resource recovery plonk implemented
guides for
municipal officials
planning one) overview
'technologies i risks
and contracts i nvrl^ls
^accounting format'
financing i procurement
'further assistance i
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This publication (SW-157.3) contains updated sections of an earlier
study by Steven J. Levy, Markets and Technology for Recovery Energy from
Solid Waste. Environmental Protection Publication SW-130. Washington, U.S.
Environmental Protection Agency, 1974. 31 p.
This publication (SW-157.3) is part of a special series of reports
prepared by the U.S. Environmental Protection Agency's Office of Solid
Waste Management Program. These reports are designed to assist municipal
officials in the planning and implementation of processing plants to
recover resources from mixed municipal solid waste.
The title of this series is Resource Recovery Plant Implementaion:
Guides for Municipal Officials. The parts of the series are as follows:
1. Planning and Overview (SW-157.1)
2. Technologies (SW-157.2)
3. Markets (SW-157.3)
4. Financing (SW-157.4)
5. Procurement (SW-157.5)
6. Accounting Format (SW-157.6)
7. Risks and Contracts (SW-157.7)
8. Further Assistance (SW-157.8)
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Resource Recovery Plant Implementation:
Guides for Municipal Officials
MARKETS
This guide (SW-157.3) was compiled
by Yvonne M. Garbe and Steven J. Levy
U.S. Environmental Protection Agency
1976
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An environmental protection publication (SW-157.3) in the solid waste
management series. Mention of commercial products does not constitute
endorsement by the U.S. Government. Editing and technical content of
this report were the responsibilities of the Resource Recovery Division
of the Office of Solid Waste Management Programs.
Single copies of this publication are available from Solid Waste
Management Information Materials Distribution, U.S. Environmental Protection
Agency, Cincinnati, Ohio 45268.
-------
CONTENTS
Page
Introduction 1
Energy Products and Markets 1
Steam and Electricity 7
Analysis and Conclusions 11
Materials Products and Markets 14
Marketing Recovered Materi al s 32
Appendix 1 39
Appendix 2 42
References 46
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MARKETS FOR MATERIALS AND ENERGY RECOVERED
FROM MUNICIPAL SOLID WASTE
By Yvonne M. Garbe and Steven J. Levy*
Several materials and a variety of different energy products can
potentially be recovered from municipal solid waste and sold to produce
revenue. The recoverable forms of energy include solid, liquid, and
gaseous fuels as well as steam and electricity. The materials that are
considered to be the primary recovery candidates are paper, ferrous
metals, glass, and aluminum.
This report discusses the markets for these energy and material
products, focusing on those characteristics that affect marketability.
Discussed are descriptions and locations of potential markets, the
product quality required by those markets, and approximate market prices.
The report then addresses marketing techniques, including how to conduct
a market research and obtain a purchase agreement.
Perhaps the paramount message which should flow from this document
is this: Markets First: specifications determine technology. Market
availability and specifications determine not only the basic components
of a recovery system, but also the specific manner in which those components
are designed and operated.
ENERGY PRODUCTS AND MARKETS
Resource recovery technologies under development in the United
States today can generate a variety of different energy products from
solid waste. Solid, liquid, and gaseous fuels are possible products, as
well as steam and electricity. Not all of these options have been
developed to the point where a municipality can consider them for
immediate implementation. (For a further discussion as to which options
are presently available, see the Technology Guide section of this series.)
The energy recovery system that should be employed in any particular
community depends upon the market outlets available for their products.
This section discusses the characteristics of various energy products,
especially those characteristics that affect product marketability. It
also discusses potential markets for energy products, and the factors
that influence their willingness to buy. Solid, liquid, and gaseous
fuels are considered first, then steam and electricity. Finally, the
various energy products are compared.
*Ms. Garbe is a Project Engineer and Mr. Levy is the Senior Staff
Engineer with the Resource Recovery Division, Office of Solid Waste
Management Programs, U.S. Environmental Protection Agency.
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FUEL
Fuels can be produced from solid waste using a number of technologies
currently under development. Either heavy duty shredders, or pulpers,
operating in conjunction with material classifiers, can produce solid
fuels, while pyrolysis reactors can produce liquid and gaseous fuels.
These fuels may be burned in furnaces either by themselves or in conjuntion
with their fossil fuel counterparts: coal, petroleum, and natural gas.
The usefulness of marketability of these waste-derived fuels depend on
their characteristics.
Fuel Characteristics
Fuels derived from municipal solid waste will have physical and
chemical properties different from those of conventional fuels and,
therefore, will have different handling and combustion characteristics.
There are a number of general characteristics that determine the
marketability of fuels derived from solid waste whether they are solid,
liquid, or gaseous. These include the following.
Quantity of fuel produced. Enough of the product must be available
to justify any expenses that the user may incur in modifying his facility
to accept this new fuel source. Naturally, the higher the cost of plant
modification, the greater the minimum quantity of fuel will be required.
This reduces the alternatives available to communities of 50,000 people
or less. These communities may want to investigate using small incinerators
with heat recovery systems.
Heat value. The heat value of each fuel must be high enough to
maintain boiler or furnace efficiency. For example, tests using gaseous
fuels with heat values of 300 British Thermal Units (Btu)/cu.ft. and
above have been successful. Below this level, they may require speical
consideration, although some types of industrial operations have used
gaseous fuels with heat values as low as 90 to 100 Btu/cu.ft. Also, the
lower the heat value, the higher the per unit cost to transport, store,
and handle the greater quantity of fuels required.
Supply reliability. An adequate and continuing supply of the fuel
increases its value because the user does not need to maintain standby
equipment or fuel.
Quality. The better the product, in terms of handling, stability,
uniformity, good burnout, greater Btu value, etc., the more it is worth
because the customer's cost to use the product is reduced.
Price. The price of the fuel will probably be approximately equivalent
(on the basis of heat value produced) to the price of the fossil fuel it
replaces. In determining equivalence, adjustments must be made for
additional costs incurred in its use.
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Solid Fuel
Solid waste fuels are produced by separating the light combustible
fraction of shredded or pulped solid waste from the heavier noncombustible
portion. The light fraction will probably represent 70 to 80 percent of
the incoming solid waste, and may be the primary contributor of product
revenue.
Refuse derived solid fuels can be used as a supplement to coal in
suspension-fired utility boilers. They are also being considered for
use in conjunction with oil-fired units as a fuel supplement in cement
kilns. These fuels can be prepared as a fine powder, light fluff,
dewatered wet pulp, or as a densified pellet or cubbette. Heat values
are typically 4500 to 6500 Btu per Ib (as received) and the fuel may
have value of $.30 to $2.00 per million Btu depending on the quality of
the product, the user's expected handling costs, and the availability of
alternative fuels. Some factors that influence the marketability of
these solid fuels are:
Particle size. Ideally, particles must be small enough to permit
complete combustion when burned in suspension. However, practical size
ranges vary with the type of unit used to burn the fuel. A general rule
of thumb has been a one-inch nominal (90 percent less than one inch)
particle size. Small particle size is particularly important if there
are no burnout grates at the base of the combustion chamber.
Residue content. Residue should be kept to a minimum in order to
prevent erosion of the furnace walls and the fuel firing system. Excessive
residue may restrict the re-sale value of the coal ash. Air classifiers
and magnetic separators can be used to remove noncombustible materials
to reduce the ash content of the combustible fraction of the fuel.
Typically, ash content amounts to about 20 percent by weight. This can
cause a five fold increase in ash per unit of heat delivered, since
better grades of coal average about 10 percent ash and have heating
values two and one-half times that of the refuse derived fuel.
Moisture content. Moisture content will affect the heat value of
the fuel. The combustion efficiency of the unit is reduced as the
moisture content is increased. This is particularly important in
preparing fuel by the wet pulping method because the fuel product must
be dewatered to an acceptable moisture content. Dry separation processes
generally produce a fuel containing 25 to 30 percent moisture content
and having a 4500 to 6500 Btu/lb. heat value. The wet pulping method
produces a fuel containing 50 percent moisture and has a 3500 Btu/lb.
heat value.
Solid fuels may also be formed into pellets in order to improve the
fuel's handling characteristics. Also, by forming pellets this fuel may
be made suitable for use in older stoker-fired units which would not be
able to use a finely divided fuel. The use of pellets, however, has not
yet been demonstrated on a large scale.
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Liquid Fuels
One energy recovery technology under development in San Diego,
California, produces a heavy, oil-like liquid fuel that can be used as
a supplement to No. 6 fuel oil in large industrial or utility boilers.
Factors which will influence its marketability include the following.
Volumetric heating value. The volumetric heat value (Btu per
gallon) influences the cost of transporting and storing the fuel. The
fuel has about 75 percent of the heat value of No. 6 fuel oil, on a
volumetric basis.
Chemical stability. If the fuel undergoes chemical change, storage
time may be restricted.
Special handling problems. The need to maintain separate storage
and firing systems for the solid waste fuel, and to purge the firing
systems after the fuel has burned, places an extra burden on the user
and may diminish the fuel's value.
Gaseous Fuel
Most gaseous fuels produced from solid waste have a low heating
value (100-500 Btu per cu ft) as compared to natural gas (1000 Btu/cu
ft) because they contain significant quantities of carbon dioxide and,
in some systems, nitrogen. The distrance they can be transported is
limited due to cost of compressing and pumping the gas during transit.
As the fuel value goes down this cost becomes prohibitive. Distances
beyond 2 to 3 miles may be uneconomical for transporting gases having
heat values of 300 per cu ft or less. Such fuels would probably have to
be converted to steam or electricity on site where they are produced.
Markets for Fuels
The best markets for solid waste fuels would be large utility or
industrial users who could replace 20 to 30 percent or more of their
conventional fuels with solid waste fuel.
Steam electric power plants, industrial operations, and central
heating/cooling plants represent the most likely market outlets for
solid waste fuels.
Steam Electric Power Plants
Electric utilities operating steam-electric plants fired by fossil
fuels are the most promising market because they use very large quantities
of fuel and are often located close to the urban area where the solid
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waste is generated. Also, the quasi-public structure of the electric
utility tends to be more conscious of community problems and, in some
cases, more receptive to accepting the present uncertainties associated
with using these fuels. For instance, a utility may gain approval of a
new power plant site more easily if it is part of a solid waste energy
recovery program.
