SUSTAINABLE INDUSTRY:
Promoting Strategic
Environmental Protection
in the Industrial Sector
Phase 1 Report
June, 1994
Prepared by:
Office of Policy, Planning, and Evaluation
U.S. Environmental Protection Agency
Washington, B.C.
and
Industrial Economics, Incorporated
Cambridge, Massachusetts
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United States Policy, Planning, EPA 23OR-94-009
Environmental Protection And Evaluation June 1994
Agency (2125)
oEPA Sustainable Industry:
Promoting Strategic
Environmental
In The Industrial Sector
Phase 1 Report
Printed on Recycled Paper
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SUSTAINABLE INDUSTRY PROJECT TEAM
UJS. Environmental Protection Agency
Pollution Prevention and Toxics Branch
Office of Policy, Planning and Evaluation
401 M Street, SW (2125)
Washington, D.C 20460
(202-260-8661 Fax 202-260-0174)
Robert S. Benson
James E. Casey
Julie B. Frieder
Jerry L. Newsome
Lucille Preston
Chief, Pollution Prevention and Toxics Branch
Overall Project Manager
Metal Finishing Industry Team Leader
Thermoset Plastics Industry Team
Administrative Coordinator
Photoimaging Industry Team Leader
Thermoset Plastics Industry Team Leader
Administrative Assistant
The EPA Project Team gratefully acknowledges the valuable contributions
of the following non-EPA project team members:
James Cummings-Saxton
Mary E. Compton
Nancy H. Hammett
David H. Haury
Margaret C.H. Kelly
Farron W. Levy
Patrick B. Marshall
Andrew M. Schwarz
Stuart W. Staley
Non-EPA Project Manager
Thermoset Plastics Industry Team
Photoimaging Industry Team
General Issues Analysis
Photoimaging Industry Team
Metal Finishing Industry Team
Thermoset Plastics Industry Team
Research Analyst
Research Analyst
Metal Finishing Industry Team
Associate
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TABLE OF CONTENTS
EXECUTIVE SUMMARY SEE SEPARATE BOOKLET
1.0 INTRODUCTION CHAPTER 1
1.1 Historical Context 1-1
12 Project Goal 1-3
13 Report Organization 1-4
2.0 PROJECT METHODOLOGY CHAPTER 2
2.1 Introduction 2-1
22 Initial Research on Industry Decision-making 2-1
23 Taking an Industry-Specific Approach 2-4
2.4 Using a Backward Mapping Analytical Method 2-5
2.5 Selecting Three Industries for Study 2-6
2.6 Identifying Drivers, Barriers, and Policy Options 2-10
2.7 Building Peer Review and Stakeholder Networks 2-11
2.8 Next Steps 2-12
3.0 PHOTOIMAGING INDUSTRY CHAPTERS
3.1 Introduction 3-1
32 Approach to Analysis 3-1
3.2.1 Scope 3-1
322 Overview of Industry 3-3
323 Information Gathering and Panel Meetings 3-4
33 Major Findings 3-7
33.1 Industry Characteristics 3-7
332 Drivers and Barriers 3-18
333 Possible Policy Options 3-29
Chapter Appendices:
3A Bibliography 3-A-l
3.B All Suggested Policy Options 3-B-l
3.C Contacts To Date 3-C-l
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4.0 METAL FINISHING INDUSTRY CHAPTER 4
4.1 Introduction .4-1
42 Approach to Analysis 4-1
4.2.1 Scope .4-1
4.2.2 Overview of Industry 4-2
4.23 Information Gathering and Panel Meetings 4-2
4.3 Major Findings 4-5
4.3.1 Industry Characteristics 4-5
43.2 Drivers and Barriers 4-16
433 Possible Policy Options 4-19
Chapter Appendices:
4-A Bibliography 4-A-l
4-B All Suggested Policy Options 4-B-l
4-C Metal Finishing Industry Contacts 4-C-l
5.0 THERMOSET PLASTICS INDUSTRY CHAPTER 5
5.1 Introduction .5-1
52 Approach to Analysis 5-1
5.2.1 Scope 5-1
522 Overview of Industry 5-2
5.23 Information Gathering and Panel Meetings 5-5
53 Major Findings .5-5
53.1 Industry Characteristics 5-6
53.2 Drivers and Barriers 5-16
533 Possible Polky Options 5-18
53.4 High Priority Policy Options 5-23
535 Relationship Between High Priority
Policy Options and Drivers/Barriers 5-32
Chapter Appendices:
5-A Bibliography 5-A-l
5-B All Suggested Polky Options 5-B-l
5-C Thermoset Plastics Industry Contacts 5-C-l
5-D Panel Meeting Participants 5-D-l
APPENDIX
Preliminary Selection of Industry Subsectors
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INTRODUCTION CHAPTER 1
1.1 HISTORICAL CONTEXT
EPA's traditional programs have focused on end-of-pipe pollution controls
implemented largely through command-and-control regulations. These programs were
effective in addressing many industrial sector pollution problems of the 1970*5 and 1980*8.
However, these approaches may not work as well in the 1990*8 and beyond, as environ-
mental problems become difficult to identify and prioritize and environmental priorities shift
toward pollution prevention and waste minimization.
In addition, current and future pollution problems will have to be addressed within
an economic climate that demands cost-effective policies and business practices, a focus on
sustainable growth, and long-term technological development
Given the environmental and economic challenges of the 1990*s, the Agency believes
it is increasingly important to achieve broad private sector commitment and investment in
strategic, economically-based approaches to environmental management approaches that
will move individual firms beyond baseline compliance. For these firms, strategic
environmental management will require the permanent integration of environmental
management functions into the basic, profit-oriented activities of the organization.
Firms taking this approach will seek cost-effective pollution prevention and waste
minimization opportunities as part of their overall commitment to develop innovative new
products, improve product and process quality, and achieve economic growth. For many
firms, this sort of commitment to a more strategic approach to environmental management
represents a difficult adjustment in corporate culture, particularly within the current
economic and regulatory climate.
In order to effectively promote industrial culture change of this nature, EPA is
rethinking its traditional approach to regulation of the industrial sector, with the goal of
harmonizing, to the extent possible, the Agency's future environmental programs with the
economic goals of society. EPA's Administrator, Carol Browner, has emphasized this
objective:
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President Clinton and Vice President Gore [want to achieve] real and
meaningful environmental protection, and to prove once and for all that such
protection can exist harmoniously with a growing economy .... We have
an opportunity ... to firmly establish a productive relationship between
environmental and economic policies.
At present, the strategies and policies to establish that linkage between
environmental and economic priorities have not been fully developed. However, the
Administrator has taken the lead in promoting innovative approaches to deal with
environmental issues facing the industrial sector, both within EPA and under the auspices
of the President's Council on Sustainable Development (PCSD). Administrator Browner
is committed to the development of EPA policies that promote "cleaner, cheaper, smarter"
environmental performance by industrial firms of all types and sizes.
The Sustainable Industry Project is one of the Agency's new industrial sector eco-
efficiency initiatives, focusing specifically on corporate decision-making issues that are
crucial to long-term sustainable development policies for the industrial sector. In developing
this project, EPA's Office of Policy, Planning and Evaluation (OPPE) is seeking to
complement the Agency's traditional emphasis on media-specific regulatory/enforcement
programs and recent emphasis on voluntary programs and technology transfer.
For example, pollution prevention is a critical component of any strategic
environmental management program, and thus should be a major component of EPA's
policy agenda for the 1990's. However, the principal focus of pollution prevention programs
at EPA has been on technical and outreach issues relating to the implementation of
pollution prevention in the industrial sector. While such work is of considerable value,
relatively little has been done to evaluate the economic basis upon which firms may choose
to pursue pollution prevention options, or to identify and assess incentive approaches to
promote cost-effective pollution prevention by industry sub-sectors or individual firms.
Analysis of these types of issues is crucial to the development of effective environmental
policies and programs for the industrial sector.
OPPE initiated the Sustainable Industry Project with the intent of establishing a
strong information and analytic base on which to build an industrial sector environmental
program for the 1990's. In order to accomplish the widespread adoption of strategic
environmental protection throughout U.S. industry, companies will have to permanently
integrate environmental management functions into the basic, profit-oriented activities of
their organizations. These innovative new approaches will be embodied in industrial sector
policies and programs that recognize the need for U.S. industry to remain competitive, while
also fostering a move toward sustainable production strategies through continual and
systematic improvements in environmental performance.
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12 PROJECT GOAL
The primary god of the Sustainable Industry Project is to develop, test, and
implement industry-specific policy recommendations that will remove barriers to
innovation and promote strategic environmental protection in the selected
industries. The recommended policies and programs should promote a culture
change throughout the industrial sector, among firms of all types and sizes, in the
form of long-term corporate commitment to achieve cleaner, cheaper, and
smarter environmental performance. The Agency's sustainable industry policies
and programs should be achieved with a reduced reliance by EPA on command
and control regulations. The recommended policies and programs should be
widely implementable and acceptable to all relevant stakeholders (e.g., EPA,
states, industry, and NGOs).
This goal statement is in keeping with the Clinton Administration's commitment to
the concept of sustainable development, which has been defined by the Bruntland
Commission and the PCSD as "meeting the needs of the present without compromising the
ability of future generations to meet their own needs." In the context of wealthy nations,
sustainable development involves "maintaining economic growth while producing the
absolute minimum of new pollution, repairing the environmental damages of the past, using
far fewer non-renewable resources, producing much less waste, and extending the
opportunity to live in a pleasant and healthy environment to the whole population".
Achieving sustainable development in developed economies requires promoting "eco-
efficiency" - becoming more efficient, using less energy and material, producing less waste
and pollution, and destroying less natural habitat per unit of economic growth - in all
economic sectors, including industry.
Achieving eco-efficiency in U.S. industry will require companies to build strategic
environmental protection into their business decisions. By strategic environmental
protection we mean long-term planning and investment by companies to develop the most
cost-effective and innovative environmental management approaches, starting with pollution
prevention. We want to encourage and enable companies to link those approaches to
ongoing efforts to improve product quality, process efficiency, financial performance, and
overall competitiveness. Over the long term, we seek to enhance their environmental and
economic performance and reduce unnecessary conflicts between these two priorities. In
so doing, we will demonstrate how sustainable economic growth can be compatible with
innovative environmental protection in the industrial sector.
President's Council on Sustainable Development, Task Force on Principles, Goals
and Definitions, Discussion Paper (final draft), October 1, 1993, p. 2.
2 Ibid., p. 3.
3 Ibid., pp. 2-3.
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13 REPORT ORGANIZATION
The remainder of the report is organized in four chapters. Chapter 2 presents the
methodology employed in the first phase of the study. Chapters 3 through 5 present the first
phase results for each of the three industries studied - photoimaging, metal finishing, and
thermoset plastics. Each industry chapter describes the approach used in the initial analysis
of that industry, and the major findings with regard to industry characteristics, key drivers
and barriers affecting environmental performance, and possible policy options for EPA to
explore further. Background information assembled to support the selection of the three
industries is presented in appendices to each chapter and Appendix A of the report
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PROJECT METHODOLOGY CHAPTER 2
2.1 INTRODUCTION
Chapter 2 provides an in-depth discussion of the methodology and approach. The chapter
covers issues that are general to the entire study. Information on the methodology used that is
specific to the three selected industries is provided in the chapters that follow.
22 INITIAL RESEARCH ON INDUSTRY DECISION-MAKING
A key early task in the project was to gather economic and environmental data on the full
range of manufacturing industries, as a basis for selecting three industries for detailed study. This
in turn required that we first identify characteristics of industries that we thought would be relevant
to factors that drive environmental performance. Once we had selected the three industries for
initial study, this framework was also important in guiding our industry-specific research and the
topics we addressed in interviews with industry contacts.
We conducted an initial literature search to review what other studies had said about factors
that influence environmental performance. This literature review used a broad brush, including all
factors (economic, cultural, regulatory, and other) that might drive environmental practices.. While
there is a large and growing literature on this topic, there does not yet exist a predictive model of
firms' environmental decision-making that is in any sense rigorous or quantifiable. In part, this is
because of two factors:
o It is difficult to develop quantifiable decision-making models that provide
valid comparisons across firms and facilities.4
4 OPPE and other EPA offices have been conducting research into ways of measuring
environmental performance, that may yield more quantifiable measures in the future. See, for
example, Industrial Economics, Inc., Pollution Prevention Frontiers (PPF) and Other Approaches
to Pollution Prevention Assessment: Comparison Based on New Jersey Materials Accounting Data.
prepared for the U.S. EPA, Office of Policy, Planning and Evaluation, Pollution Prevention and
Toxics Branch, June 1994.
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Many of the factors that are believed to influence environmental decision-
making are "fuzzy" and not readily measured such as various aspects of
firm culture and internal structure.
In addition, much of the information on sustainable performance in industry and on
industrial environmental performance is anecdotal in nature and incomplete. The literature
describes exemplary practices and programs, but does not provide clear evidence on why some firms
are taking these proactive measures and others in the same industry are not.
While we did not find an explicit model of industrial environmental decision-making, we
were able to compile a list of variables influencing firms' environmental decisions. Exhibit 2-1 lists
the factors we identified from the literature and that we used as a checklist of characteristics for
evaluation.
Business decisions of industry are often analyzed using a profit-maximization model. While
many factors influence business decisions, it is useful as a starting point to assume that businesses
will act in ways that maximize profits (by reducing costs and/or increasing revenues) and will choose
their least-cost option, other things being equal. Of course, other things are not always equal, and
different businesses choose different business strategies in the same markets.5
For example, one firm may take a high-quality strategy to product design or customer service
that results in both higher revenues and higher costs than another competitor that chooses a low-cost
approach to allow competing on price. Any market may offer room for different competitive
strategies. However, assuming initially that businesses will act to minimize costs provides a useful
first approximation of industry responses to policies that affect costs. A major task in analyzing
industry responses is therefore to understand how environmental policies affect their costs, revenues,
and profits.
More broadly, a number of factors affect industry environmental and economic decision-
making. These factors include federal and state regulation, changes in production technologies, and
foreign competition. Industry structure (e.g., is the industry highly-competitive or characterized by
concentrated market power?) may reflect barriers to entry such as patent ownership, economies of
scale, and substantial customer brand loyalty. These characteristics are relevant to predicting
environmental performance, both because they affect the resources available to invest hi
environmental improvements (profits) and the ability to recover the costs of environmental
improvements from customers.
Other factors that are likely to affect both environmental and economic performance include
the nature and capital intensity of production technologies, the size of firms, the availability of in-
house technical expertise, the baseline rate of innovation in products and production processes, the
availability of substitutes for manufacturing inputs, and the price sensitivity of demand for the
industry's products. Identifying a list of factors that might influence environmental decision-making
was only a preliminary step in our analysis, providing some overarching information to support our
industry-specific analysis.
5 Michael Porter's work provides a framework for understanding the strategies of different firms
as the matching of firm competencies to the demands of the target market. See Michael E. Porter,
Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1980, and Competitive
Advantage: Creating and Sustaining Superior Performance. 1985.
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Exhibit 2-1
EXAMPUES OF CORPORATE VARIABLES INFLUENCING
FIRMS' ENVIRONMENTAL DECISIONS
1. Social Variables
Employee Recruitment
Employment Morale
Media Treatment
Corporate Reputation
Community Relations
Plant Siting
2. Market Variables
Growth Markets
Product Image
Customer Loyalty
Product Certification
Competitive Advantage
Industry Standards
3. Financial Variables
Liability Exposure
Insurance Coverage
Damage Compensation
Credit Quality
Capital Access
Investor Relations
4. Regulatory Variables
Government Relations
Raw Materials Costs
Operating Costs
Litigation Costs
Disclosure/Reporting
International Competitiveness
Source: National Wildlife Federation Corporate Conservation
Council "SYNERGY '92" Conference, January, 1992.
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23 TAKING AN INDUSTRY-SPECIFIC APPROACH
As stated previously, the overall goal of the Sustainable Industry Project is to develop
policies that foster the permanent integration of environmental protection functions into the basic
profit-oriented activities of industrial firms. To accomplish this goal, EPA needs to understand the
factors that motivate or impede a firm's behavior with respect to investment in projects that result
in improved environmental performance. We believe that the best way to understand these factors
is to study the behavior of firms within the context of the industry of which they are a part.
EPA's traditional one-size-fits-all approach to policy-making, often dictated by statute,
establishes requirements and programs that are applicable to many industries. This approach does
not take into account differences among industries, such as available resources, prevailing corporate
culture, market trends, and corporate decision-making factors in different industries. A one-size-fits-
all approach for the industrial sector therefore may result in programs that effectively achieve
environmental goals in some industries, but fail to do so (or even impose barriers to effective
environmental performance) in others.
On the other hand, an industry-specific approach to policy-making offers opportunities to
design policies that fit the particular characteristics of the industry of interest An understanding
can be gained of industry-specific decision factors and behavior that can then be used to identify
incentive (driver) factors or barriers to improved environmental performance. Since operating
environments and processes vary a great deal across the industrial sector as a whole, policies that
are tailored to unique characteristics of specific industries are likely to be more effective in
promoting cleaner, cheaper, smarter environmental performance by individual firms in those
industries.
Additional factors support an industry-specific approach. Although a wide range of firm
sizes, types and scales of production processes, and levels of technical and environmental
sophistication may coexist within an industry, the participating firms frequently face similar
environmental issues with respect to types of emissions. Development and implementation of EPA
policy options at an industry level is thereby simplified because attention can be focused on
promoting improved environmental performance through management of a limited number of
processes.
Firms within industries classified at the 4-digit SIC level generally utilize similar technologies
and production processes, purchase raw materials from the same types of suppliers, and compete
with each other in many of the same markets on the basis of product design and performance, price,
quality, and service. These upstream and downstream relationships can be very important with
respect to environmental decision-making within an industry.
Because a relatively limited number of markets are served by a given industry, competitive
imbalances that may be caused by a specific policy option can be more accurately assessed prior to
implementation of the policy because EPA can more easily understand the competitive dynamic
occurring among the various firms within an industry than it can assess the effects of controlling a
specific pollutant across many industries. The Agency can use this knowledge of the competitive
dynamic of an industry to identify points within the industry's structure and culture where policies
can have the broadest, long-term impact.
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While it has many advantages, an industry-based approach is not the only method that can
be used to assess policy options. Historically, EPA's efforts to address environmental problems have
employed geographic, industry, and/or chemical-based approaches. While all three approaches have
their place, the industry-based approach has received less attention in recent years. The Sustainable
Industry Project is founded on the premise that the increased tension between economic and
environmental objectives in recent years demands a more sophisticated understanding of the
interrelationship between these objectives, and that this understanding can be best achieved via an
industry focus.
2.4 USING A BACKWARD MAPPING ANALYTICAL METHOD
"Backward mapping" is an approach to policy implementation described by Richard Elmore.6
He distinguishes two approaches to implementation analysis:
o "Forward-mapping11 begins by defining a policy objective, elaborates
increasingly specific steps for achieving that objective (starting with the top
of the implementation hierarchy and working down), and identifies outcomes
by which success or failure will be measured. It relies on the implicit
assumption that policymakers can control the organizational, political, and
technological processes that determine outcomes.
o "Backward-mapping" begins not with a statement of policy objectives, but
with a description of the behaviors that the policy seeks to influence. Only
when the behavior creating the need for a policy is fully understood is a
policy objective defined and desired outcomes identified. The policy is
developed by working backward from the most directly involved parties, and
asking at each level of the system what would encourage a desired change hi
behavior. This analysis focuses on what incentives and resources each stage
would need to make the desired changes.
