THE IMPACTS OF LEAD INDUSTRY
ECONOMICS AND HAZARDOUS WASTE
REGULATIONS ON LEAD-ACID
BATTERY RECYCLING:
REVISION AND UPDATE
Prepared for
Office of Policy Analysis
Environmental Protection Agency
Prepared by
Putnam, Hayes & Bartlett, Inc.
124 Mt. Auburn Street
Cambridge, Massachusetts 02138
September 1987
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EXECUTIVE SUMMARY 1
INTRODUCTION . 4
I. ECONOMICS OF THE BATTERY RECYCLING PROCESS 5
Secondary Lead Production 5
Battery Recycling Chain 5
II. LEAD INDUSTRY ECONOMICS 9
Demand 9
Supply 10
Prices 13
III. ENVIRONMENTAL REGULATIONS AFFECTING THE SECONDARY LEAD
INDUSTRY 16
Clean Air Act 16
Clean Water Act 16
OSHA 16
RCRA 17
Compliance Costs 17
Secondary Smelter Closures 18
IV. CALCULATION OF BATTERY RECYCLING RATES (1960-1985) 22
Battery Recycling Rate Calculation 22
Battery Recycling Rate Results 22
Effect of Lead Prices on Recycling Rates 25
Uncertainty about Input Assumptions 28
V. IMPACT OF ENVIRONMENTAL REGULATIONS ON BATTERY RECYCLING ... 30
Superfund Liability 30
Concerns about RCRA 31
VI. REGIONAL CONCERNS ABOUT BATTERY RECYCLING 32
Domestic Recycling Activity 32
Export of Lead Scrap 32
Summary 33
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TABLE OF CONTENTS (Continued)
Page
VII. STATE REGULATORY ACTIONS 34
California 34
Minnesota 35
Rhode Island 35
Observations about State Efforts 35
VIII. CONCLUSIONS AND RECOMMENDATIONS 37
Appendix A:
GUIDE TO THE CALCULATION OF BATTERY RECYCLING RATES
Appendix B
DATA TABLE TO ACCOMPANY FIGURES
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EXECUTIVE SUMMARY
This report presents the results of a follow-up study to Putnam, Hayes &
Bartlett's June 1986 study for the EPA entitled The Impacts of Lead Industry
Economics on Battery Recycling.*' In the present study, we review the trends in lead-
acid battery recycling over two and one-half decades. We also investigate a number of
issues that directly influence lead-acid battery recycling rates such as lead industry
economics and environmental regulations pertaining to spent lead-acid batteries.
The primary conclusions of this study are the following:
• Between 1960 and 1985, lead-acid battery recycling rates were extremely
volatile. Responding to a rapid increase in lead prices, they reached an all-
time high in 1965 of 97 percent. They exhibited gradual declines through
the early 1970s and gradual increases during the late 1970s, averaging
approximately 72 percent, until reaching a second major peak in 1980 at 83
percent. Between 1980 and 1983, recycling rates fell rapidly to an all-time
low in 1983 of 61 percent. By 1985, recycling rates had recovered to levels
near 70 percent.
• Despite the recent recovery of recycling rates to levels that are only
slightly lower than historical levels, there is reason to be concerned about
the future. There has been a clear downward trend in recycling rates since
1960. Recycling rates averaged 80 percent during the 1960s. During the
1970s, the average recycling rate declined to 72 percent. Between 1981 and
1985, the average rate was 69 percent.
• Correspondingly, the number of batteries exiting the recycling chain has
increased at an average annual rate of 6 percent from an average of 8
million batteries per year in the 1960s to more than 20 million batteries per
year in the middle 1980s.
• Long periods of depressed le?.d prices and increasingly stringent environmen-
tal regulations caused contractions in the secondary lead industry in the
early 1980s. The loss of secondary smelting capacity in some areas of the
country, particularly the Pacific Northwest, has led to battery recycling
problems in certain regions.
• In response to growing awareness about the importance of battery recycling,
several states have taken regulatory actions that specifically address lead-
acid battery recycling. Some actions are aimed at reducing the number of
batteries exiting the recycling chain, while others are aimed at ensuring that
existing recycling activities are conducted in an environmentally sound
manner.
1 Prepared for the Office of Policy Analysis, 13 June 1986.
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• There is evidence that the ability of the lead recycling industry to collect
spent batteries has been hampered by a loss of many members of the battery
recycling chain. For example, the fear of environmental regulations (and
Superfund liability in particular) among scrap dealers and smelters has caused
an exodus that may not be reversed even with the higher lead prices evident
since the end of 1986. This exemplifies the potential of current and future
environmental regulations to adversely affect recycling efforts.
In summation, our analysis indicates a trend over time to lower levels of battery
recycling. The low lead prices in the 1980s, coupled with a number of government
regulations, caused recycling rates to drop sharply before the recycling industry was
able to respond to numerous challenges and bring rates back near to historical levels.
The recent increases in lead prices from levels of about 20 cents per pound to levels
of about 40 cents per pound have probably stimulated recycling efforts in the short
run. However, the data needed to assess the impact of the price increases are not yet
available and there is anecdotal evidence to indicate that structural changes in the
recycling industry brought about by a combination of economic and regulatory factors
are limiting the ability of the recycling chain to respond to higher prices. The
impact of these structural changes is particularly acute in certain regions of the
country where regional secondary smelters have closed.
The general trend toward lower recycling rates, the existence of certain regional
problems, and the significant changes in the structure of the recycling chain that have
occurred in the 1980s all suggest that the EPA should continue to monitor the status
of lead-acid battery recycling. In particular, the EPA should:
• Review data on 1987 recycling performance when it becomes available to
determine whether structural changes in the industry caused in part by EPA
regulations have reduced the ability of the recycling chain to respond to
higher prices.
• Monitor the experience of certain regions of the country such as the Pacific
Northwest to see if reduced recycling rates are leading to environmental
problems.
• Review the experience of states that have implemented independent
regulations to control battery recycling to see if environmental impacts are
positive or negative.
These activities should enable the EPA to determine whether reduced recycling
could be leading to environmental impacts sufficient to warrant government attention
and to identify regulatory activities that could be exacerbating or reducing problems.
To the extent that activities in certain states are effective in addressing battery
disposal problems, the EPA can serve as a useful clearinghouse of information for
other states that may seek ideas. To the extent that the cause of any problems is
federal regulations, the EPA should identify such cases and consider whether regulatory
revisions are appropriate. Lead-acid batteries clearly have the potential to create
environmental harm. Consequently, environmental regulations that govern the handling
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of spent batteries are appropriate. However, the lead-acid battery recycling chain
serves an important environmental function in preventing the improper disposal of a
hazardous material. It is important that the EPA understand the impact of the regu-
lations on the recycling chain so that well-intended regulations do not inadvertently
increase environmental problems by hampering the lead-acid battery recycling process.
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INTRODUCTION
In June 1986, Putnam, Hayes & Bartlett, Inc. (PHB), published a report for the
Office of Policy Analysis (OPA) at the EPA entitled The Impacts of Lead Industry
Economics on Battery Recycling.' The primary conclusion was that a combination of
low lead prices and stringent environmental regulations had led to significant declines
in lead-acid battery recycling rates since the early 1980s.
In response to growing concern about battery recycling in the secondary lead
industry, the OPA asked PHB to investigate more closely a number of factors that
influence battery recycling rates and update the recycling rate calculation based on
recent trends in lead industry economics. In addition, we focused our analysis on the
regional effects of battery recycling and on the extent to which any states had taken
specific regulatory or other actions directed at scrap battery collection.
This report presents the results of the study and is divided into eight sections.
The first section reviews the fundamentals of the secondary lead industry and
emphasizes the importance of a functioning battery recycling chain for its survival.
The second section presents an overview of the economics of the lead industry,
focusing on supply, demand, and prices of lead on world markets. The key environ-
mental regulations affecting participants in the recycling chain are identified in the
third section. The fourth section presents the results of the battery recycling rate
calculations for the period 1960 to 1985. In the fifth section, we discuss in some
detail the impact of two key environmental regulations on the members of the battery
recycling chain including smelters, scrap dealers, and service stations.
The analysis outlined above is based on nationwide aggregate data and is aimed at
a study of the scrap battery mass balance from a national perspective. However, we
feel it is equally important to give attention to the regional problems that might have
arisen in those areas hardest hit by the variable economics of the secondary lead
industry. For this reason, the sixth and seventh sections focus on regional concerns
(particularly in the Pacific Northwest) and on the regulatory actions that certain states
have taken to address battery recycling. Finally, the conclusions are presented in the
last section.
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I. ECONOMICS OF THE BATTERY RECYCLING PROCESS
A typical automotive lead-acid battery is made up of approximately 50 percent
lead by weight. When such a battery dies, this lead can be recycled by secondary lead
smelters. Secondary smelters, which rely on spent lead-acid batteries for the vast
majority of their raw material, are a vital component of the battery recycling chain
which brings a battery full cycle from the battery manufacturer to the consumer and
finally back to the secondary smelter for processing into usable form for further
consumption. The linkages between the secondary lead smelters and battery recycling
are explored in this section.
Secondary Lead Production
Secondary lead production is one of two sources for refined lead. Secondary lead
is produced from old and new lead scrap. New scrap is generated in the process of
refining, casting, or fabricating leaded materials. Old scrap comes from obsolete
materials. In contrast, primary lead is produced from mined lead.
In general, secondary lead production has been more volatile than primary lead
production. Because of the production processes involved, fluctuations in lead demand
affect secondary lead producers much more than primary lead producers. Secondary
lead production has declined steadily in recent years from its peak in 1979 at 803,000
metric tons to 594,000 metric tons in 1985. In 1985, secondary producers supplied 52
percent of the 1 million metric tons of lead produced in the U.S.2
For their raw material input, secondary lead producers rely principally on the 70
million automotive batteries replaced and available for recycling annually. Figure 1
shows that scrap batteries typically account for 75 percent of the raw materials
processed by secondary smelters. The remainder comes from drosses and skimmings
and other general lead scrap. This percentage has been increasing from approximately
53 percent in the early 1970s to 60 percent in 1980 to over 73 percent in 1986.
Clearly, secondary lead smelters play a pivotal role in the battery recycling process.
Battery Recycling Chain
Secondary lead producers are the final element in a well-established battery
recycling chain which has a number of paths and players. This chain is responsible for
recycling a spent battery into the raw material necessary to produce a new battery.
The time required for a battery to move through the full cycle is approximately five
years.
The recycling chain, shown in Figure 2, typically works as follows: A consumer
returns his spent battery to a battery dealer or service station, who then returns it to
a battery distributor and/or scrap dealer. It is then transported to a secondary
smelter for battery breaking and smelting. Battery breakers, which separate a battery
2Bureau of Mines, Minerals Yearbook. Lead, Table 1.
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Figure 1
SECONDARY LEAD INDUSTRY AND BATTERY PRODUCTION
Other
Scrap
25%
Secondary
Lead
Production
i
75%
Other
Lead
[Products
Lead—Acid
LJ
Battery
Production
Battery
Recycling
Battery
Scrap
Other
Disposal
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Figure 2
BATTERY RECYCLING CHAIN
Customer -
Battery
Manufacturer
V
Primary
Smelter
Secondary
Smelter
Scrap Metal
Dealer
Battery
Disposal
Service
Station
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into its component parts (e.g., plastic casing, lead plates, and sulfuric acid), were
historically independent operations. However, stringent environmental regulations and
poor lead industry economics caused most of the independents to cease operations by
1985. The vast majority of the secondary smelters are currently integrated processors
and have their own battery breaking equipment. The recycling chain is complete after
the lead from scrap batteries has been smelted and shipped to a battery manufacturer
for the production of new lead-acid batteries.
All of the participants in the recycling chain are attempting to make a profit
from their endeavors. This means that the ultimate value of the lead and other
material in the battery has to be high enough to allow all those involved in the
recycling chain to realize an adequate return for their efforts. In theory, there is a
minimum lead price that the smelter must pay for the scrap battery to cover all the
costs of recycling a battery back to the smelter. This minimum price ranges between
15 and 25 cents per pound of lead, depending mostly upon the transportation distances
required and the regulations that govern transportation of scrap batteries. This
estimate is based on battery breaking and smelting fees on the order of 11 to 15 cents,
2 to 4 cents per pound for transportation of the spent battery to the smelter, and the
remainder for storage and handling at various stages of the chain.
Based on the above, the ability to stimulate battery recycling is, at least
partially, a function of lead price. Consequently, when lead prices decline, the number
of batteries that can be recycled profitably also declines.
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II. LEAD INDUSTRY ECONOMICS
The previous section emphasized the link between lead prices and battery recy-
cling. In order to understand better the dynamics of lead prices, this section is
devoted to a general discussion of lead industry economics. Further discussion of lead
Industry economics can be found in the June 1986 PHB study, "The Impacts of Lead
Industry Economics on Battery Recycling.'
In general, the demand for lead products has been flat or declining since 1980.
In addition, primary lead mines have continued to supply lead at low prices due to low
variable costs of production and/or the revenues received from sales of co-product
metals. This combination of flat demand coupled with oversupply of lead has resulted
in relatively low lead prices since 1980. Prices have rebounded at least temporarily
during late 1986 and 1987. The factors behind these lead price movements, particularly
the trends in lead demand and supply, are reviewed briefly in this section.
Demand
The three primary end uses of lead are storage batteries, leaded gasoline, and
lead paints. In 1976, storage batteries accounted for 55 percent of the 1.35 million
metric tons of lead consumed in the United States. During the same year, leaded
gasoline and lead paints and pigments accounted for 16 percent and 7 percent of lead
demand, respectively. By 1985, storage batteries accounted for a much larger (73
percent) share of the 1.1 million metric tons of lead consumed. By contrast, the use
of lead in gasoline had declined to 4 percent of total lead consumption, and the use of
lead in paints and pigments was 6 percent of total lead demand in 1985.3
In fact, of the major end uses of lead, the storage battery industry is the only
lead-consuming industry that has experienced any growth. The two other major end
uses of lead mentioned above - lead in gasoline and lead in pigments and paints --
have experienced major declines in usage due to environmental and health regulations
in the United States. Both of these end uses are expected to be phased out completely
over the next decade. Many other end uses of lead, such as lead in typesetting and
lead foil, have been displaced by technological advances or other materials.
The only potential source of expansion in lead demand, aside from storage bat-
teries, is new technology. The full-scale usage of new applications is well into the
future; however, there is some medium-term potential for lead in certain areas of
application such as the use of load-leveling batteries for airplanes, lead in fiber optics
telecommunications lines, and lead caskets for permanent storage of high-level nuclear
waste.
Thus, at least in the near term, storage batteries represent the only major source
of continued growth for the lead industry. Its steady growth has at least partially
offset the declines in lead usage in other sectors and led to relatively constant annual
3Bureau of Mines, Minerals Yearbook. Lead, Table 12.
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demand in the United States since 1980 between 1.1 and 1.2 million metric tons of
lead. Worldwide demand for lead has also been relatively stagnant since 1980 between
3.8 and 4.0 million metric tons (see Figure 3).
Since the demand for lead is dominated by storage batteries, in order to assess
the future demand for lead we must examine recent trends in the battery market. The
SLI (starting, lighting, and ignition) automotive battery market Is typically separated
into three categories: original equipment (OE), replacement, and export. OE batteries
are used for new equipment whereas replacement batteries are used to replace spent
batteries in used equipment. The OE market is correlated with the number of new
vehicles on the road each year (15 million in 1984), and the replacement market is
correlated with the total number of vehicles on the road (150 million in 1984). Clear-
ly, the replacement market is much bigger than the OE market. In 1986, over 80
percent of total U.S. battery shipments of 74 million units (excluding exports) were
replacement batteries. Figure 4 shows that the domestic replacement market has grown
at an average annual rate of 2 percent between 1976 and 1986.
The demand for lead in batteries depends not only on the automobile market but
also potentially on battery technology. In the United States, the average battery lasts
approximately three to four years. Its exact life depends on weather conditions and on
how it is used. Battery manufacturers have made significant technological progress
that has led to longer battery lives; for example, as a result of the 'DieHard' battery,
battery life has been relatively constant at three to four years since the 1970s. The
same can be said for lead content per battery, which decreased steadily in the 1960s to
approximately 17 pounds per battery, peaked in the middle 1970s at 23 pounds
(responding to the need for heavy-duty batteries to power heavy cars), and has
declined slightly since then. In 1985, lead content per battery was calculated to be
approximately 20 pounds (see Appendix A). It is not likely that battery technology will
have much effect on battery lead content or battery life in the near future.
Based on all of these factors, battery industry specialists such as the Battery
Council International predicted in 1986 that the U.S. battery market will grow at a
rate between 1 and 2 percent per year into the early 1990s.9 Additionally, it is clear
that future growth in the lead market will continue to be dominated by the battery
market. Growth in battery sales will act to offset declines in other end uses due to
product obsolescence and environmental regulation, and will yield a relatively constant
demand for lead into the 1990s.
Supply
On the supply side, western world primary production has remained fairly stable
at approximately 2.4 million metric tons per year. In the United States, seven lead
mines in Missouri have continued to produce approximately 80 to 90 percent of U.S.
mined production and 12 percent of western world production. Unlike many mines that
4"Battery Shipment Review and Five Year Forecast," The Battery Man. January
1987, pp. 18-20.
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Figure 3
DEMAND FOR LEAD IN THE U.S. AND WESTERN WORLD
THOUSANDS OF METRIC TONS
5000
4000
3000
2000
1000
0 r-'—
I 1
1975 1977 1979 1981 1983 1985
YEAR
Source: Metallgesellschaft Aktiengesellschaft and Bureau of Mines
Western World
U.S.
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rv>
Figure 4
BATTERY SHIPMENTS 1960 - 1986
MILLIONS OF UNITS
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ORIGINAL EQUIPMENT
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Source: Battery Council International
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produce lead as a by-product or co-product, the Missouri mines are primarily lead
mines. Within this category they are among the lowest cost producers, and by virtue
of their size have a major impact on the domestic and world lead price.
The lead industry has historically been burdened with a relatively flat demand
coupled with worldwide oversupply of the metal. A major factor leading to oversupply
is the growth of lead produced in conjunction with growing metals markets such as
zinc, copper, and silver. During times of expanding markets for these metals, lead is
produced as a by-product or co-product at virtually no additional cost. This kind of
lead production put downward pressure on lead prices through the early to middle
1980s.
Since 1986, however, the dynamics of lead supply have changed. Strikes in lead
mines in the United States have kept the lead industry somewhat supply constrained.
Cominco, a major domestic .primary lead producer with over 110,000 metric tons of
capacity, suffered a shutdown due to labor strikes. In addition, a giant merger in 1986
between St. Joe Minerals and Homestake Mining Company consolidated approximately
two-thirds of U.S. lead mining capacity into the hands of Doe Run Mining Company,
which has maintained production at less than capacity levels. These events have led to
a restructuring of the primary lead industry and to a supply-constrained situation
which started in late 1986. This situation has had a major impact on lead prices.
Prices
The historical combination of stagnant lead demand and oversupply resulted in the
lead price profile shown in Figure 5. Lead prices remained relatively constant during
the 1960s and early 1970s with a slight run-up in prices in 1965. They peaked in 1979
at over 52 cents per pound, before beginning a dramatic decline to prices below 20
cents in 1985. The price profile is even more volatile when prices are adjusted for
inflation. In constant (1985) dollars, lead prices peaked at 78 cents in 1979 and
declined by more than 75 percent in only six years to 19 cents per pound in 1985.
However, since 1986, a supply-constrained situation has initiated the rapid recov-
ery in lead prices to levels above 40 cents by the middle of 1987. Mine closures,
strikes, and consolidation efforts have improved the supply/demand balance and led to
the recent price profile shown in Figure 6. However, it is not clear that price levels
in the 40 cents per pound range can be sustained in the long run unless Missouri mine
operators are able to exercise continued production restraint.
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Figure 5
U.S. PRODUCER LEAD PRICES
CENTS PER POUND
80
60
40
20 -
NOMINAL
REAL (1985 dollars)
Q I J.._l..l...l .J--U-I U I...U.J—1..4- I...I . A... L.J...
1960 1965 1970 1975
YEAR
l_ I ..1... 1.-.L-.I _I...J ,
1980 1985
Source: Bureau of Mines
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Figure 6
U.S. PRODUCER LEAD PRICES: 1986 & 1987
en
CENTS PER POUND
50
40
20
10
Jan 86 Apr Jul Oct Jan 87 Apr
Source: Metals Week
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III. ENVIRONMENTAL REGULATIONS AFFECTING THE SECONDARY LEAD INDUSTRY
The depressed lead prices during the middle 1980s have not been the only factor
to influence battery recycling. In addition, stringent environmental regulations have
increased the costs of doing business for secondary smelters and have created a
concern about liability for all the members of the recycling chain. This section
highlights the impact of these environmental regulations on the secondary lead
industry.