Economic gain is a minor factor influencing a utility to use solid
waste fuels because savings, if any, would amount to only a small fraction
of the utility's total fuel costs and because savings in the cost of a
solid waste fuel are generally passed on to the utility's customers
through an automatic fuel price adjustment clause. However, economic
gain in the form of capital investment savings and generating capacity
credits can be considerable and may result when the utility agrees to
purchase steam and/or electric energy.
Solid fuel can be burned only in boilers equipped to handle the
residue. To date burning has occurred only on a demonstration basis and
only in plants that were initially designed to burn coal. Oil fired
plants may not have suitable ash handling capability or air pollution
control facilities suitable for handling burning of solid fuel. Waste
burning in such plants has not been demonstrated. Recent orders from
the Federal Energy Administration require many oil and gas fueled units
that are capable of burning coal to convert to coal. This tends to
expand market opportunities for waste firing.
In establishing a solid waste fuel market with an electric utility
it is necessary to determine whether the market will be capable of using
the fuel for the entire projected useful life of the waste processing
plant. This is because as plants become older they are replaced by more
efficient newer plants, and their load factors (the amount of use they
receive) tend to decline.
The capacity of a power plant to handle solid waste fuel will be a
function of its load factor as well as the percentage of solid waste
fuel that can be handled safely without damaging the plant or otherwise
affecting its operation. For example, a 200 megawatt boiler having a
load factor of 60 percent and a heat rate of 11,200 Btu/kwhr retrofitted
to burn 10 percent solid waste derived fuel could handle about 500 tons
of solid waste per day. A nomograph to calculate capacities of various
boilers to handle solid waste fuel is included in Appendix I.
Utilities project load factors for all of their units using a set
of assumptions such as future price of fossil fuels, customer demand,
planned nuclear construction, projected environmental constraints, etc.
These projections are understandably subject to a great deal of uncertainty.
If however, a utility company projects that the economic utilization of
the facility which will burn solid waste is going to decline then it may
mean that the price the utility will pay for the fuel will decline sharply,
or that the market might disappear completely.
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Industrial Operations
Many industrial operations are potential markets for fuel produced
from solid waste. Cement plants, paper mills, steel mills, and lime
plants, for instance use vast amounts of fuel. To date most of these
industrial markets have not been investigated in detail and there is
virtually no experience in their burning of municipal waste derived
fuel.
Feasibility studies are currently examining the possibility of
using solid waste as a fuel in cement manufacturing kilns and a demonstration
project is planned in Palmer Township, Pennsylvania, in 1977. The solid
waste would supplement the coal or other fuel being used, and any ash
remaining would be incorporated into the final cement product. Research
is needed on any adverse impacts on cement quality that may result from
the use of a waste derived fuel.
Cement kilns require about 8 million Btu of fuel per ton of cement
produced. Plants range in capacity from 1,000 to over 3,000 tons or
more cement per day. Therefore, using solid waste as 20 percent of the
fuel load, a small plant could consume the fuel produced from 400 tons
of solid waste per day.
A typical paperboard mill using about 25,000 pounds of steam per
ton of boxboard at the rate of 360 tons of boxboard per day would require
400,000 pounds of steam per hour. This is equivalent to an energy yield
of 1,200 tons of solid waste per day based on 20 percent solid waste
fuel input.
Most paper mills currently burn their own bark and wood waste in
boilers to supplement conventional fuels. Although this reduces the
capacity of this market for solid waste fuels, it should ease the marketing
task because the industry is already accustomed to burning waste fuels.
Market Value
Current fossil fuel prices generally range from around $.30 per
million Btu on older long term coal or natural gas contracts to $2.00
per million Btu for spot purchases of low sulfur coal or oil. The value
of the solid waste fuel will be a function of the cost of the fuel it is
replacing and the increased costs associated with the use of the fuel.
Because of the wide range in prices being paid for fossil fuel it
is wise to examine all potential fuel markets before selecting a particular
process or end user.
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STEAM AND ELECTRICITY
Steam can be converted to other forms of energy: (1) its heat can
be used directly, for example, to heat buildings in a district heating
system; (2) it can be converted mechanically into electricity by the use
of steam turbines, which is what happens in a steam-electric power
plant; or (3) for steam to provide motive force for industrial operations,
such as to drive machinery or to operate a compressing unit to produce
chilled water in a district cooling system.
Steam Characteristics
Steam temperature requirements generally range from 250 F to 1,050 F
with pressures ranging from 150 pounds per square inch (psi) to 3,500 psi.
The strength of the materials used to construct the steam-generating
system is dictated by the temperature and pressure. In electric power
plants the greatest efficiency is achieved at the highest temperatures
and pressures. In steam distribution systems, however temperatures are
kept as low as possible to minimize heat loss in the delivery system and
to minimize the possiblity of bursting pipes.
In systems that use solid waste as the sole or primary fuel, the
steam is usually produced at 600 psi or less in order to minimize slagging
and corrosion of the boiler tubes. The steam can be processed further
in separate units to bring it to the temperature and pressure at which
it is needed.
Market Considerations
Steam can be marketed in two ways: as a guaranteed supply, or as
a limited supply that requires the user to have a backup system. In the
first case, the producer (a municipality, private company, or public
authority) provides a reliable supply and assumes the responsibility of
providing steam from other sources (e.g., a fossil fuel package boiler)
if there is an interruption in the production of steam using solid
waste. In the second case, the customer buys all of the steam the
producer can generate using solid waste, but the customer carries the
burden of producing additional steam in the event that this supply is
interrupted or is not adequate to meet its demand. In this case, the
steam's value to the customer is lower, but the steam producer assumes
less risk and responsibility.
To be marketable, steam must meet the specific needs of the user.
Some factors that affect steam marketability are:
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Proximity to Customer. The steam-generating facility must be close
enough to serve the steam market economically. Steam can be transported
economically only about 2 miles; and in congested areas expensive
pipeline installation can be expensive and other problems may further
restrict this distance.
Value. The price at which the steam is delivered must be competitive
with the costs of the customers' alternate energy sources.
Availability of Solid Waste. The municipality must insure that it
has enough waste to meet its steam output commitments.
Quantity. The amount of steam supplied must be compatible with the
customer's needs. If peak loadings cannot be supplied entirely by
burning solid waste, then standby, fossil-fuel-fired boilers will be
needed.
Operating Schedule. The steam-producing facility must be set up on
an operating basis that satisfies the operating schedule of the steam
customer.
Reliability. The system must include sufficient backup facilities
to meet the level of reliability of supply agreed upon. This may include
contingency plans to burn fossil fuels when the solid waste unit is out
of service or when strikes or weather prevents solid waste from reaching
the plant. The cost of building and operating these facilities must be
considered in the economic evaluation of the system.
Excess Steam. The facility must be designed to serve the community's
disposal needs, even if there is an interruption to the steam market.
Condensing units or a backup sanitary landfill may be necessary.
Timing. The steam must be available when it is needed. Unanticipated
delays in construction of the facility could force a steam customer to
find another source of steam.
Markets for Steam
Most metropolitan areas have one or more major outlets for steam.
Yet, despite the fact that proven technology exists for generating steam
from municipal solid waste, constraints on its use have made the marketing
of steam difficult in some cases. Several of these are discussed
below.
District Heating and Cooling Systems
There are about 450 commercial and campus district steam heating
systems operating in this country, a number of which also distribute
8
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chilled water for cooling buildings during warm weather. A number of
cities have large steam systems serving their central business or
industrial areas.
In these systems, steam is distributed at a low pressure, generally
about 250 psi, which can be provided easily by a solid waste disposal
facility. Unlike the demand for electricity, which has certain peak
periods, steam demand is generally more constant throughout the day and
from day to day. Seasonal variations can be significant, but if the
utility also distributes chilled water it can operate its chilling plant
with a steam-driven turbine. In any event, the demand for steam can be
sufficient to accomodate a constant amount of steam produced in an
energy recovery plant during most, if not all, of the year.
Seasonal variations in energy demand can also be balanced by contracting
separately for steam and chilled water. For example, in an area where
peak demand occurs in the summer, a utility can serve a greater number
of winter (steam) customers than summer (chilled water) customers.
Also, customers with their own backup systems (such as existing buildings
which were later tied into the pipeline) can be put on an interruptable
contract to help balance loads.
Because steam usually cannot be transported economically for more
than about 2 miles, the solid waste plant must be located close to the
steam users; usually this will mean in or near the central part of the
city. Although land costs may be higher, solid waste hauling costs will
probably be reduced, because of the proximity of the plant to the waste
generators.
In a city where no steam distribution network exists, the municipality
can consider installing a complete solid waste steam-generating incinerator
and a steam distribution network. To minimize the costs, this might be
tied to a major urban renewal project or to the construction of a large
industrial park. Although the municipality might then be able to sell
the steam at a much higher price, it would also be responsible for a
much higher capital investment because, being the only source of supply
for its customers, it would also have to assume the responsibility for
total reliability. A backup system (which might add 10 to 20 percent to
the total system costs) would be needed to provide steam when the steam
generator was out of service or if there were an interruption in the
delivery of refuse to the facility.
Two new systems which are still undergoing modifications to improve
their operations will soon produce steam for utility distribution. One
is in Baltimore, Maryland and the other is in Nashville, Tennessee.
Numerous European cities produce steam from refuse incineration for
utility distribution.
Industrial Plants. Large industrial facilities such as paper
mills, food processors, and major manufacturing plants, or industrial
facilities who operate 24 hours a day, 7 days a week are preferred
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customers because a steam-generating (waterwall) incinerator is designed
for round-the-clock operation. Some industrial users may specify the
quantities of steam to be delivered at specific times, and all will most
likely specify the temperature and pressure. These factors must be
identified and incorporated in the design of the system.
Many cities have single industries large enough to utilize all the
steam that a large solid waste facility can produce. In Saugus, Massachusetts,
a waterwall incinerator is being built that will handle 1,200 tons of
solid waste per day. All of the steam produced in this plant (about
350,000 pounds per hour) will be used in the adjacent General Electric
Company plant for heating and cooling, electric power generation and a
variety of manufacturing and testing operations.
