O O
CL.r-1 S (—
re
o
in
-U
in
O
O)
c
re
O) O)
CL r-
O JD
~a re
re
re
a
o
re
-P
c
CD
O)
C
i-
4J
co
Q.
CO
co
o o o
«*• CM CO
un in
co o co
Cn OsJ rH
co r*.
cr> co
co r--
csj co
en «3-
r*. co
CvJ CO
CD
3
C
o
u
LT) rH CO
r^ csj en
rH CO
CO O
O rH rH
r^ csj cn
CO rH Cn
co csj co
rH CO
CO O
CM ^>
t-H CO
CO O
CM «3-
O)
rH CO
CM CO
CM rH CO
tO CM CO
O
i.
-p
C
o
u
O
i-
•P
c
o
o
<*- o
a>
>
(•
re
4-> r—
•r- re
Q.-P
re -r-
tn u
•P
m -a
o at
CJ i—
Q.
re
r— re
re -P
-P m
••- c
Q.I-I
re
o
O5
C
*r- r— •
-^ re
s- -P
o o
in
-P
tn
O
o
OJ
c
re
s-
0)
Q.
O
re
ai
re
3
c
-------
cu
CM
CO
CO
cu
cu
ra
•p •<-
0 o
cu
•P
ro
u
CO
CU
ro
to
to
cu
a_
r— O
O i-
t- -P
-P C
C O
o u
u
<*-
<*- o
cu cu
a. >
co CM in
oo
CM
c\j
CM -st 10
oo en
to CM
CM CM
CM r--
IO <£,
•3- 10
O 00 CO
LO m o
CM
00 CO tO
co in en
CM 10
<3- co
<* oo
CM
CM
CM 00 O
CO LT> Cn
r-t if)
«3- CO
«3- oo
rH ID
«* CO
•=!• CO
CM
CM
If) CO CO
CM
CM
tn co oo
o to to
CM
CM
o co co
O IO VO
O IO O
•3- O sj-
•sf 00 CO
o r^ 01
«=i- o co
^ oo co
en en en
co o co
•3- co co
CM
CM
ro
-p i—
•r- ro
Q.-P
ro •!-
to u a.
•P ro
to T3 (J
o cu
O
u
o>
ro
:_
CD
cu
r— C
Q. r-
i— ra *r— r— "o ra
ro -p ^t ra i— cu -i-
jj tn s- -P ra x i-
•r- c o o 3 -i- ro
Q.1-H SI— C U. >
ro c
o <
cu
cu
•a >
cu o
s- u
cu s-
o
O i-
cu o
S- 4-
i. -P
O -r-
S-
• i- U
•a
cu cu
i. jr
U 4->
ra
cu 05
JZ C
-P •!-
en
01 CU
3 -P
ra
•a i—
cu 3
•p u
ra r—
r- ra
3 U
u
i— CU
ra s-
u co
CO
ra
cu
•p -p
£= C
CU CU
•a ra
cu a.
cu
.C to
•P S-
C <1)
cu ^
S- E
ra 3
a. c
c
3 CU
-C
CU I—
to CM
i- .
CU 00
JO
i. C
o o
tO •!-
T3 -P
ra o
cu
c to
i. •!-
ra
U T3
eu
cu
to s-
cu
c -P -P
•i- C C
i— CU CU
> >
i- r— r—
000
u_ 10 in
ro
8-86
-------
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
-------
ta
co
LU
O
CD
a:
a:
o
CO
CD
- co
oodo'e*
oo
oo
oi re >
*> .wi-
re o> o
u t. in
X H- TO
ra o 01
4J t.
4J 0)
01 3 >
-U o O
re u
t- 13 oi
O V 1m
a. o
s. c i.
o re o
o c M-
re o
Ol -P
>. C r-
IA
t- Ol O)
§g =
O -i- in
O) *•> fr)
e i
Q.4-J CO
•p~ re
3 f at
CP+J — x-s
0) J3 t.
TJ re re
<— C I— Ol
*•> " E **
•— - O £-
O.4J i. 01
re c u- a.
o a)
o c »
*- S- 0) S-
O 01 JC 3
c. re o
^o «s *" ^
+J +2 C
ID o. re -.-
•t- o TJ *J
u re
oi oi ^-> i.
t. *J in 01
Q. re o o.
0) &. O O
"O
*> o
Ol C .
a) o o
*•> *> -a in
g^ £ rH O 2.