Since the late 1970s, secondary smelters have faced significant costs and tech-
nological challenges posed by EPA under the Clean Air Act, Clean Water Act, OSHA,
and RCRA. Each is discussed very briefly below.
Clean Air Act
The Clean Air Act (CAA), together with the National Ambient Air Quality Stan-
dards (NAAQS), promulgated lead emissions limits of 1.0 micrograms of lead per cubic
meter released into the atmosphere at the smelter fence line. This standard is to be
fully implemented by 1 January 1988.
In their 1986 study of environmental compliance costs, the Bureau of Mines
concludes that operating costs to meet the current NAAOS standard of 1.5 micrograms
per cubic meter for a typical secondary smelter are on the order of 1.2 cents per
pound of lead produced. However, compliance costs vary widely depending on factors
such as the size of the smelter, location, plant technology, and plant age.5
Clean Water Act
Beginning in 1984, the Clean Water Act governed effluent limits to 80 ppm of lead
in the water for smelters and 120 ppm for battery plants. The regulation requires that
nonferrous smelters comply with the "best available technology1 (BAT) limits by March
1987. There continues to be controversy over whether such limits are attainable with
BAT.
The Bureau's estimated CWA compliance operating costs are 0.19 to 0.75 cents per
pound of lead.
OSHA
The Occupational Safety and Health Administration (OSHA) set in-plant maximum
permissible exposure limits of 50 micrograms of lead per cubic meter in the air.
^Further discussion of the compliance cost estimates can be found in the follow-
ing Bureau of Mines 1986 report: 'Domestic Secondary Lead Industry: Production and
Regulatory Compliance Costs," Intermountain Field Operations Center, Denver,
Colorado, July 1986.
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Battery plants and secondary smelters must have met the standards by 1986. The
Bureau's estimated OSHA compliance costs are 0.65 cents per pound of lead produced.
In 1983, OSHA regulations also set a blood lead limit of 50 micrograms of lead
per 100 grams of blood to apply to all employees in the industry. Today, an employee
with a blood lead level at or above that level must be immediately removed from that
location until the blood level has been reduced to no more than 40 micrograms per 100
grams of blood. Monthly monitoring programs must also be provided. Although
estimates of the costs required to meet the blood lead standard are not available, this
standard can be a significant cost item at some smelters.
RCRA
The Resource Recovery and Conservation Act (RCRA) classifies as hazardous waste
all effluent, with lead or lead compound concentrations of 500 ppm or more, or pH
levels below 2.0. According to the Bureau of Mines, RCRA adds 0.35 to 1.6 cents per
pound of lead (depending on the smelter size) to the smelter's operating costs.
Also, as part of RCRA, effective January 1985, spent lead-acid batteries (or parts
thereof) are classified as hazardous materials. RCRA imposes costly restrictions on
owners and operators of facilities that store spent batteries before reclaiming them.
Since some secondary smelters store lead-acid batteries on site, they become land
disposal facilities and need a RCRA permit or interim status to operate. Before a
RCRA permit will be issued, the operator must be issued a Part B application (costing
$30,000 to $50,000 for an average-sized smelter), install a groundwater monitoring
system (costing $30,000), and obtain $6 million of non-sudden liability insurance. These
costs can be prohibitive, and, in the case of the liability insurance, may simply be
unavailable.
Because many smelters have been unable to meet all of these requirements by the
deadline of November 1985, many have lost their interim status. Stringent enforcement
of the provisions could force the closure of a number of smelters in the industry.
Current federal legislation exempts from RCRA those persons who generate,
transport, or collect spent batteries or persons who store spent batteries but do not
reclaim them. These exemptions apply to components of the battery chain such as
backhaulers, battery dealers or distributors, service stations, or scrap metal dealers.
Regardless of these exemptions, however, many of these businesses ceased handling
spent batteries when depressed lead prices persisted over long periods.
Compliance Costs
In total, the Bureau of Mines indicates that compliance with current
environmental regulations (including OSHA standards, environmental equipment opera-
tions and maintenance, supplemental labor costs for pollution control equipment, and
hazardous material handling costs) will raise operating and maintenance costs by about
2.3 cents per pound of lead produced.
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Recent regulatory pressures threaten to tighten the environmental pressure on
smelters even further. For example, the NAAQS will be reduced from 1.5 micrograms
of lead per cubic meter to 1.0 by January 1988. It is possible that the NAAOS will be
further reduced to 0.5 micrograms of lead per cubic meter. This alone could add .5 to
1.3 cents per pound of lead to smelter operating costs.
Secondary Smelter Closures
The combination of depressed prices and regulatory pressures has had a sig-
nificant impact on participants in the lead-acid battery recycling chain. At the end of
1980, nominal smelting capacity of domestic secondary smelters stood at approximately
1.3 million metric tons. By 1986, this capacity had shrunk by almost 40 percent to
800,000 metric tons. Roughly two-thirds of those secondary smelters operating in 1976
were closed by 1986. In addition, the long-lasting depression in lead prices resulted
in much of the industry's capacity operating under bankruptcy proceedings in 1986.
Figure 7 documents the closures of secondary smelting capacity since 1982 and Table 1
lists the operating status of domestic smelters at the end of 1986.
However, by 1986 (even before the lead price increases in late 1986) it appeared
that the contractions in the secondary lead industry were basically complete. In 1986,
the secondary smelters produced approximately 600,000 metric tons of lead.6 Since
secondary lead smelting capacity was approximately 800,000 metric tons during this
time, this means that capacity utilization rates were on the order of 75 percent. This
is a substantial increase from the 1985 utilization rate of near 60 percent. At current
utilization levels, smelters could expect to generate profits even at prices near 20
cents per pound. Therefore, absent the threat of more stringent environmental regula-
tion, most industry analysts predict that secondary smelting capacity will remain
relatively stable over the next several years. However, stringent enforcement of
current environmental regulations or new regulations could cause further contractions.
6Preliminary estimate, Mineral Industry Surveys. Lead, March 1987, and Bureau of
Mines, William Woodbury, personal communication.
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Figure 7
SECONDARY SMELTERS IN THE U.S. (AS OF APRIL 1987)
CD
OPEN
CLOSED
-------
TABLE 1
SECONDARY SMELTERS IN THE U.S. (AS OF APRIL 1987)
Company
AIco Pacific
Bergsoe-Bolinden
Bergsoe Metal
Chloride
East Penn Mfg.
Federated Metals
General Battery
General Smelting
GNB Battery
Gopher Smelting
Gulf Coast Lead
Houston Lead
Hyman Vtener
llco
Imperial Metal
Inco U.S.
Industrial Smelting
Inland Metals
Master Metals
Murmur Corp.
Nassau Recycle
National Smelting
Refined Metals
Ross Metal
Roth Brothers
RSR
Capac(ty(000 mt)
Location Ooen Closed (Datel
Gardena.1 CA 5
Muncie, IN
St Helens, OR
Seattle, WA
Tampa, FL 12
Columbus, GA 12
Florence, MS
Lyon Station, PA 15
Newark, NJ
San Francisco 10
Whiting, IN
Houston, TX
Dallas, TX 25
Reading, PA 65
Heflin, LA
Nashville, TN 10
Omaha, NE
Frisco, TX 35
Los Angeles. CA 75
Savanna, IL
Eagan, MN 15
Tampa, FL 16
Houston, TX
Richmond, VA
Leeds, AL 18
Philadelphia, PA 6
Jacksonville, FL
Detroit, Ml
Chicago, IL
Cleveland, OH 15
Dallas, TX
Slaten Island, NY 10
Gaston, SC 35
Atlanta, GA
Pedricktown, NJ
Memphis, TN 30
Beech Grove, IN 30
Rossville, TN 10
E. Syracuse, NY 5
Los Angeles, CA 42
Indianapolis, IN 45
Middletown, NY 42
20
25 (5/86)
20 (7/84)
12 (11/82)
10 (10/84)
10 (2/83)
10
13 (3/82)
25
55
15 (8/81)
12
(Ch 11)
15
4 (86)
3
(Ch 11)
60
25 (3/84)
60 (1/84)
-20-
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TABLE 1 (CONTINUED)
Company
Sanders Lead
Schuylklll
Southwest Metals
Standard Electric
Taracorp
Tonolli
U.S.S. Lead
Witlard Lead
Location
Capacity(000 mt)
Open Closed (Date)
Troy, AL 60
Cedartown, GA 10
Baton Rouge, LA 70
Mound City, MO 33
San Bemadino, CA 10
San Antonio, TX 5
McCook, IL 14
St. Louis Park, MN 18
Granite City, IL 25
Atlanta, GA 30
Nesquehoning, PA 45
E. Chicago, IN 22
Charlotte, NC 20
TOTAL CAPACITY
820
540
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IV. CALCULATION OF BATTERY RECYCLING RATES (1960-1985)
In the preceding sections, we have described how the lead industry supply and
demand balance resulted in a prolonged period of low lead prices during the 1980s. We
have also described how these low prices, coupled with significant regulatory pressures,
led to a significant decline in the number and capacity of secondary lead smelters.
Because lead-acid battery recycling requires the participation of secondary smelters and
is sensitive to the price of lead, one might suspect that the recycling rate would have
fallen sharply during the 1980s and potentially created a problem of improper disposal
of lead-acid battery waste.
To investigate whether a significant decline in recycling has occurred, we have
estimated recycling rates over a 25-year period from 1960 to 1985. A comparison of
current rates to historical rates can help indicate the extent to which recent smelter
closures or low lead prices have resulted in a significant disposal problem.
Battery Recycling Rate Calculation
In this section we describe the mechanics of the battery recycling calculation
that quantifies the trends in lead-acid battery recycling in the United States. Our
approach is based on the concept of mass balance (see Figure 8). On one side of the
equation, we consider the generation of battery scrap, that is, the amount of lead
scrap that is generated annually from spent batteries, decommissioned vehicles, and
battery scrap imports. On the other side, we consider the consumption of battery
scrap, that is, the amount of battery scrap that is consumed annually by secondary
smelters, scrap exports, and scrap inventories.
The recycling rate is then calculated by expressing the consumption of battery
scrap as a percentage of the total battery scrap generated. The difference between
the amount of battery scrap generated and consumed is the amount of lead that is
unaccounted for and exiting the recycling chain annually.
In Appendix A, each component of the recycling rate calculation is described
separately.
Battery Recycling Rate Results
The results of the battery recycling rate calculation for the period 1960 to 1985
are shown in Figure 9. The figure shows that recycling rates have fluctuated during
this time between a high of 97 percent in 1965 to a low of 61 percent in 1983. In
recent years, recycling rates declined very sharply from a 1980 peak above 83 percent
to the historical low in 1983. Since 1983, however, recycling rates have recovered to
levels around 70 percent (by 1985). The 1985 level is not significantly below historical
levels, which averaged approximately 75 percent.
The rebound in recycling rates starting in 1983 demonstrates the ability of the
secondary industry to respond and adjust to some significant changes in the business
environment. During this time, many components of the battery recycling chain were
-22-
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Figure 8
SCRAP BATTERY MASS BALANCE
ro
BATTERIES FROM
DEREGISTERED VEHICLES j
i
i
BATTERIES REPLACED !
SCRAP BATTERY IMPORTS
SCRAP
BATTERY
STOCK
LEAD CONTENT PER BATTERY
SCRAP BATTERIES RECYCLED
BY DOMESTIC SMELTERS
I SCRAP BATTERY IMPORTS
h- i
SCRAP BATTERY
INVENTORIES
SCRAP BATTERIES
EXITING THE
RECYCLING CHAIN
-------
Figure 9
BATTERY RECYCLING RATES: 1960 - 1985
80
70
60 \
L
i
l..j..i j_j -i.. i...i j. i.. i ..i. i i .i i.-.i . i ii ii i.i.i i_ j
1960 1965 1970 1975 1980 1985
YEAR
-------
consolidated: some secondary smelters and most independent battery breakers closed
and many scrap dealers and service stations stopped handling batteries altogether.
Those who did stay in business were able to expand their collection network and
absorb much of the surplus. It is too early to tell whether or not these improve-
ments can be sustained in the long term.
Despite the year-to-year fluctuations and the improvements since 1983, Figure 9
also shows a steady downward trend in recycling rates since the 1960s. Recycling
rates averaged 80 percent during the 1960s. During the 1970s, the average recycling
rate declined to 72 percent. Between 1981 and 1985, the average rate was 69 percent.
We can also consider the trends in the absolute number of batteries exiting the
recycling chain over time. Because of steady growth in battery sales, a decrease in
recycling rates over time can be translated into an increase in the number of batteries
exiting the recycling chain. Note that because of the growth of the battery industry,
even constant recycling rates over time would mean that increasing numbers of bat-
teries were exiting the recycling chain. While recycling rates in the mid-1980s are
only slightly lower than historical rates in the 1960s and 1970s, we note that the
number of batteries that are not being recycled continues to increase (see Figure 10).
Between 1960 and 1985, the number of batteries not being recycled increased at an
average annual rate of approximately 6 percent. In 1960, there were approximately 5
million batteries (44,000 metric tons of lead) unaccounted for. In 1969, there were 14
million batteries (or 105,000 metric tons of lead) not being recycled. By 1985, the gap
between the batteries available for recycling and those actually recycled had widened
to 22 million batteries (190,000 metric tons of lead).
To summarize, our calculations show a volatile, but downward, trend in battery
recycling rates since 1960 and a general increase in the number of batteries that are
not recycled every year. Recycling rates hit an all-time low in 1983 at 61 percent
with 26 million batteries not collected. Since that time, recycling rates have rebound-
ed (at least temporarily) to levels that are not significantly lower than historical
levels. Despite the rebound in recycling rates, the number of batteries exiting the
recycling chain has remained high at over 20 million batteries per year since 1982.
Effect of Lead Prices on Recycling Rates
As expected, fluctuations in recycling rates can be at least partially explained by
fluctuations in lead prices. Figure 11 shows recycling rates and lead prices (with
different unit scales) on the same graph. As shown in the figure, the lead industry
experienced a significant rise in lead prices during the middle 1960s, reaching a peak
price of 55 cents (in 1985 dollars) in 1965. The declines in recycling rates between
1965 and 1973 correspond to periods of relatively low lead prices, preceding another
price increase in 1974. Yet another price increase between 1979 to 1980 also con-
tributed to increases in recycling during that time.
It is particularly interesting to analyze the linkage between lead prices and
recycling rates over time. A changing business environment might have led to a
change in the secondary lead industry's ability to respond to changes in lead prices.
-25-
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Figure 10
NUMBER OF BATTERIES EXITING THE RECYCLING CHAIN
MILLIONS OF BATTERIES
30 r
25 i
Q I...I...I X .1.-I..I-I -J--I...I—I . 1... I...I l-.l-I ..I. 1 .1. I .J...I L..I I-
1960 1965 1970 1975 1980 1985
YEAR
-------
Figure 11
BATTERY RECYCLING RATES AND LEAD PRICES
CENTS PER POUND
- 60
70 1-
60 L
80
Recycling Rate
— Lead Price
- 40
-L 20
50
1960 1965
..L. 1.-L.
1970
.1-. i.-.j
1975
0
1980 1985
YEAR
-------
To test this theory, we performed a relatively straightforward statistical test to
analyze the correlation between lead prices and recycling rates over time. Regressions
between lead prices and recycling rates were performed over multiple periods. During
the 1960-1970 period, approximately 50 percent of the variation in recycling rates could
be explained by changes In lead prices. In contrast, during the 1970s and 1980s, less
than 40 percent of the variation in recycling rates could be explained by changes in
lead prices. Furthermore, the coefficient on lead prices in the regression using data
of the 1970s and 1980s was only one-fifth as large as that of the regression for the
earlier period. This indicates that recycling rates are less responsive to lead prices in
the late 1970s and 1980s than they were in the 1960s and early 1970s.7
One possible reason for the damping effect over time is increasing environmental
pressures and the threat of Superfund liability in particular. Fear of government
regulation may simply prevent certain members of the chain from ever becoming
involved in battery recycling again, regardless of the lead price and potential profits
involved. Unfortunately, 1986 and partial 1987 data are unavailable to track the
response of recycling rates to the rapidly increasing lead prices which occurred during
early 1987. This is a key relationship to watch in the future.
Uncertainty about Input Assumptions
Before ending the discussion of battery recycling rates, it is important to note
that many of the assumptions made in the calculation are subject to uncertainty. The
recycling rate calculations only represent single point estimates around which the
actual rates lie. In many cases, the data needed to perform the calculation exactly
were unavailable and assumptions or approximations for such inputs as the lead content
per battery, import levels of new replacement batteries, and inventory levels of scrap
batteries at the smelters yards were required.
In addition, even the 'hard* data are subject to revision. For example, in late
1986, the Bureau of Mines statistics on the amount of lead actually recovered by
secondary smelters in 1984 and 1985 were significantly revised upward by 10 and 18
percent, respectively. As a result of these changes alone, battery recycling rates in
those years increased by 5 and 11 percentage points. Thir is the primary reason that
the 1984 and 1985 recycling rates calculated in this stuc'y jre significantly higher than
the 60 percent levels reported in the June 1986 study.
While the recycling rates results are subject to uncertainty, the assumptions
made about the key input variables affect all years' recycling rates approximately
equally. As a result, we believe that the relative variations in year-to-year rates are
robust, even if the actual levels may be slightly above or below the estimates
presented here.
7A statistical test which relied on the construction of an F-distribution indicated
with 95 percent confidence that the relationships between lead prices and recycling
rates during the two periods were different from one another.
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The reader who is interested in more details about the assumptions made in the
calculation is again referred to Appendix A for a detailed discussion.
•29-
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V. IMPACT OF ENVIRONMENTAL REGULATIONS ON BATTERY RECYCLING
We have seen in an earlier section that environmental regulations have imposed
significant compliance costs on members of the battery recycling chain. In addition,
environmental regulations have created concern and fear on the part of some recyclers
about their potential long-term liability at a waste disposal facility. CERCLA and
RCRA regulations in particular are having significant impacts on the recycling chain,
which are discussed in this section.
Superfund Liability
Recycling industry participants are still facing a host of complex regulations that
threaten the recycling chain. These government regulations are viewed as a major
threat by many scrap dealers. The primary concern cited by a number of scrap
dealers interviewed for this study was Superfund liability. Recyclers are fearful that
they will be liable for damages stemming from an association with a facility that
ultimately becomes a hazardous waste site.
This fear is not entirely unsupported. For example, in a battery site in Alaska
(Alaska Husky Battery), environmental officials have recently measured lead levels as
high as 74,000 parts per million (7.4 percent) in the soils. For comparison, levels
near 1,000-3,000 ppm are considered the safe limit. In addition, the municipal sewer
system in the town has been damaged by the dumping of sulfuric acid from these scrap
batteries. The future of the site and the ultimate involvement of the EPA are uncer-
tain, but it is clear that some remedial action must be taken to clean up the site. The
question of who is liable still looms as a major unresolved issue.8
Such concerns have also led the metal scrap industry's largest trade association,
the Institute of Scrap Iron and Steel (ISIS), to issue a warning to its members about
accepting any material that 'poses a potential risk to their businesses." At the
association's annual convention in January 1987, the president of ISIS urged that scrap
handlers refuse to accept such material, and called environmental rules and regulations
the gravest issue facing the metal recycling industry.'9
As a result of natural tendencies toward risk averse responses, many of the
dealers who previously tolerated low margins of spent batteries to be able to provide a
complete range of services to their customers have elected to stop handling batteries
altogether. Some industry representatives believe that sources of available scrap are
drying up altogether. One smelter in the East reported that 30 percent of its suppliers
had dropped out of the scrap battery end of the business.10
8Anchorage Daily News. 7 May 1987.
9American Metals Market. 15 January 1987, p. 1.
10American Metals Market. 16 April 87, p. 9.
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Concerns about RCRA
In addition to potential Superfund liability, secondary smelters also face some
serious regulatory obstacles in the future. Along with the cost of complying with
RCRA regulations discussed in an earlier section, a primary unresolved issue has been
the inability to provide financial assurance due to the unavailability of liability in-
surance. Because most of these smelters cannot obtain liability insurance or demonstr-
ate the financial strength to provide financial assurance, they are in the precarious
position of facing the possibility of immediate closure by the EPA. There are many
smelters operating as land disposal facilities that have not yet fulfilled the insurance
and other requirements necessary to maintain interim status. Stringent enforcement
of these regulations could cause continued closures.
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VI. REGIONAL CONCERNS ABOUT BATTERY RECYCLING
In addition to the regulatory pressures that affect the industry in general, there
is some evidence that the industry consolidation that has occurred since 1982 or so has
left certain regions of the country with inadequate recycling capability (see Figure 7).