Steam Electric Power Plants. Although steam electric power plants
use tremendous quantities of steam, it may be difficult to develop
satisfactory marketing arrangements in this sector.
One problem is that the cost of accomodating an outside steam
source may exceed the value of the expected fuel savings. Modification
of the pressurized components of the power plant could be prohibitively
expensive and could require that the power plant be kept out of service
for a long time. Also using supplementary steam may cause a boiler to
operate at a lower efficiency so that additional fuel will be needed to
obtain the same energy output.
Another marketing problem results from the fact that the amount of
electricity that a utility must produce varies considerably throughout
the day from day to day. The utility's most efficient plants are used
continuously to supply the base load demand, while the less efficient or
otherwise more costly plants are only used during peak demand periods.
The utility would be able to buy steam only when the boiler that has
been modified to accept outside steam is operating. Generally, base
load units operate 75 percent or more of the year, while peak load units
operate about 25 percent or less. The base load plants which would make
the better market are the ones that the utility is least likely to
subject to a disruption in service required by a retrofit.
An alternative to retrofitting an existing unit would be to build a
new baseload turbine-and-generator unit especially to take steam produced
in the solid waste facility. The Florida Power and Light Company
suggested such an agreement to the Dade County Government as part of a
plan to buy energy from a proposed solid waste processing facility.
According to their proposal, the company building the solid waste facility
would also build the generating facility. Florida Power and Light would
then buy the steam and the generating facility, paying for the latter on
the basis of the units of electricity produced. This arrangement requires
that the municipality provide the capital investment; and the municipality,
10
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rather than the utility, assumes the financial risk because reimbursement
is conditional on successful operation. The value of the steam in this
situation is then adjusted to a price equivalent to the utility's "average"
generating costs. In the case of the Dade County - Florida Power and
Light arrangement, an equation will be used to calculate this value (see
Appendix II).
Markets for Electricity
Electricity produced from solid waste is identical to electricity
produced by any conventional method. The problem in marketing electricity
though, is that it usually can be sold only to the electric utility
serving the area, because within that service area the utility is generally
exempt from competition. However, where the electric utility is municipally
owned (10 percent of the nation's generating capacity), the city is
already in the retail electric sales buisiness and thus, may sell this
new supply of electricity to anyone.
The price that a utility will pay for electricity depends on whether
it is used to satisfy baseload or peakload demand. Peakload marketing
commands a much higher price (perhaps three to five times the price of
baseload electricity), however, a municipality needs to sell electricity
on a continuous basis (i.e., as baseload) in order to maintain a continuous
solid waste disposal operation.
A municipality considering the sale of electricity to a utility
should seek to establish a floating price for the electricity, whereby
the price per kilowatt-hour rises as the demand on the utility increases.
Thus, the price would be a function of the incremental direct costs the
utility incurs in producing the electricity needed to meet increased
demand. Another approach would be to sell the electricity to the utility
at a price equal to its average cost of production.
ANALYSIS AND CONCLUSIONS
The key to successful implementation of a solid waste energy recovery
program is to select a system that is compatible with the energy market
as well as the community's solid waste disposal requirements. Once a
suitable market has been identified, an appropriate system can be
designed that will convert the solid waste energy potential into a
marketable form. The system should not be selected until the market has
been identified.
Comparison of Market Opportunities
It is important that the market is large in size since the customer
may have to absorb the cost of process changes needed to accomodate
11
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the new energy source. This is particularly true with regard to producing
an oil or a solid waste prepared fuel because special storage and
firing facilities are needed and because it is anticipated that (at
least for the present) that these fuels are fired only as a small percentage
of the total fuel load.
The facility should be located near the point of solid waste generation
to reduce transportation distance and costs.
Steam electric power plants are the most promising market for
several reasons. They can accomodate large quantities of solid waste
prepared fuel and geographic dispersion. The fact that most utility
systems consist of several power plants increases the probability that
an acceptable market can be found. The potential energy value of all
solid waste generated amounts to between 5 and 10 percent of the total
of fossil fuels used for electric power generation. However, limited
experience with use of solid waste prepared fuels plus the limited
economic incentive of the price regulated electric utilities makes it
difficult to obtain commitments from utilities.
Steam distribution systems are also a good prospective market. The
scarcity and rising cost of fuels (particularly natural gas) is creating
a demand for new or expanded systems. These systems are centrally
located in order to serve the greatest concentration of customers, so
the solid waste haul distance is minimized. There may be less day-to-
day and hour-to-hour fluctuation in load than in electric power with the
constraints of a refuse-fired system.
Comparison of Energy Forms
In marketing energy from solid waste it is an advantage to produce an
energy form that can be sold and used without regard to its derivation.
It is also helpful if the type of fuel produced is storable and transportable
so the solid waste facility can be located and operated independently of
the fuel market.
Steam and electricity satisfy the first objective; but as pointed
out earlier, neither can be stored and steam can be transported only
very short distances.
The solid and liquid fuels can be transported and stored for brief
periods of time (several days to several weeks). However both fuels
require the user to install special storing and firing facilities. In
addition, the user must follow special handling procedures to minimize
problems of air pollution and corrosion.
Gaseous fuels currently being produced do not appear to require
separate facilities for storage and firing, but they cannot be compressed
economically for extended storage and shipment. The best of the gaseous
fuels cannot be economically shipped more than 2 miles.
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Selecting an Alternative
As the above discussion indicates, implementing a solid waste
energy recovery program is more complex than just selecting a technology.
The first and most important consideration is to secure a reliable and
realistic market.
All aspects of the market must be carefully understood by both the
user of the fuel or energy and the municipality that supplies it. The
constraints of the market will indicate the technical alternatives
available. Once the various major energy markets and the energy forms
that can satisfy those markets are examined (Table 1), the possible
alternatives can be narrowed to just one or a few technologies.
Table 1
LOCATION AND STATUS OF ENERGY RECOVERY SYSTEMS
BY TECHNOLOGY TYPE AND ENERGY PRODUCT, 1975
Energy product
Technology
Waterwall
incineration:
Burning of
unprocessed
solid waste
Pulped or
shredded
solid
waste
Processing for
use as supple-
mental fuel
for boilers
Electricity
—
Hempstead, N.Y.**
St. Louis, Mo.t
Ames, Iowa§
Bridgeport, Conn.§
Chicago, Ill.§
Milwaukee, Wis.**
Monroe Co., N.Y.**
New Britain, Conn.**
Steam (other
than for
generating
electricity)
Braintree, Mass.T
Nashville, Tenn.t
Saugus, Mass.§
Hamilton, Ontariot
Solid fuel
(other than for
producing steam
or electricity)
Not
applicable
Not
applicable
Palmer Town-
ship, Pa.**
Gaseous fuel
Not
applicable
Not
applicable
Not
applicable
Liquid
fuel
Not
applicable
Not
applicable
Not
applicable
Pyrolysis
Methane
recovery.
From
sanitary
landfills
Controlled
digestion
Direct combus-
tion/gas
turbine
Baltimore,
Los Angeles,
Calif.'t
Menlo Park, Calif.*}
Not
applicable
Not
applicable
Not
applicable
Not
applicable
South Charleston,
W. Va.*t
Los Angeles, Calif.*+
Mountain View,
Calif.*
Pompano Beach,
Fla.*
Not
applicable
San Diego,
Calif.g
Not
applicable
'Research or experimental operations.
'tSystem in operation.
tin shakedown.
§Under construction.
**Construction not yet started, but system has been selected.
13
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MATERIALS PRODUCTS AND MARKETS
Materials in municipal solid waste that can potentially be recovered
and marketed include ferrous (magnetic) metals, glass, aluminum, and
paper.
This section discusses the markets for each of these materials.
Included in the discussion are characterization and location of the
potential users, quality requirements for those markets, and approximate
market prices. The following section includes a discussion of techniques
for conducting a market search and obtaining a purchase agreement.
FERROUS METALS
Ferrous metals (excluding automobiles) comprise about 8 percent of
municipal post-consumer discards now going to disposal. About 50 precent
of these ferrous discards are in the form of cans.* The remainder
consists of appliances (16 percent) and miscellaneous items such as
hardware, metal castings, and non-descript pieces of metal (33 percent).
In 1973 only about 160,000 tons, or 1.4 percent of the ferrous metal in
these discards, were recycled.
The characteristics of steel cans bear heavily on the marketability
for ferrous metals recovered from municipal solid waste. Scrap steel
cans can be marketed to three discrete industries: steel, copper
precipitation, and detinning. All recovered steel scrap potentially can
be marketed to the steel industry, while only scrap steel cans are
generally acceptable to copper precipitation and detinning markets.
Steel Industry
Present Scrap Consumption
The steel industry represents the largest potential market for
ferrous metals recovered from municipal solid waste. There were 85
companies operating 145 plants in 1972. Ninety-five percent of these
*"Steel" or "tin" cans are often a composit of several materials.
Typical content is steel by weight (92 percent), tin (.4 percent), lead
(1.5 percent), aluminum (3 percent or more) and organic coatings (1.8
percent). Food cans almost always contain tin and lead (but not aluminum),
while some beverage cans contain no tin or lead but have aluminum tops.
14
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plants are located in Standard Metropolitan Statistical Areas (SMSA's).
and are therefore in close proximity to potential ferrous metal recovery
sites.2,p.7 (These mills are listed by State and City in the EPA publication
"Locations of Markets for Recovered Materials").3
Closely allied to the steel industry is the foundry industry which
melts pig iron scrap for molding into casting. There are 4,000 to 5,000
iron and steel foundries in the United States. They consume about 28
percent of the purchased scrap consumed in the United States.2,p.6 TO
date there has been relatively little experimentation with high can
content municipal ferrous scrap by this industry.
Despite the use of almost 70 million tons of purchased scrap by the
steel industry in 1973, the amount of municipal ferrous scrap consumed
was insignificant. Instead, the scrap used consisted primarily of
borings, stampings and turnings from fabrication operations (e.g. automobile
or can manufacturing), demolition steel abandoned automobiles and, post-
consumer scrap from a variety of industrial sources.*
The quantities of steel recovered from municipal waste (excluding
autos) constitutes only about 0.1 percent of the steel industry's present
scrap consumption. Thus, it presently is basically an experimental
input on an industry-wide basis.