» S " 5 re
^ fe^ Si
II 3 « s_ e
C O SB*" (U U
s .£ s .x: o 3
3 O O "S -O 9-
u
to
Q.
w
a»
««-3^
QC
urcj
o- <-
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
-------
fO
(/)
UJ
i—<
f—
00
CD
t/J
cr>
co
I
CO
UJ
_]
CQ
•
t
<: O 01
• i— »f- re *i- O»
4-> *> J- *J C
£••§ E--E
re re 10 Di s- 4J in
s- c o *-
o- u-p ETu en. e-o £
l-H O O O-P'i-i—ii-O-^.
intn uco
s- 3 o
> to re
• <-t *-i
re «- -a -i-
s o
j-j 4-> in re
re •?-
u u
i- -i-
i*- ro D. *> i-
o> o 01 o u> H t-<
•a o if> ai 4J
re -P <»-<-< r— s- ^ IA
E — o e s: o> •
•o II II 3 re s.
a> a >. c- .
s- s- *-> c c a) -—' ci
0) U i- O O -C .C
S o i- -i- *>*>*».
x re *J *J in
in re CL re re v> o>
-
N N "- S i- o u
f i- o t- —
*> e i- ••-
r- E
3 J->
t3
re>3->-T- u-o oin
r- c o ro
«£ re J3 u
a. a. o c
a. t. a. T-H
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
-------
tQ
00
U-l
AC
ED
to
C3
Q
00
0
1
<"
ID
d
ro ro ^" csj r-i
in in 10 to CO
d d d do
CM ro ro ^ ^
O
d
000
odd
co r-
o o
V* O
CO
UJ
_J
CO
csj ro «3" CO O
d do do
Cft O rH
odd
i =
Line
configuration
•a-
d
»>•
d
•»— »— t •»- O «f- +J 0>
win ov) OS
ight line depreciation of capital equipment over 10 years, a corporate tax rate of 46 percent,
a discount rate of 16 percent, and that the investment was financed out of retained earmngs (nc
x 106 m2 Cost data taken from Table 8-31 using half credit for recovered solvent.
ro
vf
*j 4^ in
w c
OI II
en u
°E
in
w
ro
0)
1
£-
OI
IA
C
O
4J
£
z
o.
o
l-l
o
4J
•5
i.
u
X
ro
4->
'C
£
+j
.=
J=
U
n
OJ
^
01
ro
0)
i-
01
Q.
{-
O
.1
£
OI
o.
o
o
o
o
c
o
0)
ro
JO
OI
if
OI
Q.
0
s
tl
c
o
•p
m
•f~
••—
^
hat is, the firm can invest in traditional or alternative coating technologies. Unit costs are
c
OJ
(J
i-
0)
CL
in
r~
II
0
4J
ro
N
•F-
3
4~
*J~
OJ
OJ
u
i.
unres
j:
in
0)
in
;t is, the firm cannot invest in the alternative coating technologies (waterborne and hot melt 01
4-*
OJ
^
0)
o
4J
-^s
iH
II
^
C
ro
^
1
o
p
J?
4J
4J
W
•o
5
VI
£
-C
s.
o
•t-
^-s
•s
•F-
OJ
i
u
•^
Q.
ID
•- U u .^ £
4J U) II £ C O
0
ro
Q.
to
*r- U*O U
U 0)01 OJ
« ••-tit —5
Q.OCO
ro s-ro
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
-------
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
-------
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
-------
re
oo
AC
_j
•=C
oo
o;
o
oo
o
E
O1^
o *•»•
01
D
ra
1 <
10)
* C
(Ol
afro
1 «
1
ID
i.
IS
C
0)
u
CO
1
00
CQ
rat
oocaescjcs
O O O O ID O O
00 O CM l-i CM in PN.
ooooooSed
rHr-)t-5i-ip-ii-Ioo'
ooooooo
g
O O
o CM m •«•
O» Ol OT CT»
r»- «c CM
CJ» CM PH
f~.r-.vo
*J 01
10 Ol
s- c a.
0)^-1-.