One such region is the Pacific Northwest. The closures of its only two secondary lead
smelters in 1984 and 1986 represented a loss of approximately 50,000 metric tons of
capacity. In the wake of these closures, many collection and recycling centers stopped
accepting scrap batteries from individuals. Other recyclers In the northwest responded
by transporting spent batteries to the nearest smelters in the Los Angeles area as well
as increasing scrap battery export activity. This section assesses the current situa-
tion, relying on information from interviews with members of the West Coast recycling
community, since regional data were unavailable.
Domestic Recycling Activity
Because of the closures of the Pacific Northwest smelters and the need to
transport spent batteries over long distances, one would expect that all else being
equal, recycling rates in this region would be lower than in other parts of the country.
When lead prices were near or below 20 cents, it was not economical to transport the
batteries to the LA. smelters more than one thousand miles south. For example, one
West Coast .recycler explained that his costs to deliver a spent battery to an LA.
smelter include 2-1/2 cents per pound for loading and handling and 2 to 2-1/2 cents
per pound for transportation. In 1986, smelters were typically paying 5 cents per
pound. With these economics, there was clearly little incentive to recycle from the
Pacific Northwest.
Even with higher lead prices in 1987, it was difficult to encourage the transport
of spent batteries over such a long distance. One reason is that there existed a
significant lag between the lead price increases and the prices that smelters were
paying scrap dealers for whole batteries. However, by July 1987, West Coast smelters
were typically paying 6-7 cents per pound as compared with earlier levels near 5 cents.
We would expect these Increases to again encourage an upturn in recycling activity in
this region even with long-distance transport involved.
Export of Lead Scrap
Fortunately for the Northwest, export activrty has been an additional mechanism
for relieving some of the pressure on domestic recycling. Export activity from the
ports of Seattle and Portland to destinations in the Far East did increase significantly
between 1984 and 1986. Data from the Department of Commerce indicate that exports
of lead scrap from these two ports increased from approximately 8 million pounds in
1984 to over 37 million pounds in 1986. Despite these increases of more than 450
percent, it is the opinion of many members of the recycling community that export
activity was unable to absorb all the surplus scrap that was generated when recyclers
stopped transporting scrap batteries to the LA. smelters.
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Minnesota
The Minnesota legislation, in contrast, focuses on encouraging collection of
batteries at the consumer end of the chain. In 1986, a bill was passed which requires
all retailers who sell batteries in Minnesota to accept spent batteries at that location
(H.F. No 794). The bill contains no discussion about the pricing of this repository
service nor does it dictate the actions that retailers must take to dispose of the spent
batteries once a sufficiently large pile has accumulated at the site.
The impetus behind the passage of this bill was that scrap dealers in the north of
the state voiced concern about a perceived increase in the number of batteries found
in roadside ditches and other unsuitable areas. In response, a task force was set up in
October 1986 to consider policy alternatives. This task force comprised many members
of the recycling industry such as battery manufacturers, the Minnesota smelter (Gopher
Smelting & Refining), battery dealers, and scrap metal dealers. After considering a
wide range of policy options, there resulted a set of three resolutions that ultimately
were merged with a larger omnibus bill and passed effective 1 January 1988:
1. Spent batteries are banned from municipal landfills.
2. Retail and wholesale operators must provide a battery collection center at
the point of transfer.
3. Battery retail centers must post signs stating that batteries cannot be
disposed of in household garbage but should be recycled, and that the retail
center will accept spent batteries.
While the impact of this bill on recycling activity in Minnesota is unclear, this
bill has the potential to improve the battery collection system in the state by adding
more participants and disseminating information.
Rhode Island
Rhode Island passed a bill in March 1987 (H. 6105) which places a refundable
deposit of at least $5.00 on all vehicle batteries sold in Rhode Island starting 1 July
1986 Batteries will be stamped or otherwise marked to show the name of the dealer,
the $r?.00 deposit value, and that it was sold in Rhode Island. Such batteries must be
redeemed by battery dealers and distributors. The distributors must pay a handling
charge of at least 50 cents per battery to dealers. Once returned to the distributor,
spent batteries can only be disposed of by a facility operated by the state's Solid
Waste Management Corporation or by a licensed battery recycling business.
The long-term implications of this bill on the recycling efforts in the state should
be monitored in the future.
Observations about State Efforts
In all of these case studies, the regulation enacted was a reaction to a perceived
problem with the hope that the regulation would prevent the problem from ever
-35-
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surfacing on a big scale. We are not aware of any direct evidence that improper
disposal of spent lead-acid batteries has caused lead contamination in these states.
Certain other New England states (e.g., Maine, Massachusetts, Vermont) are
concerned, and have discussed the issue of regulating battery collection and disposal
by means of deposit schemes or collection centers, but no final agreement has been
reached. In addition, a few other scattered states have peripherally discussed the issue
(e.g., Wisconsin, Iowa). In Florida, for example, the disposal of spent batteries in
landfills is banned, just as it is in California.
What is most interesting about each of these case studies is that they were purely
independent efforts, that is, without any coordination across different states. In fact,
when canvassing all U.S. states regarding any action taken to deal with spent lead-acid
batteries, the Secondary Lead Smelters Association noted that most states had no
knowledge of the efforts taken by any other states. The experiences of these states
could provide valuable information for other states that are considering regulatory
action pertaining to battery recycling in the future.
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VIII. CONCLUSIONS AND RECOMMENDATIONS
Based on the analysis of the battery recycling industry undertaken for this study,
we conclude that despite volatility in the year-to-year results, lead-acid battery
recycling rates have generally declined since the 1960s. After hitting a historical low
of 61 percent in 1983, recycling rates have rebounded to approximately 70 percent in
1985. This 1985 level is only slightly below historical levels.
Recycling rates are linked, at least to some degree, to lead prices. The relatively
low recycling rates of the early 1980s can be attributed in part to the long periods of
low lead prices during that time. The upturn in recycling rates in the middle 1980s
demonstrates the ability of the recycling industry to adjust to a changed business
environment. During that time, the secondary lead industry lost 40 percent of its
capacity and many other members of the recycling chain also quit the battery recycling
business. However, those remaining were able to absorb much of the surplus.
Despite the improvements in recycling rates during the middle 1980s, the general
decline in recycling combined with steady growth in battery sales has resulted in an
increasing number of batteries that are exiting the recycling chain annually. In 1985,
the gap between the number of batteries actually recycled and the number of batteries
available for recycling had risen to more than 22 million batteries.
One reason for the decline in recycling activity is environmental regulations that
have added significant costs to secondary smelting operations and created a fear among
recyclers that they may ultimately be connected with a Superfund site. In addition,
recyclers are concerned about their ability to meet current and proposed environmental
regulations (primarily RCRA). There are indications that these environmental concerns,
which have already contributed to significant contractions in the secondary lead
industry, will cause the battery recycling industry to be generally less responsive to
lead price increases than in the past. One way to test this will be to trace the impact
of the rapid lead price increases in 1987 on recycling rates when those data become
available.
The loss of secondly smelting capacity during the 1980s has caused certain
regions of the country to 'experience further battery recycling problems. One such
region is the Pacific Northwest which lost all of Its secondary lead smelting capacity
by 1986. Fortunately, this region has developed a large export market for scrap
batteries; however, in times of low lead prices and reduced incentives for domestic
recycling such as 1985 and 1986, export activity was not able to absorb all the surplus
scrap generated. Although data on a regional basis are not available to perform the
calculations, it is clear that many scrap batteries left the recycling chain and were
improperly disposed of during that time. While the recent increases in lead prices may
again have encouraged domestic recycling activity from the Pacific Northwest, there is
a concern that consumers are no longer aware of their recycling options after the
departure of so many collection centers and service stations from the battery recycling
business. Thus despite improved lead industry economics, recycling in this region may
continue to be a problem.
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Due to a growing awareness of the battery recycling problem, several states have
initiated independent efforts to handle battery recycling in their states. Some states,
such as Minnesota and Rhode Island, have established deposit schemes on batteries to
discourage batteries from exiting the recycling chain. Other states, such as California,
have directed their efforts at improving the efficiency of existing recycling mechanisms
by banning scrap batteries from landfills and carefully regulating the transport of scrap
batteries. Since all of these efforts are fairly recent, it is too early to examine their
impact on the recycling activity in those states.
Based on these conclusions, we recommend continued attention to the problem of
recycling spent lead-acid batteries. Those areas that are particularly hard hit by the
contraction of lead smelting capacity might benefit most from regional collection
programs.
We also recommend that the federal government monitor the effectiveness of
certain states' efforts with respect to battery recycling. Based on this monitoring
program, the federal government could provide a valuable service by disseminating
valuable information to other affected areas of the country.
Most importantly, we recommend that regulators continue to be aware of the fact
that well-intentioned regulatory actions can produce unintended and adverse results.
There is evidence that certain environmental regulations may be hampering battery
recycling efforts across the country. It is the challenge for regulators and the regu-
lated community to work together to ensure that this does not occur.
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Just as the domestic recycling activity slows down in response to negative
changes in the economic or regulatory environment, the export market can also
experience downturns. For example, in early 1987, there were reports that more
stringent enforcement of the Department of Transportation regulations pertaining to
hazardous material caused export activity to all but stop in the Northwest.'1 The
regulations dealt primarily with the proper packaging and labeling of batteries. Since
then, shippers, together with Coast Guard officials, worked out a solution. Even still,
one Northwest exporter interviewed estimated that only 50 percent of the battery scrap
generated in early 1987 in the Northwest was exported, with the remainder being
improperly disposed of in landfills, road-sides, dumpsters, or yards.
New enterprise has also been developed in the region to alleviate the pressures on
the threatened landfills. For example, since 1985, a company based in Oregon called
Env-Pac has been recycling batteries that were otherwise fated for landfills. An Env-
Pac spokesman believes that the emergence of Env-Pac coincided with 'an awareness of
environmental issues by major corporations who are either seeking ways to avoid
encountering future waste disposal liabilities or are simply trying to be good corporate
citizens.'12 The two-year-old company has rapidly grown to a thriving operation,
handling approximately 50,000 batteries in 1986.
Summary
In summary, without regional data to quantify recycling rates, we believe that
because of the fact that there are no currently operating secondary smelters in the
Pacific Northwest, recycling rates in that region are lower than the national average.
Because of persistent low lead prices and sometimes prohibitive transportation costs,
many • members of the recycling community in the Northwest have stopped handling
scrap batteries. In fact, during 1986, there were only two operations in the State of
Washington that would still collect batteries from individuals. Fortunately, this region
is properly situated to take advantage of scrap battery export to areas in the Far East
that demand large amounts of battery scrap. However, the export market has not been
able to take all the surplus.
The recent upturn in lead prices may be significant enough to encourage recyclers
to handle batteries again. However, there remains a concern that consumers are no
longer aware of their recycling options in the Pacific Northwest after the departure of
so many collection centers and service stations from the recycling business in the
1980s. Additionally, there is no guarantee that lead prices will remain high over a
long period. If lead prices fall back to levels similar to those during the early and
middle 1980s, then battery recycling in the Pacific Northwest will continue to be a
problem.
11 American Metals Market. 27 February 1987, p. 9 and 14 May 1987, p. 1.
12The Oregonian. 27 July 1986, p. D1.
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VII. STATE REGULATORY ACTIONS
Under the Resource Conservation and Recovery Act, each state is mandated to
promulgate environmental regulations that are at least as stringent as the federal
regulations. Many states have adopted the federal regulations (discussed in Section III)
that apply to spent lead-acid batteries verbatim; a few states have independently
passed (or have attempted to pass) regulations that are significantly more stringent.
In June 1987, the Secondary Lead Smelters Association conducted a survey to
determine the types of legislative and regulatory actions that individual states have
taken with respect to the disposal, collection, and recycling of spent lead-acid bat-
teries. They conclude that to date, there are very few states that have adopted
special regulations to deal specifically with a perceived lead-acid battery disposal
problem. Some of them, such as California, have focused on making the recycling
chain operate in an environmentally sound manner. Other states, such as Minnesota
and Rhode Island, have focused on the retrieval of batteries that would otherwise have
exited the recycling chain. The experiences of these and other states are discussed
briefly in this section.
California
In 1985, California adopted final regulations governing the management of spent
lead-acid storage batteries. These regulations require that a person who drains the
acid from the battery must be a hazardous waste facility operator. In addition, a
cracked or otherwise damaged battery is classified as a hazardous material and must be
treated as such (i.e., transported by a registered waste hauler to a registered facility
with a hazardous waste manifest or bill of lading, etc.).
The transportation of (more than 10) spent batteries for recycling (except broken
batteries) requires the use of a waste manifest, but does not require a registered
hazardous waste hauler. However, spent batteries for disposal must be transported by
a registered waste hauler. Battery dealers who store less than one ton of spent
batteries for less than 180 days are exempt from storage requirements.
Scrap dealers claim that these regulations have led to dramatic reductions in
battery scrap handling in California. One dealer said that in the City of Oakland, a
major California scrap collection center and port, there is not a single scrap dealer
that still handles batteries in 1987.
The California regulations pertaining to spent lead-acid batteries have added to
the regulatory burden on recyclers and reduced incentives to recycle batteries by
making it more difficult to transport batteries from one stage of the recycling process
to the next. This may be one case where well-intentioned regulation has produced
counterproductive results.
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APPENDIX A: GUIDE TO THE CALCULATION OF BATTERY RECYCLING RATES
The following section describes in some detail the components of the battery
recycling rate calculation. As described in chapter IV, we use a mass balance approach
to account for all the battery scrap that is generated each year from spent batteries
and scrapped vehicles and consumed each year by recycling or export. The recycling
rate equals the amount of battery scrap actually consumed as a percentage of the
amount generated. The gap between the amount actually consumed and the amount
generated is assumed to have exited the recycling chain.
The first two sections of this appendix outline the procedures used to calculate
the annual generation and consumption of lead from battery scrap, respectively. The
third section supplies the key equations used to perform the calculation.
1. Generation of Battery Scrap
Battery scrap is generated from three major sources annually. The first and
largest source comes from replacement battery sales. One scrap battery is typically
generated with every replacement battery purchase. Second, one scrap battery is
typically generated with every decommissioned vehicle. In addition, a small amount of
battery scrap is imported annually. Each of these sources of battery scrap is discussed
below.
Replacement batteries
Automotive battery shipments are categorized as follows: replacement batteries,
original equipment batteries, and battery exports. Replacement batteries for cars and
trucks make up the vast majority of SLI battery shipments annually. For example, in
1986, approximately 60 million batteries were purchased to replace older spent batteries
out of a total of 76 million batteries shipped from U.S. manufacturers that year.
In addition to shipments of replacement batteries by U.S. manufacturers, a small
amount of new batteries is imported annually (mostly from the far east) for replace-
ment or original equipment. The exact data on imports of replacement batteries are
unavailable for the 1960 to 1985 period. In fact, the Department of Commerce only
began counting 12-volt lead-acid storage batteries as a separate category in 1982.
These 12-volt batteries can be automotive, motorcycle, or stationary batteries for
either replacement or original equipment.
There is growing concern about the effects on the domestic battery manufacturing
industry of a rapidly increasing influx of low-cost foreign batteries into the U.S.,
particularly from the far east (South Korea). As a result, effective January 1, 1987,
importers of 12-volt lead-acid batteries are required to indicate to the U.S. Customs
Service the specific categories of batteries brought into the country. The more
detailed statistics will permit more precise monitoring of import trends in the future
(American Metals Market. 1/19/1987, p. 4).
Based on discussions with battery industry specialists and the limited data avail-
able, we believe that imports of replacement batteries were essentially negligible until
1981. Since 1982, the number of imports has quadrupled. In 1982, approximately
750,000 12-volt lead-acid batteries were imported. By 1985, the import level had risen
to approximately 3.1 million.
-------
APPENDIX A (Continued)
Each time a replacement battery is purchased in the U.S. from either a domestic
or foreign battery manufacturer, a spent battery is generated that must either be
recycled or disposed of. Since the average life of an automobile battery is between 3
and 4 years, a spent battery available as battery scrap in a given year comes from the
stock of batteries manufactured four years earlier.
Therefore, the amount of lead scrap generated in year (i) from replacement
battery sales equals the number of replacement batteries sold in year (i) multiplied by
the average lead content of a battery made in year (i-4)- Trie procedure used to
estimate the average lead content per battery is discussed below.
Lead Content Per Battery
The amount of lead from each battery that is available for recycling is a critical
variable in the calculation of the amount of lead scrap that is generated annually from
scrap batteries. Because specific company proprietary data were unavailable, the lead
content per battery for batteries manufactured since the mid 1950s was estimated.
The average lead content per battery was calculated by dividing the total amount
of lead consumed each year by U.S. battery manufactures to produce SLI batteries
(note that industrial batteries are excluded) by the total number of SLI batteries
shipped by U.S. manufacturers in each year. To account for losses in the battery
manufacturing process, we assume that 5 percent of the lead used to produce batteries
is lost as lead scrap. We also assume that only 95 percent of the lead in batteries is
actually recovered in the recycling process (Battery manufacturers indicate that this
may be a conservative figure, citing 98 percent recovery rates as more typical.)
A three-year rolling average smoothed the profile of lead content per battery
over time and minimized the effect of minor inventory fluctuations.
Note that this result is the recoverable lead per SLI battery, averaged over car
and truck batteries (which typically have a higher lead content than car batteries).
Assuming the car population has been a relatively constant proportion of the total
number of vehicles on the road, there is no need to calculate the lead content of car
and truck batteries separately.
These calculations show that during the 1980s, a typical 38 pound car battery
contained roughly 20 pounds of recoverable lead. These values are slightly higher than
during the 1950s and 1960s, at which time the "DieHard" type battery was introduced,
requiring more lead per battery. Since that time (late 1960s), improvements in battery
technology have reduced the amount of lead required to produce the same desirable
characteristics of an automobile battery (e.g., cranking power and long life). Thus
current lead levels represent a slight improvement from the 22-23 pounds of lead in
batteries of the 1970s.
Vehicle De-registrations
In addition to replacement batteries, battery scrap is generated when a vehicle is
decommissioned. The total number of decommissioned vehicles in each year can be
derived from the statistics about the number of vehicles on the road and the number
of new vehicle registrations. The number of vehicles on the road at end of the year
equals the number of vehicles on the road at the beginning of the year, plus the
number of new vehicle registrations in that year, less the number of vehicles decom-
missioned in that year.
-------
APPENDIX A (Continued)
The lead content of batteries generated from decommissioned vehicles (both cars
and trucks) equals the number of decommissioned vehicles in year (i) multiplied by the
lead content of an average vehicle battery made in year (i-4).
Imports of Battery Scrap
The U.S. has imported anywhere between 700 metric tons and 14,000 metric tons
of lead scrap since 1960. This lead is intended for consumption by the secondary lead
industry in the U.S. and is tabulated annually by the Department of Commerce. The
Commerce data are categorized as 'lead waste and scrap" rather than battery lead
scrap in particular. However, based on information from battery exporters, we assume
that essentially all of this scrap comes from scrap batteries.
The majority of the imported lead scrap comes from countries bordering the U.S.:
Mexico and Canada. In general, this battery scrap is transported by land to the
nearest smelters in the U.S. from those areas of Mexico and Canada that are farthest
from their own smelters.
2. Consumption of Battery Scrap
Battery scrap is consumed in one of several ways. First, many thousands of tons
of spent batteries are dismantled into parts (e.g., sulfuric acid, plastic casing and lead
plates) and recycled. Ultimately the lead is smelted at a secondary smelter for battery
manufacture. Second, for those coastal regions of the country, exports have recently
been a significant means of handling battery scrap. Third, some battery scrap may not
actually be consumed by a smelter in a given year, but rather is stockpiled in inven-
tory until a subsequent year, when the lead is smelted. Each of these methods of
consumption is ^discussed below.
Secondary Smelting
The Bureau of Mines reports data on the total amount of lead that is recovered
from all types of battery scrap by secondary smelters. However, these data include
lead recovered from industrial batteries as well as SLI batteries. Since this analysis is
concerned with the recycling rate of SLI batteries in particular, estimates of the total
lead recovered from industrial batteries (supplied by lead industry analysts) are sub-
tracted from the Bureau of Mines data.
Scrap Battery Exports
A certain amount of lead scrap is exported every year primarily to destinations in
the far east (notably Taiwan and Korea) and South America (notably Brazil and Colom-
bia).
In the wake of the previous study of battery recycling, there was speculation that
the number of scrap battery exports reported to Commerce was significantly below the
actual level of exports. If this were true, it would imply that recycling rates were
actually higher than calculated. Therefore, in this effort, we investigated the data on
scrap battery exports and interviewed both port officials and scrap traders. We find
no reason to believe that the Commerce data for the category 'lead waste and scrap"
are inaccurate.