Municipal scrap is significantly different from other sources of
ferrous scrap. The lead and tin in the ferrous scrap are contaminants
in steelmaking. The scrap may also contain organics or other materials
that make the scrap undesirable.
The steel industry is immense and its potential assimilative capacity
for the relatively small quantities of municipal ferrous scrap appears
to be great. However, since the steel industry is in the early stages
of experimenting with this type of scrap, the potential interest and
demand is somewhat uncertain. Quality of municipal ferrous scrap will
be a key to interest by the steel industry.
Steel Industry Scrap Specification
If steel scrap from municipal solid waste is to be sold to the
steel industry, then it must meet certain quality and purity specifications.
However, due to the industry's limited experience with this type of
scrap, only a very general specification now exists. Listed below are
the specifications for can bundles issued by U.S. Steel: 6, p. 28
- Bundles must be hydraulically compressed to a charging box
size not to exceed 24" x 24" x 60". Density must be greater
than 70 Ib./cu. ft.
*A more complete discussion of the structure of the steel industry,
its scrap consumption, and scrap recycling issues can be found in other
EPA publications.
15
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- Must be free of all liquids and solids prior to baling.
- Must be free of aluminum cans, loose tin plate and terne plate
scrap in any form, dirt, garbage, nonferrous metals (except
those used in can construction), plastics, vinyls in any form,
and other non-metallics of any kind.
It is not certain to what degree this specification is accepted by
the industry as a whole, because of the absolute terminology used (i.e.
"free of all . . "). Indeed, if interpreted literally, it would be
impossible to meet.
The American Society for Testing Materials (ASTM is presently
endeavoring to establish specifications for steel scrap from municipal
waste. The intent is to make the specifications as specific as possible
with regard to both physical and chemical properties. The industry
members represented on this committee acknowledge that no one specification
can really suffice due to differences in the requirements of different
products being produced. Therefore, negotiation of specifications with
each user mill will still be necessary, but published specifications,
such as from ASTM, can provide a common ground for negotiating and
pricing and will provide basic guidance for recovery equipment design.
However, the development of specifications may be a year or more away.
To be certain of being able to meet the specifications of a particular
steel mill the official concerned with ferrous recovery must obtain
clearly defined quality requirements from the potential buyer of steel
scrap so that the ferrous recovery system in his plant can be designed
to meet that specification. Alternatively, ferrous scrap could be sold
to a secondary materials processor who would further process and refine
the scrap and then sell it to a final consumer. These determinations
should be made prior to final selection of a processing system.
Steel industry scrap prices
It is difficult to quote steel industry prices for ferrous metals
recovered from municipal waste because little actual trading has occurred
and because variances in quality result in significant price variations.
It is likely that this material will have a market value equivalent to
a No. 2 bundle less some discount related to contaminant levels. Table
1 shows the composite price of No. 2 bundles in the U.S. over the past 3
years.
Some insights into market value can be gained from the quotes for
ferrous metals being recovered in EPA's resource recovery plant demonstrations,
Examples are listed on the next page.
16
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Location Buyer Price/ton
(F.O.B. the resource
recovery plant
early 1975)
Franklin, Ohio GiHerman Steel Corporation $25
St. Louis, Missouri Granite City Steel Company $20
Baltimore, Maryland* Metal Cleaning and Processing
Company $20
*Post incineration
Copper Precipitation Industry
Present Scrap Consumption
The copper precipitation industry utilizes ferrous scrap as
precipitation iron. In the process, the scrap is placed in a solution
of copper sulfate and in a chemical reaction, the copper is displaced
by the iron, thus forming iron sulfate, while the copper is precipitated
and extracted.
Eight copper products operate 23 copper precipitation facilities
in Montana, Nevada, Arizona, Utah, and New Mexico. These plants are
listed in a separate EPA publication.3
This industry presently consumes about 500,000 tons of ferrous
scrap each year. An estimated 10 percent, or 50,000 tons, is
scrap from municipal recovery operations. This represents almost
a third of the total municipal ferrous scrap recovery.
The potential for additional use by this industry is somewhat
uncertain. Though the growth of the industry is not rapid, the undetinned
scrap from municipal recovery could displace more costly detinned scrap
now purchased from the detinners, which can in turn be utilized by the
steel industry. However, even if all 500,000 tons of precipitation iron
came from municipal scrap, this amount would represent only a small
portion of the over 9 million tons of scrap ferrous available in municipal
solid waste. Nevertheless, in the near term this is a very viable and
significant market.
The greatest difficulty posed by this market is its remoteness to
sources of supply, particularly cities in the East. Nevertheless, the
industry regularly receives scrap from as far away as Chicago and St.
Lou i s.
Copper Precipitation Scrap Specifications
Specifications for ferrous metals used by this industry are very
general at this time, just as those specifications available from the
17
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TABLE 2
COMPOSITE PRICE OF NO. 2 BUNDLES
($/long ton)
1972 1973 1974
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sep.
Oct.
Nov.
Dec.
AVG.
$23.2
24.5
24.5
24.8
25.8
25.1
24.8
25.1
25.6
26.3
26.5
29.4
25.4
$34.6
35.5
34.4
35.3
38.5
40.4
38.5
37.8
39.0
41.8
48.6
47.6
39.4
$48.9
58.9
68.1
69.1
55.1
57.1
60.3
56.8
58.9
60.5
54.3
47.6
58.0
Source: Iron Age Magazine
-------
steel industry. Like most current users of ferrous scrap, the current
practice is to buy from scrap dealers whom they have depended on in the
past rather than buying to a published specification.
The general requirements from precipitation iron are listed below.
- Shredded and crumpled cans not folded on themselves (all
magnetic material), loose packed density of 30#/cu.ft. maximum.
- Uniform guage and of maximum surface area to weight ratio.
- If not shredded to this specification, the cans may be prepared
for shipment to a dealer and processor of scrap for the copper
industry. In this case, the cans must be clean, free of heavy
plate or wire, and shredded to a density of 40,000#/railroad
car minimum shipment.
- Scrap cans sent to a dealer-processor may be incinerated first
to remove lacquers, and organic contaminants, but not enough
to cause oxidation, or metal and strength loss.
- Baled cans are unacceptable because surface exposure is too
limited to permit reasonable reaction time.
It is particularly important to note that the material must be of
fairly uniform thickness and have maximum surface area. This is in
sharp contrast to steel industry requirements, where high density is
important.
Copper Precipitation Scrap Prices
There are no published prices for scrap purchased by this industry.
However, prices in 1974 ranged from $50 to $60 per ton or roughly
equivalent to the No. 2 scrap bundle. Market prices for scrap metal are
volatile, however, and there has been a declining price trend in 1975.
Moreover, these prices are not attainable by the initial processor who
simply shreds and magnetically separates ferrous metals. Controlled
incineration of the scrap by a secondary processor is also necessary to
prepare it for this market. Thus, price will vary depending on the
degree of processing involved.
Because prices paid by copper precipitators are likely to be higher
than those offered by the steel industry, and because the specifications
of this market will generally be easier to meet, the municipal marketer
should carefully investigate copper precipitators as a ferrous market.
The Detinning Industry
Present Scrap Consumption
Detinners chemically process "tin plate" such as that in cans to
remove tin content. Tin which comprises roughly 0.4 percent of a "tin
can", is a very valuable commodity, worth roughly $4.00 per pound
19
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(1974 average). Although detinners process tin plate primarily for the
tin content, the resulting "tin free" steel is also valuable as a raw
material to the steel or copper precipitation industries. It is commonly
sold to the steel industry as No. 1 bundles.
Fourteen detinning plants are located in Baltimore, Maryland; E.
Chicago, Indiana; Elizabeth, New Jersey; Milwaukee, Wisconsin; Pittsburgh,
Pennsylvania; San Francisco, California; El Paso, Texas; and Wilmington,
Delaware. These plants are listed by location in a separate EPA publication.
The major contaminant in post-consumer can scrap is aluminum tops
from bi-metal beverage cans. When present, aluminum undergoes a chemical
reaction during detinning causing foaming (boilovers) and the production
of hazardous gases. Removal of the aluminum adds significant cost,
approximately $10 per ton of cans processed to the detinning process.
Nevertheless, the detinning industry is a prime market for cans
recovered from municipal solid waste, and the industry is showing increased
interest in post-consumer cans despite contaminants. They have indicated
possible interest in building new "mini" detinning plants wherever
30,000 tons of can scrap are guaranteed yearly. Facilities processing
2,000 tons per day or more of municipal solid waste would probably
produce enough scrap to meet this quota.
Detinning Scrap Specifications
As with the steel and copper pricipitation industries, the specifications
for scrap consumed by detinners are very general at present, but should
be improved by the ASTM committees working on this issue. Two very
basic considerations are that (1) the material destined for detinning
should not be incinerated (indeed, post-incineration scrap is normally
unacceptable to the detinning industry since incineration causes the tin
to diffuse into and alloy with the base steel, making it unrecoverable),
and (2) the scrap must have a large surface to weight ratio to allow for
a maximum of surface exposure within a reasonable reaction time.
In general, the detinning industry will accept scrap cans that meet
the following requirement.
- The scrap should be all magnetic material, not incinerated.
- Loose flowing, whole cans, or shredded for maximum surface area.
- It should not be balled or convoluted so as to interfere with
access of detinning solution.
- Less than 5 percent organic contamination. Content may be used
to determine price.
- Less than 4 percent aluminum (only from a normal mix by bi-
metallic cans). Content may be used to determine price.
20
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Detinning Industry Prices. The 1974 market value for can scrap for
detinning ranged from $30 to $100 per ton depending on the quality of
the material and geographical location. Naturally the prices are
influenced by the price for scrap steel, since detinned cans are sold to
the steel industry.
The detinning industry, just like copper precipitators, appears
able to offer prices for cans that are higher than the steel industry
can offer. Therefore, this is a market which should be thoroughly
explored as an outlet for recovered municipal cans.
Summary Comments on Ferrous Markets
The ability to market ferrous metals from municipal solid waste is
heavily dependent on the form and purity of the recovered scrap. The
three major potential markets have specification requirements that
differ markedly. Therefore, it is important to arrange a market prior
to the selection of recovery configuration and technology. If this is
done it may be possible to successfully recover and sell municipal steel
scrap because the recovery technology is available.