T3 S- CO
M O 4J
U
Ol
C
0
•o
"o
QJ O)
Q. C
c 0
(o ••- «>
t» ITJ
sal
HS fc. £.
o u o-
U U
c •<->
03 10 .1-
•
O> Ol
t- E C
O) +J^-
> in in
o 01 r>
•W C CM
c ^- cr>
01 i
E O) eo
CLf
•r- *J O)
0) 10 10 S.
.C h- ID
•— *J 01
•f- C S- £-
CL ID
q>
>
o ai (b
••- O.-W
*> ID C
IO IO T3 "i-
10
O
0
C
u 4-1
a>«- to
S- O O
10-
a) UN
0
o
0
8-m
-------
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
-------
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
-------
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
-------
-------
APPENDIX A
EVOLUTION OF THE PROPOSED STANDARDS
-------
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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
-------
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.
-------
-------
00
CO
nt
o
o o
4J Q
E CU
CU -E
4-> 4-5
OO
>>4-
c/r o
CU CO
O C
E O
25
•0 o
CU 03
x o.
cu E
CO 4-5
CO E
o cu
O E
4-S
O -r-
a> c
i— LU
Q.
p- I ^
03 -E
X CTJ
LU •!—
O1
C
c
c
ft
c
M-
£Z
*""*
•a
E
3
£
en
o
03
ca
cu
-E
.C
S
Locatior
"2
03 E
"O T—
E
O3 "O
4J CU
CO (S)
.E '£
O O3
•r— E
-E E
S 3
OO .
§*~H
, SU l
S. C i— I
4- 03
CU
00 r— CO
CU 03 O3
> if) a.
•i— O
4-5 CL «
O3 O t— I
E i- .
S- CLI— 1
0)
4-5 S- E
i—OO
03 4- -t-
4-5
>, E 0
i- CU CU
O CO OO
4-> 0
O3 -E "
I— O rH
CO CU 1-
CU jQ CU
i— Q.
CU i— 03
-E -^--E
1— S 0
r— 1
OO 1
•i— CM
oo to
-o cu
s- co
O3 03
-0 Q.
E '
O3 •«
4-> .— 1
00 .
CM
CO
E E
•i- O
CO •!—
O 4-5
Q. 0
0 CU
S. 00
0.
i- CM"
S- CO
OO « 3
CU E S-
-E 3 -E
1— 00 4->
C
O -
03
r— •*
3 CO
CO
CU 00
cu
CU 4-5
.E CL
4-> 03
E C_5
CU
0 O
r -0
03 >, •
> 0 CO
E
CU CU T3
-E 0) E
(— 03 03
4J 3
O) Q. i- 4->
-E O3 CU O3
•*-> JC. J= E «
-Cl E 3 ~O S-
•r— LU. «r— CU
•o E 4J
CU T3 O Q. .
4-5 CU • E 03 t— 1
O 4-> OO O -E "S-
CU E 1 CJ C_3 1
4— CU OO CU CO
4-00 \ E
O3 CU -E OO T- _E
i- CO OO CO
bCl. 3 CU -0 3
O E CU O
4-> CO S- -I- 44 i-
oo -i- x: oo E .E
3 4-> 3 CU 4->
"O oo .0 oo
E CU i— 1 = O) i— i
••- > 1 i- 8
•r- 00 CU Q.CO
CU 4J ^=
-E O3 OO 4-> OO OO
4-5 E CU •!-. CU
i- CO CO CO
4- CU 03 E >, 03
O 4-> CLT- 5? CL
r- S- 4->
E O3 A CU OO "
O r- 1 > 3 t-i
•r->,. O -0 •
00 S- OO O E CO
OO O -i—
3 4J C 00 E
O 03 O r— CU O
OO , — -r- T- .E «r-
•r- 34-5 ro +j 4J
T3 CO O 4J O
CU CU CU 4- CU
eC S- 00 -0 O 00
OO
•o oo oo
CU E "CJ CU 1
4-5 -i— CU O OO
O , o
cu -a ••- s- oo oo
4— CU O3 Q-'i— CU
4- N 4-> CO
O3 T- CU "O oo O3
i- TD E CU CL
oo 03 03 >
CU E «=t -i- •>
•i- E 00 4J CM
4-53
OO CO CU O
•O CU 03 JE >, CU
E > CL4-5 i. 00
03-1- O
4-> «4- 4-5 «
OO OS t— 1 O O3 OO
0) E . r-
OO S- i— 1 E 3 S-
00 CU O CO CU
CU 4-> E T- CU 4->
' o,— o co i- a.