As applied to environmental policy, a forward-mapping approach would yield hierarchical,
"command-and-control" policy solutions, with a distrust of discretion at lower levels in the system
and an emphasis on compliance with inflexible standards. A backward-mapping approach seeks to
capitalize on knowledge and skill at the point of impact to achieve environmental policy objectives,
by creating incentives or removing barriers to the desired behavior. In Elmore's words, backward
mapping emphasizes "that it is not the policy of the policymaker that solves the problem, but
someone with immediate proximity.... Rather than reasoning from top to bottom, trying to discover
how each layer can control the next, one begins at the point of the problem and tries to find the
most parsimonious way of reaching it."7
6 Richard F. Elmore, "Backward Mapping: Implementation Research and Policy Decisions,"
Political Science Quarterly. Vol. 94, No. 4, Winter 1979-80, pp. 601ff.
7 Ibid., p. 612.
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Based on the backward mapping approach, the sustainable industry project emphasizes
understanding the factors that influence the behavior of different players in each industry, before
recommending any policy prescriptions. We use the concepts of "drivers" and "barriers" to
distinguish factors that encourage or hinder, respectively, improved environmental performance in
industry. Drivers and barriers include any variables that influence decision-making with respect to
environmental performance. For example, if a firm has to undertake an investment in pollution
controls to comply with a specific regulation, then the regulation acts as a driver of environmental
improvements. If the firm is contemplating an environmental investment but cannot obtain the
necessary financing, then financial constraints act as a barrier to environmental improvements.
Understanding the factors that influence environmental performance provides the basis for
designing policies to encourage improved performance. Starting with a thorough understanding of
the factors that influence the key industrial actors gives EPA the opportunity to align policy
objectives with their business objectives. With this insight into the dynamics of the industry, EPA
has the opportunity to use a broader and potentially more effective set of policy levers, rather than
being limited to traditional command-and-control options.
25 SELECTING THREE INDUSTRIES FOR STUDY
Our intended scope for this project was to work with a set of two to four industries. We
started with a preliminary list of about ten industries, identified by 4-digit Standard Industrial
Classification (SIC). We collected economic, environmental, regulatory, and other data on the
original list of industries, and selected three for the first phase of this project: photographic
manufacturing and processing (photoimaging), metal finishing, and plastics and resins. (We
subsequently focused on the thermosets subset of the plastics industry.) The types of data and the
selection criteria are summarized below. A more extensive discussion of the "candidate" industries
is provided in the Appendix of this report.
We conducted the industry selection process using Standard Industrial Classifications (SICs),
because most data sources that provide comparable data across industries report data aggregated
by SIC.8 The following measures of economic and financial characteristics were collected for all
manufacturing SICs:
8 SICs are two- and four-digit codes that group similar establishments by industry. An
establishment is a single location: a manufacturing facility, a headquarters location, a retail outlet,
and the like. Most establishments in the manufacturing SICs (SIC 20 through 39) are manufacturing
facilities. The basis for defining SICs varies, and the categories are often not ideally defined for the
purposes of a particular analysis. Some SICs combine industry subsectors that have very different
characteristics, and in other cases a single "industry" (as defined by the markets served or the type
of processes used) includes several SICs. In addition, establishments report data based on their
primary product, but may produce products associated with other SICs as well. Therefore, some of
the products or services which define the primary SIC may be produced as secondary products by
establishments in other SICs. While the SICs provide a useful standardized reporting system for
data, it is important to realize that there may be a discrepancy between an "industry" and the most
closely related SIC.
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o Number of establishments;
o Size distribution of establishments;
o Production characteristics (capital versus labor intensive);
o Market concentration (based on share of value of shipments);
o Geographical concentration; and
o Economic performance (using capital utilization as a proxy).9
We also collected data on various environmental outcomes as a measure of environmental
performance. The available data give only a general picture of the environmental characteristics of
an industry, however, and do not reveal the extent to which industry participants have taken full
advantage of all existing methods for improving performance that is, how many industry players
are operating with state-of-the-art production processes and pollution controls. We used two sources
of environmental data in the industry selection process: Toxics Release Inventory (TRI) releases
and transfers of toxic chemicals (total and by media), and energy consumption (a proxy for emissions
from fuel combustion and potential for energy efficiency improvements).
Finally, we investigated the current regulatory status of the candidate industries. For each
industry, we considered the size of current and historical pollution abatement and control
expenditures, and the extent of current and future EPA regulation (particularly under the Dean Air
Act, the Clean Water Act, and the Resource Conservation and Recovery Act).
The selection of the industry sectors for detailed investigation in the first phase of the
Sustainable Industry Project was guided by the following criteria:
o We wanted to select industry sectors that present significant opportunities for
EPA to encourage movement toward sustainable practices. This criterion
suggested that we pick industries with substantial releases to the
environment, as reported in the Toxics Releases Inventory.
o In addition, we wanted to select industries that might benefit from use of
innovative policy approaches that go beyond the traditional command-aud-
control paradigm. This goal encouraged selection of industries (1) with
multi-media rather than single-medium releases, (2) with significant historical
expenditures on pollution abatement and control, and (3) facing significant
current and future regulatory requirements.
9 Later research on the three selected industries also included other important economic
variables, such as extent of foreign competition, growth rates, and financial characteristics.
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Similarly, we were interested in picking industries that would particularly
benefit from an industry-wide, life-cycle focus. Therefore, we picked
industries that appeared to present life-cycle issues, and to present interesting
relationships among suppliers, manufacturers, downstream businesses, and
end-users.
We also wanted to select a set of industries that appeared to have different
characteristics from one another, so that we could learn as much as possible
about the applicability of our analytical approach to different types of
industries. A more diverse set of industries, in terms of company size, scope
of environmental issues, and market and product trends will provide us with
a broader range of experience as we seek to implement the policy options
developed through this project.
Finally, we wanted the results of the sector studies to provide insights into
influences on environmental performance and the effects of different policy
strategies for other industries as well. This goal of generalizing results
required that we pick industries that presented common rather than unique
environmental issues, and that we pick a set of industries that together would
cover a range of economic and environmental characteristics.
The selection of three industries for detailed study was necessarily judgmental. Other
industry sectors could easily have been chosen, applying the same decision criteria. Exhibit 2-2
summarizes some of the key data for the three selected industries.
As a group, these three industries provide us with a variety of economic characteristics which
we expect to influence environmental performance, including establishment size, difference in capital
versus labor intensive production, and more and less concentrated markets. All present multi-media
pollution problems, when viewed from a life-cycle perspective, and are subject to current and
forthcoming regulations at the federal level.
As for the desired diversity of characteristics, the three selected industries clearly reflect
different types of companies and issues. The metal finishing industry includes a large number of
relatively small operations, often with limited resources and a large set of regulatory requirements
with which to comply. The photoimaging industry is highly concentrated on the manufacturing side
and widely diffuse on the processor side, with fewer environmental issues but significant
opportunities for cleaner, cheaper, smarter initiatives nonetheless - particularly in view of the highly
technical, innovative nature of the industry. The plastics and resins industry was selected to
represent a typical huge, widely diverse industry, with many different types of companies, products,
and issues. Even with the subsequent change in focus to the thermoset plastics subsector, these
characteristics remain valid.
As discussed in the industry-specific chapters, further work led us to refine our focus in each
of the three sector studies; we narrowed the scope of our analysis enough to allow us to understand
technical, economic, management, and environmental issues in detail, and to identify the key
leverage points for each industry. Despite these adjustments in focus, the desired variety in issues
and industry characteristics has been retained from the initial selection process.
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Exhibit 2-2
KEY CHARACTERISTICS OF SEUECTED INDUSTRIES
Total Number of
Establishments*
Number of Establishments by
Employee Size Category:"
1-19 employees
20-249 employees
250+ employees
Concentration Ratios - Share of Value
of Shipments by:*
4 largest companies
8 largest companies
20 largest companies
Ratio of Capital to Labor
Expenditures**
Capacity Utilization Rate (1990)***
TRI Releases (1990):
Air
Water & POTWs
Land & Underground
Offsite Transfers
Total
Pollution Abatement and Control
Expenditures (&
percent of total expenditures)**,****
Purchased Fuels and Electricity as
Percent of Total Expenditures***
Future Federal Rule-Makings
Photographic
Equipment &
Supplies
(SIC 3861)
787
508 (65%)
242 (31%)
37 (4%)
77%
84%
90%
30.3
77%
29,968,807
1,153,916
115,244
6,156,799
37,394,766
$157 mill
(1.4%)
1.7%
CA: VOC
limits
RCRA:
Solvents
listings
* 1987 Census of Manufactures
** 1991 Annual Survey of Manufactures
*** Current Industrial Reports, Survey of Plant Capacfr
f Total expenditures includes capital equipment, laboi
n Values for this industry were obtained from the Nat
(personal communications) and The Silver Coalition
from Silver Pretreatment Standards, June 26, 1992).
Electroplating
& Polishing
(SIC 3471)
3,451
2,408 (70%)
1,032 (30%)
11 (<1%)
7%
10%
16%
10.0
82%
11,830,549
3,963,623
45,252
16,480,193
32^19,617
$236 mill
(7.0%)
6.2%
CA:MACT
for surface
coating,
degreasing/
metal
cleaning
RCRA:
Solvents
listing
Plastics Materials
& Resins
(SIC 2821)
480
160 (33%)
266 (55%)
54 (11%)
20%
33%
61%
72.2
96%
102,874,467
16,27,877
4,452,326
39,730,186
163,284,856
$929 mill
(3.9%)
4.4%
CA: MACT for
numerous
individual plastics
& resins
RCRA: solid
waste legislation
affecting end-uses
of plastics
CA: Effluent
guidelines
Photographic
Processing (SIC
7384 & 7819)n
580,000
522,000 (>90%)
58,000 (< 10%)
0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$45 mill
NA
CWA: Effluent
Guidelines
RCRA: Silver
listing
M990
r and materials.
ional Association of Photographic Manufacturers
(An Economic Assessment of the Impact Resulting
2-9
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2.6 IDENTIFYING DRIVERS, BARRIERS, AND POSSIBLE POLICY OPTIONS
Once the three industry sectors were selected, our goal was to gather extensive information
on each industry, including corporate decision-making factors in the industries, in order to create
the knowledge base necessary to support policy recommendations that would meet the goal of the
project. A team of OPPE and contractor staff from Industrial Economics, Inc. (lEc) was formed
for each of the industries. The Phase 1 work for each industry followed the same major steps, but
each industry study differed somewhat in the topics emphasized and the results achieved to date.
The first step of the data-gathering process was to develop a thorough understanding of the
relevant characteristics of the industries - the industry-specific economic, institutional, cultural,
technical, life-cycle, and regulatory factors ~ that may promote or hinder environmental
improvements. A key aspect of this characterization of the selected industries was the identification
of the driver factors and barriers that influence corporate decision-making and environmental
performance. The drivers and barriers represent the key leverage points for the industries the
regulatory, informational, economic, or other factors - that provide the greatest incentives or impose
the most significant obstacles to improved environmental performance. Our emphasis here was on
the identification and prioritization of corporate decision factors, rather than on EPA's traditional
role of assessing and managing environmental risks. The driver factors and barriers provided the
basis for subsequent policy development.
The next crucial step in the analytical approach of this project was the development of a
menu of policy options and recommendations that we would anticipate having the greatest long-term
impact on the selected industries in terms of achieving the overall goal of the project to promote
strategic environmental protection in the industries. The identification of these policy options is
based on our knowledge of the industries, their characteristics, unique driver factors, and barriers
to innovation. The recommended actions are both regulatory and non-regulatory in nature.10 The
actions may be taken by EPA headquarters or regions, states and localities, the industries themselves
or their suppliers or customers, or other entities.11 Some actions might require statutory changes,
while many are achievable within existing statutory mandates.12 Our approach was to link the
10 The description of policy options as regulatory or non-regulatory is somewhat arbitrary, and
the line between the two categories is blurred. Strict use of the term "non-regulatory" would include
only those options that rely solely on incentives to influence behavior, without any mandatory
provisions. In practice, a very wide range of incentives, quasi-regulatory, and regulatory policies are
typically discussed in studies of "non-regulatory" options. For example, deposit-refund systems used
to encourage the return of materials to a central location include both incentives (for the ultimate
customer to return the materials) and regulations (requiring intermediaries to accept the materials
and return them to a central location). Similarly, marketable rights are typically used within the
context of a regulatory program, e.g., trading of rights to emit criteria air pollutants in a given area,
subject to a regulatory maximum on total emissions or minimum standard for ambient air quality.
In this case, the creation of markets promotes compliance with the regulatory standard at the lowest
aggregate cost to the regulated facilities.
11 In all cases, we will identify steps that EPA could take to promote adoption of the best
policies, even if EPA would not be the lead agency implementing the policy.
a However, when evaluating potential difficulties in implementing the options, we will clearly
distinguish options requiring statutory changes from those that do not.
2-10
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policy options to the key leverage factors for the industries, so as to promote cleaner, cheaper,
smarter environmental outcomes over the long-term future, preferably with less Agency involvement
over time.
An important aspect of our policy development process was to look at each industry and at
policy options with a broad, holistic perspective. Often, policy strategies are considered only in the
context of a single rulemaking. Many regulatory decisions are highly constrained by specific
legislative mandates and by the precedents set by earlier rulemakings. This narrow focus may miss
opportunities to take positive, non-regulatory actions or to coordinate and rationalize regulations
and enforcement across programs. Also, the general applicability of regulations to many industries
may fail to reflect unique factors that affect environmental performance in specific industrial sectors
or sub-sectors.
By contrast, the approach used in the Sustainable Industry Project involves looking at
environmental issues in a comprehensive life-cycle context, considering all the environmental
dimensions of industrial products and processes (all media and all important end-points) and a full
range of policy options. The broad perspective is necessary to ensure that policies promote true
movement toward sustainability, not just shifting of problems from one medium, source or type of
adverse outcome to another.
2.7 BUILDING PEER REVIEW AND STAKEHOLDER NETWORKS
Our initial outreach efforts for this project focused on peer review of our overall concepts,
goal, and intended approach. Since early 1993, we have discussed the project with close to 100
individuals in EPA and other federal departments and agencies, industry, state governments,
academia, the media, and other non-governmental organizations (NGOs). We have actively solicited
suggestions for improving our methodology, and have attempted to be responsive to all comments
about the project as a whole. This peer review effort will continue throughout the life of the project
As we moved into the data-gathering phase of the project in mid-1993, we began the
essential process of developing stakeholder networks for each of the three selected industries. In
view of our intent to focus first on characteristics of the three industries, we made a significant effort
early in Phase 1 to identify and connect with the key individuals and organizations in each industry,
in order to begin to understand the issues as industry perceives them. These interviews with industry
contacts provided an important initial source of information on drivers and barriers. These early
rounds of interviews generated a wider range of hypotheses about drivers and barriers of
environmental performance, which we were able to test in discussions with an expanding set of
stakeholders in later stages of the Phase 1 work. Major trade associations for each industry were
important sources of contacts in individual companies. In addition, we had the help of consultants
with expertise in the particular industries.
2-11
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In addition to interviews with trade associations and company contacts, we conducted site
visits to manufacturing facilities to enhance our understanding of the manufacturing technologies
and plant-level environmental issues. We also conducted a review of the trade literature and the
pollution prevention and control literature for each industry.
During the course of our research and interviews, we began identifying industry and other
contacts who might participate in an expert panel for each industry. The first set of expert panel
meetings was held in January, 1994. The primary purpose of these meetings was to verify our
understanding of the economic and environmental characteristics of each industry, and to determine
the key drivers and barriers affecting performance. The initial expert panel discussions of drivers
and barriers provided a preliminary list of policy options that might enhance incentives or reduce
barriers to more sustainable industry practices.
After the first round of industry expert panel meetings, we began to expand our stakeholder
networks to include other important, non-industry participants. These non-industry stakeholders
include members of EPA offices that are responsible for programs of particular significance to the
industries; NGO representatives from environmental organizations and other groups with interest
in the industries (e.g., the Association of Metropolitan Sewage Agencies, representing POTWs); and
representatives of relevant federal, regional, state, and small business interests.
A second round of expert panel meetings, involving more diverse groups of participants,
occurred in February and March of 1994. The goals of these meetings were to verify our
understanding of key industry characteristics, drivers, and barriers - this time through a dialogue
with a wider set of stakeholders and to select key policy areas for focus in Phase 2 of the project.
As with our peer review efforts, the development of industry-specific stakeholder networks
is an ongoing process. We want all interested viewpoints to be represented in our data-gathering
and analytical processes, to ensure the accuracy of our substantive findings, to elicit innovative ideas
to the maximum extent possible, and to enable stakeholders with divergent points of view to engage
in constructive dialogue. Over the long-term future, these networks will help to provide a solid
substantive basis for our policy recommendations and a broad participant base for future
public/private partnerships to implement those policies.
2.8 NEXT STEPS
This report reflects work completed through the second round of expert panel meetings for
each of the three industries, the last of which occurred on March 15,1994. The remaining chapters
of the report provide in-depth discussions of the three industries that were the subject of this study,
including the top policy options identified for each industry.
The Sustainable Industry Project remains a work in progress. Each of the industry sectors
will need additional investigation to clarify the issues that have been raised. More work is also
needed to continue broadening the stakeholder network, and involve some groups whose views have
not yet been adequately represented.
2-12
-------
During Phase 2 of this project we will further develop and characterize potential
implementation projects for each industry that will test the environmental and economic impacts of
the industry-specific policy options identified in Phase 1. The implementation projects, which are
the logical next step of our backward mapping analytical approach, will be undertaken in Phase 3.
The projects may include implementation and testing of policies on a pilot basis, cooperative efforts
to develop definitions or information needed to implement new policies, tests of innovative
compliance and enforcement approaches, and further research on key scientific or technical issues.
We will use the implementation projects to assess whether the specific policy options effectively
address the key drivers and barriers that affect long-term environmental performance in each
industry.
We believe that the following tasks will likely be a part of Phase 2, subject to change as we
continue to be responsive to new information, input from stakeholders, and the views of EPA
management:
o Holding additional meetings with industry/stakeholder expert panels, and
interviews with parties involved in each of the policy areas selected for focus,
to clarify the issues involved and understand what specific actions would be
required to implement a new policy to address the issues. The project team
will continue to contact stakeholders whose views have not yet been fully
represented in the expert panel discussions and interviews. In particular,
more involvement by environmental groups, state regulators, EPA regional
representatives, and groups with practical experience with various non-
regulatory policies will be solicited.
o Developing EPA cross-office teams to work with OPPE project managers -
in particular, to review, assess and revise the findings for each industry and
to comment on the design of useful implementation projects. These teams
will include regulatory, compliance, and permitting representatives whose
selection will be based on the specific issues and options identified for each
industry.
o Preparing strategic plans for individual implementation projects, along with
background materials on the issues motivating consideration of each project,
for review by all major stakeholders, including EPA program offices and
senior management. The plans will define the purpose of the projects and
success measures by which the results can be evaluated. Gear definition of
"success" and concrete ways of determining success will be critical to making
the project results a valid basis for broader policy decisions.
We anticipate that the implementation stage of the Sustainable Industry Project will require
broad stakeholder participation, with OPPE playing a coordinating and facilitating role, but not
necessarily a leadership role in every implementation project. The strategic plans, participants,
resource requirements, timeframe, and success measures of each project will differ based on the
industry-specific driver factors and barriers that are being addressed.
2-13
-------
Once implementation projects are developed and underway, OPPE will assess environmental
and economic results of policy options, to test whether the anticipated payoffs of the recommended
policies are in fact being achieved. On this basis, we can with greater confidence make broad policy
and programmatic recommendations to the Administrator.