GLASS
Present Scrap Consumption
Glass comprises about 10 percent of the municipal post-consumer
waste stream in the United States and in 1973 totaled 13.6 million tons,
Glass containers represent the major portion of glass found in solid
waste. Approximately two-thirds of these glass products are made of
flint or clear glass. The remaining percent is split between amber
glass used for beer bottles and green glass used for wine and soft
drinks. In 1973 only 350,000 tons or 3 percent of the glass in post-
consumer solid waste wa recovered.
There are two major potential markets for recovered waste glass:
(a) as cullet for making new bottles, and (M as a raw material for
making secondary products (i.e., Glassphalt.Rhighway paving material,
foamed insulation, construction materials).
Gullet in Glass Products
There are 119 glass plants in the United States with most located
in the east and west cost regions. These plants are listed by location
in a separate EPA publication.3
21
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Glass manufacturers have long practiced adding waste glass to their
glass furnaces to improve the operating efficiency through reduced fuel
consumption and improved melting time. Normal Gullet use is 10 to 20
percent of the glass batch, but a few plants use higher percentages of
waste glass. Normally the cullet used is in-plant scrap, which is
already color-sorted, of known quality, and is free of dirt organics and
metal contaminants. A second source of generally acceptable cullet is
from volunteer community recycling centers. The glass manufacturers
require this glass be color-sorted, reasonably clean, and free of caps
and neck rings.
Gullet Specifications
The most pressing issue with markets for municipal glass centers on
the quality of the cullet. If the glass is properly sorted by color and
if contaminants are kept to a minimum, it is likely that a buyer can be
found. However, these are major barriers.
Color
There are three basic colors of glass containers produced: clear
(flint), green, and amber. About two-thirds of the glass produced is
clear.
To be acceptable to the container manufacturer for use in making
flint glass, the cullet must be at least 95 percent clear. Similarly
color-sorted cullet labeled "green" or "amber" can contain only limited
amounts of other colors. These specifications provided by the Glass
Container Manufacturers Institute in 1975 on cullet labeled "color-
sorted" are listed below.
Gullet Color Amber (%) Flint (%} Green (%)
Amber 90-100 0-10 0-10
Flint 0-5 90-100 0-1
Green 0-35 0-15 50-100
Waste glass meeting these color specifications provides the industrial
user with reasonable assurance that his final product will not be off-
color, and therefore not meet specification requirements. Unfortunately,
hand separation is the only color-sorting method currently being
practiced that provides good color separation. Mechanical color-sorting
is still in the developmental stages and has not been proven technically
or economically feasible on a large scale (See the "Technology Options"
section of Resource Recovery Plant Implementation—A Guide for Municipal
Officials.) The only glass recovery subsystem which includes a color-
sorting process is currently being evaluated at EPA's demonstration
project in Franklin, Ohio. The evaluation should be complete in early
1976.
22
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Use of color-mixed cullet products has a much more limited potential
than use of color-sorted glass. One limitation is that color-mixed
r.ullet is practically never used in making clear glass since roughly two-
thirds of the industry's production is in clear glass, the potential
buyers for mixed color cullet are not wide-spread. Thus, in several
areas of the country, potential buyers do not exist.
Though mixed color Gullet is generally thought to be acceptable for
use in green or amber containers, many companies are uncertain of the
amount of this material their furnaces will tolerate without causing
their product to be off-spec. Experimentally, one glass company has
successfully used as much as 50 percent color-mixed cullet in their
amber furnaces and up to 80 percent mixed cullet in their green furnaces.
Contaminants
Whether sorted by color or not, glass cullet will not be accepted
by container manufacturers unless rigid contaminant limitations are met.
Contaminants include metals, organic materials, ceramics (refractories),
and excessive liquids.
Refractories are by far the most serious concern at this time.
Metals and organics can be removed in a resource recovery plant to an
acceptable extent through a process called "froth floatation". This
process is believed to be technically and economically feasible though
it has not been demonstrated at full scale on glass from municipal solid
waste. Refractories are also removed by this process, but it is questionable
whether a very stringent specification could be met consistently. It is
possible that the glass industry will relax this specification as they
gain more experience with use of cullet from municipal waste.
The general glass cullet specification for container manufacturing
is listed below.
- Cullet must be noncaking and free flowing.
- Cullet must show no drainage from the sample.
- Maximum 0.2 percent organic content (dry weight sample).
- Size 0 percent retained on 2" mesh screen; 15 percent maximum
to pass 140 mesh.
Less than .05 percent magnetic metal content; no particle to
exceed 1/4".
- Nonmagnetics: +20 mesh 1 particle per 40# sample.
No particle shall exceed 1/4".
- Refractories:
+20 mesh 1 particle per 40# sample
No particle shall exceed 1/4".
-20+40 mesh 2 particles per 1# sample.
-40+60 mesh 20 particles per 1# sample.
- Color specifications (see p. 22 and discussion above).
23
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Prices
Waste glass that can meet the color and contamination specifications
discussed above will have a market value ranging from $15 to $25 per ton
F.O.B. the plant (1974 prices) depending on the geographical locations.
Color-sorted and clean color-mixed glass share an almost equal market
value based on the substitution for raw materials.
Secondary Products for Waste Glass
There are several secondary products in which waste glass may be
useable. The quality of the waste glass to be used in these products
generally may be lower than that used in the glass furnaces; thus,
color-sorting would not be needed and more contaminants could be tolerated,
Secondary products fall into three broad categories:
1. Road building material: Glassphalt^paving, slurry seal, glass
beads for reflection paints.
2. Building materials: bricks, foamed glass insulation, ceramic
tiles, terrazzo tiles, building blocks, sewer pipe, aggregate.
3. Miscellaneous: costume jewelry, ground cover, trickling
filters, glass-polymer composites.
Though some experimentation has been done with use of waste glass
in these products, none of them are now manufactured on a large scale
using waste glass. However, utilization of waste glass has been shown
to be technologically feasible for many of these products. One of the
most promising use is in brick manufacture. Although no large scale use
in this manner is now taking place, it could be worthwhile for the city
or company marketing recovered glass to contact a local brick yard and
explore marketing arrangements.
Summary Comments on Glass Markets
Glass manufacturers have established stringent contamination
specifications for waste glass. Although pilot plant work has been
performed, there are currently no full scale glass recovery systems
operating. Thus, it is uncertain whether these specifications can be
met day to day on a production scale. The uncertain!ty regarding the
ability to meet glass industry specifications should be investigated
with potential buyers.
24
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ALUMINUM
Present Scrap Consumption
Aluminum comprises about 0.7 percent of the municipal solid waste
stream. About half of the aluminum discards in solid waste are cans,
one-third are foils, and the remainder largely from major appliances.
Aluminum composition varies significantly from one community to another
due to differences in aluminum beverage can distribution.
Aluminum scrap constituted 27 percent of the aluminum produced in
1973. Sixty percent of the scrap utilized was consumed by secondary
smelters, 17 percent by primary producers, and the remainder by aluminum
fabricators and foundaries. There are 31 primary aluminum producers and
111 secondary aluminum smelters in the United States. The locations of
these users are listed in a separate EPA publication.3
The only form of aluminum recovery from municipal solid waste
currently being practiced is source separation of aluminum cans through
volunteer community recycling centers. In 1973 about 34,000 tons of
aluminum cans were recovered, which represents 3.5 percent of all the
aluminum discarded. Source separated aluminum cans generally can be
remelted by the primary producers and made directly into can stock.
Mechanical extraction of scrap aluminum from mixed municipal solid
waste is being developed and as yet has not been demonstrated on a
commercial scale. It is anticipated that aluminum scrap extracted by
mechanical means will be lower in quality than that recovered through
source separation. It is likely that a large portion of this may be
sold to secondary smelters who will pretreat and upgrade the aluminum by
removing contaminants and diluting the alloy contents to acceptable
levels. As is common with any scrap metal, the value of this recovered
aluminum scrap is likely to be negotiated based on the quality of the
recovered product and the specifications required by the purchaser.
Scrap Specifications
The quality requirements of purchasers may vary from plant to plant
depending on the alloy content in their products being produced. However,
in general, scrap aluminum should meet the following specifications.
- free of sand, grit, and particularly glass (at melt temperatures,
aluminum reduces the silica in glass to silicon which will
alloy and cause the melt to be off-spec).
- free of iron contamination (1 percent or less)
- contain a minimum of organic contamination. These materials
will burn off in the furnace causing additional load on the
air pollution equipment.
25
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- have a low surface to volume ratio to avoid melt-loss during
resmelting—hence it should be baled or briquetted. For the
same reasons, fines are also limited.
Presently, a committee of the American Society for Testing Materials
(ASTM) is attempting to develop more refined specifications. However,
until significant quantities of this scrap are recovered and used
successfully at full-scale operations, glass cullet useage will be con-
fined to individual company experimentation and specification setting.
Prices
A price of $.15 per pound ($300 per ton) was paid in 1974 by certain
aluminum companies and brewers for aluminum cans brought to their collec-
tion centers. Aluminum recovered mechanically will be less consistent
in quality and priced accordingly. Prices in the range of $100 to $400
per ton are probable current for this scrap depending on the quality.
Summary Comments on Aluminum Markets
Like glass, aluminum is not presently being recovered in any great
quantities from mixed municipal waste in any full-scale plants. However,
pilot plant work is being performed and full-scale operations will begin
in 1976 in Ames, Iowa. The quality specifications for aluminum seem to
be a somewhat lesser problem than those for glass recovery. The high
market value of aluminum permits further processing or price discounts
if quality is not sufficiently high. Key issues for early resolution
facing the city considering aluminum recovery are (1) the quantity of
aluminum in the local waste stream, (2) the quality specifications of
potential buyers, and (3) the level of confidence in developing technology
to produce a product meeting those specifications.
WASTEPAPER
Present Wastepaper Consumption
Paper recovery depends primarily on source separation. However,
some mechanical separation of paper is likely in the future, and in
addition source separation of paper would affect the input tonnage and
composition to a recovery plant. Source separation of paper should be
considered explicitly by a city contemplating a resource recovery plant
so that overall recovery strategy can be integrated.