-------
APPENDIX A (Continued)
Furthermore, industry sources confirm that the vast majority of the lead waste
and scrap exports is spent batteries. Therefore, the amount of battery scrap exported
is approximately equal to the total lead waste and scrap exported (gross weight)
multiplied by 50 percent (assuming a typical battery is 50 percent lead by weight).
Scrap Battery Inventories
One comment regarding PHB's earlier (June 1986) study was that the impact of
scrap battery inventories at scrap yards or smelters on battery recycling rates were
not considered. Some industry analysts believe that during the early and middle 1980s,
low lead prices may have induced the stockpiling of battery scrap by some members of
the recycling chain who had hopes of selling it at higher lead prices in the future.
We interviewed many scrap dealers about the practice of stockpiling. The overwhelm-
ing response was that fear of government regulation had caused them to unload their
inventories as quickly as possible, regardless of the current lead price. Therefore, we
believe that this inventory effect is small.
Nevertheless, the Bureau of Mines does track the inventory levels of scrap
batteries at the smelters. These have been incorporated in the analysis. If inventory
levels increase (all else being equal), the recycling rates also increase since less
battery scrap ends up exiting the recycling chain.
3. Recycling Rate Equations
Having discussed each major element of the calculation, this section presents the
equations used to calculate recycling rates. The values of key input variables as well
as the recycling rate results are shown in the table that follows this section.
a) The total motor vehicle batteries available to recover are:
U.S.-made replacement batteries sold in U.S.
+ Foreign-made replacement batteries sold in U.S.
+ Auto de-registrations
+ Truck de-registrations
[SOURCE: Battery Council International (BCI) Statistics Annual 1984 and personal
communication with BCI for battery shipments; Department of Commerce for
import data; Ward's Automotive Yearbook for de-registrations]
b) The average recoverable lead content per motor vehicle battery (averaged over
cars and trucks) is estimated as follows:
95% * (Total lead consumed for all batteries • Lead in Industrial batteries)
/ Total U.S. Battery Shipments
where, total battery shipments includes original equipment, replacement, and
export shipments of SLI batteries.
In addition, the recoverable lead (excluding lead in industrial batteries) generated
is assumed to be 95% of the lead content per battery.
To account for inventory fluctuations, a three-year moving average of lead
content per battery is used to smooth the profile over time.
-------
APPENDIX A (Continued)
[SOURCE: Bureau of Mines Mineral Industry Surveys. BCI, and Lead Industries
Association for data on industrial batteries. The 95% recovery rate is based on
typical industry rules of thumb.]
c) The average life of a battery is between 3 and 4 years. In our analysis, we used
4 years. Therefore, to calculate the amount of lead scrap generated in each year:
Batteries Available for Recycling * Average recoverable lead per battery
(four years earlier)
+ Imports of lead scrap (lead content).
[SOURCE: Department of Commerce data on imports of lead scrap]
d) To get the total SLI battery lead scrap actually recovered in each year,
Total Lead Recovered at Smelters from all Battery scrap
• Lead recovered from Industrial batteries (9% of total)
+ Exports of Lead Scrap (50% of gross weight)
+ Change in Battery Scrap Inventories at Smelters
[SOURCE: Bureau of Mines (BOM) Mineral Industry Surveys. Tables 11 & 24 & 8
and Bill Woodbury, BOM, personal communication; Department of Commerce for
exports]
e) Battery Recycling Rate= Battery Scrap Recovered /
Battery Scrap Available for Recovery (per year)
-------
APPENDIX A (Continued)
CALCULATION OF BATTERY RECYCLING RATES FOR 1960-1985
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
U.S. MADE REPLACEMENT BATTERIES (Millions)
* IMPORTED REPLACEMENT BATTERIES (Millions)
* VEHICLE DEREGISTRATIONS (Millions)
CARS
TRUCKS
• BATTERIES AVAILABLE FOR RECOVERY (Millions)
* AVERAGE RECOVERABLE LEAD PER BATTERY
(4 year delay) (pouxte)
SUBTOTAL (000 Metric tons)
• IMPORTS OF LEAD SCRAP (000 Metric tons)
• TOTAL BATTERY SCRAP AVAILABLE FOR RECOVERY
LEAD RECOVERED FROM ALL BATTERY SCRAP (000 Mt)
- LEAD RECOV. FROM INDUSTRIAL BATTERIES (OOOMt) 9X
« LEAD RECOVERED FROM SLI BATTERIES (OOOmt)
* EXPORTS OF LEAD SCRAP (000 Metric tons) SOX
+ CHANGE IN BATTERY SCRAP INVENTORIES
AT SMELTERS (000 ml) 90X
« TOTAL BATTERY SCRAP RECOVERED (000 Metric tons)
43.5
0.000
8.0
1.4
52.9
19.9
477.0
2.5
479.5
335.5
30.2
305.3
54.3
-13.5
320.3
44.4
0.000
5.9
0.8
51.1
20.8
481.2
0.7
481.9
379.6
34.2
345.4
53.9
4.2
376.2
42.6
0.000
5.6
0.9
49.1
21.4
476.5
1.2
477.7
378.7
34.1
344.6
45.3
-4.3
363.4
49.2
0.000
7.2
1.3
57.7
21.7
567.0
2.0
569.0
418.6
37.7
380.9
42.5
0.2
402.4
54.6
0.000
8.8
1.8
65.2
22.5
666.2
3.2
669.4
468.7
42.2
426.5
77.5
9.0
473.4
56.4
0.000
7.9
1.7
66.0
23.3
696.9
2.8
699.7
496.6
44.7
451.9
98.6
1.3
502.4
53.7
0.000
8.6
1.5
63.8
22.1
640.9
3.1
644.0
495.6
44.6
451.0
119.7
-17.3
495.3
50.1
0.000
8.9
1.5
60.5
21.3
583.5
5.2
588.7
480.6
43.3
437.3
119.7
•7.7
490.3
53.6
0.376
7.2
1.4
62.6
21.6
611.8
2.7
614.5
481.4
43.3
438.1
59.4
3.8
471.2
54.2
0.751
6.7
1.5
63.2
21.4
614.1
4.8
618.9
439.2
39.5
399.7
51.8
-10.6
416.0
56.1
1.565
6.8
1.8
66.3
20.4
611.7
4.2
615.9
371.5
33.4
338.1
50.9
14.5
376.6
59.3
1.997
7.1
2.0
70.4
19.6
626.5
5.0
631.5
486.6
43.8
442.8
45.1
-12.7
453.9
58.7
3.116
8.8
2.5
73.1
20.0
663.7
3.2
666.9
478.9
43.1
435.8
60.1
-2.9
463.2
RECYCLING RATE (X)
66.8X 78.1X 76.IX 70.7X 70.7X 71.8X 76.9X 83.3X 76.7X 67.2X 61.U 71.9X 69.5X
-------
APPENDIX A (Continued)
CALCULATION OF BATTERY RECYCLING RATES FOR 1960-1985
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
U.S. MADE REPLACEMENT BATTERIES Millions)
• IMPORTED REPLACEMENT BATTERIES (Millions)
+ VEHICLE DERECISTRATIONS (millions)
CARS
TRUCKS
• BATTERIES AVAILABLE FOR RECOVERY (Millions)
• AVERAGE RECOVERABLE LEAD PER BATTERY
(4 year delay) (pounds)
SUBTOTAL (000 Metric tons)
» IMPORTS OF LEAD SCRAP (000 Metric tons)
• TOTAL BATTERY SCRAP AVAILABLE FOR RECOVERY
LEAD RECOVERED FROM ALL BATTERY SCRAP (000 Mt)
- LEAD RECOV. FROM INDUSTRIAL BATTERIES (OOOmt) 9X
« LEAD RECOVERED FROM SLI BATTERIES (OOOMt)
* EXPORTS OF LEAD SCRAP (000 Metric tons) SOX
* CHANGE IN BATTERY SCRAP INVENTORIES
AT SMELTERS (000 Mt) 90X
* TOTAL BATTERY SCRAP RECOVERED (000 Metric tons)
26.3
0.000
4.5
0.7
31.5
18.2
259.6
5.1
264.7
232.1
20.9
211.2
1.4
9.6
220.5
28.3
0.000
4.3
0.6
33.2
17.5
263.3
3.5
266.8
218.5
19.7
198.9
4.7
1.7
202.7
30.5
0.000
4.3
0.6
35.4
17.1
274.3
1.9
276.2
229.1
20.6
208.5
2.2
-6.5
203.8
31.7
0.000
4.5
0.7
36.9
17.2
288.1
14.0
302.1
247.1
22.2
224.9
2.2
-10.8
216.3
29.6
0.000
5.1
0.8
35.5
17.0
273.4
1.7
275.1
276.3
24.9
251.4
11.9
-2.8
254.9
29.5
0.000
6.0
0.8
36.4
16.9
279.4
3.3
282.7
284.1
25.6
258.5
3.4
14.3
273.1
31.1
0.000
6.0
0.9
38.0
17.2
297.0
3.6
300.6
259.0
23.3
235.7
0.5
-4.6
231.8
31
0.000
6.3
0.9
38.1
17.4
301.6
8.5
310.1
275.1
24.8
250.4
0.4
-1.1
249.6
33.8
0.000
6.2
1.0
41.0
17.7
329.3
3.9
333.1
281.4
25.3
256.1
0.9
2.2
258.5
35.5
0.000
10.2
1.4
47.1
17.9
383.3
6.1
389.3
317.1
28.5
288.5
2.1
-14.4
276.6
37.9
0.000
10.5
0.7
49.1
18.1
403.7
2.7
406.4
317.8
28.6
289.2
3.8
4.5
295.2
39.1
0.000
7.1
1.2
47.4
18.4
395.0
2.3
397.3
302.1
27.2
274.9
15.5
-5.5
277.7
43.2
0.000
7.2
1.2
51.6
18.9
442.1
1.6
443.7
315.6
28.4
287.2
32.0
1.0
304.1
RECYCLING RATE (X)
83.3X 76.0X 73.8X 71.6X 92.6X 96.6X 77.IX
B0.5X
77.6X
71.OX 72.6X 69.9X 68.5X
-------
APPENDIX I : DATA TAJLE TO ACCOMPANY FIGURES
LEAD DEMAND
(000 Bttrtc tons)
UMt. World U.S.
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
4974
P*
1976
1977
1978
1979
1980
1981
1982 -
1983
1984
198S
3447.3
3856.4
4146.0
4099.9
4196.6
3928.8
3847.4
3776.0
3845.1
3962.5
3947.2
1179.2
1354.6
1438.5
1432.7
1361.2
1072.5
1169.5
10'ft.4
..1148.5
1207.0
1148.3
•ATTERY SHIPMENTS
(Millions)
OE Rt
.9
.7
.2
.1
.3
11.1
10.3
9.0
10.7
10.1
8.2
10.6
11.3
12.6
10.1
9.0
13.4
14.7
15.2
14.4
10.0
10.0
8.4
10.8
12.8
13.5
U.S. ftOO. LEAD PRICE
(ctnti/potnd)
pl»c«Mnt Koiinal Rt»t (S1985)
26.3
28.3
30.5
31.7
29.6
29.5
31.1
31.0
33.8
35.5
37.9
39.1
43.2
43.5
44.4
42.6
49.2
54.6
56.4
53.7
50.1
53.6
54.2
S6.1
S9.3
58.7
12.0
10.9
9.6
11.1
13.6
16.0
15.1
14.0
13.2
14.9
15.7
13.9
15.3
16.3
23.2
21.5
23.1
30.7
33.7
52.6
42.5
36.5
25.5
21.7
25.5
19.1
43.4
39.1
34.3
39.1
47.2
54.6
50.1
45.1
40.9
43.8
43.5
36.9
39.5
39.5
50.6
43.0
43.7
54.7
55.6
77.9
55.7
43.1
28.3
23.4
26.5
19.1
RECYCLING 8ATTERIES
RATE MOT RECYCLED
(X) <
83.3X
76.0X
73.8X
71. 6X
92.6X
96.6X
77. IX
80.5X
77.6X
71 .OX
72.6X
69.9X
68.5X
66.8X
78.1X
76. IX
70.7X
70.7X
71.8X
76.9X
83.3X
76.7X
67.2X
61. IX
71 .9X
69.5X
•illfonc)
5.4
8.1
9.3
11.0
2.6
1.2
8.8
7.7
9.3
13.9
13.5
14.4
16.3
17.7
11.2
11.8
17.0
19.2
18.7
14. B
10.2
14.7
20.9
25.9
20.0
22.4
-------
Appendix A
THE IMPACTS OF LEAD INDUSTRY
ECONOMICS ON BATTERY RECYCLING
Prepared for
Office of Policy Analysis
Environmental Protection Agency
Prepared by
Putnam, Hayes & Bartlett, Inc.
124 Mt. Auburn Street
Cambridge, Massachusetts 02138
13 June 1986
-------
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY 1
INTRODUCTION 3
GENERAL LEAD INDUSTRY ECONOMICS 3
Demand 3
Supply. *. 9
Prices 11
ECONOMICS OF THE SECONDARY LEAD INDUSTRY 11
Battery Recycling Rates, 11
Battery Recycling Chain 18
Health and Environmental Regulation of Lead 20
Impacts on Secondary Smelters and Battery Breakers 23
HEALTH AND ENVIRONMENTAL IMPACTS 28
Scientific View 28
Empirical Evidence 29
CONCLUSIONS 31
RECOMMENDATIONS 32
APPENDIX 1: GUIDE TO THE CALCULATION
OF BATTERY RECYCLING RATES
-I-
-------
THE IMPACTS OF LEAD INDUSTRY
ECONOMICS ON BATTERY RECYCLING
EXECUTIVE SUMMARY
In recent years the domestic lead Industry has been characterized by
a stagnant demand and ample supply that has resulted in real price levels
at or near historical lows. Combined with significant environmental and
occupational health standards, these low prices have resulted In major
impacts on the U.S. secondary lead industry where plant closures and
reduced economic activity have been experienced. The purpose of the
study is to identify the factors leading to the contraction of the secon-
dary lead Industry and assess the likelihood of their continuation, to
quantify the extent to which the recycling of lead-acid batteries has
declined In recent years, and to assess the extent to which Improper
disposal of unrecycled lead-acid batteries is occurring and creating risks
to the environment and human health.
The major conclusions are the following:
• There is very little doubt that low lead prices and increasingly
stringent environmental standards have resulted In the closure
of many secondary lead smelters and a 20 percent reduction in
the lead-acid battery recycling rate to approximately 60 percent
from typical historical levels of approximately 80 percent and
peak levels near 90 percent. This translates into 120,000 addi-
tional metric tons of lead that entered the environment In 1985
rather than the recycling chain. Relative to the peak year for
battery recycling in 1980, as much as 180,000 metric tons
entered the environment.
• There is a strong indication that lead-acid batteries are not
being disposed of at approved facilities. Anecdotal evidence
Indicates that batteries are going in increasing numbers to
municipal landfills and incinerators that are not prepared to
accept the hazardous materials.
• In theory, there exists a mechanism by which solid lead chemi-
cally combines with certain acidic compounds commonly present
In household garbage and forms a soluble material which
migrates through soil in a landfill and contaminates ieachate and
ground water.
-------
• Empirical evidence based on a review of the NPL sites does not
Indicate that groundwater contamination from lead in municipal
landfills has occurred to a great extent to date. However.
because the phenomenon of large and increasing numbers of
potentially Improperly disposed batteries is relatively recent, an
Investigation of current sites may not be an accurate indication
of potential future problems. Thus the lack of empirical evi-
dence is inconclusive.
Based on these findings, we recommend that the EPA undertake
further study to determine whefKer the improper disposal of lead-acid
batteries is likely to cause a significant environmental and health problem
in the near future. If the study results are affirmative, then a compre-
hensive examination of alternative policy measures — such as deposit
schemes and regulatory reforms — should follow. Such innovations
would provide the required incentives to producers and consumers to
utilize the existing recycling system to increase battery recycling activ-
ity.
-2-
-------
THE IMPACTS OF LEAD INDUSTRY
ECONOMICS ON BATTERY RECYCLING
INTRODUCTION
In recent years the domestic lead Industry has been characterized by
a stagnant demand and ample supply that has resulted In real price levels
at or near historical lows. Combined with significant environmental and
occupational health standards, these low prices have resulted in major
Impacts on the U.S. secondary lead industry where plant closures and
reduced economic activity have been experienced. The purpose of this
study is to identify the factors leading to the contraction of the secon-
dary lead industry and assess the likelihood of their continuation, to
quantify the extent to which the recycling of lead-acid batteries has
declined in recent years, and to assess the extent to which improper
disposal of unrecycled lead-acid batteries is occurring and creating risks
to the environment and human health.
This report Is divided into four major sections. For purposes of
background to the battery recycling problem, the first section presents
the recent economic trends in the lead Industry, such as ample lead
supply, flat demand, and low prices. The second and major section
reviews the economics of the secondary lead Industry and includes a
calculation of battery recycling rates as well as a discussion of the bat-
tery recycling chain. Additionally, the impacts of Increasingly stringent
environmental regulations for lead on the secondary lead industry are
discussed. The third section Is devoted to empirical evidence and scien-
tific implications regarding the degree of hazard posed by improper
disposal of lead-acid batteries. Finally, a fourth section presents the
major conclusions and recommendations for further action by the EPA
based on the results of this study.
GENERAL LEAD INDUSTRY ECONOMICS
Demand
The economics of the lead Industry are growing Increasingly dim.
Since the late 1970s, western world consumption of lead has fallen from
almost 4.2 million metric tons in 1979 to a level below 4.0 million metric
tons in 1984. This trend is echoed In the U.S. lead Industry with 1985
domestic consumption nearlng 1 million metric tons from highs above 1.4
million In the late 1970s. Figure 1 !!J?: strates that lead demand has been
approximately flat since 1980.
The three primary end uses of lead are in storage batteries, as a
gasoline additive (TEL), and in paints and pigments. Figure 2 shows
-3-
-------
Figure 1
CONSUMPTION OF REFINED LEAD
UNHEO SU-BS AMD
WORLD
eo
ftO
4,0-
30-
fe
0
3 »H
1.0-1
oo
1875
1876
1877
1878
1§7»
19BD
1181
19B2 1»&3 1t&*
US.
C8NSUHPTION OF tiriMED LEAD
(PHMry «nd Secondary
Tt*r
1975
IfTA
1*77
1978
1979
1980
1981
1982
1983
1984
8eurct: nttalUtttUtlk 1974
in 000 't of
U.S.
1122.7
1272.3
U17.9
U04.5
IKS.i
10M.O
1127.1
1106.1
11J4.2
1092.0
•198t
•trie tern)
Wnttrn
World
JU7.3
S8S&.A
41U.O
4099.9
4198.*
3928.8
J84T.7
J774.0
M4S.1
S962.S
198S, p.27.
-------
Figure 2
END USES OF LEAD IN U.5.
105
£
g
i
1.4 -
1.1
103
OB -
O7-
oe -
Oft-
.04-
os -
02
O1 H
oo
«75
197B
1177 117B
TO.
»7» 1»8D
WAR
-1»82
Oltar
1»fiS
EMD UCCS Of LEAD IN U.S.
(OOO'S of avtrlc tone)
Ttar
Mtt«ri»t
TEL
taint
Other
Total
1975
1976
1977
1978
1979
1960
1981
1982
1983
1964
^•WMHBiaBBBBl
Seurea:
•35.8
747.6
•99.9
•79.3
•16.1
644.7
771.7
704.3
•06.9
•65.5
Statittle* Annual 1964.
189.6
218.0
211.7
178.3
187.4
128.2
111.4
119.2
•9.1
79.1
tottery
71.9
96.0
90.9
91.6
91.0
78.6
•0.4
40.9
48.7
76.3
281.8
293.0
276.0
283.5
2*6.7
219.0
205.8
191.0
183.8
186.1
Council International
1179.2
1354.6
1438.5
U32.7
1361 .2
1072.5
1169.5
1075.4
1148.5
1207.0
(ten.
p. 26. and
Minerals YMrfeook U.S. •ureau of Mtnn, 1984, (Table 12).
1963. (Table 13). and
•an-FarrouB Metal Oau 19B4 Awriean ftureau of Metal «t§tittle*.
pp. 52,53. and
Awrican Metal Market. January 31. 1986.
-------
that storage batteries accounted for 865,000 metric tons (or 70 percent)
of the total 1.2 million metric tons consumed in the U.S. in 1984. The
storage battery industry is the only lead-consuming industry that has
experienced any (very smalt) growth. Other end uses have declined
steadily since the late 1970s. The consumption trends in each end-use
category are reviewed below, with a major section devoted to the storage
battery industry. For each lead-consuming product. It is clear that the
long-term forecast is not promising. For various technological and/or
environmental reasons, the major end-uses for lead are experiencing
either no growth or dramatic declines.