2-14
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THE PHOTOIMAGING INDUSTRY CHAPTER 3
3.1 INTRODUCTION
This chapter discusses the background information and preliminary findings of the
Sustainable Industry Project's analysis of the photoimaging industiy. This introduction outlines the
contents of this chapter. The approach to our analysis, including the scope of the project, an
industry profile, and our information sources are addressed in Section 3.2. Section 33 presents our
findings to date, including:
(1) Information on the economic characteristics of the industry;
(2) Descriptions of key factors that influence environmental performance in this
industry (drivers and barriers); and
(3) A list of policy options that might enhance the drivers and reduce the
barriers to improved, more cost-effective environmental performance by the
photoimaging industry.
32 APPROACH TO ANALYSIS
3.2,1 Scope
The photographic supplies and equipment manufacturing industry is classified under
Standard Industrial Code (SIC) 3861, which includes the manufacture of:
o Equipment: still and motion picture camera and projection apparatus,
photocopy and microfilm equipment, blueprinting and diazotype (white
printing) apparatus, photocopy and microfilm equipment, and other
photographic equipment; and
o Supplies: sensitized film, paper, cloth, and plates, and prepared photographic
chemicals for use in processing sensitized products.
3-1
-------
During our initial analysis of the photographic manufacturing and processing industry, we
identified a number of characteristics which make the photographic processing segment attractive
for in-depth study, compared to those identified for the photographic manufacturing industry which
appeared far more limiting. As a result of these factors, outlined below, the EPA/IEc project team
decided in Phase 1 of the project to focus on environmental issues in photoprocessing1, though not
to the exclusion of manufacturing issues. Photographic processing is classified under two SICs: SIC
7384, which comprises all photoprocessing except that of motion picture film; and SIC 7819, which
comprises all support operations involved in the production of motion picture films, including the
photoprocessing step.
The following are specific factors frequently identified by both manufacturers and
photoprocessors which encouraged us to focus on photoprocessing:
o There was a high degree of industry interest in photoprocessing
environmental issues. This interest reflects the difficulty some
photoprocessors are having complying with local standards, due to their small
size, lack of capital, and lack of technical expertise, as well as to the
increasing stringency of some local standards.
o According to manufacturers, much of the impetus for their environmental
innovation originates with their customers, the photoprocessors, who look for
ease of compliance with environmental regulations, rapid picture
development, and minimal waste generation.
o Innovative policy approaches may have especially high payoffs in the
processing sector, which includes large numbers of small dischargers who are
difficult to monitor for enforcement purposes.
o Given the small number of U.S. supplies manufacturers and the variation in
their products, a focus on manufacturing might provide policy conclusions
that were applicable to only one or two facilities. In contrast, similarities in
products and processes among the numerous photoprocessors will likely lead
to policies which are applicable throughout the sector.
Although we decided to focus on environmental issues in photoprocessing, this focus has required
the participation of both manufacturers and processors as the product and process changes and
much of the training that influence photoprocessors' environmental performance come from the
manufacturers. Furthermore, we intend in Phase 2 of the project to conduct additional research into
the barriers to innovation and drivers to environmental improvements in the manufacturing sector.
We therefore continue to gather information from the manufacturing sector regarding sustainable
practices.
1 The terms "photoprocessing," "photofinishing," and "photo developing" are interchangeable.
For consistency, we use the jterm "photoprocessing" throughout this report
3-2
-------
We recognize that other potentially significant environmental issues have not yet been
explored, and that we have not yet presented a full life-cycle characterization of environmental issues
in this industry. There is no doubt, however, that the release of silver and other toxics from
photoprocessing is one of the key environmental issues in this industry. Our initial focus on this
issue has allowed us to develop a concrete understanding of environmental performance drivers and
barriers and to begin considering policy options and specific pilot projects. It will be important in
future work to keep in mind our relative lack of knowledge of environmental issues in
manufacturing, and to pursue those issues in later stages of the process.
3.22 Overview of Industry
The two major segments addressed in the scope of the photoimaging industry sensitized
goods manufacture and photoprocessing - consist of very different products and processes and are
structurally dissimilar. The manufacture of sensitized photographic goods involves, first, the
preparation of the base, such as film or plates, for coating with a photographic emulsion. In the
case of film, the material is generally an acetate-base plastic. Other inputs include plastic and metal
for the film canisters and casing, numerous solvents, and the chemical emulsions. The base is then
coated with an emulsion, usually of silver, to prepare it for capturing the image. The film is then
prepared for sale by cutting and rolling it onto the film canister. The degree to which these
activities are performed in-house varies with the manufacturer. Kodak, for instance, manufactures
its own acetate film base and conducts emulsion and assembly in the same plant Fuji and Konica,
on the other hand, purchase the base from outside suppliers.
Production capacity of the photographic manufacturing industry is dominated by large
companies, such as Kodak and Fuji. As mentioned, this industry concentration is one of the reasons
behind our current focus on photoprocessors. The processing industry, in contrast, consists primarily
of small, independently owned labs; minilabs within retail stores; and a few larger wholesale and
mail-order processing labs. Most labs are engaged primarily in the processing of amateur pictures.
Others specialize in the development of professional photography. Larger labs, such as mail-order
labs and professional labs, tend to be more effective in implementing environmental controls, largely
because capital is more available and the employees have more expertise in the field. The
processing operations within these labs, however, are similar regardless of size and specialty.
Processing operations begin with the removal of exposed film from its housing canister. The
processor then puts the film through a variety of chemical baths. First, a hydroquinone solution
serves as the developer of the image; then, if the film being developed is color film, bleach is used
to remove the remaining silver emulsion not contributing to the image; third, ammonium or sodium
thiosulfate solution is used to fix the silver image to the film base; and finally, one or more washes
remove any remaining chemicals and unexposed silver. As film is passed through the developer,
bleach, and fix, these solutions are replenished with new solutions to maintain their effectiveness.
The rate of replenishment is a factor in determining the amount of processing chemicals used The
majority of silver removed from the film base is in the bleach and the fix. Consequently, these two
developing solutions are commonly passed through a recycling system to recover valuable silver.
Manufacturers and processors have a close relationship in this industry. Processors rely
heavily on manufacturers for compliance assistance and innovations to address environmental and
regulatory concerns. Manufacturing is driven in part by the demands placed upon the processors,
both by regulators and by the end consumer. The result is an industry which is sensitive to
environmental issues that are the focus of regulation at a more local level.
3-3
-------
3.23 Information Gathering a^H Panel Meetings
In our efforts to fully understand the photoimaging industry as a system, we researched
numerous areas, including the economic and financial characteristics of the industry, the products
and processes involved, environmental issues, and current and future regulatory issues. Our first
step was to review published documents for data on the size of the industry, the number of players,
market growth rates, and end-use sectors. We also contacted the major trade associations.
Interviews with the trade associations were extremely helpful in providing initial information on
economic and environmental issues in the industry, and in identifying the names of individuals to
contact in the industry itself.
We then conducted interviews with a number of industry, government, trade association, and
environmental group contacts. We visited Kodak's major manufacturing facility and two
photoprocessors. Because most photoprocessors discharge their wastewaters to publicly owned
treatment works (POTWs), we also contacted the Association of Metropolitan Sewerage Agencies
(AMSA) and several POTWs. The Veterans' Administration and the American Hospital
Association provided information on medical uses of photoprocessing. To investigate issues related
to silver recycling, we contacted the International Precious Metals Institute (IPMI). We also
contacted researchers with the U.S. Geological Survey, the University of Wisconsin, and the
Baltimore Academy of Natural Sciences to discuss the scientific evidence regarding the toxicity, fate,
and transport of silver in the environment. Finally, we contacted representatives of the
Environmental Defense Fund (EDF) and the Natural Resources Defense Counsel (NRDQ to assess
the environmental community's position on the issues raised. Throughout this process, we had the
help of Peter Krause, a consultant with extensive experience in the photographic industry. The list
of sources used and organizations contacted is provided in Exhibit 3.2-1. A more detailed list of
documents consulted is provided in Appendix 3-A, and the individuals interviewed are listed in
Appendix 3-C to this chapter.
3-4
-------
Exhibit 3.2-1 1
1
CONTACTS AND SOURCES FOR THE PHOTOGRAPHIC INDUSTRY |
Documents
Toxics Release
Inventory
Census of
Manufactures
U.S. Industrial
Outlook
Photography
Trade News
Wolfman Report
on the
Photographic
imaging Industry
Photoprocesting
News,
Incorporated
Industry
Associations
National Association of
Photographic
Manufacturers
Photo Marketing
Association International
Silver Coalition
Association for
Information and Image
Management
Photographic
Manufacturers and
Distributors Association
Printing Industries of
America
International Precious
Metals Institute
Industry
Members
Eastman Kodak Co.
Polaroid Corp.
Fuji Photo Film USA
Fuji Hunt Photographic Chemicals
Konica
3M Company
DuPont
nford
Agfa Division
Mitsubishi International Corp.
Anitec Image
Advanced Photographic
Noble's Camera
Eckerd Drug Company
Eckerd Express Photo Center
FotoFast
Qualex,Inc.
Wal-Mart Stores, Inc.
ECS Refining
Handy & Hannan
Envision Compliance Ltd.
Government
U^. EPA
- Office of Solid
Waste
-Office of Water
- Office of Pollution
Prevention and Toxics
- Office of Air Quality
Performance
Standards
-Office of
Enforcement
- Risk Reduction
Engineering Lab
-Region 1
-Region 4
States
Department of
Commerce
State Pollution
Prevention
Roundtable
Palo Alto POTW
Hampton, VA
Sanitation District
US. Geological
Survey
Department of
Veterans' Affairs
Ontario Ministry of
the Environment and
Energy
Non-
Governmental
Onranrratinnc
«*
Environmental
Defense Fund
Natural Resources
Defense Counsel
Association of
Metropolitan
Sewerage Agencies
American Hospital
AsKKlSfKHl
Baltimore
Academy of
Natural Sricncn
University of
Wisconsin
On January 13,1994, we held the first of two expert panel meetings for this sector study.
This meeting included only industry participants and experts. At this meeting, industry participants
assisted us in identifying the drivers and barriers to improved environmental performance in the
industry, and in determining potential arenas for environmental improvements. They also identified
stakeholders in the photoimaging industry that we had not yet contacted.
3-5
-------
The second expert panel meeting was held on February 25, 1994. This meeting included
representatives from various U.S. EPA offices involved with the industry, POTWs, photoprocessors,
and trade associations.2 The objectives of this second panel meeting were to confirm our
characterization of the industry, and to identify policy options with potential to promote improved
environmental performance. At this meeting, the participants identified four policy areas as high
priorities for work in Phase 2 of the project.
The organizations attending the first and second panel meetings are listed in Exhibit 3.2-2;
each organization's representative is identified in Appendix 3-B.
Exhibit 32-2
PANEL MEETING PARTICIPANTS
Panel Meeting
January 13,1994
Kodak
Company
Fujifilm USA
Konica USA
3M Printing and
Publishing Division
DuPont
Qualex, Inc.
Panel Meeting
February 25,1994
National Association of Photographic
Manufacturers
Photo Marketing Association
The Silver Coalition
Noble's Camera (minilab)
Association of Metropolitan Sewerage Agencies
International Precious Metals Institute
U.S. Department of Veterans' Affairs
U.S. EPA Office of Water
U.S. EPA Office of Solid Waste
U.S. EPA Office of Enforcement
U.S. EPA Office of Research and Development
Additional interviews are still required to obtain the views of all key stakeholders. In
particular, we have had only limited contact with environmental groups, state regulators, and end-
user representatives (especially non-medical). The project team will continue to solicit input from
these and other experts and stakeholders as the project proceeds.
2 Representatives from two environmental groups were invited to this meeting and accepted the
invitation. Neither representative was able to attend, however, due to last minute conflicts.
3-6
-------
33 MAJOR FINDINGS
33.1 Industry Characteristics
Industry Size and Structure
Establishments in SIC 3861 produce a wide variety of products, only some of which directly
relate to photoprocessing. Therefore, SIC-level data provide only an imprecise picture of economic
trends in this industry. Exhibit 33-1 shows the composition of all products classified as SIC 3861
"Photographic Equipment and Supplies".-3
Exhibit 33-1
COMPOSITION OF SIC 3861 PRODUCTS
(1987 Census of Manufactures)
Product
Still cameras (hand-held)
Still picture commercial type
finishing equipment:
processing equipment for
film
processing equipment for
paper
continuous printing
machines
all other (inch developing
machines, print washers &
dryers)
Other still picture equipment
Photocopying equipment
Number of Companies with
Shipments of
$100,000+
4
13
8
2
5
NA
NA
Value of Shipments
(minion $)
324.4
124.8
NA
73.9
NA
4723
5,9823
(continued)
3 Of the total value of shipments of SIC 3861 products ($153243 million), 98 percent ($15,052.0
million) is produced by establishments whose primary products are classified in SIC 3861. That is,
only a small part of the production of these products is accounted for by establishments primarily
in other industries. Therefore, SIC 3861 captures virtually all of the products of interest, but covers
other products as well.
3-7
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Exhibit 33-1
(continued)
COMPOSITION OF SIC 3861 PRODUCTS
(1987 Census of Manufactures)
Product
Motion picture processing
equipment
Other motion picture
equipment
Microfilming, blueprinting, and
whiteprinting equipment
Photographic sensitized film
and plates, silver halide type
(except X-ray):
still picture film
other film, plates and slides
Sensitized photographic paper
and cloth, silver halide type
Sensitized photographic film,
plates, paper and cloth, other
than silver halide type
Prepared photographic
chemicals:
office copy toner
other
X-ray film and plates
Other photographic equipment
and supplies
Total
Number Of Oimpaniea with
Shipments of
$100,000+
8
NA
NA
5
NA
6
NA
20
24+
9
NA
719"
Value of Shipments
(miDion $)
242
164.4
382.9
1,357.3
3,187.9
*
1247.8
5382
686.6
757.0
153243
Source: 1987 Census of Manufactures, Industry Series MC87-I-38B, Table 6a-l.
* Included with value of shipments for photocopying equipment
Industry representatives maintain that all SIC 3861 companies have shipments over $100,000; the
1987 Census of Manufacturers lists this total number of companies in a separate table.
Exhibit 33-1 shows that nearly half of the 1987 value of shipments (VOS) in this SIC relate to
photocopying, mkrofiirning, and motion picture equipment unrelated to camera picture-taking and
processing. Another eight percent of the VOS are cameras and other non-processing related
equipment and supplies. Approximately 33 percent or $5,092 million in VOS is related to silver
3-8
-------
haJide sensitized film, plates and paper, and processing equipment supplies - items relevant to our
analysis. Of these, $547.3 million are shipments of processing equipment, and $4,545.2 million are
shipments of supplies (e.g., film and paper).4
Exhibit 3.3-2 shows the distribution of establishments by their primary product.
Exhibit 33-2
1987 INDUSTRY STATISTICS BY PRIMARY
PRODUCT GLASS SPECIALIZATION (SIC 3861)
Primary Product Class
Still picture equipment
Photocopying equipment
Motion picture equipment
Microfilming, blueprinting, and
whiteprinting equipment
Sensitized photographic film and
plates, silver halide type
Sensitized photographic paper
and doth, silver halide type
Sensitized photographic film,
paper, and doth other than silver
halide type
Prepared photographic chemicals
X-ray film and plates
Total SIC 3861
Number of
ments
64
11
30
21
21
3
42
28
4
787
Value of Shipments
(million $)
Total
8213
(D)
237.4
287.8
7,2643
(D)
1,521.5
622.5
(D)
19,240.5
Average/
Estab.
12.8
NA
7.9
13.7
345.9
NA
362
222
NA
24.4
New Capital
Expenditures
(million $)
27.6
(D)
3.7
6.0
426.6
(D)
553
183
P)
681.0
Source: 1987 Census of Manufactures, Industry Series MC87-I-38B, Table 5a.
(D) withheld to avoid disdosing individual facility information.
4 VOS for X-ray film and plates, and silver halide sensitized paper and cloth are combined with
values from other SICs and cannot be separated; therefore, these figures understate the VOS for
products covered by the scope of this study.
3-9
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Exhibit 3.3-2 shows that 21 establishments produce silver-halide-sensitized film and plates, and
another 3 produce silver-halide-sensitized paper and cloth as primary products. Exhibit 3.3-2 also
shows that the 21 establishments producing silver-halide film and plates are larger on average than
the establishments producing other products in this SIC, and account for a substantial portion of the
industry's new capital expenditures.
Manufacturers with significant operations in the United States include:
o Eastman Kodak Company,
o Polaroid Corporation,
o 3M Corporation,
o Xerox,
o nford (owned by International Paper), and
o Anitec Image (also owned by International Paper).
Kodak is by far the largest U.S. manufacturer.5 Polaroid Corporation is the second largest U.S.
manufacturer, but their primary film product is instant film. Given our focus on photoprocessing
issues, we excluded instant photography from our scope. Several foreign companies, such as Fuji
and Konica, have established operations in the United States, but conduct the majority of their
production operations abroad. The major foreign manufacturers include Fuji, Agfa (owned by Miles
Incorporated), Konica, and Mitsubishi International Corporation.
Manufacturers supply processing systems which include both equipment and supplies to
customers. Photoprocessors do not have to purchase chemical supplies from the same manufacturer
that supplied the processing equipment, but many especially the smaller minilabs often do. All
of the manufacturers have support systems to assist the processors with operations and
environmental compliance. Such systems include instructional seminars, facility compliance
evaluations, and compliance kits.
Photoprocessora
Cameras and film are sold in a wide variety of retail establishments, including general
merchandise stores, gas stations, food and drug stores, and specialty camera and photographic supply
stores.6 However, photoprocessing supplies are sold only to the subset of establishments that
perform photoprocessing on-site. These include commercial photoprocessing labs (wholesale and
retail) and some camera stores, drug stores, and discount and mass merchandising stores. In
addition, x-ray processing is done in large numbers of doctors', dentists', and veterinarians' offices
and hospitals. An estimated total of 500,000 facilities perform some kind of photoprocessing.
5 For example, the Photo Marketing Association's 1991-1992 Industry Trends Report shows that
Kodak accounts for 71 percent of color paper sales to U.S. amateur processing labs.
6 The 1987 Census of Retail Trade reported 63,723 establishments as selling photographic
equipment and supplies. Of these, only 3,791 were specialty camera and photographic supply stores.
3-10
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Within commercial photoprocessing, industry sources distinguish between retail minilabs and
larger wholesale, captive, or mail order labs (see Exhibit 3.3-3). The number of minilabs has grown
rapidly over the past decade (from approximately 800 in 1981 to 17,200 in 1991). In 1991, minilabs
were located in 3,100 camera stores; 7,100 stand-alone minilab outlets; and 2,700 mass-retail stores.
This indicates a significant increase in the number of minilabs in mass-retail stores, which grew from
1,400 in 1989. The number of minilabs in other types of stores declined slightly over the same
period.
Exhibit 33-3
ESTIMATED MARKET SHARE OF RETAIL
(Share of Rolls Processed, 1991
Retail Channel
Drugstore
Stand-Alone Minilab
Camera Store
Discount/Mass
Merchandiser
Supermarket
Mail Order
Other
Total
Processed by
Wholesale,
Captive, or
Mail Order Labs
MflL
Rob
148.5
4.1
25.0
120.4
823
58.6
253
464.4
%
21.1%
0.6%
3.6%
17.1%
11.8%
83%
3.6%
66.1%
Photoprocessing
)
Processed by
Retail Minflab
Equipment
MflL
Rolls
28.7
116.0
48.0
17.6
14.8
0.0
12.6
237.7
%
4.1%
163%
6.8%
25%
2.1%
0.0%
1.8%
33.9%
Total
MflL
Rofls
177.2
120.0
73.0
138.0
97.4
58.6
38.0
702.1
%
25.2%
17.1%
10.4%
19.6%
13.9%
83%
5.4%
100.0%
According to industry representatives, the characteristics of large and small labs vary
tremendously. Smaller labs have a limited capital base, and hence tend to be somewhat less
sophisticated. Industry points out that there has been a trend toward concentration among
photoprocessing labs over the past several years, largely as a result of restrictive environmental
standards. They claim that compliance has become prohibitively expensive for small operations to
achieve.