Source separation technologies and paper market issues are dis-
cussed in greater detail in other EPA publications.9» 10, 11, 12 jne
objective here is to provide a general understanding of wastepaper
markets and quality requirements so that the roles of both mechanical
and source separation can be better understood.
26
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In 1973, 13.8 million tons of paper were recovered and recycled.
About two-thirds of this quantity was recovered from post-consumer
waste; the remainder originated in fabricating and converting opera-
tions.
Most of the paper now received is obtained through source separa-
tion and separate collection. Some is obtained through hand sorting
from mixed waste, and almost none is recovered through mechanical separation
from mixed waste. Obviously, the fraction of paper now recovered from
post-consumer sources represents the highest value (clean, high grade
paper), most readily recoverable fraction of paper discards. Nonetheless,
a vast amount of paper is still available for recovery. (Table 3).
The major paper industry market for post-consumer recovered paper
is combination boxboard. These are boxes used for packaging dry foods,
shoes, and clothes, and similar items. Each ton of combination boxboard
requires 0.25 tons of corrugated, 0.21 tons of old newspapers, and 0.48
tons of mixed wastepaper. The construction paper and board sector of
the industry also uses substantial quantities of wastepaper, and the
quality requirements of this market are not exacting. Properly segregated
corrugated containers are used to manufacture new corrugated containers,
and separated newspapers are used in manufacture of newsprint. High
grade wastepaper, e.g. printing paper, is used to manufacture printing
paper, tissue, and other products. More data on wastepaper use is available
in other EPA publications.7'!!
Paper mills are located throughout the nation; however most of the
mills that now use wastepaper are located in the Northeast and North
Central regions of the nation. Lists of mills organized by product
category are contained in a separate EPA publication.3 Exports offer a
market that has grown in recent years and may provide an important
outlet in selected areas of the nation.
Specifications
For a fiber fraction to be readily marketable, it must correspond
to an existing fiber type. For example, the short groundwood fibers
from newspapers cannot be used as a replacement for the long kraft
fibers used in manufacturing corrugated boxes. Most paper mills rely
heavily on specific fiber inputs and make substitutions among fibers
only within narrow limits. (The greatest substitution occurs in con-
struction paper grades. Boxboard mills can use some mixed grade fiber).
Thus, a mixed fiber such as that obtained from a combination of all the
different types of fiber found in municipal solid waste would be acceptable
for only the lowest strength or quality products. Fortunately, there
are many such paper products.
27
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TABLE 3
PAPER IN THE WASTE STREAM 1973*
(million tons)
Category
Apparent
Consumption
Estimated
Total
Newsprint
Writing/publishing
papers
Corrugated packaging
Other
TOTAL
10.
13.
17.
20.
61.
7
3
2
1
4
Gross
10.4
11.0
15.1
16.5
53. ff
Net+
8
9
II
14
44
.0
.7
.8
.7
.2
Post-Consumer
Discard
Household
Gross Net+
9.9
6.9
1.2
10.3
28.3
7.
6.
1.
10.
25.
5
9
2
3
9
Other
Gross Net+
4
13
6
26
.5
.1
.9
.2
.5
.5
2.8
10.6
4.4
18.3
*This table was developed
Institute in their annual publ
from statistics compiled
ications: The Statistics
by
of
the American Paper
Paper and Paperboard
9
Wood Pulp Capacity 1973 - 1976. The methodology employed is described in an
EPA report (EPA/530/SW-I47).A Solid Waste Estimating Procedure: Material
Flows Approach. Fred Lee Smith, Jr. May 1975.
+Gross discards less quantity recovered.
28
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Wastepaper is classified into a large number of grades that specify
the source of the fiber and the amount of contaminants that the grade
can tolerate. Wastepaper specifications are described in a publication
of the National Association of Recycling IndustriesJl Only the news,
corrugated, and mixed grades are relevant to those concerned with post-
consumer wastepaper recovery.
Markets for Paper Recovered in Central Recovery Plants
The paper discarded from households and commercial establishments
handled by the city and that is not separately collected will arrive at
the centralized resource recovery facility in a more or less contaminated
state. For some waste sources, the degree of contamination may be
minimal and permit a favorable yield from sorting at a central facility.
The traditional sorting methods is hand picking. In such situations,
the practice has been to sort only those selected loads having very high
paper content. A rule of thumb has been that the derived paper fraction
must equal 50 percent or more of the total waste load in order for this
practice to be feasible.
The technological possibilities for recovering paper fiber from a
mixed refuse stream have only recently begun to be explored. The first
major novel technology introduced into this area was the Hydrasposal/
Fiberclaim system developed by Black Clawson, Inc. in 1969 and demon-
strated recently with EPA funding at Franklin, Ohio. This system is
discussed in the "Technology" section of this Guide. In the Fiberclaim
process, all incoming refuse is first wet pulped into a slurry, the
fiber is drawn off, and then cleaned to produce a marketable fiber.
The Franklin plant has operated successfully for over 3 years on a
continuous basis. The quality of the fiber resulting from this process
is low but is acceptable for use as a fiber input to a roofing felt
mill. The demand for paper varies with construction activity, however,
which may preclude the stable markets that a community will require.
All currently available mechanical fiber recovery processes yield
relatively low value fiber fractions—somewhat equivalent to the mixed
grade of wastepaper. The markets for such material are limited.
Processes now under development have the potential of yielding more use-
ful fiber fractions such as newsprint-rich stream or a high strength
kraft fiber component, but neither the technology nor the economics
of these alternative processes have been well developed.
Price Considerations
Prices of wastepaper have historically been unstable. Figure 1
illustrates the wastepaper price index over the period 1950 to 1975.
The two major anomalies correspond to very dramatic periods in
recent economic history—the Korean War and the short-lived 1973-74
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economic boom. On such occasions, demand momentarily spurts ahead of
installed capacity. Capacity utilization rates approach 100 percent
and industries become willing to use secondary materials as the input
of last resort. This, in turn, creates a sharp increase in the price
of secondary material. The correction—increased supplies of waste-
paper, increased virgin material availability, or downturn in the
economy—results in an equally rapid drop in prices.
Wastepaper prices vary by grade and region. Prices rose in the
1973 boom period but then began to decline as markets collapsed in the
1974 recession. Although severe price fluctuations are rare, the
decision-maker should ensure that his selling arrangements take account
of their possibility. Specifically, contracts should be established
which guarantee a minimum purchase prices.
Summary Comments on Paper Markets
Quality requirements of most markets for wastepaper can presently
be satisfied only by recovery through separation at the source or hand
sorting from mixed waste. In considering a resource recovery plant,
the inclusion of source separation or hand sorting of paper in the
overall recovery scheme will impact on overall recovery economics.
It may increase the economic viability or decrease it depending on
market prices for the recovered paper and for the energy or fuel out-
puts of the recovery plant. Also, source separation of paper would
affect the input tonnage and composition to a recovery plant. Thus,
source separation of paper should be considered at the same time that
the city is contemplating a resource recovery plant so that overall
recovery strategy can be integrated.
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MARKETING RECOVERED MATERIALS*
The previous discussion addressed the characteristics of materials
and energy products recoverable from solid waste and their potential
markets. This information provides a foundation for the marketing
of such products. However, the question of technique is also important.
How should one go about finding a buyer for resource recovery products
and obtaining a commitment to buy? The objective of this section is to
provide general guidance that will lead hopefully to a sound marketing
technique.
Marketing and Sales Strategies
Obtaining advance commitment for the purchase of recovered materials
is the single most important step in resource recovery planning. The
commitments provide the financial assurances that municipal managers
seek and the specifications accompanying the commitments determine the
type of plant to be built. Again, the statement made earlier needs to
be emphasized: MARKETS FIRST; SPECIFICATIONS DETERMINE TECHNOLOGY.
The recovery plant must be designed and operated to produce products to
the specifications of the market commitments or else economic success of
the plant will be unlikely.
An obvious first step in the marketing process is to determine
which types of products can be sold in a reasonable proximity to the possible
recovery plant sites. This means conducting a market survey. The elements
of such a survey will be discussed below.
The second step is to attempt to obtain as strong a commitment as
possible from these potential buyers. One feasible approach developed
here is to obtain "letters of intent" from prospective buyers. Letters
of intent will also be discussed below.
Who Does the Marketing?
There are two parties that could be designated to do the marketing.
First, the city can rely on system bidders to obtain their own market
agreements for the system they propose; then the city can evaluate the
*The section is based on information obtained from the National
Center for Resource Recovery, Inc.
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strength of their market commitments as a facet of their bid to build,
own, and operate a proposed facility. Secondly, the city can obtain
these commitments in advance of a system procurement. In this case, the
developmental marketing is done directly by the municipality or by its
consultants. In this latter case, the availability of markets is the
major determinent in the type of recovery system that a community should
try to procure.
The issue of who conducts the marketing cannot be separated from
the choice of type of procurement (e.g. A & E design of municipally
owned plant v.s. turnkey or full service contract for either privately
or pub!ically owned plant). Even if turnkey or full service is selected
and a request for proposal (RFP) is issued, the RFP will be more or less
specific about markets, depending upon whom the city designates to do
the marketing. Unless a very general RFP is to be issued, advance
marketing is a requirement for specifying a system. (This does not
preclude additional marketing by bidders.) These procurement issues are
discussed in the "Overview" and "Procurement" sections of this Guide.
For purposes of discussion below, it will be assumed that the
municipality or its consultant will conduct advanced marketing.
THE MARKETING SURVEY
The purpose of the market survey is to locate potential buyers for
recovered products and to determine the conditions—price and quality--
under which they would purchase these products. The market survey is
the first major step toward selection of a recovery technology. If
buyers for particular products do not exist within reasonable transportation
distances, or if their specifications or probable prices appear unsatis-
factory, then technologies producing these products should not be investigated
seriously. If potential buyers exist, then serious consideration can be
given to the equipment and processes to produce products to the buyer's
specification.
Likely Markets
The likely markets for the products recoverable from municipal
waste have been discussed earlier in this guide document. A detailed
listing of users of various materials is provided in the EPA publication
"Locations of Markets for Recycled Materials." The EPA publication
"Where the Boilers Are" provides information on one potential market,
electric utilities, for refuse derived fuel. Other potential fuel and
steam markets can be identified by referring to data gathered by local
chambers of commerce and by State and local air pollution control authorities.