O O3 M— OO O3
S- 4-5 3 CU -E
CL >, CJ O -E CJ
i- CU CO 4-5 .
O O 00 -I- E VO
••-4-5 -CJ >,••- 00
4- 03 « -Q 1
•f— r— «-H i— "0 OO
O 3 03 -O CU
CU CO i- O CU 4-5 JC
Q- CU CU ••- 4-5 E CO
00 S- 4-5 E O CU 3
CL.E cu oo ci
CU CU 03 O 4- CU S-
-E-E J= CU 4- £- -E
1— 4-5 o 4-> 03 CX4-5
b
O oo
I » I ^
fO CU
i— CU
3 E
CO CU
CU 4-5
C£. 03
4-5
COCO
E
'£ tj
03 03 -
Q- Q-CTi
a.
r— 00
i- 03
o 4-> o;
00
cu
E C^
E 00
••- s-
I T—
cu >
TD E
•r- LU
CD E
CU «
CO
O
4->
03
3
CO
2!
3
OO
-a
E
03 CO
CU
-a >
3 4->
j^ 4)
03 I—
ca 03
CO
•s
03
E
03
CO
•r-
CO
O
CL
O
CL
OO
03
b
o
3
03
CO
E
4-> E
00 S-
3 a>
"O 4-5
E r—
O)
•o
4-5
4- CU
03 T-
CU E
CU 4-5
O 'tO
0 O
4^ 03
O *3
CU CO
B-3
-------
-------
APPENDIX C
EMISSION SOURCE TEST DATA
-------
-------
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
-------
g
a
co
LU
LU
co
<
o
o
re «
u_ re
cn
Tt_^ f*
re o
to re
•PO
tors
> re
^C *^~
^
•»-> 0
re s-
co o
•j-j ^g-"
to
O)
—•
LO
£Jco
oi *-»' —
z: to"-"
C^UD
1 — S
*—**
Z§
rs ip r™"
Z OJ
"^O
«-~ to
^
**~^
o
LO LO
co r*"** ^j*
r^*» "^-v. i— •
OJ O> —
OJ CM
1 00
0 CO CO
r-..
*•— •*
CD
LO CO
to r-. ^t-
co ^^i—
OJ CO~— •
OJ r—
i *^^ ^-
o co o
CO
*•"•«*
CD
LO O
to r-- LO
co — r—
oj co — '
OJ r—
1 -v^.LO
C_5 CO r—
CO
CD
s-
3
re
s_
o>
G.
E
CO
•{-^
s-
o
4_> *— *
• re u_
o s-o
^>» OJ *~ -•
c
4-> O) •!— o
to -H oo
1
CO
to
CO
f*»»
o
o
A
CO
OJ
o
0
•sj-
^~
f—
0
CO
en
*
•
0
c
a
o
0
It*
cn-o
s-
o «
O) Q.
r— » — '
^-~-
to
OJ
^ g
co
•
^•^^
OJ
CO
en
to
^ z
^~
•
CO
o
o
r--
f\
CO
OJ
VM*
10 DC
OJ
^— ^
O
o
CO
n
co ^ — *
i — CO
— en
CO
CTi ^f-
CO
LO
^~,
CD
cn
r*^» ** — ^
CO LO
•*-* CO
cn
to cn
OJ
•~
.
o
OJ
t/5
•» —
co
E
z: CD
c
•* 3
(I) 4->
4->'— - re
re >> i-
S- S- QJ
S T3 Q-
O E - — -
^~ « QJ 1 I
t- ,£ -WO
v^ >*—^
4J 0 4->
O) tn •»
CO
O E
E *Z
O
0
O)
O 4->
•i— re **"^*
CO S- O TD
S- TD r—
0 M_ .,
4-J ^ 4^ t^_
OJ CL O) O
i — Q- i — tO
j ^ *- -. i ^ ^^,
LO
CO
10
«*
**"*
B^^N
CD
O
C-
0
to
r--
s^^
o
LO
t
^ ^
j^^
CO
„ — ^
CD
CO
t
x^^ ^
^>
CD
CO
„ — .