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The characteristics of the various types of labs are shown in Exhibit 3.3-4.
Exhibit 33-4
CHARACTERISTICS OF AMATEUR FILM PROCESSING LABS7
Lab Type
Minilabs
Wholesale Labs (Drug
Stores, Grocery Stores)
Mail Order Labs
Price
Two to Three Tunes
Higher than Others
Medium
Low
Quality
Lower than Others
Equal to Minilabs
High
PfiM rmng Speed
One Hour
Two to Three Days
One Week
Photoprocessors vary in size, as follows:
o Over 90 percent are small to medium, employ less than ten people, discharge
less than 10,000 gallons of wastewater per day, and generate less than 100
gallons of silver-rich solution per week.
o About 9 percent are large, discharge 10,000 to 25,000 gallons of wastewater,
per day and generate 100 to 250 gallons of silver-rich solution per week.
o Less than 1 percent are significant industrial users which discharge over
25,000 gallons of process wastewater per day. These include most hospitals;
a few diagnostic clinics, printers, and photoprocessors; and the major motion
picture film processors.
Consumers of Photoproccssmg
The market for photographic services and supplies is divided into three major segments:
o Medical applications,
o Graphic arts, and
o Amateur photography.
Other photoprocessors include labs serving professional photographers, and various government
agencies, such as police departments and the Department of Defense. The product consumed varies
among these segments.
7 Consumer Reports. November 1993, pp. 711-715.
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Medical users include large hospitals and diagnostic clinics, as well as doctors' offices and
veterinarians. The largest single user in the medical market is the Veterans' Administration. The
medical industry purchases developing products for use in processing. The final consumer, the
patient, is concerned not about the x-ray itself, but about the diagnosis.
The graphic arts industry consists mainly of printers who are only partially involved in
photoprocessing. In most cases, photography represents a small part of their business and does not
present their most pressing environmental problems.' These businesses serve an industrial market
through published documents and advertising. The amateur photography sector includes all amateur
photographic processing, whether at minilabs, large wholesale laboratories, or mail order processing
labs. These labs serve individuals taking pictures to preserve memories. These consumers are
concerned only about the final picture, not about the process that produces it.
Industry participants stress the variations among the demands of the three major market
segments - medical imaging, graphic arts, and amateur photography. These requirements affect the
constraints on process and product improvements.
o The graphic arts market requires high quality pictures, but is relatively
unconcerned with processing speed.
o The amateur market tends to be more concerned with speed in processing,
but demands increasingly higher quality.
o The medical market is concerned with rapid and accurate diagnosis, and
therefore requires both quality and speed, as well as longevity of the image.
According to industry participants, the compliance burdens faced by the photoprocessors make the
environmental characteristics of products and processes an important competitive factor in the
industry. In Phase 2, we will further investigate the extent to which consumer demands act as a
barrier to environmental improvements.
Photoprocessors compete based on price, quality, convenience, and speed of processing. The
trends in demand for amateur photographs are somewhat cyclic and follow the economic cycles, with
a minimiinr customer base below which demand will not fall When people become more price
sensitive, as in a recession, they are more willing to sacrifice convenience and speed for lower prices.
Furthermore, in recessionary times, vacations and other leisure activities tend to decline, eliminating
many picture-taking opportunities.
Commercial photography in the graphic arts industry tends to be even more closely linked
to the economy, as much of this industry is based on advertising and business expenditures.
Applications in the medical field are for x-ray technology, and are therefore driven by the health
care market
8 Printers are usually more concerned about hazardous inks and air emissions from solvents
involved in the printing process than about the wastes generated in photoprocessing.
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Current Economic Status
The photoimaging industry is continuing through a decade-long restructuring and
streamlining process. Manufacturers have been laying off workers, spinning off secondary
businesses, and forming alliances with other companies to pursue new markets and add expertise
in digital technologies.9 The value of shipments for SIC 3861 products as a whole has shown a
decline since 1991 in constant dollar terms. U.S. photoprocessing sales decreased three percent in
1992, despite modest growth in photoprocessing worldwide. These recent trends reflect the effects
of the recession, both on amateur sales (with reduced travel and leisure activity spending) and on
graphic arts (which follows overall business trends).
Since the 1950s, there has been substantial growth in amateur photography, due to
development of higher quality photographs and the advent of user-friendly cameras. However, the
real price of film and materials has fallen or remained constant over the same time period, mainly
as a result of product and process improvements, as well as increasing price competition.
In photoprocessing, there was rapid growth in the number of minilabs in the 1980s. This
growth has ended recently, except for an increased number of minilabs in mass merchandising and
discount stores.
Consolidation is occurring hi the industry, both from a manufacturing perspective and from
a processing perspective. Some smaller manufacturers have been absorbed by the large market
players. In addition, some manufacturers are now involved in processing. Kodak owns
approximately half of Qualex, Incorporated, which is the largest single photoprocessing company.
Fuji and Konica have also purchased photoprocessing labs. As a result, the three largest
manufacturers are now also full or partial owners of the three largest photoprocessing chains. (We
do not know what portion of the photoprocessing market these three players serve.)
Products and Pn
Photography is currently dominated by silver-halide processes - silver being the image-
capturing component of film. Within this market, manufacturers have made continuous
improvements, including film with sharper colors, finer grain, and a greater variety of speeds; and
point-and-shoot and single-use cameras. There are, however, some innovations in products and
processes that may reduce the importance of sirver-halide products in the future. Most notable is
electronic imaging
The role of electronic imaging is becoming increasingly important in the photographic
industry and represents an important area of potential growth. Many of the major photographic
manufacturers are planning to add electronic imaging to their product lines. Although the extent
9 U.S. Department of Commerce, U.S. Industrial Outlook 1994. p. 23-1. Total employment for
SIC 3861 as a whole decreased from 88,000 in 1987 to 76,500 in 1991, and to an estimated 75,500
in 1993. A further decline to 75,000 is forecast by the Department of Commerce for 1994.
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to which this will affect the market for silver-halide-based materials is unclear,10 silver-halide imaging
is likely to maintain a significant market share due to the inferior quality of electronic imaging. The
most likely area of growth in the near future is in hybrid systems, which combine the image-
manipulating capabilities of electronic imaging with the imaging quality of silver-halide-based output.
Manufacturers have also been developing films without silver halide, mainly because of the
high price of silver and the regulations affecting it. Xerox recently developed a heat-based film,
which uses selenium rather than silver. Diazo, vesicular, photopolymer, and electrostatic films also
are undergoing development and improvement. The success of these alternatives depends on how
well they meet consumers' demands as disadvantages associated with substitutes can outweigh the
benefits of eliminating silver. For example, alternatives to silver-halide-based x-ray films require that
people receive higher exposures to radiation.
Another significant development in the industry has been the single-use camera, which has
been purchased by 20 percent of U.S. households. Last year, sales increased 60 percent, with an
estimated 20 million units sold world-wide in 1992. Currently, single-use cameras account for
approximately 10 percent of the 1.8 billion rolls of film sold annually world-wide.
Environmental
The photographic manufacturing industry is a significant contributor of releases according
to the Toxics Release Inventory. In 1990, the industry emitted a total of 37,394,766 pounds ofTRI
chemicals. Eighty percent of these toxics were emitted to the air. The other media for TRI
emissions, in order of decreasing volume, were water and publicly owned treatment works (POTWs);
land and underground applications; and offsite transfers.
The industry's primary production emissions are volatile organic compounds from solvent
vapors. According to TRI, the largest component of these releases is methylene chloride, which
represented 25 percent of the industry's total releases in 1990. Together, five solvents (methylene
chloride, methanol, acetone, toluene, and methyl ethel ketone) accounted for 80 percent of 1990
TRI emissions.
Outside of the industry's solvent use, several toxic inputs to the manufacturing process have
typically been the target of environmental concerns. These include:
o silver,
o hydroquinone,
o chromium, and
o selenium (in Xerox's heat-based film).
10 The production of electronic images is not a chemical process, though chemicals are used in
manufacturing the equipment
3-15
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Over the past 20 years, the industry has significantly reduced the content of silver in their products.
The vast majority of silver in film is not used in the image and is recovered from processing
solutions. However, the nature of the image formed determines the amount of silver used in that
image; quality requirements for image and consistency limit the potential for further reduction.
As a result of the reduction in the silver content in film, the industry has also reduced the
amount of hydroquinone in developer. There is a direct relationship between the amount of silver
on the film base and the amount of hydroquinone required to develop the image. The amount of
chromium used in the film emulsion has also been substantially reduced, and is currently used only
in the Kodachrome process. The elimination of chromium in traditional films was primarily the
result of regulatory demands on processors to eliminate it from their effluent. In contrast, the
concern about selenium has arisen only recently with Xerox's development of a heat-based film
which contains the chemical. Although Xerox is promoting the film on the basis of its silver-free
nature, many in the industry claim that selenium is far more toxic than silver, and that from an
environmental perspective, the new technology represents a step backward.
The industry generates solid and hazardous waste during the production process, including
plastic from film cuttings and cartridges, silver, and various solvents. For example, emulsion coating
rejects generated during the coating phase contain silver, and are therefore considered hazardous
waste. The majority of these materials are recovered, the silver is removed, and the material
recycled.
Solid waste has also become a concern for photographic manufacturers, particularly with
respect to the single-use camera. Environmentalists have opposed the product based on its
disposability. In response, manufacturers have established an infrastructure for recycling the camera,
compensating the processors for each camera returned (generally five cents) and for the shipping
charges.11 They have also increased the readability of the materials used. Many of the camera's
parts, such as the lens, are reused numerous times prior to being recycled. In addition,
manufacturers have established recycling programs for other industry by-products. For example,
photoprocessors can return film cartridges, spools and returnable chemical drums to the
manufacturer for recycling.
Environmental and technical innovations are sometimes developed by the manufacturers in
response to their customers' needs. At least partially in response to regulations faced by customers,
chemicals in processing solutions and materials have been reduced overall by 30 to 50 percent in the
last ten years. Chemistry replenishment rates have fallen, and the manufacturers are improving
recyclable processing solutions. These environmental improvements, particularly with respect to the
reduction in silver content, have produced positive economic returns. Industry members point out
that source reduction generally produces at least some financial benefit
Photoproccssing operations generate four types of wastes:
o silver-bearing fix solutions and wastewater,
o chemical recovery cartridges (CRCs) used to recover silver;
o film chips containing silver, and
o ferrocyanide sludge.
11 The 1994 U.S. Industrial Outlook reports that most larger photo processing labs and more
than one-half of all minilabs participate in recycling programs for single-use cameras (p. 23-2).
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The wastewater from photoprocessing operations has been a focus of regulation because of
a number of parameters, including toxic metals, toxic chemicals, oxygen demand, ammonia, and bio-
nutrients. By far the largest environmental concern cited by the industry is silver. Gose to one
hundred percent of the silver in film and paper is removed during color processing, while 40 to 60
percent is removed from black and white film and paper. The amount of silver remaining in the
wash water is significant, and many photoprocessing operations have installed equipment designed
to recover silver from spent solutions and wash water. The types of silver recovery equipment, in
order of usage, are listed in Exhibit 3.3-5.
Exhibit 33-5
SILVER RECOVERY EQUIPMENT
Technology
Electrolytic
Metallic
Replacement
Ion Exchange
Systems
Chemical
Precipitation
Reverse
Osmosis
Evaporation
and
Distillation
Effectiveness
Removes 90
percent from silver-
rich solutions
Removes 90
percent from silver-
rich solutions
Removes 90
percent from wash
waters
Removes 99
percent from wash
waters
Concentrates silver-
rich solution 40-60
percent
Advantages
No additional
chemicals released;
Equipment
reusable
95 percent removal
with two cartridges
Reduces water
volume
Reduces water
volume
Disadvantages
Will not reach extremely low concentration limits
Efficiency diminishes with use; Iron in effluent
Can not be used for spent fix and bleach-fix
solutions; Costly; Complicated technical
requirements; Adverse environmental impacts
Can not be used for spent fix and bleach-fix
solutions; Costly, Complicated technical
requirements; Requires hazardous chemicals
Requires additional recovery
Requires additional recovery
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Exhibit 3.3-6 provides data on the current use of environmental controls by commercial
photoprocessois. Similar data are not available for hospitals and other non-commercial processors.
Exhibit 33-6
COMMERCIAL PHOTOFIN1SHER ENVIRONMENTAL CONTROLS (1991)
Percent Operating Silver
Recovery Systems
Type of Silver Recovery
Systems Used:
. electrolytic recovery
. steel-wool canister
. ion exchange
. evaporation/distillation
Percent that Recycle
Water
Percent that Regenerate
Chemistry
Percent of Firms Visited
or Contacted by State or
Local Water Authority in
1991
Afl
Specialty
Retaflen
Combined
80.7%
45.8%
3.6%
2.4%
7.8%
25.8%
Camera
Store with
Mmflab
963%
82.6%
48.9%
0.9%
0.9%
102%
19.6%
13.1%
Stand-Alone
Minflab
89.5%
81.0%
43.9%
63%
03%
72%
28.6%
25.4%
Mafl Order,
Wholesale,
and Captive
Labs
100.0%
94.7%
57.9%
20.8%
83%
40.9%
86.4%
733%
Portrait
Studio
Firms
66.7%
632%
36.8%
2.0%
4.1%
10.0%
22.6%
25.0%
Source: 1991-1992 PMA Industry Trends Report, pp. 69-70.
33.2 Drivers
A wide range of factors was identified in the interviews and expert panel meetings as
influencing environmental performance in the photoimaging industry. In some cases, these factors
were explicitly identified as encouraging environmental improvements or as posing barriers to
compliance or environmental progress. In other cases, a diagnosis of causes was implicit in
participants' arguments for various policy solutions, but was not explicitly stated. Of necessity, we
have had to interpret the implications of various comments. The reader should keep in mind that
not all parties participating would necessarily agree with our interpretations. In general, however,
we found substantial agreement about the major environmental issues in this industry among the
parties consulted so far (although not necessarily about what policy responses to those issues are
appropriate).
As described in Chapter 2, our goal is to determine what factors act as incentives to improve
environmental performance (drivers) and what factors act as barriers or disincentives to improving
environmental performance. Currently, environmental improvements are largely, though not
3-18
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exclusively, driven by federal and state regulation in the photographic industry, as in most industrial
sectors. Much of the discussion in interviews and panel meetings concerned the merits or drawbacks
of specific regulations. Given the substantial effort required to comply with existing and new
regulations, it is not surprising that many participants in this study were most interested in talking
about the regulatory system and improvements to it. This focus on regulation is only part of the
broad range of issues we hope to address in this study, however. To maintain this broad focus, we
have supplemented the issues raised by various participants in some cases, to suggest issues that lie
outside the interests of these participants or that might take on more importance once specific
regulatory concerns are addressed.
To the extent possible, we have noted the specific effect each barrier or driver has on
environmental performance in the photoimaging industry. Some of the issues cited as barriers affect
the costs of achieving compliance with regulations or improved performance, rather than the extent
to which such improvements occur. Reducing these barriers would not necessarily promote
additional improvements in environmental performance, but would reduce the costs of existing
practices. We included these issues in our discussion of barriers for three reasons:
o First, high compliance costs can reduce compliance, and make regulations
less effective in practice. Reducing unnecessary costs may encourage
increased compliance, with the attendant environmental benefits and savings
in enforcement efforts.
o Second, one of the general goals of the sustainable development concept is
to reduce the conflict between environmental and economic goals. One step
in that effort is to ensure that regulations are as cost-effective as possible.
This project therefore includes efforts to achieve equal or better
environmental performance at less cost
o Third, many of the manufacturers stated that they have a fixed research and
development budget for environmental performance, including compliance
expenditures. If the cost of compliance were lower, these funds could be
diverted to innovative environmental improvements.
We discuss economic, technology, and regulatory drivers and barriers in separate sections
below.
Economics
The economic characteristics of this industry have presented both incentives for and barriers
to improved environmental performance, according to our discussions to date.
A major barrier to the effective recovery of silver in photoprocessing wastes is the small size
and lack of technical sophistication of many of the photoprocessors. Processes to remove silver from
wastes require careful operation and maintenance to achieve their design effectiveness. Many
photoprocessors, especially the minilabs within drug stores, grocery stores, and department stores,
do not have staff with sufficient training and longevity to operate this equipment effectively. While
manufacturers make substantial investments in training and guidance, there may be inherent limits
in the ability of these processors to operate silver recovery systems effectively.
3-19
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High prices for certain inputs have encouraged reduced use of those inputs over time. In
addition, competition based on product quality has encouraged some environmental improvements.
This congruence between economic and environmental goals was particularly noted with respect to
silver. Past increases in the price of silver encouraged efforts both to reduce the amount of silver
used in sensitized products and to increase silver recovery and recycling.13 The extent to which
silver is recycled is sensitive to price, and according to industry participants is currently hampered
by the combination of moderate prices for silver and the costs of complying with RCRA rules.13
However, actions taken to reduce the amount of silver in sensitized products also had the effect of
improving product quality.14 According to industry contacts, competition based on product quality
has continued to encourage the use of less silver over time, independent of fluctuations in the price
of silver.
The high costs of replacing in-place photoprocessing equipment acts as an economic barrier
to improved environmental performance. Many environmental improvements (e.g., processes that
recycle photoprocessing chemicals) are embedded in the photoprocessing equipment, and
replacement of existing equipment is required to achieve those improvements.15 Photoprocessors
are reluctant to replace equipment before the end of its useful life especially minilabs, for whom
the capital investment can be a substantial burden. While the equipment replacement cycle acts as
some constraint on the speed of environmental improvements, it is not clear that it causes significant
delays. The basic pace of product and process improvement results in a turnover of photoprocessing
equipment in only eight years on average, according to industry experts.
Photographic product users' needs are also cited by industry contacts as a factor influencing
the pace and extent of environmental improvements. As described earlier, different end-use
segments present different demands that influence the nature of changes in photoprocessing
chemistry over time. For example, the market demand for one-hour processing eliminates many
opportunities for reducing the chemical content of processing chemicals. If chemicals are reduced,
the film must remain in the solution longer, extending the time required for developing. Also, the
accuracy and quality requirements of x-ray film and graphic arts film limit the potential for
alternatives to silver-halide-based film.
12 Incentives to conserve and recover silver were especially strong in 1980 when the Hunt
Brothers' attempt to corner the market in silver drove prices up to about $50 per troy ounce. Silver
prices declined dramatically after this episode, and are now approximately $5.15 per troy ounce.
13 The impact of RCRA on incentives to recycle is discussed later in this section.
14 Using fewer and thinner emulsion layers produces a sharper image, as well as reduces the
amount of silver and other chemicals used.
15 For example, the Rapid Access color developing process requires less water and less chemicals,
and takes up less space than its predecessor. RA processing is also faster, allowing for one-hour film
developing.
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Finally, competition from foreign suppliers is cited as a factor influencing manufacturers'
ability to absorb the costs of environmental compliance. The industry is becoming increasingly
international in nature as the trade environment changes and foreign companies begin
manufacturing in the United States. According to the industry, foreign competitors often face less
stringent or more cost effective environmental regulations than those with which U.S. companies
must comply. To the extent that production by foreign companies in the United States increases,
this cost advantage will narrow. We do not currently know how much of a cost advantage foreign
suppliers actually enjoy, or what the future mix of U.S. versus overseas production is likely to be.