In the case of recovered metals, glass, and paper, it may be desirable
to contact the scrap processor whose role it has traditionally been to
upgrade scrap materials and market them. Scrap processors typically
already have working relationships with scrap users, are trusted for
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quality control, can market to numerous alternative buyers, and can
inventory materials to help match supply to demand. Because of the
upgrading that the scrap dealer provides, the specifications that the
recovery plant products must meet need not be as stringent as required
by final users.
In return for these services, the scrap processor receives a fee
that results in a lower gross price paid for the scrap to the resource
recovery plant compared to what may be paid by a paper mill, steel mill,
or other ultimate user. However, the reduced purchase price must be
discounted by the municipal planner against the value of the services
and the consequent reduced investment in resource recovery facilities
and operational costs.
Shipping Distances
In conducting a market survey, how far from the recovery plant
location should one search? Simple answers are not possible. Indeed
the shipping limits will be determined partly by the price offered, the
cost of recovery, and the shipping rates that can be negotiated.
It is possible to estimate freight charges for particular commodities
in many cases by contacting a local railroad or truck company. However,
"rate table" quotes obtained by phone might be significantly different
from rates obtained through serious negotiation. Also, one should
expect the carrier to ask about quantities to be shipped, physical form,
schedules, and loading and unloading facilities.
We believe that providing meaningful general rate information is
useful only for rough estimates. More precise information can be obtained
only through negotiation with local carriers.
The Specification
After locating the likely markets, the next step is to approach the
potential buyer to determine quality requirements and potential price.
The quality of the recovered product (its specification) must assure
utility in current manufacturing processes. An existing industry,
accustomed to operation on particular raw materials, will be unwilling
to drastically alter its processes to accommodate perhaps a relatively
small amount of material from a resource recovery process.
It would be helpful to have product samples from other recovery
plants to show to prospective buyers. The seller should keep in mind,
however, that essentially a specification, not a product, is being sold.
The specification designates the form and composition of the product as
the basis for a acceptance or rejection. Sale to a specification means
that failure to meet it results in downgrading of price by the buyer, or
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rejection of shipments. It is critical that the seller understand this.
A bid to a specification is of no value if a product cannot be produced
to meet the specification.
It is likely that the prospective buyer is unfamiliar with recovered
materials and may be somewhat uncertain of its performance. The prospective
seller should familiarize the buyer with the specification developments
underway by consensus standard writing organizations such as ASTM,
industry associations, or other individual firms, and provide product
samples when possible. These specifications are discussed earlier in
this document.
Letter of Intent
The Letter of Intent (LOI) is the instrument negotiated between the
seller and the potential purchaser of recovered materials. The LOI
is the culmination of the market survey, the financial underpinning to
the resource recovery plant, and the precursor to orders.
Terms and Conditions
The fundamental terms and conditions of an advance commitment to be
included in the LOI are length of commitment, quantity of material,
quality, delivery schedule, termination and price (which will be discussed
separately). The LOI may be worded as an intent to issue a purchase
order to the resource recovery plant subject to the terms and conditions
in the LOI and is usually included in the buyer's purchase orders.
The length of commitment ought to be related to the financing term
of the resource recovery plant. It is highly unlikely, and even unreasonable,
to expect the advance commitment to be for the full financing term,
which will be 10 or more years. However, both objectives may be fulfilled
if the commitment were for the first five operating years of the facility.
Because of the length of time needed to plan and construct a recovery
plant, this may translate to eight or nine calendar years, a long commitment.
The quantity of material to be sold should be specified in the LOI.
Because of the uncertainty in the composition of the waste, the quantity
of recovered material to be delivered may be expressed as a range for
the first year, subject to adjustment within this range after the first
year.
The quality of the material to be delivered is delineated by a specifi-
cation which becomes part of the LOI. Furthermore, the LOI should
address who will be responsible for the accompanying quality control
program as well as the basis for rejection of downgrading.
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Guarantee delivery of a specified quantity and time schedule should
be made by the facility operators if they are to service the customers
(buyers). The operator may not divert deliveries to "spot" markets,
even at higher prices except insofar as this may be provided for in the
letter.
The delivery schedule should be expressed in quantity per day, week
or month and method of delivery stating form of transportation and
minimum shipments. This is essential information for planning the
storage facilities, shipping dock and railroad siding at the resource
recovery plant.
Pricing Arrangement
There are several ways the price paid for the recovered material
can be established and expressed in the LOI. It can be based on a fixed
price, commodity quote or the same price as being paid for a comparable
material. Whichever of these pricing structures is used, every effort
should be made to include a minimum, (floor) price which is an essential
feature for preparing a reliable financial forecast.
A fixed price states merely that the price paid per ton will be the
stated figure, which may change at a later date (say after the first
year) according to a specified formula, but is guaranteed not to fall
beneath a floor price. This is a useful method of pricing materials
that are not directly comparable to a standard scrap grade. It has been
used for glass and aluminum and is easily combined with a floor price.
For example, the LOI may state, "the price paid for the recovered aluminum
the first year shall be 15tf per lb., changing thereafter to be 80 percent
of smelter's old sheet (as quoted in some standard periodical) but not
to be less than 8<£ per lb." There are no comparable scrap quotes for
glass; its price may be set at, say $17 per ton, renegotiate annually,
upwards only.
Price for some recovered products, steel and paper in particular,
may be tied to scrap quotes. For example, scrap cans may be purchased
for some percentage of a No.1 or No. 2 bundle price as quoted in a
standard periodical for the steel scrap industry for some city. (Scrap
quotes are for particular markets around the country.) Some of the
benefits (if the price increases) may be traded for some of the risks
(if the price decreases). This is applicable in the case of the floor
price. For example, the seller may have to choose between accepting a
price of No. 2 bundles and a fraction of No. 2 bundles (say 65 percnet)
with a $20 per ton floor price (or other figure). The choice is judgmental
but highly influenced by the necessity to minimize downside risk as a
requirement of the budget process. In the latter pricing arrangement,
the argument is that the buyer is entitled to the 35 percent (or other)
discount in exchange for offering a reasonably high guaranteed floor
price. The floor price helps to control downside risk for the producer.
Therefore, in such cases, during times of high prices the buyer benefits
with a lower priced source of materials. During times of low prices,
seller benefits by having a guaranteed buyer.
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A third pricing arrangement pegs the price the buyer pays to what
is paid for a similar grade to another supplier. This is a useful
arrangement at times when the buyer has no historical pattern related to
a commodity quote or the recovered product is a small amount of the
total raw material purchased. This sort of arrangement has been used
for old newsprint when the purchasing mill and their largest supplier
were not in an area covered by one of the standard quoting services.
Presumably, it can be the basis for determining market prices for glass
cullet where the price paid for the cullet is determined by the cost of
equivalent raw material (predominantly sand and soda ash).
Private vs. Public Ownership
The discussion of terms, conditions and pricing is generally applicable
whether the resource recovery facility is to be privately or municipally
owned—with the exception that if private, the potential owners have the
right to negotiate their own arrangements and prices.
If the resource recovery plant is to be publicly owned, the dicta
of open government and fairness generally requires that all responsible
and responsive bidders have an opportunity to bid for the recovered
material. The challenge, then, is how to secure the LOI as an advance
commitment while still preserving public bidding rights. An innovative
solution, used by the Metropolitan Washington Council of Government,
Allegheny County, Pennsylvania, and the Tennessee Valley Authority was
to negotiate a Letter of Intent to Bid (as distinguished from a Letter
of Intent to Buy). The sample LOI appended here is structured in this
way.
In signing an LOI to Bid, the potential purchaser essentially
agrees to submit a response to an invitation to bid for the purchase of
recovered material some time in the future. The LOI to Bid covers all
of the necessary terms and conditions and the price structure. The
potential bidder further agrees that the bid will not be less than a
stated price. This minimum stated price can then be used for financial
planning, the same as with an LOI to Buy. The bidder may increase this
price at his option when responding to the final invitation to bid.
There are two cautions in dealing with an LOI to Bid. One is that
prior to final bid opening, the exact prices in the LOI's should be kept
confidential because knowledge of any one firm's price could be used to
advantage by a competitor. This confidentiality may be arranged through
a consultant or other trustworthy third party. The second caution is
that the legality of this approach has not been tested. However, it
seems reasonable and fair hence at least within the spirit of public bid
laws.
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Cancelling the LOI
Municipal planning for resource recovery is a lengthy process,
having taken three years or longer in many communities. Even after this
length of time, a resource recovery system may not be implemented. It is
not fair to ask a potential buyer to maintain a commitment this long
unless there is a reasonable chance of success that plans will be implemented,
A potential buyer's commitment is his plan to use a certain amount of
recovered material at the exclusion of making other commitments elsewhere.
A fair approach is to have a statement in the LOI (whether to Bid
or Buy) terminating the commitment unless the municipality has demonstrated
substantial progress toward implementation by a specified date, subject
to renewal. Substantial progress may be completion of a planning document,
issuance of a request for proposals, or similar event.
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APPENDIX I
HOW TO CALCULATE WASTEBURNING CAPACITIES
As an aid for rapid calculations concerning boiler capacities and
their potential for burning solid waste, a nomograph (Figure 2) was
developed.
The nomograph shows the relationship among four variables: (1) the
capacity of the boiler, in megawatts (MW); (2) the load factor of the
boiler, as a percent of time; (3) the heat rate (or efficiency) of the
boiler, in terms of Btu per kilowatt hour (KWH); (4) the tons of solid
waste that can be burned in the boiler each working day, assuming that waste-
fuel replaces 10 percent of the fossil fuel input and assuming a 5-
day work week for waste collection and handling. For any problem, three
of the variables must be defined to calculate the fourth. When more
than one of the variables are unknown, typical values for some of these
can be used to make rough estimates of the remaining unknowns. For
example, given only the boiler capacity and load factor to determine the
waste burning capacity, one could use a typical plant heat rate of say,
11,000 or 12,000 Btu/KWH.
An example calcualtion is given on the nomograph itself:
Q, How much refuse could be burned each day of the week in a
200 MW boiler with a load factor of 60 percent and a heat
rate of 11,300 Btu/KWH?