O
CD
LO
x..^
LO
CO
OJ
S-
3
•4-)
re
s_
OJ
Q.
Q} ^— ^
^_> | T
0
,« ^ ^ _^
re
-a
re
to
ai
^
-------
Recovered
Solvent
Wastewater
Stack
gases
Carbon
Adsorption
Unit
o
Final Product
Adhesive Oven
Incinerator with primary
and secondary heat
exchange
Release
Applicator'
(T)
i r
Hood
(vi)
Adhesive
Applicator
O
Stack gases
-(7.
Release oven
Hood
(T)
Makeup
Air
Figure C-l. Tandem coating facility with add-on controls.
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
-------
CJ3
D;
o
CO
2:
o
D.
oo
£
oo
LU
o:
oo
LU
CM
CO
•=c
^— .
I ^ f~
CU -Q
> 1— -
1 — '
o
CO E
•0 E
cu -^
i- a-
3 -^
CO
to «
0) CU
*— ^*
CO 0 <^
to cu u
C714-5 CO
(O *"^^
•o s-
cu 3; o
s_ o eu
3 i — CO
CO C|_ ^
cu ^
s: z
^- *s
f»
CJ
CO
4-5 to
E
CU E
> a
"o >
CO
CU E
S- 0
3 *r~
CO 4-5
«3 fO
CU S-
s: 4-5
E
eu
CJ
o
0
ra
cu cu
OO 3
E:
^ — *
CM
LO
OO
CM
o"
cn
0
OO
CO
oo
r—
0
cn
en
oo
T~~
cn
E
•r- S-
4-5 CU
fO 4-5
O fO
0 O
cu
CO CU
ra CO
CU ra
i— CU
cu •—
S-
E
•r- J-
cu
E 0
cu
> -o
0 §
oo :E
i— CM
o"
CO
en
,^-
"*.
LO
O
LO
i-
cu
4-5
re
o
a
cu
CO
ro
CU
llJ
S-
cu
T3
E
-a
o
o
oo
o
o
CO
r—
O
CO
o
o
[^-
4-5
X
cu
E
CU
o
cu
CO
cu
"aj
cu
0
-a
o
0
•*
o
o
en
CM
-o
eu
.f—
4—
.f-.
0
eu
Q.
CO
CO
ro
T3
CU
i-
•^
CO
ro
eu
C-7
-------
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
-------
D;
LU
Q.
O
LU
o
C_3
o
C£
CO
I
o
LU
CD
*
-a
cu
CO
3
•4-*
E
CU
'o
t/1
, —
ra
.}_}
o
1—
.E
CD
CU
cu
en
fO
s-
cu
^f.
-a
cu
OJ
Q.
CO
cu
c
cu
CD
rd
S_
CU
>
CM
VO
CM
CO
f-
•=3-
CO
O
IO
^o
^— ^
LO
•
to
s
^J-
c\J
•
o
co
CM
00
CM
p_
t^.
o
CO
^^-^
J^^
en
f-^
"
fx^,
r—
O
•\
co
r—
cr>
CD
LO
%^^'
CD
O
co
CM
^
CM
^O
^-^^
ID
•
CM
s
CM
CM
•
O
^«
CM
CO
CM
'
r— •
f~~
CD
«^-
*• — ^
CT>
CO
LO
r\
F~~
r—
co
ft
CO
CM
O
CD
CO
CM
LO
•^^
co
CM
I--.
CO
CM
CO
o
,^^
CO
*^"
s
CO
CM
•
O
o
«5J-
^_
I—
fO
4-5
o
1—
o
•r-*
en
s-
3
-a
-o
cu
3
CO
(C
a>
C-9
-------
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
—
„.
95.8
_
—
_
93.0
mm
_
«.
94.2
_
_
v
92.8
_
-.
_
91.4
_
_
_
89.6
•»
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
.
-'
91.2
_
_
_
90.3
-
_
• . -
84.9
-
-
. -
85.6
-
-
-
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
-------
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
-------
-------
APPENDIX D: EMISSION MEASUREMENT AND MONITORING
-------
-------
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
-------
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.
D-7
-------
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.
D-8
-------
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
D-9
-------
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.
D-10
-------
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
-------
-------