Technology
The nature of photographic equipment requires that the supplies be relatively
interchangeable. According to industry experts, there are quality differences among products and
photoprocessing processes. However, within product categories (e.g., 35 mm films) there must be
enough consistency in design for products to be used in a range of equipment. Similarly, the
processing chemistries must be consistent to allow development of all brands of film. This results
in a strong incentive for coordination with regard to technical standards. These technical standards
may either promote or hinder environmental improvements, depending on how they are defined.
More investigation would be needed to determine whether existing standards act as barriers or as
drivers.
Regulations
Regulation has acted both as an incentive to environmental improvements in photographic
products and processes and, according to industry participants, as a hindrance. Clearly, the
regulation and high price of silver have encouraged actions to reduce and recover silver in
photoimaging. However, industry representatives argue that:
o The current standards governing silver under the dean Water Act (CWA)
and the Resource Conservation and Recovery Act (RCRA) are not justified
by the scientific evidence on the human health and environmental impacts
of silver.
o States and localities have in some cases gone well beyond the standards set
at the federal level, to impose stringent limits on silver in indirect discharges
to POTWs that (1) are extremely expensive to meet, (2) may encourage
increased discharge of other toxic chemicals, and (3) discourage water
conservation.
o Regulation of silver-bearing wastes under RCRA discourages recycling of
silver.
The Silver Coalition has requested that EPA acknowledge certain facts and take action as follows:
o "... the ionic form of silver, rather than total silver, in waste water discharges
is the substance that should be regulated.
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... during an interim period, water quality criteria for silver [should] be
established that is 40 times the current or proposed acute and chronic values
that are based on the toxicity of free silver ion (Ag*).
... a reasonable time [should] be established for the development of an
analytical method to measure the ionic form of silver at very low levels.
... silver [should] be deleted from the Toxicity Characteristic (TC) list under
RCRA... consistent with the action of the Office of Drinking Water, which
deleted the primary maximum contaminant level (MCL) for silver, and our
understanding of other pathways."16
Issues related to the CWA and RCRA are discussed separately below.
Clean Water Act
For the purposes of the dean Water Act, there are two types of dischargers of aqueous
waste - those who discharge directly to surface waters and those who discharge indirectly, through
the sewer lines and eventually to a POTW. Direct dischargers, including the POTW itself, are
regulated under National Pollutant Discharge Elimination System (NPDES) permits. The limits in
these permits are based (for some industries) on national effluent guidelines, and for all dischargers
on Federal Water Quality Standards and, if required, more stringent standards specific to the
receiving water body.
POTWs establish pretreatment standards for indirect dischargers in their service areas to
ensure that after treatment the POTWs effluent will meet its NPDES permit limits and to prevent
disruption of its treatment processes. The pretreatment limits are specified in a pretreatment permit
issued to the source. In most cases, these are the limits that apply to photoprocessing operations,
since more than 90 percent of photoprocessors are indirect rather than direct dischargers.
The main Clean Water Act constituent of concern for the photographic industry is silver.
In the 1970s, EPA stated in guidance that photoprocessors should not be regulated as a categorical
industry, because they were already recovering silver due to its economic value. The Agency was
concerned about promoting water conservation and reducing the hydraulic loading to the treatment
plants.
Prior to 1990, the drinking water standard for silver was 50 parts per billion, which was not
problematic for either the manufacturers or the processors. This acute criterion was based on
hardness, and there were no chronic criteria for silver, as the acute standard was believed to be
adequately protective of human and aquatic health. In 1990, EPA proposed chronic criteria for
silver in the Draft Silver Criteria Document This document proposed removing the hardness-based
16 Letter from Thomas J. Dufficy, NAPM, to Richard D. Morgenstern, U.S. EPA, dated June
25, 1992, accompanying a Silver Coalition report on "An Economic Assessment of the Impact
Resulting from Silver Pretreatment Standards."
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standard and suggested that fresh water chronic criteria be based on the lowest observed effect level
(LOEL). Shortly thereafter, the National Toxics Rule and the Great Lakes Water Quality Initiative
also proposed numeric chronic silver criteria.
Although EPA determined that the Draft document should not be finalized and that the
numeric chronic criteria should be removed from both the National Toxics Rule and the Great
Lakes Initiative, twenty-four states had already adopted the chronic criteria and used them to
establish silver discharge limits for treatment plants. The POTWs then established pretreatment
limits for industrial dischargers based on these standards.
Several states eventually followed the EPA guidelines. Arizona, Georgia, and Pennsylvania
have deleted the chronic criteria for silver. Missouri and New Mexico have proposed that the state
delete the standard, and the chronic standard is under review in Colorado, Florida, Mississippi, New
York, Oklahoma, Rhode Island, and Texas.
In 1992, the Office of Science and Technology at EPA issued a memo to the Regions
recommending that states not adopt chronic water quality standards for silver. The 1993 National
Toxics Rule contained only acute water quality standards for silver.
Industry representatives argue that the effective limit on silver established for many
photoprocessors is too stringent A number of factors contribute to the low effective standards
imposed in many locations:
o The federal water quality standard is based on the toxicity of ionic silver.
Industry argues that silver discharged from photoprocessors in the form of
silver thiosulfate rapidly combines with other naturally occurring substances
to form compounds that are much less toxic than ionic silver.17
o There are no reliable analytic procedures to test for ionic silver, so that
monitoring and compliance are generally based on total recoverable silver.
Some studies show that much of this silver may not be biologically available,
and that the amount of the most toxic ionic silver present is quite low.18
17 The federal concentration limit for silver in aqueous effluent is 5 parts of silver per million
parts of water. This limit is based on tests performed with silver nitrate in laboratory test water,
which decomposes to ionic silver.
18 In October 1993, EPA's Office of Water Policy issued Technical Guidance on Interpretation
and Implementation of Aquatic Life Metals Criteria, recommending that dissolved metals
concentrations, rather than total recoverable metals concentrations, be used to set and measure state
water quality standards. However, the majority of states and POTWs continue to set limits based
on the risk posed by ionic silver, and to require monitoring and measurement based on total
recoverable silver.
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o Limits on indirect dischargers are based on an allocation model used by the
POTW. Some commenters argue that the limits imposed on photoprocessors
are lower because limits cannot be imposed on households and other non-
photo sources that are difficult to control.19
Industry representatives argue that the extremely low silver limits applied in some localities
impose high costs that are not justified by the environmental benefits, and result in increased
discharges of other toxic compounds.
o In some areas, the limits are so low as to preclude discharge of any kind, and
processors must have their solution hauled off-site. The cost of having spent,
silver-rich solutions hauled off-site for recovery typically runs between $2.00
and $6.00 per gallon within a 25-mile radius of the central facility.
o The implementation of extremely low concentration limits for silver requires
processors to use more advanced recovery techniques. One of these is ion
exchange, which, according to industry requires the use of sulfuric acid and
sodium hydroxide, both of which are extremely toxic. The use of these
chemicals results in the processors' being regulated under Title III of the
Emergency Planning and Community Right to Know Act (EPCRA).
o Another option for reaching very low concentration limits is metallic
replacement with several cartridges. These cartridges deposit iron in the
effluent According to the industry, to reach very low limits, the cartridges
must be replaced at 20 to 40 percent capacity, rather than the 80 percent
capacity typically recommended by manufacturers. This results in more
cartridges being used, more iron in the effluent, and more frequent
transportation of the cartridges to silver recydeis.
Industry representatives also stated that regulation of silver in wastewater discharges may
discourage water conservation.30 Because most pretreatment permit limits are expressed on a
concentration rather than mass basis, they argue that photoprocessors are discouraged from adopting
water-saving measures. For example, use of concentration-based limits is said to discourage
photoprocessors from adopting "washless" technologies or otherwise reducing water use (e.g., by
increasing the number of stabilization tanks and using countercurrent rinsing). One source even
described situations in which photoprocessors that were not able to meet very low local limits were
encouraged by regulators to increase their water discharges to meet their concentration limit through
dilution.
19 It has been estimated that large photoprocessors such as hospitals, diagnostic clinics, motion
picture film developers, and large printers and photofinishers account for approximately 10 to 25
percent of silver loadings to POTWs. Small photoprocessors account for another 25 to 50 percent
A large portion of the remainder comes from domestic sources e.g., from washing of silverware.
20 One source stated that reducing water use is the area with the greatest potential for
environmental improvement in this industry.
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The CWA regulations allow the use of either mass-based or concentration-based limits.
Presumably, a concentration-based limit could be changed if flow were to change, to achieve the
same limit on mass loadings. However, various parties argued that POTWs are reluctant to use
mass-based limits for indirect dischargers, or to adjust concentration-based limits to encourage water
conservation. A variety of reasons were cited for this reluctance, including:
o Greater inherent difficulty in monitoring mass-based limits;
o Lack of familiarity with mass-based limits on the part of POTWs and/or the
states who oversee the POTWs' compliance with their own permits;
o Concern on the part of POTWs that they will have compliance problems and
be subject to state enforcement actions if they attempt to make changes to
their current systems; and
o Current use of computer databases and monitoring systems set up to track
concentration limits, that would require software changes if mass-based limits
were used instead.
More investigation would be needed to understand the relative importance of different barriers to
the use of mass-based limits (or more flexible application of concentration-based limits) to
encourage water conservation.
Industry representatives acknowledge that current evidence on the fate and transport of silver
in the environment is not adequate, and industry participants are currently sponsoring a number of
scientific studies in cooperation with EPA. A POTW representative on the expert panel urged EPA
and the photographic industry representatives to include studies of the fate of silver in the sewers,
while a representative of the Natural Resources Defense Counsel expressed concern that further
studies be conducted to account for possible cumulative biological effects.
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Resource Conservation and Recovery Act (RCRA)
Wastes containing silver are regulated as hazardous under Subtitle C of RCRA if they exhibit
the toxicity characteristic for silver.21 However, the Subtitle C requirements that apply to these and
other "precious metals" wastes when they are recycled are less stringent than the requirements that
apply to other hazardous wastes. In addition, generators of hazardous wastes in quantities less than
100 kg/month (including all their hazardous wastes) are largely exempt from the Subtitle C
requirements.22 Virtually all photoprocessors except individual doctors' and dentists' offices and
some very small minilabs are likely to generate wastes exceeding the Small Quantity Generator
(SQG) limit.
According to industry participants, the regulatory status of different forms of silver-bearing
materials varies, and there is some confusion about what materials are potentially subject to
regulation as hazardous wastes. In general, industry contacts said that:
o Rinsing electrolytic flake generates a hazardous wastewater.
o The electrolytic flake itself is considered a product and not subject to
regulation.
o The silver-saver cartridge from metallic replacement recovery is not a
hazardous waste jf it is properly rinsed and does not exhibit the toxicity
characteristic for silver.
The following requirements apply to silver-bearing wastes sent off-site for treatment:
o Generators must notify EPA that they are generating a hazardous waste and
obtain an EPA ID number.
21 The toxicity characteristic (TC) is one part of the "definition of hazardous waste" (40 CFR
261), and silver is one of 40 toxic chemicals currently included in the TC Wastes exhibit the
characteristic for silver if they generate a leachate that contains more than 5.0 rag/liter of silver. The
regulation specifies the test procedure to be used to generate the leachate from the waste (the
Toxicity Characteristic Leaching Procedure or TCLP) and analytical methods for testing for silver.
For liquid wastes (e.g., wastewatcrs), the waste itself, rather than a leachate from the waste, is
subject to the silver concentration characteristic. Generators of wastes are not required to actually
analyze the waste or leachate for concentration levels. They must "determine" whether the waste
exhibits the characteristic by testing 91 by applying their knowledge of the processes generating the
waste.
22
These "small quantity generators" (SQGs) must send their wastes only to facilities that are
regulated as Treatment, Storage and Disposal Facilities (TSDFs), that are authorized by the State
to handle such wastes, or that recycle the wastes. There are limits on the amount of waste SQGs
may accumulate without losing their exemption. Off-site facilities that receive wastes only from
SQGs are also exempt from the RCRA requirements. It is unlikely, however, that any off-site silver
recyclers handle only wastes from SQGs.
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o Wastes must be transported using licensed hazardous waste carriers, which
adds to the cost of transportation.
o Generators and transporters must comply with Department of Transportation
rules for transportation of hazardous materials.
o Generators must prepare a manifest for each shipment, maintain records, and
submit "exception reports" if not notified that wastes are received at the
intended destination; transporters and the receiving facilities must comply
with the tracking requirements of the manifest system.
o Generators must keep certain records and submit a "Biennial Report."
o Transporters are required to clean up and mitigate any releases of the wastes
during transport23
o Storage of the wastes prior to shipment off-site is limited to 90 days before
the storer becomes subject to extensive TSDF requirements. Such "short-
term" storage (less than 90 days) is subject to contingency planning,
preparedness and prevention, and personnel training requirements. In
addition, storage must be in containers or tanks that meet certain technical
requirements.
In addition, the central treatment facility receiving the wastes is subject to an extensive set of
requirements for Treatment, Storage, and Disposal Facilities" (TSDFs).
Generators of silver-bearing wastes destined for recycling, and facilities that recycle these
wastes, are exempt from most of the requirements that apply to wastes that are treated or
disposed.24 Generators must notify EPA and obtain an ID number, and generators, transporters
and recycling facilities must comply with the manifest requirements. Recyclers must keep records
to show that sufficient amounts of the material are being recycled.25
23 Under Department of Transportation rules for hazardous materials transport, transporters are
required to report spills and releases but not necessarily to dean up or mitigate the damages.
24 Only "spent materials" are subject to requirements when reclaimed. Other types of silver-
bearing wastes ("sludges" and "by-products") are not regulated as hazardous under RCRA when
recycled. "Sludges" are defined as solid, semi-solid, or liquid wastes generated by water treatment
or air pollution controls. In the case of photoprocessing, wastewater treatment residuals are not
subject to the precious metals recycling requirements when recycled, but other silver-bearing wastes
may be regulated when recycled (e.g., spent processing solutions). In addition, silver-bearing wastes
that are regulated when reclaimed are subject to the reduced requirements for "Resource Materials
Utilized for Precious Metal Recovery" in 40 CFR 266 Subpart F, rather than the more extensive
requirements that apply to other hazardous wastes.
25 That is, they must demonstrate that the materials are not being "accumulated speculatrvety"
rather than being recycled.
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Regulation of silver-bearing wastes under RCRA subjects more of these wastes to the
Department of Transportation hazardous materials transportation requirements than would
otherwise be regulated. The DOT rules include a variety of packaging, placarding, and transport
practice requirements that depend on the mode of transport and the type of hazard posed by the
waste. The DOT hazardous materials requirements apply automatically to any waste that is subject
to the RCRA hazardous waste manifest. If silver-bearing wastes were not subject to the RCRA
manifest requirement, they would be subject to the DOT rules only if they contained the specific
forms of silver listed in the DOT hazardous materials table and if shipped in quantities exceeding
their "Reportable Quantities." In addition, transporters would not have to comply with Subtitle C
storage facility requirements if they stored the wastes for more than 10 days in transit, and would
not automatically have to clean up or mitigate spills during transport. The effect of regulation under
RCRA, then, is to apply the DOT requirements to a larger set of silver-bearing wastes and to
impose some additional requirements on generators and transporters.
Wastes discharged to the sewers or under a NPDES permit are not subject to any RCRA
requirements, unless they are stored prior to discharge. Wastewater treatment tanks used to treat
wastes prior to discharge are also exempt from RCRA TSDF requirements. Therefore,
photoprocessors can avoid RCRA regulation by treating and discharging their wastes in compliance
with Clean Water Act requirements.
Industry participants argue that regulation of silver-bearing wastes as hazardous - even with
the reduced requirements for wastes that are recycled for precious metals discourages recycling.
They cite the example of silver-coated plastic film, which is generally chemically treated or burned
for silver recovery, since it has sufficient economic value to be worth recycling. In contrast, other
than spent fix and bleach-fix, photoprocessing solutions do not generally contain enough silver to
be recycled economically, given the costs imposed by hazardous waste regulations. Packaging and
transportation under DOT rules, using a licensed transporter, and complying with the manifest
requirements are the main sources of added cost
In addition, some industry participants expressed concern about additional liability for the
wastes sent off-site, due to their definition as hazardous under RCRA This concern may arise from
the added transporter responsibility to dean up spills imposed by RCRA, or may refer to added
liability under the Superfund program. Technically, definition of a waste as hazardous has no direct
bearing on a generator's liability for clean-up costs if the wastes end up at a Superfund site. In
practice, however, the generator may be more liable for wastes regulated as hazardous, because the
wastes can be more easily traced to their source due to the RCRA manifest and labelling
requirements.
RCRA regulation also discourages the development of centralized treatment facilities, other
than POTWs. Photoprocessors are subject to the requirements for short-term storage if they store
wastes prior to shipment off-site for treatment rather than recycling and to more extensive storage
facility requirements if they store for more than 90 days. The centralized treatment facility itself
would be subject to permitting and to the full Subtitle C requirements for treatment and storage
facilities. Absent such regulation, shipping wastes to centralized facilities for treatment might be
more economical and more effective in reducing risks than treatment on-site - especially for the
smaller processors that lack the skills, space, and capital to treat wastes extensively. For example,
industry representatives said that small processors might send their wastes for treatment in more
cost-effective equipment at larger processors' facilities. More investigation would be needed,
however, to determine under what circumstances centralized treatment would be more effective and
less costly.
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Industry representatives said that some states define recovery of silver or silver-bearing
wastes in the on-site process as treatment, subjecting the processors themselves to the TSDF
standards. Further investigation is needed to determine the basis for this regulation. The minimum
national standards established by RCRA exempt "totally enclosed treatment units" from regulation
as TSDFs. Some states may have applied more stringent standards, or there may be disagreements
about whether photoprocessing processes qualify as totally enclosed treatment units.
In general, then, industry representatives argue that regulation of silver-bearing wastes as
hazardous under RCRA encourages the discharge of wastes to POTWs and discourages recycling.
This results in added loadings to POTWs, especially from small dischargers that are unlikely to be
subject to POTW and local enforcement scrutiny. Larger photoprocessors, who are subject to more
scrutiny and more effective enforcement of pretreatment requirements, incur higher costs overall
because the costs of recycling, centralized treatment, and in some cases on-site recovery of silver are
inflated by the RCRA requirements.
The Silver Coalition is seeking removal of silver from the RCRA Toxicity Characteristic (TQ
list. Silver was originally placed on the TC list when it was initially promulgated, because the TC
included all toxic chemicals for which there were primary MCLs in effect Because the primary
MCL for silver has been deleted, the Silver Coalition argues that silver should be removed from the
TC as well. EPA's Office of Solid Waste is considering this request The OSW representative on
the second expert panel agreed that removal of silver from the MCL is sufficient evidence that silver
should not be included on the TC based on human health effects. Removal from the TC will
therefore depend on OS Ws review of the ecological effects of silver. At this time, however, OSW
is not actively studying this issue and removal of silver from the TC is low on the Office's priority
list due to lack of resources.26
333 Possible Policy Options
Our research and discussions with various stakeholders suggested a number of policy options
EPA or other parties might take to promote improved environmental performance in the
photoimaging industry. Exhibit 33-7 provides a list of the ideas that were raised by one or more
participants, or suggested by our research on the industry. The ideas range from specific regulatory
reforms, to education or outreach programs to promote compliance or improved practices, to
cooperative research projects.
* It was estimated that even a rule-making that is not controversial would take one full-time
staff person and one-and-one-half years to complete.