The largest end-use category for lead is the storage battery indus-
try, whose recent unspectacular performance is a major source of the flat
demand for lead In the U.S. As shown in Figure 2, storage batteries
(battery grids, posts, and lead oxides) accounted for over 70 percent of
total U.S. lead consumption and over 50 percent of western world lead
consumption in 1981.
Approximately 80 percent of the €0 million storage batteries consumed
in 1984 in the United States were consumed for automobiles both In Origi-
nal Equipment (OE) and as Replacement SLI (starting, lighting, and igni-
tion) batteries in used vehicles. As shown in Figure 3, U.S. replacement
sales dominate the OE battery market. This is in contrast with a country
like Japan, which produced 50 percent more batteries for OE than
replacements in 1984 due to Japan's production of approximately 30 per-
cent of the world's motor vehicle fleet. In 1985, the replacement market
captured 81 percent of the U.S. battery shipments while the OE market
iaid claim to 18 percent. These ratios have been fairly stable since the
fate 1970s.
The performance of SLI OE battery sales is heavily dependent upon
automobile sales, which in the United States have declined from 9.3 million
automobiles In 1978 to a low of 5.8 million In 1982 before rebounding to
the 1984 sales of 7.9 million. The number of motor vehicles on the roads
has increased steadily since 1975 at an annual rate of almost 3 percent in
the United States and 4.5 percent worldwide. These on-the-road statis-
tics are a major determinant of the replacement battery market and are
partly responsible for whatever growth has occurred In the battery
Industry.
The remaining 20 percent of batteries are used for industrial pur-
poses. Industrial battery sales are very cyclical and seem to mirror
overall economic conditions. Major end-uses for industrial batteries are
mater! its handling equipment (especially fork-lift trucks) and stationary
sy. t:^s such as interruptlble power. Two areas of possible long-term
growth in the industrial battery market are load-leveling batteries for
-5-
-------
electric utilities and batteries for electric vehicles. However, these areas
•re unlikely to grow significantly in the near term.
As mentioned above, demand for storage batteries is directly linked
to trends in the automobile industry. Significant growth in annual sales
for imported automobiles in the U.S. coupled with a trend toward keeping
used cars longer (evidenced by the Increasing average age of automobiles
from 6 years in 1975 to 7.4 years by 1983) have lead to the flat demand
for batteries in the United States. Every lost automobile sale per year
means one less OE battery sold during that year and one more replace-
ment battery sold every three years on average. Improvements in bat-
tery technology have exacerbated the decline in battery demand; batteries
now have more cranking power (requiring less lead per battery for the
came amount of energy produced), and provide a longer lasting product
which performs under severe cold conditions and needs replacement
slightly less often. For the past five years, gross battery weights have
declined 1 percent per year on average from approximately 42 pounds in
1973 to a current total weight under 36 pounds.* The amount of lead per
battery has declined by 16 percent since 1975 from approximately 24.5
pounds to a level of 20.5 pounds on average in 1985. In addition, the
average battery life has increased by more than 11 percent since 1977 to
approximately three years in 1985.
The second largest end-use category of lead in the United States
accounting for almost 7 percent of 1984 domestic lead consumption is as a
gasoline antiknock additive — TEL (also shown in Figure 2). Lead
consumption for TEL has been falling since 1975 when environmental
regulations reduce the amount of lead in gasoline were first adopted in
the United States. Consumption of TEL has fallen by 58 percent from
almost 190,000 metric tons in 1975 to approximately 80.000 metric tons in
1984. Exports of TEL. historically representing a significant portion of
the U.S. TEL market, have continued to decline as other countries have
Joined the United States in their commitment to reduce lead quantities in
gasoline. Therefore, experts predict the use of lead In gasoline world-
wide will decline to 10 percent of Its 1985 levels by 1989.
The third major use for lead, accounting for approximately 6 percent
of U.S. lead consumption In 1984. is In paints and pigments. Use of lead
In pigments fluctuates in the short run with nonresidentiat construction
rates which have been on the rise since 1983. However, in the long run.
Increased consumer awareness regarding the possible adverse health
impacts of lead in the workplace and the home is causing a dramatic
decline in the use of lead In paints and pigments. Consumption of lead
for paints and pigments has declined from 96,000 metric tons in 1975 .0
76,000 metric tons by 1984, and is expected to continue to decline.
Battery Man, July 1985.
-8-
-------
Figure 3
5LI BATTEKY SHIPMENTS
vs.
TO-
2
o
40
3D
ao
10
I
I
1
I
( T f
1»7S 1176 1»77
1
IfTB
I I I
1»7» 1»BO ItBI
1
i i r
itaa itas i»at
EZ)
PT^
SLI
(NUlterw of MtttriM)
roar
1975
1976
1977
1978
1979
1960
1961
1962
1963
196*
1965
t
«.6
49.2
$4.6
$6.4
$3.7
$0.1
53.6
$4.2
$6.1
$9.3
$6.7
>rifinel
Uipntnt !
9.0
13.4
14.7
15.2
U.4
10.0
10.0
8.4
10.8
12.8
13.5
Expert*
1.3
1.5
1.4
1.6
1.2
1.6
1.9
2.0
2.1
2.6
m
total
$2.9
64.1
70.7
73.2
69.3
•1.7
65.5
64.6
•9.0
74.7
72.2
ttatittict Annual 1984, Mtttry Council Informational, p.5,
. author.
»«r*on*l eeM««fcot1en Mfttt JulU
Kl ttattctin *r*«Ml.
-------
2.6
24-
22<
20-
1.B-
Figure 4
MINED LEAD PRODUCTION
MSBOLRI VS US.* HCSTWN %O«_D
i
1.2 -
1^ -
Ofl-
ae-
i
04-
O2
107S
1»77 1»7B 1f7»
1»BS
D M9SOmi
«t US.
WD1D
atOOUCTlON OF MINED LEAD
(OOO's of attric tone)
Tmr
19T5
1V76
1977
1978
1979
1980
1981
1982
1983
1984
U.S.
Wntcrn
World
449.1
4SS.5
4&4.B
441.1
472.1
497.2
JW.7
474.5
409.5
278.S
565.0
S54.1
538.6
$29.7
$25.6
SS0.4
445.5
512.5
449.0
321.9
2542.0
2496.7
2401.2
2548.6
2575.6
2542.5
2542.4
2469.4
2561.7
2471.2
ftourct: «»ttal 8tatfat
-------
None of the other uses for lead — such as lead foil and lead shot,
which account for the remaining 15 percent of U.S. lead consumption —
expect any growth, nor are any new major uses expected in the near
future that will have a significant impact on total lead demand.
Therefore. Industry sources predict that whatever growth there
might be in the lead Industry will stem from growth In the battery indus-
try, which they predict will clow to a maximum of 1 to 2 percent per
year.
Supply
<^^^»«^^^™^*» .*•-
The existing low demand for lead from the battery industry has
recently been coupled with worldwide oversupply of the metal to further
erode lead Industry economics. The major mine producers of lead in the
western world in 1984 are Australia (446.000 metric tons), the United
States (332,200 metric tons), and Canada (259,400 metric tons). Other
smaller but significant producers are Peru, Mexico, and Morocco. West-
ern world mining output has remained fairly stable at approximately 2.4
million metric tons per year.
In the United States, seven lead mines In Missouri have continued to
produce approximately 80 to 90 percent of the total U.S. mined production
(see Figure 4) and 12 percent of western world production. Due to the
purity and high concentration of the bulk deposits, the Missouri mines
produce extremely low-cost lead. These mines and associated smelters act
as price leaders for the U.S. lead industry. By 1984, U.S. lead prices
reflected marginal costs of producing lead in Missouri; the remaining
higher-cost U.S. producers have experienced substantial declines in their
production levels and many have ciosed because lead prices can not cover
their marginal costs of production.*
Another factor leading to oversupply is the growth of lead produced
In conjunction with growing metals markets such as zinc, copper, and
silver. In general, lead Is co-produced and/or by-produced with zinc in
countries such as Australia and Canada, and with silver In Mexico and
Peru. Increased zinc production translates into Increased lead production
without a commensurate increase In lead demand.
Note that primary r~, Juction of lead in Missouri In Figure 6 is
artificially low in V^ because of the mine workers' strikes which
lasted most of the year but which ended by the beginning of 1985.
-9-
-------
FigurtS
U.S. PRODUCER LEAD PRICES
MDUMALVS
10-
Iftffi 1IB7 1te»
WAR
itai
NOMINAL * MEAL
U.S. nODUCER LEAD HICES
(For •tomtarP leod in cents per pound)
i»&3 was
teer MoMirwl
85
KM I
te«r liQMiiwl 91 85
tnl
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
u.o :
1S.2 !
U.O
13.2
U.9
1S.7
13.9
1S.O
16.3
22.5
21.5
I.ii
1.31
.22
.09
.93
.77
.66
.57
.«
.18
.00
Si .6
$0.4
45.1
40.8
43.7
43.S
36.9
38.6
S9.5
49.1
43.0
1976
1978
1980
1981
1982
1983
1984
1985
S.1
30.7
33.7
S2.6
42.S
36.5
25.S
11.7
25.5
19.1
1.89
1.78
1.65
1.48
1.31
1.18
1.11
1.08
1.04
1.00
43.7
S4.5
S5.6
78.0
95.5
43.2
28.4
23.4
26.4
19.1
8flurct: U.S. ttttUtfcal AtetrKt 1985. T«btt NO. 1270,
p.712. and
Nfntral Industry Survvyt U.S. lurtau of Mints. Novmfeer 1985,
table 11.
Fact* vd PreblMB U.S. 8ur*«u of Mints. 1985 edition,
table 7, p. 12.
-------
According to the National Association of Recycling Industries
(NARI), as much as 40 percent of the world's primary lead production in
1985 is achieved at virtually no cost due to the very high co-product and
by-product credits of come mines.* Still other mines In foreign countries
operate at subsidized levels and thus are not dependent on lead prices.
Consequently, a significant portion of lead mines and smelters operate at
very low lead prices while the pure lead producers such as the Missouri
smelters depend principally on lead prices to operate profitably.
Prices
The above-mentioned stagnant demand combined with increasing
supplies have resulted in the lead price profile in Figure 5. U.S. lead
prices have fallen precipitously from over SO cents per pound In 1979 to
slightly above 19 cents in 1985. The 1985 price level represents a value
about equal to the cost of producing primary lead at the Missouri mines.
Figure 5 shows that in real terms, these prices represent historical lows.
Due to supply and demand forecasts supplied by the U.S. Bureau of
Mines, there are no indications that prices will recover from their 198S
all-time-low levels of between 18 and 21 cents a pound. At these prices.
some lead producers may leave the industry. However, this will only
serve to prevent further erosions in prices rather than cause a substan-
tial rise in prices.
ECONOMICS OF THE SECONDARY LEAD INDUSTRY
Battery Recycling Rates
The lead supply has two primary components — primary and secon-
dary production. Primary lead is produced from mined lead whereas
secondary lead is produced from old and new lead scrap. New scrap is
generated In the process of refining, casting, or fabricating leaded
materials. Old scrap comes from obsolete materials. Over 75 percent of
the old scrap comes from lead supplied by recycled auto batteries, with
the remainder coming from dressings and skimmings and other general
lead scrap.
Figure 6 Illustrates that In the U.S., the production of secondary
lead from old and new scrap has historically exceeded production of
primary lead. However, secondary lead production has declined In recent
years from its peak in 1979 at 802,700 metric tons to 536,400 metric tons
In 1985. A major share (70 percent' of this decline has been due to
NARI Metals Report, 30 October 1985.
-11-
-------
Figure 6
U.S. PRODUCTION OF LEAD
aeo
1»75 1B76 1S77 1»7B 1B7» 1»BD 1tB1 1tB3
O PRthurrr
TEAR
tesoourr
nODUCTlON OF U«D
(OOO'S ef ••trie tor«)
TMr
1975
1976
1977
1978
1979
1980
1961
1982
19(0
1984
19BS
••^••MMM^V
lourct: U.S.
»r
-------
reduced recycling of lead-acid batteries. With no increases in lead prices
In sight, there is no reason to expect that secondary production will
increase from current levels, and it may even decline further.
The declines in secondary lead production are a result of declines in
battery recycling activity. To estimate recycling activity, a straightfor-
ward model was developed by Putnam, Hayes S Bartlett. (See Appendix
1 for more details.) The battery recycling rate represents the fraction of
lead scrap from batteries theoretically available for recycling that is
actually recycled. Figure 7 shows that the gap between the amount of
battery lead scrap available for recycling and actually recycled has
widened since 1980 except for a slight increase in the amount recycled
when lead prices increased briefly in 1984. Since 1980, battery scrap
available for recycling has Increased by 10.2 percent while battery scrap
actually recycled has decreased by 26.2 percent.
Figure 8 chows how the widening gap translates into battery
recycling rates. In 1980, the recycling rate was approximately 87 per-
cent; in fact, the average recycling rate between 1974 and 1980 was 77
percent. By 1985, however, the recycling rate had declined to 59 per-
cent. Thus in the past six years, recycling rates declined by 20 to 30
percent. This decline represents approximately 120,000 to 180,000 addi-
tional metric tons of lead that are exiting the battery recycling chain each
year. At 20 pounds of recoverable lead per battery, this translates into
an additional 13 to 20 million batteries not being recycled in 1985 alone.
Figure 9 Illustrates the intuitive result that battery recycling rates
are correlated with lead prices. Battery recycling rates peaked in
1979-1980, the same years that lead prices peaked at 78 cents per pound.
Between 1974 and 1978, lead prices were fairly stable at 49 cents per
pound; similarly, recycling rates fluctuated slightly around 77 percent.
However, as lead prices fell after 1980. recycling rates fell correspond-
ingly.
The degree to which lead prices and battery recycling rates are
correlated was tested by running a regression on lead prices and battery
recycling rates. A regression that uses current and lagged real prices
as explanatory variables explained over 80 percent of the variance In
recycling rates. Clearly, this supports the intuitive result that battery
recycling rates and lead prices are highly correlated.
These are two conclusions to draw from the above analysis. First, a
declining trend of battery recycling is linked to declining secondary
smelter lead production caused by low lead pr . Second, the widening
gap between batteries available for recycling ki.iu batteries actually recy-
cled leads to the inevitable conclusion that spent batteries are not
remaining in the recycling chain and are being disposed of In increasing
numbers.
-U-
-------
FXCURE 9
BATTERY RECYCLING RATES VS. LEAD PRICES
too
10-
l»74 ItTB tfTB 1077 ItTB 1179 t»BO 1»B1 ItBZ 1§B3 1»5* 1tBE>
•ATTCTY tnmiK IATES VS.
CS UCTOO)
1974 76.1 .
1OT5 77.5
W7* 71.5
71.7
1978
I960
1961
1962
1963
1964
1965
17.3
77.1
70.4
99.9
46.9
S6.5
LEAD MISS
LEAD MICE
<198S
».6
n
55.5
«3.2
».4
8.4
26.4
1V.1
-17-
-------
FIGURE 7
BATTERY SCRAP
BOO
7001
vs. AVAILABLE TO FCCTUE
1975 1»78 1977 1978 1»7»
1»B1 1982 1983 1984 19BS
O AVAILABLE
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
UTTERY
AVAILABLE
TO KECTCLE
(000 Htrie
496.2
479.0
$65.8
A91.B
«92.8
*10.5
S86.1
611.5
598.9
S74.0
411.6
446.0
LEAD SCXAP
ACTUALLY
il CYCLED
tern)
jrr.s
jn.i
404.3
477.4
496.8
S26.7
511.7
471.2
421.5
S43.8
409.2
J7T.7
-15-
-------
Battery Recycling Chain
In order to explain the decreasing trend tn battery recycling, one
must consider the costs associated with each stage in the transportation
chain. The four- major distribution channels for celling new batteries to
customers are battery specialists (over 30 percent — e.g., Delco), mass
merchandisers-discount and department stores (23 percent — e.g.,
Sears), parts distributors (17 percent), and mass merchandisers-auto
Chains (8 percent). When a battery dies, the consumer typically returns
the used battery to a service station, battery dealer, or mass merchan-
diser for a discount on the purchase of the replacement battery. In the
past, this discount has been as high as four to five dollars per battery
.Jbut has more recently been zero to one dollar per battery (typically 25
'Cents), with the exception of some mass merchandisers that continue to
value a trade-in at five dollars. (These merchandisers have chosen to
absorb the trade-in discount by shrinking battery sales profits.) As
Illustrated in the flow diagram in Figure 10, the returned battery is then
stockpiled and often sold to a wholesaler when the stockpile Is sufficiently
large or lead prices are sufficiently high. The wholesaler may then sell
It to distributors and scrap metal dealers before It returns to the battery
breaker (to crush and separate the lead from other battery components)
and secondary lead smelter for recycling.
Most secondary smelters have their own in-house battery breaking
equipment. However, some battery breakers have also operated Indepen-
dently. It is often the case that the mass merchandiser has a contract
with the battery distributor to backhaul a certain number of batteries for
each shipment of new batteries. This delivery truck then travels between
the manufacturing warehouse, the battery retailer, and the battery
breaker or secondary smelter. The secondary smelter often has a
long-term contract with major scrap customers and charges tolling costs at
approximately 10 to 12 cents a pound to resmelt the scrap lead. The
delivery truck transports the recycled lead raw product to the battery
manufacturer and repeats the cycle. The time required for batteries to
come full cycle is estimated to be four to five years.
The typical costs at each stage of the chain are estimated by Lead
Industries Association (LIA) sources as follows:
2i/lb. for spent battery (22 Ibs. lead per battery on average)
H/lb. additional payment by wholesaler
2t/lb. delivery to battery breaker
2t/lb. battery breaking
lU/lb. tolling fee by secondary smelter
2t/lb. transport from central facility
20t/Ib. total cost of lead delivered to market
-18-
-------
PRIMARY
SMELTER
REFINED
LEAD
FIGURE 10
BATTERY RECYCLING CHAIN
-> CUSTOMER
BATTERY
MANUFACTURER
ANT1MONIAL
LEAD
DISTRIBUTION
CHANNELS
.> BATTERY
DISPOSAL
SERVICE
STATION
SECONDARY
SMELTER
A
BATTERY
BREAKEFT""
BATTERY DEALER
(SEARS.AUTO STORE,
BATTERY SPECIALIST)
\
SCRAP METAL
DEALER *._fL
•C-
\
\
\
OVPSV
TRUCKER
^
BATTERY WHOLESALER
(CENTRAL FACILITY)
BATTERY
DISTRIBUTOR
-------
It is important to note that come of the above costs such as delivery
and transport costs are quite variable. Thus the 20 cents per pound
represents a single point estimate around which total recycling costs
ranging between 15 to 25 cents per pound are distributed.
By January 1986, producer prices of common lead were 18 to 20
cents a pound. The marginal cost of primary production Is also some-
where between 18 and 20 cents a pound. Secondary producers have even
higher costs Of production. However, secondary producers may fare
somewhat better because the end product of secondary smelters from
recycled battery scrap is often a superior grade alloy called "antimonial
lead" (or "hard lead"). Antimonial lead sold for 20 to 24 cents a pound
In 1985.
Even at these prices, there is clearly little or no cushion for profit.
When lead prices decline, the profits of higher cost producers are further
eroded. As a result of the current decline in lead prices, whereas in the
past, a customer who returned a battery received a credit toward the
purchase of a new battery. In 1985 and 1986 some customers must pay a
battery disposal fee of approximately 50 cents. Otherwise the battery
does not get recycled and exits from the recycling chain.
A survey of secondary lead smelters conducted in March 1986 by the
Secondary Lead Smelters Association (SLSA) supports the fact that the
economics of lead recycling have deteriorated. One lead smelter cited an
offer of 200 batteries free of charge which it had received from a local
major discount store. The smelter turned down the offer because the
labor costs for loading and transporting the free batteries would eat up
any profit gained from recycling.
Health and Environmental Regulation of Lead
The economics of the secondary lead Industry have been further
dampened by stringent and costly environmental regulations enacted since
the late 1970s. The standards that apply to spent batteries are ambient
air quality standards for lead, OSHA standards for lead in the work
place, water quality standards for smelters and battery plants, and
recent RCRA regulations for the storage and the handling of hazardous
waste.
In 1978, the ambient air quality standards for lead were set at 1.5
micrograms/cubic meter. This meant that battery manufacturers and
prircary and secondary lead smelters could not exceed this level at the
fenccHue when averaged per quarter. The capital improvements required
to meet this lead standard alone were recently estimated by lead industry
-20-
-------
experts at the Bureau of Mines to cost 4 cents a pound of lead produced
and must be met by 1988.* Additionally, an even lower ambient air
quality standard of 0.5 micrograms of lead per cubic meter has recently
been proposed.
In March 1983, as part of the final phase of a 1979 OSHA standard,
an In-plant maximum permissible exposure limit for lead of 50 micro-
grams/cubic meter was established. Primary lead smelters must meet this
standard by 1991; battery plants and secondary smelters must meet the
standards by 1986. These OSHA regulations also set a blood lead limit of
50 micrograms of lead/100 grams of blood to apply to all employees in the
lead industry.