A. 500 tons/day.
The advantage of a nomograph is its complete flexibility to allow
quick calcualtions to be made for any boiler or plant combinations. In
addition, although the calculation would no doubt usually be done to
determine the amount of refuse a boiler could burn, given its capacity,
load factor, and heat rate, the "reverse" calculation may be useful to a
municipality. For example, what is the size of a generating plant that
could be expected to process all the refuse generated in the municipality,
given the quantity as 300 tons of refuse per day, a typical plant heat
rate of say 11,000 Btu/lb., and a typical load factor of say 50 percent?
The answer is 146 MW.
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DEVELOPMENT OF THE NOMOGRAPH
The nomograph is based on the following steps:
A. Define MW as unit (plant or boiler) capacity, in megawatts;
define PC as the unit load factor, in percent;
define H as the unit heat rate, in Btu/Kwh
B. The unit daily energy requirement is (1,000 x MW x £C_ x H x 24) Btu/day
100
C. Assume the refuse-burning capability of the unit is 10 percent
of the total fuel being fired. The energy to be supplied by refuse
is thus (4 x MW x PC x H) Btu/day.
D. Assuming a heating value for refuse of 4,500 Btu/lb, the energy
is equivalent to:
24 x MW x PC x H tons of refuse per day
4,500 x 2,000
E. The above quantity is essentially a "year-round" daily figure,
provided the average load factor for a long period time is
used. The equivalent quantity of refuse (R) to be transported
to a plant or boiler on a "5 working days per week" basis is
therefore found:
R= 24 x MW x PC x H x 1__ = (3.733 x 10-6) MW x PC x H
4,500 x 2,000 5
Tons of refuse/working day
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APPENDIX 2
ADVANCE LETTER OF INTENT TO BID FOR THE PURCHASE OF RECOVERED PRODUCTS
Whereas, the Corporation (hereinafter called
the CORPORATION) endorses resource recovery from municipal solid waste
as a means toward a cleaner environment and preservation of natural
resources, and
Whereas, the CORPORATION recognizes the need to develop firm expressions
of intent to purchase materials or energy products recovered from waste
within known financial parameters a& part of the planning process for a
new endeavor such as this, and
Whereas, (hereinafter
called the DEVELOPMENT AGENCY, is evaluating the prospects of substituting
resource recovery for its traditional means of solid waste disposal, and
Whereas, the DEVELOPMENT AGENCY recognizes the need to establish
financial data for the determination of the economic feasibility of
processing up to tons per day of municipal solid waste to
produce up to tons per day of (hereinafter
known as the PRODUCT) in a form usable and acceptable to the CORPORATION
according to the Specifications attached to this Agreement and made part
hereof.
(a) It will be a firm bid for five (5) years offering an Exchange
Price either fixed or related to a commodity quote, and if
the Exchange Price is not fixed, it will offer a Floor Price
which will not fall during the term of the contract.
(b-1) If the Exchange Price to be paid by the CORPORATION is to be
a fixed dollar amount per unit of product, f.o.b. the recovery
facility (or the CORPORATION'S plant - choose one), the
bid shall not be less than per ton.
OR
(b-2) If the Exchange Price is to be based on a commodity quote,
the monthly Exchange Price shall relate to the quotation at
the close of that month for (the same or
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the appropriate analogous commodity and location) as published
in the last issue of that month of (fill in source of
quote) using the (mid-range or highside, or lowside choose one)
of the quote, f.o.b. the recovery facility (or the CORPORATION'S
plant - choose one).
If the Exchange Price is to be bid in terms of a percentage of
the quoted price, the Exchange Price shall not be bid at less
than percentage of appropriate quote as defined above.
(Fill in percentage).
(c) If the Exchange Price is not fixed, a Floor Price will be
bid which will not be below $ per ton f.o.b. (fill in
dollar amount) the recovery facility (or CORPORATION'S plant -
choose one).
(d) The CORPORATION shall retain the right to reject any material
delivered which does not meet Specifications. Such rejection
will be at the expense of the resource recovery plant.
(e) The bid will be subject to force majeur.
(f) It will be noted the Additional Conditions of the CORPORATIONS
covering general terms and conditions of purchase, acceptance
delivery, arbitration, weights, and downgrading not explicitly
covered in this Letter of Intent or by reference, will be
negotiated according to good business practices and include
such additional conditions as are attached to this Agreement
and made a part hereof.
(g) This Advance Letter of Intent to bid is null and void if during
the period between its execution and the actual bid or negotiated
contract the CORPORATION'S plant ceases operation or no longer
has a use for this or equivalent grade of recovered PRODUCT.
The DEVELOPMENT AGENCY shall further recognize that a clause
similar to this shall be incorporated in the actual bid when
made or contract when signed.
(h) This Advance Letter of Intent may be assigned by the DEVELOPMENT
AGENCY.
THEREFORE, in consideration of the fact that the legal authority to
sell recovered products may rest upon a requirement to advertise for the
purchase of such products, it is mutually agreed between the CORPORATION
and the DEVELOPMENT AGENCY that:
I. The CORPORATION, as an expression of its support of the municipal
solid waste recovery program, agrees to:
(1) offer herein a firm commitment to bid for the purchase of the
recovered PRODUCT at prices not less than those entered
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here should the DEVELOPMENT AGENCY be required or decide to
effect a competitive procurement, and
(2) agree that if public bidding is not necessary and not the course
chosed by the DEVELOPMENT AGENCY then the conditions of this
Letter of Intent may be considered as a bona fide offer to
purchase the recovered PRODUCT at prices not less than those
recovered here.
(3) respond should a bid be required with a bona fide offer to
purchase which will include the following:
II. The DEVELOPMENT AGENCY agrees:
(1) to see that the recovery plant establishes specification
assurance procedures for the recovered PRODUCT, using good
industrial quality control practices in recognition of the
CORPORATION'S Use technology as practices in their
plant, so as to produce and offer the recovered PRODUCT for
sale in a form and to the required Specification, useable in
the plant with minimum alterations to present processing
technology and buisiness practices, and
(2) to require, should a contract be effected as a result of the
Advance Letter of Intent, that the PRODUCE be delivered
to the CORPORATION according to conditions and prices determined
herein and not diverted to a spot market which may on occasion
be higher than the Exchange Price determined by the pricing
relationship set forth here or as modified by the Contract.
(3) that should the CORPORATION'S plant, as specified herein,
become saturated in its ability to handle the recovered
PRODUCT as a result of other Letters of Intent issued by
the CORPORATION being converted into firm contracts for
delivery and purchase prior to effecting such arrangements
as a result of this commitment, the provisions of this
Advance Letter of Intent become null and void.
The CORPORATION will communicate to the DEVELOPMENT AGENCY that
information about its use technology and business practices which the
CORPORATION at its sole discretion shall consider necessary so as to
assure receipt of the recovered material in form and cleanliness
necessary for use by the CORPORATION. Such communication shall be on
a nonconfidential basis, unless otherwise subject to a confidentiality
agreement.
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This Advance Letter of Intent shall become null and void on
unless effected into a contractual relationship or mutually
extended by both the CORPORATION and DEVELOPMENT AGENCY.
Witnessed by: DEVELOPMENT AGENCY
By:
CORPORATION
Witnessed by:
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REFERENCES
1. U.S. Environmental Protection Agency, Office of Solid Waste
Management Programs. Resource recovery and waste reduction;
third report to Congress. Environmental Protection Publication
SW-161. Washington, U.S. Government Printing Office, 1975.
96 p.
2. Desy, D. H. Iron and steel scrap; preprint from the 1973 bureau
of Mines mineral yearbook. Washington, U.S. Government Printing
Office, 1973. 13 p.
3. Howard, S. E. Locations of markets for recovered materials.
Washington, U.S. Environmental Protection Agency. (In preparation).
4. Darnay, A., and W. E. Franklin. Salvage markets for materials
in solid wastes. Environmental Protection Publication SW-29c.
Washington, U.S. Government Printing Office, 1972. 187 p.
5. Identification of opportunities for increased recycling of ferrous
solid waste. W. J. Regan, R. W. James, and T. J. McLeer. U.S.
Environmental Protection Agency, 1972. 391 p. (Distributed by
National Technical Information Service, Springfield, Va., as PB-213 577).
6. Alter, H. and W. R. Reeves. Specifications for materials recovered
from municipal refuse. Cincinnati, U.S. Environmental Protection
Agency, National Environmental Research Center, May 1975. 110 p.
(Distributed by National Technical Information Service, Springfield,
Va., as PB-242 540).
7. SCS Engineers. Analysis of source separate collection of recyclable
solid waste; collection center studies. (V.I.) Environmental
Protection Publication SW-95c.2. U.S. Environmental Protection
Agency, 1974. (75 p.) (Distributed by National Technical
Information Service, Springfield, Va., as PB-239 776).
SCS Engineers. Analysis of source separate collection of recyclable
solid waste; separate collection studies. (V.II.) Environmental
Protection Publication SW-95c.l. U.S. ENvironmental Protection Agency,
1974. (157 p.) (Distributed by National Technical Information
Service, Springfield, Va., as PB-239 775.)
8. Hansen, P. Residential paper recovery; a municipal implementation guide.
Environmental Protection Publication SW-155. (Washington), U.S.
Environmental Protection Agency, 1975. 26 p.
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9. Lingle, S. Separating paper at the waste source for recycling.
Environmental Protection Publication SW-128. Washington, U.S.
Government Printing Office, 1974. 16 p.
10. Lingle, S. A. Paper recycling in the United States. Waste Age,
5(8):6-8,10, Nov. 1974.
11. Paper stock standards and practices. Circular PS-74. New York
Paper Stock Institute of America, January 1, 1974. 8 p.
12. Tunnah, B. G., A. Hakki, and R. J. Leonard (Gordian Associates, Inc.)
Where the boilers are; a survey of electric utility boilers
with potential capacity for burning solid waste as fuel.
Environmental Protection Publication SW-88c. U.S. Environmental
Protection Agency, 1974. 329 p. (Distributed by National Technical
Information Service, Springfield, Va., as PB-239 392.)
yollSOg
U. S. GOVERNMENT PRINTING OFFICE • 1976—625-495/423
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