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Exhibit 3 3- 7
POSSIBLE POLICY OPTIONS: INITIAL LIST
o EPA Will Provide Training and Flexibility for the Use of Mass-Based Limits by POTWs
o Modify Hazardous Definition of Silver
1) Flexible Regulation Under Subtitle C
2) Apply the Special Collection Rule
3) Take Silver off the Toxicity Characteristic List
o Regulate Photoprocessors under a Code of Management Practice for Water Effluent and Silver
Recovery
o Make Federal/State/Local Effluent Guidelines Consistent
o Monitor for Ionic Silver or Change Pretreatment Limits to Address Total Recoverable Silver
o Standardize the Permit Application Procedure for Minilabs
o EPA Participation in Voluntary Standard-Setting Process
o Develop Institutional Knowledge Base at EPA
o Develop Life-Cycle Analysis Techniques
o Recognize Positive Environmental Performance
o Facilitate Cooperation Among Manufacturers on Recycling Programs
This list was discussed at the second expert panel meeting, and revised to reflect their
comments and additions. At that meeting, participants selected four areas for focus in Phase 2 of
the project:
o Removing RCRA Barriers to Centralized Treatment and Recycling of Silver,
o Developing and Promoting a Code of Management Practices for
Photoprocessors;
o Continued research on Silver Spetiation, Toxicity, Fate and Transport in the
Environment, and Development of Analytical Methods
o Minimising Inconsistencies in Regulation, Standards, and Enforcement
Among the Federal, Regional, State and Local Governments.
These four areas are discussed in detail in this section. Appendix 3-B to this chapter provides brief
discussions of the policy issues and options that were not selected at that meeting for focus in the
next stage of the project. As described in Chapter 1, EPA intends to continue investigating the
potential for cooperative pilot projects in the four areas highlighted by the expert panel. Other ideas
for policy actions and pilot projects may also be pursued as well, depending on the comments
received on this report
This section first lists the criteria used to evaluate and choose policy options for emphasis,
and then discusses each of the four policy areas selected in the second expert panel meeting.
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Criteria for Selecting Policy Options
In evaluating policy areas, the expert panel favored options that would:
o Have a significant environmental payoff;
o Promote cost-effectiveness;
o Be "cleaner, cheaper, and smarter";
o Have the capacity to affect long-term thinking and action toward
sustainability,
o Be feasible, considering the length of time required for completion, the
method of implementation, the size of the relevant audience, impact and
importance, and the effectiveness of EPA as a player, and
o Encourage cooperative involvement in the project among a variety of
stakeholders.
Removing RCRA Barriers to Centralized
Treatment and Recycling of Silver-Bearing Wastes
As noted earlier, the Silver Coalition is seeking removal of silver from the RCRA toxkaty
characteristic list They point out that the primary MCL for silver that resulted in inclusion of silver
on the TC list in the first place has now been deleted by EPA. They argue, then, that there is no
reason for silver to be on the TC list because it is regulated by water quality standards and is
immobile in soils, and therefore does not appear to be a potential source of adverse ecological
effects.
This action would remove photoprocessors' silver-bearing wastes from any federal regulation
as a hazardous waste. Hazardous waste regulations would still apply under other RCRA sections
addressing secondary refiners and other specific facilities. The Coalition argues that there would
be no increase in risks to human health and the environment, and that this action would promote
more recycling of silver, resulting in reduced discharges to POTWs.
Removal of silver from the TC would not automatically result in deregulation of silver wastes
in the RCRA-authorized states. However, industry representatives say that they would have
additional leverage to persuade the states to modify their regulations and legislation.
Other options short of removing silver from the TC entirely might also reduce barriers to
recycling. EPA is currently investigating options for revising the RCRA regulation of recycled
wastes. The Definition of Solid Waste Task Force is considering a new regulatory strategy for
recycled hazardous wastes, which applies different rules for different types of wastes and recycling
practices. New provisions that reduce disincentives to recycling silver-bearing wastes might be
considered in that context. In addition, photoprocessing wastes might be subject to reduced
requirements under the Special Collection or Universal Waste Rule, which is currently in use for
fluorescent light bulbs and batteries.
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Industry members of the expert panel expressed less interest in these more limited options
than in complete removal of silver from the TC They noted that reduced federal regulation rather
than removal from the TC would be less persuasive to the states as evidence that silver does not
require regulation as a hazardous waste.
The industry's on-going research on the ecological effects of silver will clearly be an
important step toward a decision by EPA about whether to remove silver from the TC. The second
expert panel discussed the fact that the decision might also come more quickly if responsible
environmental groups agreed that deregulation of silver wastes is appropriate. As mentioned
previously, environmental groups are skeptical and will likely remain so until convinced that there
is no potential for silver to bioaccumulate in organisms.
This led to discussion about a possible pilot project to test the hypothesis that removal of
silver from the toxicity characteristic list would promote more recycling and reduced discharge to
POTWs. Such a cooperative industry-EPA project might involve testing the impact of reduced
regulation in a certain geographic area on shipments to recyclers, concentrations of silver in POTW
influent, and the extent of on-site recycling. The project might address deregulation of silver wastes
by removing silver from the TC list, or other more limited actions to reduce RCRA barriers to
recycling as well. The pilot project might also be extended to address the potential for increased
centralized treatment and recovery, as well as increased recycling.
Developing and Promoting a
Code of Management Practices
The Silver Coalition, the Association of Metropolitan Sewerage Agencies (AMSA), and the
Water Environment Federation, among others, are currently in the process of developing a Code
of Management Practices for photoprocessors. The Code is based on the Best Available Technology
Economically Achievable (BATEA) combined with Best Management Practices (BMPs), and is
intended to apply to all sources of photoprocessing waste. According to the industry, development
of the Code will proceed, regardless of the Agency's participation. However, the organizations
involved encourage EPA to promote its use and adoption, in order to provide an impetus for states
and localities to incorporate it into their permitting procedures.
The Code of Management Practices, currently in draft form, would recommend practices that
vary with the size of the photoprocessor (defined by daily gallons of process wash water and weekly
gallons of silver-rich solution). The practices are defined by a minimum recovery of silver from
silver-rich processing solutions (e.g., 90 percent) and alternative combinations of recovery methods
that would achieve those recovery rates. Those developing the Code estimate that compliance with
the recommendations would reduce silver loadings to POTWs by 25 to 50 percent.
According to industry and POTW representatives, the majority of POTWs do not have the
resources to monitor large numbers of small facilities. Industry claims that if the best treatment
technologies economically achievable and management practices for operations, maintenance, and
testing are identified and implemented, monitoring these facilities will be less resource-intensive.
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The authors intend the Code to be as simple as possible, and to ensure flexibility in
compliance. It assumes that minilabs will be educated in the appropriate maintenance, operation,
and monitoring of the recommended systems. Many labs currently have recovery equipment in place
but do not operate it effectively. The photographic supplies manufacturers have agreed to provide
this assistance and to distribute the Code. The industry claims that if labs implement the Code in
its entirety, the large majority of them will be in compliance with the pretreatment limits established
by the POTWs. According to the Silver Coalition, the Code is not intended to be a substitute for
regulation. They expect its use to result in higher actual compliance with current standards.
According to the industry, the Code of Management Practices could serve many purposes,
including:
(1) Education and technical assistance, to support improved compliance with
standards;
(2) Assistance to POTWs and other regulators in understanding silver sources;
and
(3) As a condition for regulatory variances or permit approval.27
Industry representatives argue that there are sufficient economic incentives to follow the Code of
Management Practices, because of the increase in silver recovery. The Code will make it easier for
photoprocessors to act on this incentive by providing them with the tools and information they need
to do so effectively.
The Code of Management Practices is currently in draft form; there has not yet been
agreement among the sponsoring groups on the final document. At this point, we have not fully
explored EPA's role in developing and promoting the Code. However, when the Code is complete,
the Coalition would like EPA to review it and to publicly endorse it EPA's support would provide
credibility so that states and localities are more likely to accept it. Endorsement by EPA might also
relieve processors of enforcement concerns, inducing them to implement the Code.
Agency representatives on the panel expressed interest in endorsing the Code of
Management Practices, assuming that approval does not result in any reduction in enforcement
authority. They also suggested a pilot project implementing the Code in a particular locality. If
measurements demonstrated that the amount of silver recovered rose and the total loadings to the
POTW fell with the use of the Code of Management Practices, the Agency (and concerned
environmental groups) might support its wide-spread adoption more actively.
It was also suggested that state, county, and local technical assistance groups be included in
the distribution of the document. These groups could be helpful in disseminating the information
in the Code and in assisting POTWs and processors in interpreting its provisions.
27 For instance, the Coalition would like POTWs to consider implementation of the Code an
effective pretreatment permit if the facility meets the relevant pretreatment standards.
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Silver Speciation; Toxicity; Fate and Transport; Methods
Currently, the environmental effects of various forms of silver are not clearly understood.
It is not clear how silver speciates in natural environments and in sewer systems, how toxic the
various forms of silver are, how the various forms affect biological organisms, or how to test for the
many forms of silver. The industry is attempting to resolve these issues, and would like to cooperate
with EPA in doing so.
The industry, in cooperation with regulatory agencies, is actively sponsoring research on the
fate, transport, and toxicity of silver, in the hope that this research will address regulators'
uncertainties about the effects of silver in the environment. The Silver Coalition has been
coordinating with the Office of Water in developing this research plan.
The second expert panel encouraged continued cooperation in sponsoring this research to
resolve scientific uncertainties about the effects of silver. Industry representatives expressed the
hope that EPA will respond quickly to the results of the research, when they are complete, by
reducing or adjusting standards where warranted. A representative for the POTWs encouraged
industry and the Agency to cooperate in studying the speciation of silver, particularly with regard
to its changes in form between release from the processor and arrival at the POTW. The research
efforts are ongoing, and at the moment development of sediment criteria is a major focus. Within
EPA, there is a research plan to address the toxicity of silver in sediments. The Coalition
representatives urged EPA to fund a portion ($30,000) of the cooperative effort.
Industry also asked that the Agency keep them informed of the evidence it needs to address
these issues in a regulatory context, so that they can fund appropriate studies. They also suggested
that the Agency allocate more travel money to allow their staff, particularly in OW and OSW, to
attend industry-sponsored scientific conferences.
Minimize Inconsistencies in Regulation, Standards, and Enforcement
According to the industry, there are many variations in the setting, interpretation, and
enforcement of regulations, resulting in competitive disadvantages for processors in some areas.
They claim that it is difficult for businesses to predict the actions of regulators, and therefore
compliance is problematic. It was frequently noted that some states and localities impose more
stringent limits than the federal standards. According to industry representatives, these more
stringent limits are not justified by the evidence on the risks posed by silver in the environment.
A number of suggestions were made for EPA policies that might increase the consistency
and rationality of the standards imposed on photoprocessors. The most extreme suggestion was that
EPA require that states and localities set standards consistent with national standards, unless more
stringent standards are specifically justified by local conditions. Some panel members noted that
such an intrusion on states' authority would be very unlikely to be adopted. Water quality standards
are intended to allow for local variations in water quality and usage. A single standard as proposed
by the panel would eliminate this possibility.
Another way that EPA could promote more consistent standards for silver in effluent would
be to establish national categorical pretreatment limits for the photoprocessing industry, rather than
leaving limits for photoprocessors to be based solely on POTWs' own limits and their allocation to
sources.
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A third suggestion was for EPA to sponsor education and technical guidance for local
regulators on how to establish a logical silver limit based on scientific evidence. This guidance
should include information on the risks posed by silver and the conservative assumptions used in
setting the federal standards. The guidance might also clarify the economic and environmental
effects of extremely stringent concentration standards in effluent guidelines. Those advocating this
effort argued that most states would be receptive to guidance from Headquarters if it is presented
in a palatable way. The Association of Metropolitan Sewerage Agencies (the trade association for
POTWs) should also be involved in this effort.
Industry representatives also suggested that the Agency advocate the use of mass-based limits
by the states and localities, to promote water conservation and the use of washless technologies.
Although EPA does not have the regulatory authority under current statutes to require that mass-
based limits be used, the Agency could issue guidance to states and POTWs regarding the use of
mass-based standards. The Agency might also allow temporary exemptions from enforcement for
POTWs transferring to mass-based limits. A representative of the Environmental Defense Fund
suggested that the environmental community might support such an effort, if the focus were on the
use of mass-based limits as a way to promote water conservation.
Industry representatives encouraged the Agency to provide and practice standardized
monitoring procedures. Currently, there are a number of uncertainties regarding proper sampling
and testing techniques for effluents from photoprocessors. The industry suggested that EPA train
regulators about the requirements of various federal regulations, thereby facilitating universal
understanding and consistent enforcement
More specifically, industry members and related parties complained about the inconsistency
of the 40 CFR 136. 3 list of Approved Inorganic Test Procedures, number 62 for silver.
Representatives from the Office of Water agreed to review the standard.
According to the industry, there are also inconsistencies in analytical laboratory procedures.
The expert panel discussed possible development of a system for accrediting analytical labs. EPA
participants argued that the Agency lacks the resources to establish an accreditation program for
labs, and that the Silver Coalition or an industry trade association might play that role instead. The
Photo Marketing Association is currently publishing a document entitled "How to Select an
Analytical Lab" to help processors choose reputable testing labs.
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Appendix 3-A
BIBLIOGRAPHY FOR THE PHOTOIMAGING INDUSTRY
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Appendix 3-A
BIBLIOGRAPHY FOR THE PHOTOIMAGING INDUSTRY
County Sanitation Districts of Los Angeles County. Photoprocessing: Pollution Prevention
Opportunities Checklist.
Dufficy, Thomas; Cappel, Robert; Summers, Scott M. "Silver Discharge Regulations Questioned,"
Water Environment and Technology, Vol. 5 No. 4, April 1993.
Dysart, Joe. "Corporate Environmentalism : Green is Decidedly in Fashion," PTN, Vol. 56 No. 18,
September 21,1992, pp. 8-9.
"Eye on the Environment," PTN, Vol. 57 No. 6. June 15,1993, pp. 19-20, 23.
Institute for Local Self-Reliance. Proven Profits from Pollution Prevention - Case Studies in Resource
Conservation and Waste Reduction. Washington, D.C, 1986.
LeBlanc, Gerald A.; Mastone, Joseph D.; Paradice, Arthur P.; Wilson, Brenda F. "The Influence
of Speciation on the Toxicity of Silver to Fathead Minnow," Environmental Technology and
Chemistry, Vol. 3 1984, pp. 37-46
Neubart, Jack. "Product Packaging Becomes Environmentally Friendly," PTN, Vol.56 No.18,
September 21,1992, pp. 9,16.
Neubart, Jack. "Technically Speaking, Today's Color Chemistries are Cleaner and Safer," PTN,
Vol. 57 No. 6. June 15,1993, pp. 22,27.
Photo Business, December 1992, p. 20.
Photo Marketing Association International. ThePMA Industry Trends Report, 1992-1992. Jackson,
Mississippi
Photofinishing News
Photographic Society of America, Inc. Perspective World Report 1966-1969 of the Photographic
Industries, Technologies, and Science. Philadelphia. (Note: this organization no longer exists
under this name.)
Photography Trade News
Polaroid Report on the Environment 1991.
RMA Annual Statement Studies 1992. Robert Morris Associates, Philadelphia.
Toxic Release Inventory
3-A-l
-------
Appendix 3-A
(continued)
BIBLIOGRAPHY FOR THE PHOTOIMAGING INDUSTRY
U.S. Department of Commerce, Bureau of the Census. 1987 Census of Manufactures Industry Series
- Medical Instruments; Ophthalmic Goods; Photographic Equipment; Clocks, Watches, and
Watchcases. MC87-1-38B. (Note that single establishment companies with up to 20
employees were excluded from the mail portion of the census, and administrative records
or industry averages were used to compile the data. These facilities account for 4 percent
of the total value of shipments.)
U.S. Department of Commerce, Bureau of the Census. 1987 Census of Manufactures Subject Series:
Concentration Ratios in Manufacturing. MC87-S-6.
U.S. Department of Commerce, Bureau of the Census. Current Industrial Reports: Pollution
Abatement Costs and Expenditures, 1991. MA200(91)-1.
U.S. Department of Commerce, Bureau of the Census. Survey of Plant Capacity, 1990. MQ-C1(90)-
1.
U.S. Department of Commerce. U.S. Industrial Outlook.
USEPA, Office of Air and Waste Management, Office of Air Quality Planning and Standards.
Control of Volatile Organic Emissions from Easting Stationary Sources Volume II: Surface
Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks. EPA 450/2-77-
008, May 1977.
USEPA, Effluent Guidelines Division. Devehpment Document for Effluent Limitations Guidelines
and Standards for the Photographic Equipment and Supplies Segment of the Photographic Point
Source Category. EPA 440/1-80/077-a, May 1980.
USEPA, Office of Pollution Prevention. Pollution Prevention 1991 - Progress on Reducing Industrial
Pollutants. EPA 21P-3003, October 1991.
USEPA, Office of Solid Waste and Emergency Response. National Biannual RCRA Hazardous
Waste Report (Based on 1989 data). EPA 530-R-92-027, February 1993.
"U.S. Fine Chemicals Demand," Chemical Week, January 6,1993, p. 34.
U.S. Industrial Outlook 1993, Chapter 23 Photographic Equipment and Supplies.
Wolfman Report on the Photographic and Imaging Industry in the United States, 1989.
Wolfman Report on the Photographic and Imaging Industry in the United States, 1992.
3-A-2
-------
Appendix 3-B
ALL SUGGESTED POLICY OPTIONS
-------
Appendix 3-B
ALL SUGGESTED POLICY OPTIONS
Participants in the photoimaging industry expert panels selected four areas for focus in Phase 2 of
the project:
o Removing RCRA Barriers to Centralized Treatment and Recycling of Silver;
o Developing and Promoting a Code of Management Practices for
Photoprocessors;
o Continued research on Silver Speciation, Toxicity, Fate and Transport in the
Environment, and Development of Analytical Methods; and
o Minimizing Inconsistencies in Regulation, Standards, and Enforcement
Among the Federal, Regional, State, and Local Governments.
These four areas are discussed in detail in Section 3.33. The following outline provides brief
discussions of the other policy issues and options raised during the panel meetings.
o EPA Will Provide Training and Flexibility for the Use of Mass-Based Limits by POTWs
This recommendation grew out of the view that use of concentration-based
pretreatment limits discourages water conservation, and that POTWs are reluctant
to use mass-based limits even though authorized to do so. There were mixed views
in the expert panel meetings about whether use of concentration-based limits is a
problem. Some participants said that concentration-based limits were derived from
mass-based limits, and that permits were renewed every five years. It was left
unclear whether the use of concentration-based limits in the photoprocessors' permits
does or does not discourage water conservation. (A number of industry participants
argued that it does.) Further, the reasons for POTWs' reluctance to use mass-based
limits was not fully explored. More investigation of the true effects of concentration
limits and the reasons for their use is needed before a determination can be made
about the merits of pursuing this issue. Certainly, if use of concentration-based
limits does discourage conservation of water, this might be a high priority area for
further work. This idea could be included in a Best Management Practices plan, as
part of efforts to minimize inconsistencies among regulations, or in a standardized
permit application procedure.
o Monitor for Ionic Silver or Change Pretreatment limits to Address Total Recoverable Silver
This was one of many proposals for regulatory change that related to differences in
the toxicity of different forms of silver, and industry's view that the current regulatory
limits are unnecessarily stringent The argument for this proposal is that the limits
imposed in the permit should be consistent with the toxicity assumptions underlying
the limits - the same form of silver should be the basis for each. Two factors stand
in the way of this proposal: (1) the lack of a reliable analytic method for ionic silver,
and (2) uncertainty about the relationship between discharges of other forms of silver
3-B-l
-------
Appendix 3-B
(continued)
ALL SUGGESTED POLICY OPTIONS
and the amounts of ionic silver that become bioavailable. Further consideration of
such policy actions should await the results of the research now being done on silver
speciation, toxicity, and fate and transport, and development of improved analytical
methods. This research was one of the four areas selected for emphasis by the
expert panel.