In addition to providing temporary medical removal protection (MRP)
benefits for those employees whose blood levels rose above certain levels
(experts believe as many as 30 percent of the workers in the industry at
any time could be on MRP**), the OSHA regulations required that com-
panies In the lead industry set up monthly surveillance programs, regular
physicals, respirators, uniforms, etc., to administer and monitor the
regulations. Industry sources estimate that those OSHA regulations add
20 to 40 dollars a ton (1 to 2 cents a pound) to production costs depend-
ing on the size of the operation.*
The third regulatory issue faced by the lead and battery industries
stems from the Clean Water Act of 1977. By March 1984, water effluent
limits for primary and secondary lead smelters were set at an annual
average of 80 parts-per-million; battery plants faced a standard of 120
parts-per-million. Few If any secondary smelters are currently able to
meet these standards. Wastewater treatment costs to meet there stan-
dards range from $0.75 million to $3 million per plant or about 0.5 cents
per pound of lead.++
The final and most recent regulations affecting the battery industry
are the November 1984 and January 1985 RCRA regulations which now
classify spent lead-acid batteries (or parts of spent batteries) as well as
certain lead mine and smelter effluents as hazardous wastes, thus adding
difficulty to battery recycling efforts. These regulations impose costly
• "Lead.* Mineral Facts and Problems, 1985 edition. Bureau of Mines.
p. 14.
** Ibid.
+ Secondary Lead Smelters Association (SLSA).
•M. Ibid.
-21-
-------
restrictions on owners and operators of facilities that store spent bat-
teries before reclaiming them. The Small Quantity Generators provision of
RCRA says that anyone generating more than 100 kg (220 Ibs) of hazard-
ous waste per month (less than six spent batteries) must comply with
RCRA regulations that handle transportation and disposal of hazardous
waste. However, spcj"it_bjltfcclcs have so far been exempt from the SQC
transportation crausg that wouJdlnave^required ^pent Jaatteries to be mani-
fested." The suC disposal requirements which do apply dictate inar spent
bflllUMeV from a SQC must be stored and disposed of at an approved
hazardous waste facility. On-site storage of less than 180 days remains
Since some secondary smelters store lead-acid batteries on site, they
become land disposal facilities and therefore need a RCRA permit or
interim status in order to operate. A secondary smelter that handles
spend lead-acid batteries must meet the following RCRA requirements: be
Issued a Part B application which allows them to process the hazardous
material. Install a ground water monitoring system, and obtain non-sudden
liability insurance for $3 million per occurrence and $6 million in total.
Sources close to the lead industry estimate that a Part B application costs
between $30,000 and $50,000, depending on the size of the smelter, and a
groundwater monitoring system costs approximately $30,000.* Due to
RCRA alone, the costs to an owner or operator to continue to handle
spent batteries are on the order of $100-1200,000 per plant. These costs
can be prohibitive especially for Independent battery breakers.
By themselves, these costs can be substantial. However, for many
secondary smelters, the primary issue Is not cost but the inability to
maintain operations due to the unavailability of liability insurance. Many
secondary smelters store batteries on-slte prior to processing and thus
require RCRA permits at land disposal operations. These facilities were
required by the Hazardous and Solid Waste Amendments of 1984 (HSWA)
in order to submit Part B permit applications and to certify compliance
with groundwater monitoring and financial responsibility requirement by
November 8, 1985, or else their interim status would terminate. Because
most secondary smelters could not obtain liability Insurance or Indicate
the financial strength to provide financial assurance, they were not able
to comply with the HSWA requirements and have thus lost interim status
to operate their land disposal operations. Stringent enforcement of the
HSWA interim status provisions would therefore force the the closure of a
number of smelters that have otherwise managed to remain economically
viable.
Secondary Lead Smelters Association (SLSA).
-22-
-------
In summary. It is clear that the costs faced by battery breakers,
lead smelters, battery manufacturers, and storage facilities to comply with
health and environmental regulations for lead alone are becoming signifi-
cant. The estimates above show that NAAQS and OSHA regulations for
lead cost 5 cents per pound at a minimum. In addition, RCRA regulations
for spent battery and processing facilities require an up-front Investment
of several hundred thousand dollars or up to 1 cent per pound of lead
produced. As discussed in the next section, these compliance costs have
had and will continue to have a dramatic effect on the battery reprocess-
ing Industry.
Impacts on Secondary Smelters and Battery Breakers
The progress of regulation relating to the handling of lead waste as
well as the overall'poor economics performance of the entire lead industry
mean that many secondary smelters are now unable to invest in environ-
mental equipment In order to comply with the regulations while still main-
taining their ability to collect adequate raw material (old scrap) and
ultimately sell It for a profit. In 1985, there were approximately 23
secondary lead smelters in the U.S., down from approximately 80 only two
years earlier.* Many of these secondary lead smelters in the industry
are being or have recently been forced to drop out because of price con-
straints and the increased costs of complying with, environmental regula-
tions. Table 1 shows that a total of 571,000 metric tons of furnace
capacity in secondary smelters has closed since 1981; this is a significant
portion of the total furnace capacity of less than 900,000 tons at the end
of 1984.** Thus secondary lead smelting capacity has shrunk by 37
percent In the four-year period 1981-1984. And since early 1984, eight
additional smelters have closed. Additionally, industry sources estimate
that as many as 70 percent of the currently operating smelters are.
operating without the necessary environmental permits. They could be
forced to close after the grace period expires.
Similarly, many Independent battery breakers have gone out of busi-
ness; there now remain less than five operating breakers In the entire
U.S., down from approximately 300 in the late 1970s.* One industry
expert believes that the first 150 breakers dropped out gradually under
pressure to meet OSHA regulations. RCRA regulations caused another 70
smelters to close fairly soon after the regulations were enacted. By the
• "Lead." Mineral Facts and Problems, 1985 edition. Bureau of Mines.
p. 3.
** "Lead." Bureau of Mines Minerals Yearbook, 1984, p. 5.
«• NARI Metals Report, 30 October 1985.
-23-
-------
TULE i
U.S.'ftBanobry Load iBtlttr and t<
Ciaiiaii MM* Location *f t*»lt«r
tortsovtolldon Ntfclt, 11
ftOTOMO"llfftOl Corp. ,. St. VOlont, w
tocttla, UA
Oiloridi Ploranet, US
Mdtratod HttaU ••Mrk, IJ
Hiding, II
•oMten, TX
6mr«l tottery Corp. Mf tin, U
6*mr«l tMlting BMnviUt, TV
Oil totttrin OMTI«, HE
•ouston LMd Co. taaton, TX
^n Vi«r i U~ Keh^l, VA
Ineo US, Inc. JccUonvfUt. PL
Inlond »*t«U trMntng Chieagc, 1L
Hunur Corp* Oollo*. TX
MtiarMl taBltinf Attantt, 6A
A Icftntng •^riektowt, GA
•tlttf ClOMTM
(••trie torn)
(20,000)
(27.000)
(20,000)
(12,000)
(10,000)
(10,000)
(10,000)
(15,000)
(10,000)
(25,000)
(55,000)
(15,000)
(12,000)
(15,000)
O.OOO)
(•0,000)
(25.000)
(tt.OOO)
tat* of Clour*
•Uy-85
...12
r:
tar-82
Aug-81
£;£
-24-
-------
TABLE 1. (cont.)
__
loth »ro». telling
Sander* Lead
SouthMoet Neteli
faraeorp. Inc.
Tonolli North M»rica
IKS Laad «ef inery Inc.
Wllard Laad Co.
location af taattar
E. SyracuM, NT
Cadartawt, GA
San Sarnadino, CA
tt. Louis »ark. W
•ranita City. IL
•ts^Mlni. M
E. Chlcaoo. IL
Charlottt, "C
Capacity
(aatrtc tern)
(S.OOO)
(10,000)
(10,000)
(U.OOO)
(18,000)
(25,000)
(45,000)
(22,000)
(20.000)
•ate af Claaur*
*n.85
Oac-BS
TOTAL aOSUUS:
($71,000)
SOURCE: National Association of Recycling Industries (KARI)
-25-
-------
beginning of 1983. there were less than 50 battery breakers In the U.S.;
by 1984 there were less than 25 still operating.
The numerous recent closures In the industry have led to substantial
reductions In the nation's ability to recycle batteries. A battery industry
expert noted that In the state of Texas alone, approximately 5 million
batteries are available for recycling per year, yet because of the fact
that by 1985, there did not exist any battery breaker in Texas, only 1
million batteries at best were recycled after having been transported long
distances for resmeltlng. Closure of smelters and battery breakers even
further narrows the geographic distribution of recycling facilities and
Increases the overall transportation costs of supplying the remaining
smelters with the raw material required. As one survey respondent
noted, "at current junk pricing. Junks [spent batteries] cannot be
shipped very far and have any value over freight costs." Thus it has
been observed that large junk battery shippers by 1986 generated 60 to
80 percent less volume than in 1984.
Those smelters that do remain have generally been able to do so
because of their overall strategy of vertical integration. That is, these
companies not only produce their own batteries but also break and resmelt
the secondary lead from spent batteries. Table 2 distinguishes between
those major battery manufacturers that smelt their own lead and those
that do not. °
Note that current legislation essentially exempts those persons who
generate, transport, or collect spent batteries or persons who store spent
batteries but do not reclaim them from RCRA regulations. These exemp-
tions apply to components of the battery chain such as backhaulers,
battery dealers or distributors, service stations, or scrap metal dealers.
However, according to the survey of secondary lead smelters, scrap metal
dealers and service stations have ceased handling spent batteries because
the simple economics of the situation leave no room for profitability. One
respondent cited that in the case of South Texas, by early 1986, over 50
percent of the scrap dealers were no longer receiving or buying scrap
batteries due to depressed lead prices and even fear of upcoming govern-
ment regulations that would affect their spent battery collection efforts
and potentially their liability for the potential damages caused by
Improper battery disposal.
It Is clear then that economic Incentives that existed up to six years
ago for recycling batteries have diminished. At the 1986 price levels for
lead, scrap metal dealers are not adequately rewarded to provide as
sufficient a financial Incentive to collect lead scrap as before. Thus
consumers and battery wholesalers often find It easier to simply dispose
of spent batteries (illegally) rather than find someone (and maybe pay
someone) to take them off their hands. This explains the ballooning
-26-
-------
Table 2
MAJOR STORAGE BATTERY COMPANIES
Vertically Integrated Not Vertically Integrated
General Battery Globe Union (Johnson Controls)
Chloride Delco
GNB
East Penn
-27-
-------
quantities of spent batteries that are unaccounted for (either disposed of
in landfills, permanently stockpiled, or otherwise exiting the recycling
chain). With no upturn in sight for lead demand or lead prices, battery
recycling rates will continue to decline. Faced with increasing numbers
of batteries exiting from the recycling chain, we must carefully examine
the possible health and environmental effects of improper disposal of
lead-acid batteries.
HEALTH AND ENVIRONMENTAL IMPACTS
Scientific View
To determine the potential health and/or environmental hazards
associated with improper lead-acid battery disposal, a number of chemists
and soil scientists were queried. The general consensus is that there
does exist a mechanism by which lead can form an aqueous component
which can then leach through the soil into nearby groundwater.
According to experts, lead is more soluble than most heavy metals
and Is in fact highly soluble in organic compounds such as acetic and
citric acid. This is a fact already well known to the EPA. At present,
the solution agent used to perform Extraction Procedure (EP) toxicity
tests for lead is acetic acid. The significance of acetic acid for this
analysis is that it Is very prevalent in household garbage disposed in
municipal landfills. Lead from battery plates, posts and grids when
mixed with co-disposed acetic acid can form lead acetates. There remains
some uncertainty about the extent to which these compounds will migrate
through the soil; some believe that the lead acetate will "complex" with
soils, especially clay, which prevents further movement. However, there
is clearly some possibility that lead will migrate through the landfill in the
form of lead acetate and move into adjacent regions entering aquifers used
for drinking water.
Scientists believe that the degree of leaching and the hazard that
lead leachates pose depends upon many features of the landfill. Including
how the lead source (batteries) is distributed in the landfill. It is,
however, rare for compounds such as lead acetates to migrate long dis-
tances.
The scientific implication is that a mechanism for lead migration is
present in areas with high concentrations of acetic acid. Therefore, we
would expect a greater potential for off-site health and environmental
impacts due to lead at municipal landfills rather than at industrial dumps
where the organic compounds might not be present.
-28-
-------
In addition to lead, batteries contain significant amounts of sulfuric
acid. While sulfuric acid is a highly toxic material. It is very often
neutralized by the natural buffering agents In soil. Therefore, the
release of small quantities of sulfuric acid is less of a concern than the
migration of lead compounds.
Empirical Evidence
The extent to which lead compounds have contaminated groundwater
sources is difficult to document. The reason is that there are limited
data available. A search for site-specific evidence was therefore centered
on the EPA's NPL sites since most documentation and testing would have
occurred at these sites.
:->. Based on a survey conducted by Putnam, Hayes & Bartlett of U.S.
secondary lead smelters, there is general agreement that the batteries are
finding their way in Increasing numbers to dumpsters and city garbage
trucks for hauling to municipal landfills. There are even reports that
some landfills, for example, due to the increasing presence of batteries in
landfills, are considering purchasing battery breaking equipment to
handle the spent batteries they receive. Other Incinerators report
Increasing problems with heavy metals In scrubber waste water. One
survey respondent noted that In a Texas town with a population of
10,000, an estimated five to 10 batteries were being buried in household
garbage daily.
In addition to causing problems with incinerator operations, lead-acid
batteries have also been causing problems with automobile shredding
equipment. Since per-pound payment for the weight of a junked automo-
bile is now higher than that of the average battery, spent batteries have
recently been found hidden inside crushed vehicles.* Unfortunately.
shredders have found unacceptable lead levels in the nonmetallic residue
from the shredding process bound for landfills. Additionally, the high
lead content In metal scrap changes the properties of the scrap and car-
ries a potential problem for steelmaking operations relying on this scrap.
The environmental Impacts of the Increased presence of batteries in
landfills may not yet be measurable. From a total of 786 sites on the
NPL, 55 of them noted the presence of lead (from any source) in the list
of significant contaminants. However, thus far the primary sources of
lead contamination were supposed to be fly ash and paint sludge, materi-
als whose lead content Is in a different form to test the scientific hypoth-
esis posed above regarding the formation of lead acetates.
American Metals Market. 21 November 1985, p. 1.
-29-
-------
In fact, out of more than 25 NPL landfill sites studied in some
detail, only one had notable (i.e.. above background) concentrations of
lead in nearby ground water. At the Gems landfill in New Jersey, a
facility primarily for municipal wastes, concentrations of lead in various
samples were as follows:
Leachate 300*400 ppm
Surface water 12-41 ppb
Croundwater 11-73 ppb
(groundwater background 10 ppb)
To keep these numbers in perspective, recall that the drinking water
standard for lead is SO ppm. The sources of lead contamination at the
GEMS site are unknown; however. It seems clear that lead in some form
'leached through the landfill to contaminate nearby groundwater supplies.
-30-
-------
CONCLUSIONS
Based on the analysis undertaken for this study, we conclude that
the current economic conditions of the secondary lead industry coupled
with increasingly stringent environmental regulations are causing a decline
in lead-acid battery recycling rates from typical levels of 80 percent to
current levels below 60 percent. This translates Into approximately
120,000 additional metric tons of lead that exited from the battery
recycling chain in 19B5 and entered the environment.
Since lead demand is likely to remain flat in the future and lead
supply will continue to be ample. It is unlikely that lead prices will
Increase significantly from their current low levels. Therefore, assuming
no growth or further decline in lead demand or lead prices, and extrap-
olating the 60 percent recycling rate over the next 10 years, between
1985 and 1995, nearly 120 million additional batteries containing about 2.6
billion pounds of lead will enter the environment due to the 20 percent
decline in battery recycling rates. If environmental regulations cause
further closures in the secondary lead industry, the number of batteries
exiting the recycling chain will only increase.
Based on a survey of secondary lead smelters and anecdotal evidence
collected from sources close to the battery industry, spent batteries have
been found to be entering the environment in increasing numbers by
means of disposal at municipal landfills and incinerators. The increasing
presence of batteries is causing operational problems in some facilities,
such as contamination of incinerator ash with hazardous metals. At
municipal landfills, substantial numbers of disposed batteries pose a
hazard or threat of lead contamination.
Scientists concur that a mechanism does exist at a landfill for lead to
form a compound and leach through the soil to contaminate nearby
groundwater. However, the empirical evidence that we have obtained
regarding the extent of the lead contamination problem is inconclusive.
We have not found widespread contamination of groundwater by lead at
landfills on the National Priorities list. However, the decline in recycling
rates is relatively recent. Therefore, we cannot yet expect to find much
empirical evidence; rather, we would expect to see lead contamination
posing a larger contamination problem in the future.
Based on these conclusions, and on a study of the lead Industry in
general, we believe that continued economic trends combined with existing
or more stringent environmental regulations will exacerbate the problem of
lead-acid battery recycling. The current market provides no financial
Incentives to Increase recycling rates which may decline even further and
, tely have a significant impact on human health and the environment.
-31-
-------
RECOMMENDATIONS
Based on the preliminary findings of this study, we recommend that
the EPA examine in more detail the link between improper disposal of
lead-acid batteries and health and environmental impacts of lead con-
tamination in soils and groundwater. This effort should be undertaken
both empirically (i.e., searching for sites where lead contamination from
batteries or other sources is a problem) and theoretically (I.e., reviewing
scientific Implications of the possible mechanisms for the formation and
migration of lead compounds).
If the health and environmental risks due to improper disposal of
lead-acid batteries pose or threaten to pose a significant problem, then
the EPA should explore options that address critical steps in the lead-acid
battery recycling process. Unlike most hazardous wastes, there exists a
recycling chain for lead-acid batteries that In the past has operated with
remarkable efficiency In response to market forces. The current market
economics and regulatory climate have reduced the efficiency of this
recycling mechanism. It may be the case, however, that if the recycling
chain were compensated for the environmental benefits provided In addi-
tion to the value of the lead recovered, recycling rates would return to
previous levels, and a potential environmental problem in the form of
massive amounts of improperly disposed batteries could be eliminated. In
this case, the EPA may want to consider regulatory or market-based
schemes that would take advantage of and enhance the efficiency of the
existing recycling network. For example, the EPA may want to
certain RCRA regulations that apply to thycolject ion, handling, and
•processing of lead-acid batteries to determine 'WlltlKiir" relaxation of
certain provisions may maintain public health and welfare while removing
barriers to recycling. Similarly, the EPA may want to consider the merits
of market-based Incentives such as deposit mechanisms that generate
funds, which can be added to the v£kiL UP 'a Used battery to encourage
recycling.
To complement or supplant efforts to encourage recycling, the EPA
may also want to evaluate the feasibility oJj^gulaifllX*. market-based . or
information programs that require or encourage the separation and proper
handling of batteries at the point of disposal. Such programs may
encourage landfill or incinerator operators to separate, collect, and return
batteries to the recycling chain.
-32-
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Appendix 1
GUIDE TO THE CALCULATION OF BATTERY RECYCLING RATES
The five major steps Involved to calculate the battery recycling rate are:
1. The average lead content per motor vehicle battery Is estimated as follows:
(Total lead consumed for batteries - lead consumed for Industrial batteries)/Total battery
shipments).
where total battery shipments Includes original equipment (OE), replacement, and export ship-
ments. To account for Inventory fluctuations, a two-year moving average of lead content per
battery Is used to smooth the profile over time.
2. Assume that the actual recoverable lead per battery Is 90 percent of the lead content due to losses
In the recovery process.
3. The total motor vehicle batteries available to recover are:
Truck dereglstratlons * auto dereglstratlons * I of replacement batteries.
If 90 percent of automobile registrations are car registrations (based on historical trends), then:
Truck battery lead content = 1.2 * average battery lead content;
Auto battery lead content * average battery lead content/1.02.
Therefore, motor vehicle batteries available for recycling ««
(truck dereglstratlons * .1 • replacement batteries) • truck battery weight (3 years earlier) +
(car dereglstratlons 49* replacement batteries) * car battery weight |3 years earlier|,
where the average life of a battery Is estimated at three years.
-------
•,. To get actual lead recovered from motor vehicle batteries:
Amount of lead recovered from scrap batteries - .1 • lead consumed In Industrial batteries
(€ years earlier) + .75 • lead consumed for battery exports,
where we assume 80 percent of Industrial batteries are recycled, and the lifetime of these batteries
Is six years, and 75 percent of all batteries exported are ultimately recycled In the destination
country.