Standardize the Permit Application Procedure for Minilabs
This proposal arose from views that the permit application process is too costly and
time-consuming for POTWs to implement, and for photoprocessors to go through,
given the small size and large number of photoprocessors. One approach to
streamlining the permit process might be to use the Best Management Practices now
being developed as a basis for issuing a permit, or as the condition for a streamlined
process. The first step is to complete development of the BMP, and for EPA to
review and possibly endorse it The BMP was another area selected for emphasis by
the expert panel
EPA Participation in Voluntary Standard-Setting Process
The topic of standard-setting arose in two contexts. First, the NAPM coordinates
the development of voluntary standards for the industry, and invites all interested
parties (including EPA) to participate. These standards cover a wide variety of
topics, and may in some cases have implications for the development of
environmentally-beneficial products and processes. EPA could begin participating
in future standards-development efforts, to help ensure that the standards promote
rather than hinder innovative environmentally-beneficial technologies and products.
The second arena related to standards-setting is the development of the ISO 9000
standards. These are standards developed by the International Organization for
Standardization to define the elements of an effective quality system. While these
standards are voluntary, they are expected to have a significant effect on firms' ability
to compete in international markets, especially in European markets. Discussions
are now underway on how environmental practice and policies will be reflected in
the standards. One contact from Polaroid is participating in this work, and argues
that development of the ISO environmental standards should be a major area of
interest for EPA and for U.S. industry.
Develop Institutional Knowledge Base at EPA
This suggestion arose from industry's complaint that high staff turnover at EPA (as
well as in the state governments) makes it difficult to conduct effective conversations
about regulatory issues that affect industry. They argue that much effort is needed
to educate EPA staff about technical, economic, and environmental issues in the
industry, before useful discussions about regulatory policy are possible. When a
3-B-2
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Appendix 3-B
(continued)
ALL SUGGESTED POLICY OPTIONS
contact leaves, this process must begin all over again. No specific proposal for
addressing this problem was made. However, there was a sentiment for finding ways
to increase EPA's institutional knowledge base concerning this industry - and the
durability of that knowledge base.
Develop Life-Cycle Analysis Techniques
There is lack of agreement in a number of areas about what constitutes
environmental improvement or progress toward "sustainability" in the photoimaging
sector. For example, claims about the environmental merits of a new Xerox film that
does not use silver halide are disputed, because it uses selenium another toxic
chemical. Some industry representatives argued that treating to very low levels of
silver in effluent has perverse environmental effects because the current treatment
methods require the use of chemicals that can be more toxic than silver. The
environmental and economic effects of centralized treatment of photoprocessing
wastes have not been analyzed. Even with the single-use camera, there are questions
about whether the high rate of recycling and the return of film along with the camera
results in more or less solid waste disposal than conventional cameras. A
cooperative life-cycle analysis of risks from photoimaging would provide the basis for
judging whether certain trends and policies promote a more sustainable industry or
not
Recognize Positive Environmental Performa
nce
Firms that have taken active steps to improve their environmental performance
would benefit from recognition of their efforts by regulators. Some industry
participants argue that only negative attention is available now, and that from
industry's perspective there is a strong disincentive to become more visible to
regulators. For example, requesting help with compliance or approval to try
something innovative that has the potential to result hi environmental improvements
is seen as a risky undertaking. It is thought that inspectors and regulatory officials
do not give firms positive credit for their efforts (for example, by allowing them some
flexibility in compliance schedules or immunity from enforcement actions to try
potentially innovative but untested methods). Rather, "good actors" feel that they
are nonetheless singled out for attention by enforcement staff. Several commenters
felt that a system which provided official recognition for positive environmental
actions would give them credibility with enforcement personnel. Such recognition
would represent a competitive advantage, and perhaps encourage more positive
relations with regulators. No specific suggestions were made for how such
recognition might be provided.
3-B-3
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Appendix 3-B
(continued)
ALL SUGGESTED POLICY OPTIONS
Facilitate Cooperation Among Manufacturers on Recycling Programs
It was suggested that EPA help facilitate and encourage efforts to increase the
recycling of photoimaging wastes. This might include efforts from encouraging
consumers to return solid wastes to encouraging area-wide pickups for silver
recycling.
3-B-4
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Appendix 3-C
PHOTOIMAGING INDUSTRY CONTACTS
-------
APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Frederick Albrecht
Eastman Kodak Co.
Technical Associate
716-477-1119
Dr. Anderes Andren
University of Wisconsin
Ph.D.
608-262-0905
Mr. Bob April
EPA, Office of Water-
Chief, Ecological Risk Assessment Branch
202-260-6322
Mr. John Auer
Agfa Division
National Technical Manager
201-440-2500
Mr. Guy Aydlett
Assocation of Metropolitan Sewage Agencies (AMSA)
Chair, Pretreatment & Haz. Waste Comm.
804-460-2261
Mr. George Ayers
Envision Compliance
416-790-6845
Mr. Hayes Bell
Eastman Kodak Co.
V.P. and Dir., Corp. H, S, & E
716-722-5036
3-C-l
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Phil Bobel
Regional Water Quality Control Plant, Palo Alto,CA
415-329-2598
Mr. Paul Borst
EPA, OSW, Characterization Assessment Division
202-260-6721
Mr. John Bullock
Handy & Harman , Environmental Counsel
Chair of Env. Committee for IPMI
203-757-9231
Mr. Steve Burns
ECS Refining
910-545-0640
Ms. Diane Cameron
Natural Resources Defense Council
Effluent Guidelines Task Force
202-624-9347
Mr. Robert Cappel
Eastman Kodak Company
Director, Health and Environment Lab,
716-722-1619
Mr. Peter Connery
Anitech Image
Dir. of ES&H
607-774-3424
3-C-2
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APPENDIX 3-C
Photoimaging Industry Contacts
Ms. Mary Ann Curran
EPA RREL
Mr. Tom Dagon
Eastman Kodak Company
Director, Environmental Affairs Services
716-722-4489
Mr. Pierre Danyer
ECS Refining
408-988-4386
Ms. Joanne Dicaro
Ontario Ministry of Envir. and Engery, Poll. Prev.
Project Officer
416-314-3896
Mr. Thomas Dufficy
National Association of Photographic Manufacturers
Executive Vice President
914-698-7603
Mr. Harry Fatkin
Polaroid Corporation
Director, Health, Safety, & Env. Affairs
Mr. Steve Freleigh
National Wildlife Federation
Senior Photo Editor
3-C-3
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Stephen Greene
Polaroid Corporation
Corporate Environmental Manager
617-577-4106
Ms. Mini Guernica
EPA, Office of Enforcement & Compliance Assurance
Ms. Barbara Haas
National Wildlife Federation
Director, Corporate Conservation Council
Mr. Greg Helms
EPA, OSW, Char, and Assess. Div., Waste ID Branch
202-260-6721
Ms. Sussannah Hoppsvallern
American Hospital Association
312-280-5226
Ms. Susan Johnson
Agfa, Environmental Safety Department
Sr. Applications Engineer
Mr. Greg Kearnan
Fuji Hunt Photo Chemicals
Marketing Mgr.
201-967-7849
Mr. Ron Koch
Eckerd Drug Company
Vice President, Photoprocessing
813-399-6306
3-C-4
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Peter Krause
Imaging Technology/Markets, Inc.
Partner and Vice President
914-276-2377
Mr. Ed Lange
Department of Veteran Affairs
Silver Recovery
Mr. Amy Leaberry
EPA, Office of Water
Ms. Linda Liszewski
Eastman Kodak Co.
Corporate Environment
716-477-1182
Haines Lockhart
Eastman Kodak Co.
Corp. Env. Dir.
716-722-2877
Mr. John Lounsbury
National Rountable of State Poll. Prev. Program
Executive Director
301-495-9278
Mr. Sam Luoma
United States Geological Survey (USGS)
415-853-8300
3-C-5
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Jeffrey Mathews
Eastman Kodak Co.
Env. Program Mgr.
716-722-0692
Mr. Warren Mauzy
Ilford
Manager Environment Science & Technology
201-265-6000
Mr. Greg McCoy
Mitsubishi International Corp.
Technical Services
212-605-2352
Ms. Nancy Neely
Fuji Photo Film
Environmental Specialist
914-789-8100
Mr. Bob Nelson
Department of Veteran Affairs
Chief, Quality Assurance Division
908-707-4339
Ms. Tammy Nelson
Konica USA, Inc.
Manager, Environmental Services
407-696-5111
Dr. Norman Newman
3M Company
Division Scientist
612-733-7120
3-C-6
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Brian Noble
Noble's Camera
617-749-5565
Mr. Jim Noller
Eckerd Express Photo Ctr.
Technical Specialist
813-399-6350
Mr. Dave Pasguini
Konica
Manager Health, Safety, and Environment
919-449-8000
Mr. John Peterson
FotoFast
303-534-4700
Mr. Richard Poduska
Eastman Kodak Company
Dir. Health,Safety,Environmental Affairs
716-722-0693
Mr. Tom Purcell
Printer's Industries of America
703-519-8100
Mr. David Richardson
Eastman Kodak Co.
Occupational and Health Services
716-722-5200
3-C-7
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Manik Roy
Environmental Defense Fund
Pollution Prevention Specialist
202-387-3500
Mr. Dave Salman
EPA, OAQPS, Standards Development Branch
919-541-0859
Mr. Jim Sanders
Baltimore Academy of Natural Sciences
301-274-3134
Mr. Bernie Saydlowski
DuPont
Representative to NAPM
302-992-3519
Mr. Eric Schaeffer
EPA, Office of Enforcement & Compliance Assurance
Deputy Director, Office of Compliance
202-260-8636
Mr. Paul Shapiro
EPA, Office of Research and Development
Mr. Don Spring
PMA Canada
Director of Canadian Affairs
705-789-8885
3-C-8
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APPENDIX 3-C
Photoimaging Industry Contacts
Mr. Scott Summers
Eastman Kodak Company
Health and Environment Laboratory
716-722-1311
Mr. Al Taylor
U.S. Dept. of V.A.
Inventory Mgmt. Specialist
202-233-3759
Mr. Joe Vitalis
EPA, Office of Water
Ms. Lisa Weatherford
Photo Marketing Association, USA
Manager, Environmental Activities
800-762-9287
Mr. Ron Willson
Photo Marketing Association, USA
Director, Environmental Activities
800-762-9287
Mr. Mike Wissel
Wal-Mart Stores, Inc.
Quality Assurance Mgr.
501-277-6442
Mr. Richard Woolley
Qualex
Regulatory Compliance Specialist
919-382-6478
3-C-9
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THE METAL FINISHING INDUSTRY CHAPTER 4
4.1 INTRODUCTION
This chapter discusses the background information and preliminary findings of the
Sustainable Industry Project's analysis of metal finishing industry. This introduction outlines the
contents of this chapter. The approach to our analysis, including the scope of the project, an
industry profile, and our information sources are addressed in Section 42. Section 4.3 presents our
findings to date, including:
(1) Information on the economic characteristics of the industry;
(2) Descriptions of key factors that influence environmental performance in this
industry (drivers and barriers); and
(3) A list of policy options that might enhance the drivers and reduce the
barriers to improved, more cost-effective environmental performance by the
metal finishing industry.
42. APPROACH TO ANALYSIS
4.2.1 Scope
The Electroplating, Plating, Polishing, Anodizing, and Coloring industry1 is classified under
Standard Industrial Code (SIC) 3471 and includes establishments primarily engaged in all types of
electroplating, plating, anodizing, coloring, and finishing of metals and formed products for the
trade. This industry also includes establishments that perform these types of activities on purchased
metals or formed products. Establishments that both manufacture and finish products are classified
according to their products, but nonetheless are considered a part of the metal finishing industry.2
1 Hereinafter referred to as the metal finishing industry.
2 Although much of the industry data collected for this study applies to establishments classified
under SIC 3471, establishments classified under SIC codes other than 3471 that have metal finishing
operations are also considered in this analysis.
4-1
-------
4^2 Overview of Industry
In general, establishments engaged primarily in metal finishing tend to be small,
independently owned "job shops." In this report, we often refer to these establishments as
independent metal finishers. Establishments that conduct metal finishing operations as part of a
larger manufacturing operation are referred to as "captive" metal finishers. While most of the data
analyzed in this report have been collected from independent metal finishers, we believe the analysis
is applicable to the captive metal finishers as well. Enough similarities exist between the
independent and captive facilities that they can essentially be considered part of one industry. In
addition, the two segments have parallel ties with suppliers and customers. Differences that do exist
between the two segments can be used to understand more fully the drivers of the decision-making
processes and the barriers to improved environmental performance in each segment.
The independent and captive metal finishers use the same types of processes and fall within
the same regulatory framework. Captive operations may be more specialized, or focused, in their
operations because they often work only on a limited number of products and/or employ a limited
number of processes. Independent metal finishers, on the other hand, tend to be less focused in
their operations because they may have many customers, often with different requirements. In
general, captive metal finishers tend to have greater access to financial and organizational resources
and, as a result, tend to be more proactive in their approach to environmental management;
however, this isn't always the case. Independent and captive metal finishers do not ordinarily
compete against each other since captive finishers seldom look for outside contract work. However,
captive facilities may use independent facilities as subcontractors to perform tasks that their own
captive operations are unable or choose not to do. In addition, some captive facilities have been
recently shut down in cases where management has decided that metal finishing is not of strategic
importance to the firm's long-term success. In these cases, the firm's plating activities are shifted
to independent shops.
The metal finishing industry has developed close relationships over the years with both its
upstream material and equipment suppliers and its downstream customer base. Metal finishers have
come to rely upon their suppliers to help them understand new developments in plating technology
and upon their customers to define product requirements. Excellent plating quality and responsive
service are the two defining competitive variables within the metal finishing industry.
4.23 ^formation fathering an
-------
Extibit 4.2-1
CONTACTS AND SOURCES FOR THE METAL FINISHING INDUSTRY (to date)
Industry Aswxiatiom
Industry Memben
Goven
Non-Governmental Organizations
The U.S. Census of
Manufacturers
The U.S. Industrial
Outlook
The Tonics Release
Inventory (TRI)
The Code of Federal
Regulations
Numerous industry-
specific reports, studies,
and articles
American Electroplaten and
Surface Finishers Society (AESF)
National Association of Metal
Finishers (NAMF)
Metal Finishers Suppliers
Association (MFSA)
American Institute for Pollution
Prevention (AIPP)
Lawrence LJvermore National
Laboratory (ULNL)
Pratt & Whitney (United
Technologies Corporation)
Whyco Chromium Company,
Incorporated
Light Metals Coloring Company,
Incorporated
Mid-Atlantic Finishing,
Incorporated
Simmonds Precision Aircraft
System (BF Goodrich Aerospace)
Connecticut Resource Group, Inc.
Haward Corporation
Universal Fasteners, Inc.
Frederick Gumm Chemical
Company
Enthone-OMI Corporation
Integrated Technologies, Inc.
Pollution Prevention International
U.S. EPA:
- Office of Solid Waste
- Office of Water
- Office of Air
- Office of Research and
Development
- Office of Enforcement
and Compliance Assurance
- Risk Reduction
Engineering Laboratory
(RREL)
Environmental Defense Fund
Association of Metropolitan
Sewage Agencies
Hopewell Regional Wastewater
Facility
4-3
-------
Following this initial data collection, we compiled a preliminary list of what we felt were
some of the key industry characteristics and trends, as well as lists of the drivers of decision-making;
barriers to improved environmental performance; and possible incentives to improved environmental
performance. These preliminary findings provided the framework for discussion at an industry
expert panel meeting held on January 14,1994, that consisted only of industry members and experts.
At this meeting panel participants assisted us in clarifying the major issues, drivers, and barriers, and
in identifying potential policy options that EPA could consider to remove some of these barriers.
The organizations that were represented at this expert panel meeting are listed in Exhibit 4.2-2. For
a complete list of the individuals who attended this meeting see Appendix 4-C.
Exhibit 4.2-2
PANEL MEETING PARTICIPANTS
Panel Meeting *1 - January 14.1994
Pud meeting #2 - March 11,1994
American Electroplatera and Surface Finishers Society
(AESF)
Connecticut Resource Group, Inc.
Enthone-OMI Corporation
Frederick Gumm Chemical Company
Haward Corporation
Integrated Technologies, Tne^
Metal Finishers Suppliers Association (MFSA)
Mid-Atlantic Finishing, Tne
National Association of Metal Finishers (NAMF)
Simmonds Precision Aircraft Systems
(BF Goodrich Aerospace)
Universal Fasteners, Inc.
American Electroplaters and Surface Finishers Society
(AESF)
Association of Municipal Sewage Agencies (AMSA)
GoniMKliait Resource Group, Inc.
Environmental Defense Fund
EPA, Definition of Solid Waste Task Force, Office of
Solid Waste
EPA, Engineering and Analysis Division,
Office of Water
EPA, Office of Compliance, Office of Enforcement
and Compliance Assurance
EPA, Risk Reduction Engineering Laboratory, Office
of Research and Development
Frederick Gumm Chemical Company
Haward Corporation
Hopewell Regional Wastewater Facility
Integrated Technologies, Tne,
Metal Finishers Suppliers Association (MFSA)
Mid-Atlantic Finishing, Inc.
National Association of Metal Finishers (NAMF)
Pollution Prevention International
Simmondi Precision Aircraft Systems
(BF Goodrich Aerospace)
4-4
-------
Based on the discussion at the panel meeting, we made changes to the initial list of drivers,
barriers, and possible policy options that we had identified.
On March 11,1994, we convened a second panel meeting for the purpose of involving other
stakeholders to the metal finishing industry who are not industry or trade association members. The
goal of this second meeting was to reaffirm our characterization of the industry and to identify and
prioritize some of the more acceptable and feasible policy options that EPA could consider for this
industry. The participants in the second panel meeting included regulators, publicly owned
treatment works (POTW) representatives, environmental organizations, as well as industry members
and trade association representatives. The participating organizations and agencies also are listed
in Exhibit 4.2-2. A discussion of the findings of the second panel meeting is included in Section
4.3.3 below.
43 MAJOR FINDINGS
43.1 Industry Characteristics
Definition of Metal Finishing
Electroplating, plating, polishing, anodizing, and coloring are industrial processes that either
coat or finish metal or other formed products. Finishing, or more broadly speaking surface finishing,
is the process of coating a metallic or plastic object with one or more layers of another metal, paint,
or plastic to enhance, alter, or finish its surface.3 Firms that apply these coating processes to a
metallic base material can be grouped together in what is referred to as the metal finishing industry.
Surface finishing/metal finishing provides protection for the base material and/or changes the surface
of the base material to create any one or some of the following desirable characteristics:
Improved appearance Improved solderability
Corrosion resistance Light reflectivity
Abrasion resistance Improved electrical properties
Wear resistance (e.g., insulation, conductivity)
Improved lubricity Temperature resistance
Improved decorative appearance Non-toxicity
Markets
The metal finishing industry is a highly diverse and flexible industry catering to many
applications. Products that have undergone surface finishing can be found almost anywhere. Some
examples of the major industries that depend upon metal finishing in the manufacturing of their
products are:
3 This definition is .taken from the brochure "Understanding Surface Finishing,11 published by the
National Association of Metal Finishers (NAMF), Chicago, Illinois.
4-5
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Automotive
Aerospace
Commercial Aviation
Communication
Computer Equipment
Construction Hardware
Defense
Electric Hardware
Furniture
Household Appliances and Accessories
Jewelry
Motorcycles/Bicycles
Oil Drilling Equipment
Steel Mill Products
Tools and Dyes
Processes
In general, objects to be finished (workpieces) undergo three stages of processing, each of
which involves moving through a series of baths containing reagents designed to complete a certain
step in the process.4 These three stages are listed below, and Exhibit 43-1 illustrates each of the
three basic stages and the steps typically associated with them.
1. Surface Preparation. The surface of the workpiece is cleaned in preparation
for treatment; detergents, solvents, caustics, and other media are commonly
used in this stage, and the workpiece is then rinsed.