5. Battery recycling rate « battery lead scrap actually recovered/available for recovery.
-------
tPPENDIX I (centIt CALCULATION OF IATTERI RECTO. IRQ RATH FOR 1974 • 1985
1974 1975 1776 1977 1978 1979 1980 1981 1982 1983 1984 1985
UTTER IE* .REPLACED
(Millions) '
llrt:
VEHICIE OEREGISTRATIONS
CARS (Million*)
TRUCKS (Million*)
44.4
5.9
0.8
42.6
5.4
0.9
49.2
7.2
1.3
54.6
8.8
1.8
56.4
7.9
1.7
5S.7
8.6
1.5
50.1
8.9
1.5
5S.6
7.2
1.4
54.2
6.7
1.5
56.1
6.8
1.8
59.S
7.1
2.0
58.7
8.8
2.5
IMTERIES AVAILABLE FOR RECOVERY 51.1 49.1 57.7 65.2 66.0 63.8 60.5 62.2 62.4 64.7 68.4 70.0
(•IIIlent)
AJUIPIIED ITi
AVERAGE RECOVERABLE IEAO PER BATTERY 21.4 21.5 21.6 23.3 23.1 21.1 21.3 21.7 21.1 19.! 19.7 20.3
13 re«r deity) (pound*)
IOIAI RECOVERABLE IEAO FROM SPENT BATTERIES
(000 Metric tor > 496.0 478.8 565.3 689.1 691.6 610.6 584.5 612.2 597.2 372.3 611.2 644.6
IEAO RECOVERED FRO* SCRAP BATTERIES
(000 Metric ton*) 379.6 378.7 418.6 468.7 469.6 495.6 480.6 481.4 439.2 371.3 443.1 406.7
LESS:
LEAD RECOVERED FRO* INDUSTRIAL BATTERIES
(6 y*«r delay) (000 Metric torn) 80* 42.4 41.7 46.2 49.4 46.7 58.6 58.7 54.7 56.5 65.9 67.8 74.0
PLUS:
IEAO RECOVERED IN BATTERT SCRAP EXPORTS
(000 Metric ton*) 75X 40.4 34.0 31.9 58.1 74.0 89.8 89.7 44.6 38.9 38.2 33.8 44.9
TOTAL LEAD ACIUALIT RECOVERED FROM SPERT BATTERIES
(000 Metric tons) 377.6 371.0 404.3 477.3 496.8 326.7 511.6 471.2 421.6 343.8 409.2 377.6
RECKLING RATE
(X) 76.1X 77.5X 71.5X 69.3X 71.8X 86.3X 87.5X 77.0X 70.6X 60.IX 66.9X 58.6X
-------
SCRAP IRON & STEEL PRICES
Conium»f Buying PrlcH
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UMANOfltt
-------
GNB Incorporated Corporate Headquarters
Mailing Address:
P.O. Box 64100
St. Paul, MN 55164-0100 U.S.A.
July 10, 1986
1110 Highway 110
Mendota Heights, MN 55118
Telephone (612)681-500
Mr. Bob Wilbur
B C I
1101 Connecticut Ave, Suite 700
Washington, D.C. 20036
SUBJECT: CURREKT UPDATE - DISTRIBUTION TO SLSA MEMBERSHIP AND OTHER INTERESTED
PARTIES
Dear Mr. Wilbur:
Attached you will find copies of two recent articles, one issued on July 2nd,
1986 by American Metals Market and the second one by Metals Week, dated July 7,
1986 all pertaining to the recent spent lead acid battery studies.
The articles are of course self-explanatory. For example, an EPA policy
staffer has stated "we haven't been able to generate any interest in the
problems along the agency's chain of command where follow-up work could be
authorized. One official of the office of EPA Policy Planning and Evaluation
made the astounding statement that "the research so far shows no solid
evidence ^f health risks from the finding that more batteries are entering
landfills as the battery-recycling industry shrinks! They further comment that
"wnat arives the agency are health risks. (EPA1 s own consul ting firm
contradicts this conclusion.) An EPA policy staffer was also quoted as saying
"there's no future study planned." From this person's view point, I find the
EPA conclusions as incomprehensible!
On March 8, 1984, EPA promulgated Effluent Guidelines for Nonferrous metals
manufacturers of which Secondary Lead Smelting (Battery recycling) was a sub-
category. In the pre-amble of those regulations, EPA stated that the raw,
untreated waste waters from all operating secondary lead smelters contained 80
tons per year of toxic pollutants. If we conservatively assume that lead
constitutes 70% of the total toxics, that equates to 56 tons per year of lead
in untreated waste water. The promulgated BAT/PSES regulations require
treatment of those waste waters to reduce discharge of toxics to 1.67 tons per
year (1.17 tons per year lead). The Secondary Lead Smelter Association Inc.
(SLSA) filed a law suit against EPA contending those levels were unachievable
using EPA's model technology. SLSA entered into ernest settlement negotiations
with EPA and proposed effluent limitations equating to a discharge levei of
approximately 3.U tons per year of toxics (2.1 tons per year of lead). EPA
refused to negotiate with SLSA on this matter and instead chose litigation in
Federal District Court over the difference ... 0.93 tons per year of lead!
It is totally incomprehensible to me why the EPA would fight so hard over 0.93
tons per year of lead on this issue which will cost the secondary lead industry
millions of dollars to attempt to comply with, if at all possible, and then
tatce the attitude that 200,000 tons per year of lead being improperly disposed
of (as shown by their own study) is insignificant and causing no harm - or in
the words of the EPA "shows no solid evidence of health risk".
Tolov ?07m« r-NP MPNPI
-------
-2-
July 10, 1986
In other words, the EPA does apparently consider 56 tons of lead discharged
into the environment is a health hazard requiring millions of dollars for the
secondary lead industry to correct while at the same time considering 200,000
short tons of lead and millions of gallons of acid improperly disposed of
in the environment as a result of not being reclaimed as constituting "no solid
evidence of health risks."
On the bright side, you will see from the article that the Department of
Commerce disagrees with the EPA conclusions and plans to start a study of their
own. It is my understanding that there is somewhat of an adversary
relationship between EPA and the Department of Commerce. You will note from
the article that Commerce says "EPA is looking at health effects. That's a
small part of what we want to get at." Current plans call for a Commerce study
to begin this autumn and to be completed-by mid 1987. Please also note that
Commerce is "very interested...in the possibility that remedies - such as ihe
imposition of cash deposits on battery purchases - are needed in light of**
threats to the public health or the recycling industry's health."
From this writer's viewpoint, the matter of cash deposits on battery purchases
is a very sensitive issue. Although primaries or secondaries may or may not be
greatly concerned about cash deposits, I have noted that the battery
manufacturers in general, have some concern as to how this might effect the
battery market. It is unlikely that any battery manufacturer would like to
be known as the author of a cash deposit program with their customers. Please
note that many retailers are now advertising with the stipulation that "no
trade-in required." Retail stores are becoming less interested in dealing with
junks due to lack of economic incentives. In addition, we are finding that the
re-cycling business is growing rapidly. In this business, entrepreneurs are
culling junk batteries, cleaning them up, charging and re-testing and then
selling them on the open market at extremely low prices. This results in loss
of lead and battery sales to smelters and battery manufacturers. There is some
question in my mind as to product liability ramifications regarding such
transactions.
I am also enclosing an article from the July 8th issue of American Metals
Market pertaining to the B & 0 Railroad agreement to clean up a lead battery
scrap site. Please note that scrap battery dealers are to be held responsible
if they shipped any batteries to a specific location as far back as 40 years
ago! Actions such as this will further deter scrap deaTers from being
interested in collecting junk batteries.
Also, please find copies of a four page article from the "Phoenix Quarterly"
published by the Institute of Scrap, Iron & Steel, Inc. which deals extensively
with our paper entitled "Impending Crisis?" and the EPA authorized study nade
by Putnam, Hayes & Bartlett. BCI will be publishing an article on this same
subject in late July.
Consequently, as of this writing, we have one agency (EPA) who says this Batter
is of no great concern even though EPA's own con«f 1' ing firm's statistics snow
otherwise, while at the same time the Department :? :)ommerce says they are very
interested in this project!
-------
-3-
July 10, 1986
Mike Sappington of Lake Engineering is preparing a letter now to various
agency individuals (including the Department of Commerce) pointing out the
incongruity of EPA's conclusion and will be sending SLSA members copies of his
correspondence. You will recall that at the last SLSA meeting held in
Philadelphia the "Impending Crisis" paper was discussed in depth and it was
decided that an SLSA committee should be formed to make specific technical
guideline recommendations to the EPA. Mike Sappington was appointed chairman
of this project and is organizing this committee now. You will be hearing from
him in the near future.
I have engaged the services on behalf of GNB of Mr. Gary H. Baise - Attorney
at Law with the firm of Beveridge & Diamond, Washington, D.C. to represent
GNB in matters pertaining to environmental issues. Mr. Baise is a former
Deputy Administrator of the EPA serving under Mr. William Ruckleshaus, former
Administrator of the EPA. Mr. Baise will assist GNB in communicating
the inequities of the present situation on both, federal and state levels.
,'<•>
- .
fame's G\( Palmer
Executive Vice President
Strptfly & Distribution Group
End
-------
Battery Studies
Are Picked Up
By Commerce
ByBUXSCBVITT
NEW YORK—The Commerce
Department will carry on where
the Environmental Protection
Agency is leaving off as the
federal unit spearheading stud-
ies of the unrecycled battery
problem, sources say.
Commerce is developing plans
to begin this year its own
research into the declining rate
of lead battery recycling, Robert
(CoattoMd ra pact S)
2
""Commerce Gets Battery Studies
C Reiley, director of the agency's
'Office ef Metals and Com-
nudities, said Ifonday.
. "We're very interested," he
uiiMfl the possibility that reme-
dies—each as the imposition of.
cash deposit* on battery pur-
'chisci are needed in light of
threats to the pablie health or the
recycling industry's health.
The idea of battery deposits is
•a good idea," Beiley said. "We
think that we wold support that,"
bat it has to be studied more
closely, through more govern-
•tent research.
Reiley's remarks came in
response to indications that the
EPA, which recently sponsored a
preliminary study on the recy-
cling decline (AMM, June 10). will
not move ahead with follow-up
research because no significant
health effects from the trend can
be found.
"There's no future study
planned." said the EPA policy
staffer who coordinated the ini-
tial research.
"We haven't been able to gen-
erate any interest" in the prob-
lem along the agency's "chain of
command" where follow-up work
could be authorized, acknowl-
edged Glen Anderson in the EPA
Office of Policy, Planning and
Evaluation.
Be said that the research so far
shows no solid evidence of health
risks from t>e finding that more
batteries are entering landfills
as the battery-recycling industry
shrinks. Staffers consulted last
week regarding the study showed
little interest, Anderson said,
beeanse "what drives this agency
are health risks."
Reiley at Commerce
responded, -EPA is looking at
health effects. That's a small part
of what we want to get at" The
agency's Basic Industries Sector
is interested in studying whether
and how to create policies aiding
the recycling industry, be said.
"We plan to do it," Reiley said
of the study, "but we're being a
little cautious because of
Gramm-Rudman and some staff-
ing problems we have right now."
' Current plans call for the study
to begin this autumn and to be
completed by mid-1987. Reiley
said.
Pa
mer
-------
IS! AD Aig Q Z IMC
New North American zinc price
hike met with skepticism
The latest wave of rise price increase* to 444 per Ib may be
premature in the view of wine analysts, bat there is general
agreement the 414 level will remain firm at least through
Angast The new hikes came in anticipation of the July 11 US
Mint tender, and on the heels of a June 26 contract rejection by
Nortnda's striking Valleyfkld, Que, zinc refinery workers.
The strike vote **"'•««rrt I.ME prices, which moved back
above the 37* mark (£533) for spot HG. On June 30 St. Joe and
Jersey Mbuere moved up 34 to 444 per Ib for HG. Hudson Bay
went up 4.54 to 42J4 for HG, and raised its domestic HG tag
6J4 to 58J4 (Canadian). Cominco followed to 444 and 60.54
^ (Canadian) for HO oo toy 2. baoyed m part by the LME, and
- *'" [•»*"»§ some analysts who thought the major f»»if«r>*mg 4onf last
' year for 1986," said one analyst, "and now they're trying to
"reeonp." Although the new price increases were "forcing the is-
. sac," he said the market will definitely be tight for August
Oao producer predicted settlements at the Broken Hill Mines
B Australia or Valleyfkld would have little effect on cur-
reat price iocs*. "If the present status quo centimes, even if
Neruda cornea back, 414 wifl be ***•***• iiwiti'* he •aid, noting.
• ^Thiaxi are basically is balance." Despite tin "^f*****
iiu«o\i«a. to added. "I thick third-quarter demand from the
atesJ mdastry, particularty is coated products, looks very good."
NEW PRODUCER US ZINC PRICES
(US t per ft)
• ft US M CB8
41.00 41.50 41.50 4130 41.75
41.00 41.00 4160 NA 41.75
44.00 44.00 NA 44.75 44.75
4400 44.75 44.50 44.75 44.75
44.00 NA 44.50 44.50 44.75
4250 43.00 4100 43.00 43.25
4100 4150 41.50 4150 4175
4100 4150 4100 4150 4175
Tb» US Mini leader for 7.642.000 Ib of SHO this week will be
carefully watched, though nest producers say they expect the
winning bid will go to a dealer. The tender should solidify the
August price, and provide some momentum for September sales.
And evea if some strikes do occur in the US steel industry, most
analysts said a widespread stoppage was unlikely.
Finally, Noranda declared force majeun for zinc shipments
from the VaUeyfield refinery on June 16. The company is, how.
ever, selling and tolling concentrates.
Lead prices predicted stable through 1986;
BHAS announces July shutdown for Port Pirie
Analysts are expressing "cautious optimum" lead prices will
remain firm through the end of the year, even if a settlement it
reached in the six-week labor dispute at Broken Hill Mines.
With BHAS's Port Pirie, Australia lead smelter slated to close
on July 25 for at least s month because of depleted stocks, down*
ward pressure on the LME price is now expected to be slight in
the event of a settlement.
Asarco, eyeing the softened LME price, lowered its quote by
0.254 to 22.254 per Ib on July 1. Though the price difference
between the LME and the US market was as high as 5.54. one
industry analyst said if the gap attracted metal from Europe, its
effect would be shortlived. "As soon as material starts coming
from Europe, it will firm up that market." be noted.
The real story in lead is inventories. Producers hope there will
be a healthy reduction in stocks through the end of the year. Al-
ready, the once bloated inventories are returning to supply and
demand balance; US stocks, which stood at 116.699 tons at the
end of May, are expected to fall below 100.000 tons by the end of
June, and below gO.OOO tons by the end of July. North American
producers report they are receiving some calls for metal from
Europe and the Far East because of the Broken Hill strike.
Given these conditions, one analyst expressed confidence the
price will hold in the 224- to 244-per-lb range through the end of
the year. If inventories reach a less cumbersome level, and sup-
ply and demand are stable, he said, "I don't think the price will
go below 204. even next year."
At Broken Hill, mine owners AM&S and North Broken Hill
Holdings were to respond on July 4 to a union compromise
proposal calling for 19 work shifts per week, up from 1S shifts
before the strike began on May 26. The owners want 21 shifts.
Finally, USW negotiators will meet with Homestake repre-
sentatives on July 8 to discuss the terms of a new contract for 215
mine and mill workers at the Bnick, MO. lead operation. No
talks are planned for 200 idle smelter workers. The smelter will
be down at least through the end of the year, one source satd.
Elsewhere in lead and zinc...
BoJklea wffl efaraai (ha Black A0fd Mat in Greenland for st
least two years, a stipulation required by Oamsb authori-
ties in the deal worked out between Comiaco and Boliden
two weeks ago. "We are confident there are ore bodies for
at least two years, and we are crossing our fingers for
more," a Boliden spokesman said. If the sale is approved
by Vestgron Mines' stockholders on July 8. ownenbip will
be transferred to Boliden during the week of July 14.
To* EPA has*
to sBsoy the i
atal impact of
(pent batteries on municipal landfills. "It's not a real big
issue," an EPA spokesman said. There may someday be
a problem, but it's a long-term problem." A recent stency
repon recommeded a follow-up study after it found 40%
of all spent batteries are escaping the secondary lead recy-
cling chain because of low lead prices. Meanwhile, the
Commerce Dept.'s Office of Meuls snd Commodities
plans its own study of the secondary lead industry, which
should be under way by the end of the year. "It» becom-
ing a hazardous waste management industry, ratf.er trun
a lead recycling industry," an OMC spokesman UM The
report will suggest policy solutions.
l £tffiurto monthly averages are on page 8.
• Amu H expected to be awarded tungsten ' GSA;i
July 3 tender. Amu bid on oae lot (20*: <-ssi.iiiunsj
1,763.139 its of WO, at S41769 per stn. Bomar t.d on
three lots: (202) 1.763.159 stn of WO,; (203) 3.:<9 :•*
stu; and (204) 646.346 stu at $28.50. $30. and S 30 per n a.
respectively. The material should be swarded this wee*
-------
American Metal Market
B&O in Agreement to Cleanup
Of Lead Battery Scrap Site
By EDWARD WOBDEN
NEW YORK—The Baltimore it Ohio Railroad
has agreed to a voluntary cleanup of lead-contami-
nated railyards in Troy, Ohio, as part of a federal
Superfund case, but will continue to hold scrap
dealers responsible if they shipped any batteries
to nearby United Scrap Lead Co. as far back as 40
yean ago.
United, a now-defunct recycler of vehicle and
industrial batteries, shipped lead from the B&O
yard from 1946 to 1980. Empty battery casings were
shredded and left in an on-site fill area. After the
recycler's property was put on the National Pri-
orities List (Superfund) in 1984 state environmen-
tal officials sought federal testing of the railyards,
too.
Levels as high as 386,000 parts per million were
found on railroad property. The B&O initially
applied a dust controller and erected fencing
around highly contaminated areas.
The federal Environmental Protection Agency
(EPA) reached an agreement with B&O officials
but not with owners of the now-defunct scrap com-
pany. The former site of the battery recyclingoper-
ation, located near the railroad property, is on the
National Priorities List for Superfund action.
As possible suppliers of batteries to United.
scrap dealers throughout Ohio and Kentucky have
been notified by the railroad that they might face
liability for a portion of cleanup costs. Some 175
letters signed by James L. O'Connell. a Cincinnati
attorney retained by B&O, were sent in recent
months.
"I've turned the letter over to my attorney," one
scrap dealer said. "We haven't done business with
United for at least 15 years."
The consent order, which was approved by
federal and state EPA officials, is in lieu of a
federal cleanup that had been estimated at SI mil-
lion or more, a federal EPA spokesman said. The
proposed action by B&O, other sources said, will
require roughly half that amount.
The railroad company agreed to remove soil con-
taining more than 500 parts of lead per million
parts of soil. According to the EPA the level repre-
sents a margin of safety, since levels up to 1.000
parts per million are permitted by the federal
Agency for Toxic Substances and Disease
Registry.
Approximately two months will be required to
take away an estimated 4,000 cubic yards of con-
taminated soil, according to the EPA.
"Levels as high as 386.000 parts per million were
found on railroad property," the EPA spokesman
said. "We also sampled the surrounding residen-
(Continued on page 8)
B&O Agrees to Clean
Scrap Battery Site
(CoBtlnned from first page)
Ual area but no levels of concern
were found. The railroad com-
pany applied a dust controller
and fenced the highly contami-
nated areas in October to limit
access to the soil."
Owners of United have
retained counsel but have been
unavailable for comment.
AMERICAN METAL MARKET. JULY 8.1986
-------
VOii18 :~NO,:2~- SUMMER 1986
Illl
-------
In This Issue
Volume Eighteen, Number Two, Summer 1986
Dead Batteries
A Negative Charge to the Environment?
The automobile battery recycling rate has plummeted from 90 percent in 1979
and 1980 to just over 58 percent by 1985. Only 416,000 net tons of the 712,000
tons of battery scrap available for recycling last year were actually recycled. The
big question, and a growing concern, is, what's happening to those batteries and
the secondary lead smelters that recover the lead scrap from spent batteries. Two
new studies, one of which was prepared for the U.S. Environmental Protection
Agency, found that increasing numbers of batteries are being disposed of in
municipal landfills and incinerators that are not prepared to handle hazardous
materials.
Drums Are Marching to a New Drummer
In addition to reconditioning some 45,000,000 drums each year, a relatively new
service offered by drum reconditioners is scrap preparation, sometimes called
"flush and crush." This procedure, that prepares a drum for recycling when it
is no longer suitable as a container, is a rapidly growing portion of the recondi-
tioner's business since scrap processors refuse to buy drums of unknown origin.
The U.S. Steel Industry in Transition:
The West—Part One of a Four-Part Series
In the Spring issue of Phomu Quarterly, Dr. Robert W. Crandall, a Senior Fellow
at The Brookings Institution in Washington, wrote on "The Steady Growth of
Entrepreneurial Steel Companies." In this issue, he begins a four-pan series on
how the steel industry has changed in the West, Northeast, South, and Midwest
regions of the country. Dr. Crandall points out that as we look around the coun-
try, we should expect to see two quite different U.S. carbon steel "industries:"
the integrated sector and the minimills. The former are contracting and looking
for joint ventures with foreign capital. The latter are growing rapidly and press-
ing into new product lines.
Ferrous Data
Scrapbook
Domestic Demand Off
Exports Set Record
The Institute
Like the pboenii of old. acrap iron and md. Chairman, Public Relation* Committee:
having outlived (heir usefulness in one life, are Alan H. Cohen
purified and revnalind in die furnace of dteir Chairman. ffcsmir Qf**fy Subcommittee:
own destruction and returned to the economy Ernest "rm'bffl
a* newneeJ. This cvde of reclamation, which Editor Jama E. Fowter
conserves our precious natural resource*, a the Design: Aihcoa-WorthiapoB, lac.
modem counterpart of the phoenix arising from
the aahet of iu own funeral pyre to lymboliat. «
anoent tima. the perpenmy of life.
AMU gMWrfr is a registered trademark belong-
ing to (he Inatmne of Scrap Iron and Sieei, Inc.
U27 K fcrwt. N.W.
Waskiagton, DC tOOOC
(102) 4*6-4030
-------
Dead Batteries
A
ive Charge
to the Environment?
A product with one of the highest
recycling rates in the country, if not
the highest, now finds itself on a
downhill slide, scorned as hazardous.
In 1979 and 1980, nearly 90 per-
cent of the spent lead-acid automobile
batteries discarded in the United
States were reclaimed by secondary
lead smelters—nearly 600,000 net tons
of lead scrap. However, by 1985, the
battery recycling rate plummeted to
just over 58 percent. Of the 712,000
tons of battery scrap available to re-
cycle last year, only 416,000 tons were
actually recycled.
Since 1980, battery scrap available
for recycling has increased by 10 per-
cent, while battery scrap actually re-
cycled has decreased by 26 percent.
This decline in the recycling rate over
the past six years represents from
132,000 to 198,000 additional tons of
lead that are leaving the battery recy-
cling chain annually. At 20 pounds of
recoverable lead per battery, it is esti-
mated that an additional 13 to 20 mil-
lion batteries were not recycled in
1985 alone.
The big question, and a growing
concern, is, what's happening to those'
batteries and the secondary lead
smelters that recover (he lead scrap
from spent batteries?
The U.S. Environmental Protection
Agency thought the problem serious
enough to commission a study entitled
"The Impacts of Lead Industry Eco-
nomics on Battery Recycling." Just
prior to the EPA study, "An Impend-
ing Crisis?" was released by GNB,
Inc. and Lake Engineering and Devel-
opment, Inc. describing the secondary
lead smelting industries evaluation of
the situation.
A great deal of similar information
is contained in both reports, including
consensus on two basic problems con-
fronting the secondary lead industry:
1. Low market prices for an over-
supply of lead.
2. Increasingly stringent environ-
mental regulations.
Both studies also conclude that in-
creasing numbers of batteries are
being disposed of in municipal land-
fills and incinerators that are not
prepared to handle hazardous
materials.
James G. Palmer and Michael Sap-
pington, authors of "An Impending
"- ,sis?," report instances where
ucldoad quantities of lead-acid bat-
teries are being disposed of in munic-
ipal sanitary landfills." This, they
say, is "the opposite of the intent of
the various environmental regulations.
What is difficult to son out is how
much of the secondary lead industries'
problem can be attributed to an abun-
dance of lead at historically low prices
and what can be attributed to govern-
ment regulation. The former is cer-
tainly easier to quantify.
U.S. lead prices have nose-dived
from over 55 cents a pound in 1980 to
19 cents in 1985. (Between 1977 and
1980, lead prices averaged 61 cents a
pound, hitting a high of 78 cents a
pound in 1979.) That 19 cents ap-
proximates the cost of producing pri-
mary lead at the seven mines in Mis-
souri that account for 80 to 90 percent
of total U.S. mine production.
Historically, the production of sec-
ondary lead from old and new scrap
has exceeded production of primary
lead. (More than 75 percent of the old
scrap comes from recycled auto bat-
teries.) However, secondary- lead pro-
duction has declined m recent years
from its peak of 885.000 tons in 1979
to 591,000 tons in 1985. With no in-
creases in lead prices in sujht, Put-
nam, Hayes & Banlett (PH&B),
which prepared the EPA study, finds
no reason to expert thai secondary
production will increase Irum .current
levels; it may even decline further.
-------
The Cambridge, Massachusetts,
consulting firm also found that "the
-economics of the secondary lead in-
dustry have been further dampened
by stringent and costly environmental
regulations enacted since the late
1970's." Those that apply to spent
batteries are ambient air-quality stan-
dards for lead, Occupational Safety
and Health Administration (OSHA)
standards1 for lead in the work place,
water-quality standards for smelters
and battery plants, and recent Re-
source Conservation and Recovery
Act (RCRA) regulations for the stor-
age and handling of hazardous waste.
The costs of RCRA alone to a sec-
ondary smelter that handles batteries
are between $100,000 and 1200,000
per plant.
Price and regulation have taken
their toll on the industry. Palmer and
Sappington report that in 1981 the
secondary lead industry in the U.S.
had the capacity to recycle some 1.2
million tons of lead contained primar-
ily in scrap batteries. That capability
has shrunk to just over 700.000 tons
today, of which only about 66 percent
is operational. The 60 operational
smelters in the U.S. in 1982 have
dwindled to 24.
Their point is, the shrinkage in the
industry will not stop the annual gen-
eration of 70,000,000 spent lead-acid
batteries, which represent 70 million
gallons of highly corrosive, lead-con-
taining sulfuric acid and approximately
1.25 billion pounds of toxic lead. They
warn that if the declining trend in
battery recycling is not reversed, "by
1990 it is possible that over three bil-
lion pounds of spent lead-acid batter-
ies will have been improperly disposed
of in the environment during the de-
cade of the 1980's."
Palmer and Sappington point out
that market analysts predict lead will
remain in abundant supply and prices
will remain below levels necessary to
support the collection chain for the
foreseeable future. The authors ex-
plain that low lead prices dictate low
scrap prices.
"Currently, a spent lead-acid bat-
tery is worth around $1.00 delivered
to a smelter. At this low level, and
after subtracting freight costs to get
the battery to the smelter, there is
little economic incentive for the collec-
tion chain to operate.
"For example, if a spent battery is
only worth 25 cents to the local ser-
vice station, it is easier to place the
battery in the trash rather than to
save it for pickup. Suppose the entre-
preneur who collects batteries
service stations in his pickup
delivery to a collection center pays tne
sen-ice station the 25 cents for the
battery. His truck holds 100 batteries
which he can sell to the collection
center for 50 cents each. The $25 he
nets on his load hardly pays for the
fuel for his truck, much less his labor
and other expenses.
"Additionally, should that entre-
preneur be required to obtain environ-
mental permits to transport the spent
batteries, such a requirement could be
the 'final blow' to any incentive to
collect batteries.
"Since worldwide lead prices
quoted by the London Metal Exchange
are based on an abundant supply
versus demand, the secondary Irad
smelter cannot pass forward its in-
creasing environmental compliance
costs. Consequently, thev must be
passed backward to the scrap bat-
teries, which acts as a disincentive to
the collection chain. Under current
conditions, we (Palmer and -Sapping-
ton] estimate ncarlv 35 percent ol the
spent batteries berni; generated in the
U.S. are not now bemc collected
returned to smelters. As ihe
environmental compliance costs in-
crease, further downward pressure on
-------
the scrap prices will certainly exacer-
bate this ( roblem."
EPA's ;tudy points out that when a
battery di •$, the consumer4ypically
returns it s used battery to a service
station. I ittery dealer, or mass mer-
chandise; for a discount on the pur-
chase of i replacement battery. In the
past, thi: discount has been as high as
$4.00 to $5.00 per battery, but more
recently has been zero to $1.00 per
battery i,;ypicaJly 25 cents), with the
exception of some mass merchandisers
that continue to value a trade-in at
$5.00.
PH&3 found that "as a result of
the current decline in lead prices,
wherea: in the past a customer who
returned a battery received a credit
toward;, the purchase of a new bat-
tery, ir 1985 and 1986 some cus-
tomers must pay a battery disposal fee
of approximately 50 cents; otherwise
the battery does not get recycled and
leaves die recycling chain:"
. It i: dear to PH&B "that economic
incentives that existed up to six years
ago for recycling batteries have dimin-
ished. At the 1986 price levels for
lead, : crap metal dealers are not ade-
quately rewarded to provide as suffi-
cient a financial incentive to collect
. lead scrap as before. Thus, consumers
and I attery wholesalers often find it
easie; to simply dispose of spent bat-
terie:. (illegally) rather than Find some-
one . and maybe pay someone) to take
therr off their hands.
"This explains the ballooning quan-
tities of spent batteries that are unac-
cour ;ed for (either disposed of in land-
fills, permanently stockpiled, or other-
wise exiting the recycling chain). With
no upturn in sight for lead demand or
leac prices, battery recycling rates will
con inue to decline. Faced with increas-
ing numbers of batteries exiting from
the recycling chain, we must carefully
examine the possible health and en-
vir inmental effects of improper dis-
posal of lead-acid batteries."
Based on a survey of secondary
lefcd smelters conducted by PH&B,
"there is general agreement that the
btueries are finding their way in
increasing numbers to dumpsters and
cry garbage trucks for hauling to
rr jnicipal landfills. There are even
r> ports that some landfills, for example,
c te to the increasing presence of bat-
!• ries in landfills, are considering pur-
r lasing battery breaking equipment to
handle the spent batteries they receive.
• ncinerators report increasing prob-
lems with heavy metals in scrubber
waste water. One survey respondent
noted that in a Texas town with a
population of 10,000, an estimated 5
to 10 batteries were being buried in
household garbage daily."
Citing a specific situation and the
probable results, Palmer and Sapping-
ton explain that the only secondary
lead smelter in the northwestern U.S.
announced in March 1986 that it will
cease operation and close by July 1,
1986, due to its inability to obtain
environmental impairment liability in-
surance required under RCRA regula-
tions.
"The states of Oregon, Washing-
ton, Idaho, and Montana are expected
to generate approximately 2,500.000
spent lead-acid automobile batteries
this year. The nearest secondary lead
smelters are in Los Angeles, Cali-
fornia—over 1,000 miles away. Freight
costs to transport the spent batteries
to Los Angeles are greater than the
market price the Los Angeles plants
pay for their raw material. Some of
the spent batteries may be exported to
smelters in the Far East, but the most
likely scenario is that the northwestern
U.S. could very soon have a serious
disposal problem with junk batteries."
In another regional example,
PH&B found that in the state of
Texas alone, approximately five mil-
lion batteries are available for recycl-
ing per year, yet because of the fact
that by 1985 there did not exist any
battery breaker m Texas, only one
million batteries at best were recycled
after having been transported long
distances for smelting.
One smelter, responding to a March
1986 survey by the Secondary Lead
Smelters A ssoc1.* .'••„• i, cited an offer
from a local r..-7jior .liscount store of
200 batteries Tree of charge. The smel-
ter turned down the offer because the
labor costs for loading and transpor-
ting the free batteries would eat up
any profit gained from recycling.
The study for EPA found that
"large spent battery shippers by 1986
generated 60 to 80 percent less vol-
ume than in 1984."
Palmer and Sappington have deter-
mined that if the 70 million spent
auto batteries generated annually in
the U.S. (1985 rate) from replacement
sales and junk autos, are allowed to
be disposed of in sanitary landfills
near the major metropolitan areas,
where the highest concentration of
spent batteries occur, "ground water
contamination and other environmen-
tal impairments are not only very
likely, but highly probable."
Although attempts have been going
on for decades to find a replacement,
the general consensus is that there is
no viable substitute for the lead-acid
battery. When asked the consequences
of a ban, one top official of a major
U.S. battery manufacturer replied,
"You'll have to install a hand crank
on all new cars." Asked about the
future—10 or 15 years from now—he
replied, "I assure you, the lead-acid
battery will be the starting/lighting/ig-
nition system well into the 21st century."
What then is the solution?
According to Palmer and Sapping-
ton, "EPA has spent 20 years regulat-
ing the removal of lead from gasoline
so as to eliminate release to the envi-
ronment of an estimated 250,000 tons
of lead per year. The problem we are
now facing with unrecycled lead-acid
batteries is of nearly the same magni-
tude and could become even greater if
current trends are not reversed."
They suggest economic incentives
as a way to attack the problem "to
ensure that the vast majority of ail
scrap lead-acid batteries enter the col-
lection chain for delivery to secondary
lead smelters for reclamation rather
than being disposed of in the environ-
ment" and "to offset or compensate
for the smelters' continually rising en-
vironmental compliance problems."
In a recent letter to the U.S.
Department of Commerce, the Sec-
ondary Lead Smelters Association em-
phasized that "regulation which
discourages recycling, even m the
name of environmental control, may
cause rather than alleviate environ-
mental harm in the Ion? run."
As an example of this point. SLSA
said under "EPA's new definition of
solid waste, effective Julv 5. 19Ho".
secondary lead smelters must obtain
-------
and comply with RCRA permitting
•requirements for storage facilities for
lead-acid batteries which are stored for
recycling each year. The unintended
effect of this regulation will be to
discourage secondary smelters from
accepting spent automobile batteries
for recycling (if not to force the clo-
sure of the few remaining secondary
smelters)."
PH&B concludes its study for
EPA's Office of Policy Analysis ex-
pressing the belief that "continued
economic trends combined with exist-
ing or more stringent environmental
regulations will exacerbate the prob-
lem of lead-acid battery recycling. The
current market provides no financial
incentives to increase recycling rates
which may decline even further and
ultimately have a significant impact
on human health and the environ-
ment."
The consulting firm recommended
that EPA "examine in more detail the
link between improper disposal of
lead-acid batteries and health and
environmental impacts of lead con-
tamination in soils and groundwater."
If there is a problem, the next
recommendation is for EPA to "ex-
plore options that address critical steps
in the lead-acid battery process."
PH&B elaborates: "Unlike most
hazardous wastes, there exists a
recycling chain for lead-acid batteries
that in the past has operated with
remarkable efficiency in response to
market forces. The current market
economics and regulatory climate have
reduced the efficiency of this recycling
mechanism.
"It may be the case, however, that
if the recycling chain were compen-
sated for the environmental benefits
provided in addition to the value of
the lead recovered, recycling rates
would return to previous levels, and a
potential environmental problem in
the form of massive amounts of im-
properly disposed batteries could be
eliminated. In this case, EPA may
want to consider regulatory or market-
based schemes that would take advan-
tage of and enhance the efficiency of
the existing recycling network.
"For example, EPA may want to
consider the merits of market-based
incentives such as deposit mechanisms
that generate funds, which can be
added to the value of a used battery
to encourage recycling."
Palmer and Sappington think the
government needs to take a closer
PRODUCTION OF LEAD
(000 of not tens)
look at who is doing what to whom
and why: "It is critical that Congress
establish means to accomplish cross
regulatory coordination and review of
related programs in order to keep
specific programs from defeating the
overall effectiveness of a system.
'Catch 22* situations will not help the
environment, and elimination of lead
recycling capability surely is not in the
national interest."
This problem it yet another example of why
the ' 'Design for Recycling'' program, being
sponsored by the Institute of Scrap Iron and
Steel, is important to the nation. What a
product is made with will have a tremen-
dous bearing on its future recyclability. And
if that product must be made with hazard-
ous material, as is the case presently with
lead-acid batteries, then society must be
prepared to confront the recycling/disposal
problem and deal with it intelligently.
However, it would seem more rational to
consider the various implications, conse-
quences, and costs at the outset. In this
way, the outcome and cost of using a haz-
ardous material can be identified and ac-
tountedfor. The cost to maintain the
environment either through recycling or
disposal can be established and included in
the overall cost of the product—no environ-
mental surprises at the end of the product's
life. O>
For a tn|>\ «>f (In 1.1'.\ «md\ uriic:
Kcnniili ^ i»i
Put num. H;i\r- \ H.iriliti. Im.
t'2 1 Ml. .Ulburi: Mrn-t
Cumbrid-i-. M \ i'-'l '.':
Primary
637.4
6543
606.3
6243
6354
605.3
547.2
566.1
5692
430.9
551.2
Secondary
5°A
*
,
8498
6848
73S6
7085
631 3
5551
631 3
591 3
Putnam. Hayes A Banien. inc
Source: U.S. Industrial Ou/too* 1995. DO. 20-4. ana
U.S. Statistic*! AOstracts 1965. p. 712.
BATTERY RECYCLING RATES
VS. LEAD PRICES
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
(% RECYCLED)
76.1
77.5
71.5
69.0
71.7
86.3
873
771
70.4
59.9
669
585
LEAD PRICE
(cenii/lb)*
491
430
43.7
545
55.6
78.0
55.5
432
284
234
264
191
•calculated on real 1985 dollars
Putnam. Hayes & Bartietl. inc
BATTERY LEAD SCRAP
(000 of net lent)
1974
1975
1976
1977
1978
1979
19M
1981
1982
1983
1984
1985
AVAILABLE
TO RECYCLE
5470
5280
6237
7626
7637
6730
6461
674 1
660.2
632.7
6742
712.1
ACTUALLY
RECYCLED
416 1
4091
4457
526.2
5476
5806
5641
S194
4646
3790
451 1
4163
Putnam. Hayes 4 Bartiett. inc
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fff GENERAL BATTERY CORPORATION
T® INTER-ORGANIZATION CORRESPONDENCE
TO: BCI Board of Directors 11/6/86
BCI - Air, Water and Hazardous Waste Committee
FROM: John Bitler, Chairman
BCI - Air, Water and Hazardous Waste Committee
SUBJECT: REPORT TO BOARD OF DIRECTORS (SUPPLEMENT)
RECYCLING OF SPENT BATTERIES
This position received after initial summary was prepared.
Additional comments received November 6th.
"Our company favors a governmental regulation or taxation (i.e.
Excise Tax) to generate a fund to support recycling with a
financial incentive. It is felt that a refund to the consumer
for return of a spent battery at time of purchase of the re-
placement battery is a more effective method. (Details on how
the initial financing of the refund was not disclosed].
JAB/bb
-------
rff GENERAL BATTERY CORPORATION
T® INTER-ORGANIZATION CORRESPONDENCE
TO: BCI Board of Directors 11/6/86
BCI - Air, Water and Hazardous Waste Committee
FROM: John Bitler, Chairman
BCI - Air, Water and Hazardous Waste Committee
SUBJECT: REPORT TO BOARD OF DIRECTORS
BATTERY MANUFACTURING EFFLUENT LIMITATIONS GUIDELINES
The revisions to the allowances obtained by this Committee -were finally made
official by publication in the Federal Register Vol 51, No. 167 dated Thursday,
August 28, 1986 p.30814.
RECYCLING OF SPENT BATTERIES
The Committee feels very strongly that we need to advise the consumer and
encourage the return of spent batteries into the recycling chain as some of our
members are instituting a program of awareness of the problem. Some of the
members feel strongly that we, the battery industry, should make this effort for
encouraging recycling in order to keep governmental regulations out of this cause.
One method we propose is a notice of some type of advise the user that; a
spent battery has a value for conservation of natural resources, but a greater
negative impact on the environment if not properly recycled. Tbis we can
implement simply and quickly with a label, standardized by the industry with the
BCI logo similar to the attached sketch. For consideration, we obtained a price
for three different sizes of acid proof plaques of which our industry uses. Cost
application and location will differ by each manufacturer. Anocner option is to
imprint or mold the case to have a permanent message. Following is a summary of
some comments we received from Committee members:
"...our people like the idea of having our industry take Che initiative in
battery recycling."
"Our sales people have a problem with adding another label to batteries."
"We would need universal customer approval..."
"Concur with this idea as it is the manufacturer that is cited as the 'deep
pockets' when a suit is filed for a site cleanup."
"...possibly incorporate an 800 telephone number for C
-------
TO: BCI Board of Directors 11/6/86
BCI - Air, Water and Hazardous Waste Committee Page 2
"...label should suggest ways to recycle the battery:
Give the battery to the retailer
Look in the Yellow Pages under scrap dealers
Drop off with local service station mechanic"
"Greatest visibility is on the top if possible to incorporate vith other
messages."
"...reduce fear by using something less alarming such as 'Trade-In* rather
then 'Don't Pollute'."
"...identify more closely with other consumer recycling programs. This
will mean a change of graphics to those that exist on soda cans, class
bottles and the like. (Triangular pattern of arrows trailing each other)."
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