2. Surface Treatment This stage involves the actual modification of the
workpiece surface, such as plating.
3. Post Treatment The workpiece, having been treated, is rinsed and subject
to further finishing operations, such as coloring or anti-corrosion treatment
Exhibit 43-1
OVERVIEW OF METAL FINISHING PROCESS
Akaflra
Cleaner
*
RhM
-
Add Op
-
RlnM
|
Plating or
1
RJRM
-
Finishing
IhMtTMnt
-
RkiM
Surface Preparation
Surface
Treatment
Post
Treatment
4 Note that these steps will vary according to the specific process type (e.g., electroplating,
plating, etc.)
4-6
-------
Facilities
Exhibit 4.3-2 shows the distribution and value of sales in each size category of SIC 3471
establishments for the years 1982 and 1987. As noted earlier, there are two main types of metal
finishing establishments, independent metal finishers and captive metal finishers. Approximately
3,500 independent metal finishing establishments operate in the United States. These establishments
receive their workpieces from outside their company. A typical job shop is a small single
establishment that employs 15 to 20 people and generates $800 thousand to $1 million in annual
gross revenues.5
Greater than two-thirds of independent metal finishers employ less than twenty employees,
and less than one-half of one percent of the establishment have 250 or more employees. Between
1982 and 1987 the total number of independent metal finishers employing less than 20 employees
declined slightly, while those employing 20 employees or more increased by a corresponding amount.
Exhibit 43-2
ESTABLISHMENT SIZE DISTRIBUTION IN SIC 3471
Number of
Employees
1-4
5-9
10-19
20-49
50-99
100-249
250-499
500-999
Totals
1982
Number of
1,006
745
801
638
191
61
7
1
3,450
Value of Shipments
(millions of dollars)
$ 922
$ 206.6
$ 396.0
$ 815.8
$ 605.6
$ 481.1
$ 134.0
(D)
$2,7313
1987
Number of
943
706
759
719
233
80
8
3
3,451
Value of Shipments
(millions of dollars)
$ 100.6
$ 228.1
$ 500.6
$1,1002
$ 924.6
$ 732.0
$ 280.7
(D)
$3,866.8
Source: Census of Manufacturers: 1982,1987.
(D) - withheld to avoid disclosing data for individual companies; data are included in higher level totals.
5 Taken from the brochure "Understanding Surface Finishing," published by the National
Association of Metal Finishers (NAMF), Chicago, Illinois.
4-7
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Captive metal finishers are integrated into a larger manufacturing operation. These
establishments, which both manufacture and finish products, are classified according to their end
products and, therefore, are not listed under SIC 3471. Estimates indicate that there are
approximately 10,000 captive finishing operations in the United States.
Although the metal finishing industry is geographically diverse (in 1987, 35 states employed
150 or more people in SIC 3471; total employment was 71,100 persons), the industry is heavily
concentrated in what are usually considered the most heavily industrialized regions in the United
States. This geographic concentration occurs in part because small metal finishing facilities often
find it cost-effective to be located near their customer base.
Waste Streams
Air emissions, wastewater effluent, and solid waste are all produced during the metal
finishing process. These wastes predominantly result from (1) the use of organic halogenated
solvents, ketones, aromatic hydrocarbons, and acids during the surface preparation stage; and (2)
the use of metals (primarily present in the form of dissolved salts in the plating baths) in the surface
treatment stage of the process. Cyanide, used widely in copper plating baths, is also a pollutant of
concern.
The top 25 chemicals in the TRI database for SIC 3471 from 1987-1990 (ranked in order of
decreasing release quantities) constitute the following categories, with the TRI rankings given in
parentheses.6
Acids:
Solvents:
Sulfuric acid (1)
Hydrochloric acid (2)
Nitric acid (7)
Phosphoric acid (17)
1,1,1-Trichloroethane (3)
Trichlorethylene (6)
Dichloromethane (methylene chloride) (9)
Tetrachloroethylene (13)
Methyl ethyl ketone (15)
Toluene (19)
Xylene (21)
Acetone (25)
6 The list contains only 22 chemicals. Sodium sulfate (5) and aluminum oxide (18) were delisted
from EPCRA Section 313 in 1988 and are no longer reported to TRI; sodium hydroxide (4) was
delisted in 1989.
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o
o
Metals: Nickel compounds (8)
Zinc compounds (11)
Chromium compounds (12)
Zinc (14)
Nickel (16)
Copper (20)
Chromium (22)
Copper compounds (23)
Cyanide: Cyanide compounds (24)
Other: Freon 113 (10)
This TRI database ranking is by total release and transfer, without regard to risk to human
health. In addition to the chemicals noted above, several SIC 3471 substances listed in the TRI
database have National Fire Protection Association Health ratings of 3 or 4, which indicate a high
level of risk to human health.
Metal finishers are required to control, treat, and reduce their wastes. Firms in SIC 3471
had annual capital expenditures of approximately $40 million for pollution abatement for the years
1989 through 1991. This amounts to greater than 20% of the total capital expenditures for the
industry. Exhibit 4.3-3 breaks down the pollution abatement costs by media.
Exhibit 43-3
POLLUTION ABATEMENT CAPITAL EXPENDITURES
(millions of dollars)
Year
1989
1990
1991
Total
$44.9
$34.7
$42.1
Air
End of
Line
$2.9
$2.7
$83
Changes in
Production
Processes
$1.0
$0.7
$3.1
Water
End of
Line
$18.7
$192
$19.7
Qiai»gp« m
Production
$63
$5.0
$75
Solid Waste
Hazardous
$8.5
$5.4
$2.9
Non-
HflCEUuOUS
$7.5
$1.7
$02
Source: Census of Manufacturers: 1989, 1990, and 1991.
Regulatory Framework
Three major pieces of federal legislation regulate releases and transfers from the metal
finishing industry: (1) the dean Air Act as amended in 1990 (CAAA); (2) the Clean Water Act
(CWA); and (3) the Resource Conservation and Recovery Act (RCRA).
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Air Act
The Clean Air Act, as amended in 1990, established a list of 189 hazardous air pollutants
(HAPs). Of the 56 SIC 3471 substances reported in the TRI database for 1990, 33 are included on
the list of HAPs. Under the CAAA, Congress required EPA to identify major and area source
categories associated with the emission of one or more listed HAPs. To date, EPA has identified
174 categories of sources. Congress also required EPA to promulgate emission standards for listed
source categories within 10 years of the enactment of the CAA amendments (by November 15,
2000). These standards are known as National Emission Standards for Hazardous Air Pollutants
(NESHAPS).
EPA is currently working on two NESHAPs that will directly affect the metal finishing
industry. A summary of these two activities follows.
1. NESHAP: Chromium Electroplating
The chromium electroplating process emits a chromic acid mist in the form of hexavalent
chromium (CR*6) and smaller amounts of trivalent chromium (Cr*3). Human health studies suggest
that various adverse effects result from acute, intermediate, and chronic exposure to hexavalent
chromium. As a result, EPA has proposed a NESHAP (58 FR 65768, 12/16/93) for chromium
emissions from hard and decorative chromium electroplating and chromium anodizing tanks.
These standards propose to limit the air emissions of chromium compounds in an effort to
protect public health. The proposed regulation will be a Maximum Achievable Control Technology
(MACT) based performance standard that will set limits on chromium and chromium compounds
emissions based upon concentrations in the waste stream (e.g., mg of chromium/m3 of air).
EPA holds that these proposed performance standards allow a degree of flexibility since
facilities may choose their own technology as long as the emissions standards (established by the
MACT) are achieved. The proposed standards differ according to the sources (e.g., old sources of
chromium emissions will have different standards than new ones), thereby reducing the standards'
rigidity also through the recognition of diverse sources.
2. NESHAP: Organic Solvent Degreasing/Qeaning
EPA has also proposed a NESHAP (58 FR 62566, 11/29/93) for the source category of
halogenated solvent degreasing/cleaning that will directly affect the metal finishing industry. This
proposed standard aims at reducing halogenated solvent emissions to a MACT-equivalent level, and
will apply to new and existing organic halogenated solvent cleaners (degreasers) using any of the
HAPs listed in the CAAA. EPA is specifically targeting vapor degreasers that use the following
HAPs: mcthylenc chloride, perchloroethylene, trichloroethylene, 1,1,1-trichlorocthane7, carbon
tetrachloride, and chloroform.
7 Under the Montreal Protocol, a ban on the production and importation of 1,1,1 -trichloroethane
will go into effect on January 1,1996.
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This NESHAP proposes to implement a MACT-based equipment and work practice
compliance standard. This would require that a facility use a designated type of pollution prevention
technology along with proper operating procedures. However, EPA has also provided an alternative
compliance standard. Existing operations, which utilize performance-based standards, can continue
in place if they can be shown to reach the same limit as the equipment and work practice
compliance standard.
dean Water Act
The Clean Water Act regulates the amount of chemicals/toxics released by industries via
direct and indirect wastewater/effluent discharges. Regulations developed to implement this Act
establish effluent guidelines and standards for different industries. These standards usually set
concentration-based limits on the discharge of a given chemical by any one facility. If a facility is
discharging directly into a body of water, then it must obtain a National Pollution Discharge
Elimination System (NPDES) Permit. However, if a facility is discharging to a POTW, then it must
adhere to the specified Pretreatment Standards. In addition, specific state or local conditions may
require more stringent treatment or pre-treatment requirements than those provided by the effluent
guidelines.
Currently, congress is considering a bill to reauthorize the Clean Water Act.8 In addition
to the reauthorization, the effluent guidelines and standards for Electroplaters (40 CFR Part 413)
and Metal Finishers (40 CFR Part 433) are currently under review. These guidelines were
promulgated in the 1970s and amended in the 1980s. EPA is scheduled to present an options paper
reporting the findings of this review sometime in the Spring of 1994.
EPA is also currently developing effluent guidelines and standards for a related industry, the
Metal Products and Machinery Industry (40 CFR Part 438), which are due by May 1996. Although
this industry contains only cleaning and finishing operations as captive processes, it appears that
EPA will integrate new regulatory options for metal finishing industry processes (SIC 3471) into this
guideline.9 Under this scenario, any effluent guidelines for Electroplaters and Metal Finishers
would most likely reference appropriate sections of the guideline for the Metal Products and
Machinery industry. It is unclear, however, how "job shop" operations, which are not part of the
Metal Products and Machinery industry, would be covered under this scenario.
Recover Act
Solid waste sludge is one of the waste products created during the metal finishing process.
The Resource Conservation and Recovery Act classifies these wastes and requires certain methods
for treatment, storage, and disposal under each of these classifications.
8 One bill (S.1114) is being proposed by Senator Max Baucus (D-Montana) and Senator John
Chafee (R-Rhodc Island).
9 Taken from "Finishing Line" the newsletter of the NAMF, Vol. 15, Issue VI, p. 5.
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A material is classified under RCRA as a hazardous waste if the material meets the
definition of solid waste (40 CFR 261.2), and that solid waste material exhibits one of the
characteristics of a hazardous waste (40 CFR 261.20-24) or is specifically listed as a hazardous waste
(40 CFR 261.31-33). A material defined as a hazardous waste is then subject to Subtitle C generator
(40 CFR 262), transporter (40 CFR 263), and Treatment, Storage, and Disposal Facility (TSDF) (40
CFR 254 and 265) requirements.
Within RCRA Subtitle C, EPA has subcategorized hazardous wastes from non-specific
sources in a series of "F" listings. F-listed hazardous wastes which may be relevant to the
electroplating industry are identified in Exhibit 4.3-4. In November of 1992, EPA promulgated
revisions to the treatment standards for spent solvents (F001-F005) and electroplating wastewater
treatment sludges (F006). The new revisions concerning F006 encourage recycling the metals in the
sludge by allowing chromium and/or nickel-bearing electroplating F006 sludges in high-temperature
metal recovery units to meet land ban requirements.
There are two reform initiatives being proposed for RCRA which will have an effect on the
metal finishing industry:
(1) The Hazardous Waste Identification Rule (HWIR)
As of April, 1992, there were two proposals for hazardous waste
identification. The first proposal, CBEC, contained approaches that were
health-based, technology-based, and based upon contingent management.
The second proposal, ECHO, consisted of expanding the use of hazardous
characteristics.
Under this proposed rule, those units that managed wastes prior to
implementation will escape Subtitle C requirements only if there is no on- or
off-site contamination. TSDFs would not be subject to Subtitle C if all of
their units and wastes met the CBEC or ECHO levels. This will ensure
significant cost savings for those individual waste streams that will no longer
have to be managed as hazardous wastes.
Currently, an EPA working group is trying to develop a series of delisting
standards for RCRA hazardous waste streams that can be universally applied.
In other words, if certain requirements (i.e., concentration-based standards)
were achieved for a given waste, then it could be removed from the RCRA
hazardous waste management system.
(2) The Definition of Solid Waste
The EPA and industry representatives are currently negotiating over the
definition of solid waste (specifically hazardous waste). This definition will
affect how wastes are classified, which in turn determines how that waste can
be handled. Industry is urging EPA to reduce regulatory requirements of
solid waste if specified waste management and recycling standards are
achieved.
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Exhibit 43-4
HAZARDOUS WASTES FROM NONSPECIFIC (F LIST) SOURCES
RELEVANT TO THE METAL FINISHING INDUSTRY
EPA
Hazardous
Waste No. Hazardous Waste
F001 Halogenated solvents used in degreasing: tetrachloroethylene, trichJoroethylene, methylene chloride,
1,1,1-trichloroethane, carbon tetrachloride, and chlorinated fluorocarbons; all spent solvent
mixtures/blends used in degreasing containing, before use, a total of 10% or more (by volume) of one or
more of the above halogenated solvents or those solvents listed in F002, F004, and F005; and still
bottoms from the recovery of these spent solvents and spent solvent mixtures.
F002 Spent halogenated solvents: tetrachloroethylene, methylene chloride, trichloroethylene, 1,1,1-
trichloroethane, chlorobenzene, l,l,2-trichloro-l,2^-trifluoroethane, ortho-dichlorobenzene,
trichorofluoromethane, and 1,1,2-trichloroethane; all spent solvent mixtures/blends containing, before use,
one or more of the above halogenated solvents or those listed in F001, F004, F005; and still bottoms
from the recovery of these spent solvents and spent solvent mixtures.
F003 Spent non-halogenated solvents: xylene, acetone, ethyl acetate, ethyl benzene, ethyl ether, methyl isobutyl
ketone, n-butyl alcohol, cyclohexanone, and methanol; all spent solvent mixtures/blends containing,
before use, only the above spent non-halogenated solvents; and all spent solvent mixtures/blends
containing, before use, one or more of the above non-halogenated solvents, and, a total of 10% or more
(by volume) of one of those solvents listed in F001, F002, F004, F005; and still bottoms from the
recovery of these spent solvents and spent solvent mixtures.
F004 Spent non-halogenated solvents: cresols and cresylic acid, and nitrobenzene; all spent solvent
mixtures/blends containing, before use, a total of 10% or more (by volume) of one or more of the above
non-halogenated solvents or those solvents listed in F001, F002, and F005; and still bottoms from the
recovery of these spent solvents and spent solvent mixtures.
FOOS Spent non-halogenated solvents: toluene, methyl ethyl ketone, carbon disulfide, isobutanol, pyridine,
benzene, 2-ethoxyethanol, and 2-nitropropane; all spent solvent mixtures/blends containing, before use, a
total of 10% or more (by volume) of one or more of the above non-halogenated solvents or those
solvents listed in F001, F002, or F004; and still bottoms from the recovery of these spent solvents and
spent solvents mixtures.
F006 Wastewater treatment sludges from electroplating operations except from the following processes: (1)
sulfuric acid anodizing of aluminum; (2) tin plating on carbon steel; (3) zinc plating (segregated basis) on
carbon steel; (4) aluminum or zinc-aluminum plating on carbon steel; (5) cleaning/stripping associated
with tin, zinc, and aluminum plating on carbon steel; and (6) chemical etching and milling of aluminum.
F007 Spent cyanide plating bath solutions form electroplating operations. ^____
FOOS Plating bath residues from the bottom of plating baths from electroplating operations where cyanides are
used in the process.
F009 Spent stripping and cleaning bath solutions from electroplating operations where cyanides are used in the
process.
F010 Quenching bath residues from oil baths from metal heat treating operations where cyanides are used in
the process. ^^^^
F011 Spent cyanide solutions from salt bath pot cleaning from metal heat treating operations.
F012 Quenching waste water treatment sludges from metal heat treating operations where cyanides are used in
the process.
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Key Industry Characteristics and Trends
During the course of our discussions with industry members, trade association
representatives, and industry experts, we began to focus on a set of key industry and firm
characteristics and trends that may influence a company's decision-making process with regard to
environmental activities.
The balance of this section focuses on these key industry and firm characteristics and trends
that influence the decision-making processes within the metal finishing industry. Understanding the
role that these key characteristics and trends play in decision-making is a necessary step in the
process of developing or revising current and future environmental policies.
We assume that metal finishers will act in ways that maximize profits (by reducing costs
and/or increasing revenues) and will choose the least-cost methods of operation, other things being
equal. Depending upon firm competencies and market demands, however, different firms within
the metal finishing industry may choose different business strategies (and different environmental
strategies).
For example, one firm may adopt a high quality strategy in process design or customer
service that results in higher revenues and higher costs, while a competitor chooses a low-cost
approach that supports price-based competition. Any market may offer room for different
competitive strategies and, as we will document, the metal finishing industry has a distinct multi-
layer structure that reflects not only a firm's overall business strategy, but also the environmental
compliance strategy that is consistent with that business strategy.
This multi-tiered structure is perhaps the single most important industry characteristic that
we should understand and research to help develop any new strategy to address environmental
improvements in the metal finishing industry. This structural characteristic influences firm behavior
and the way firms in the metal finishing industry define their market niche; it results from and
influences the firm's commitment to environmental management; it results from and affects a firm's
ability to secure financing; and it affects regulatory and enforcement policy-making strategy at the
federal, state, and local level.
Although this multi-tiered structure defines the metal finishing industry as a whole, many
other factors, both economic and environmental, affect the performance of each individual metal
finishing operation. These factors include federal and state regulations and enforcement policies;
changes in production technologies; the overall industry structure; barriers to entry and/or exit; and
customer requirements. These factors affect environmental performance because they determine
how much capital can be invested in environmental improvements and a firm's ability to recover this
invested capital from its customers. For the metal finishing industry, the nature and capital intensity
of production and environmental technologies, the size of firms, the availability of substitutes for
manufacturing inputs, and the price sensitivity of demand for the industry's product are all factors
that are likely to affect both environmental and economic performance.
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The key metal finishing industiy characteristics and trends identified during the course of
our analysis are as follows:
o There are approximately 3,500 independently owned metal finishing job
shops, mostly small operations with limited capital and personnel; there are
also about 10,000 metal finishing operations that are captive within larger
manufacturing facilities, often with greater information and other resources
than job shops. Based on discussions with industiy members, we have
grouped metal finishing firms into four distinct tiers, based on their
environmental performance, as described below:
1. Environmentally proactive firms that are in compliance with
environmental rules and regulations and are actively pursuing and
investing capital in continuous improvement environmental
management projects that go beyond compliance.
2A. Firms that are consistently in compliance, but do not or cannot look
for opportunities to improve environmental performance beyond that
level (Le., they do not or cannot move up to Tier 1).
2B. Finns that would like to consistently be in compliance but are not
able to do so (i.e., they want to be at least a Her 2A firm but cannot
achieve that level of performance).
3. Older firms that want to close operations, but stay in business
because they fear the legal consequences of shutting down (Le., "good
people, bad managers").
4. Out of compliance "outlaw" firms that are not substantial competitors
but pull down the reputation of the industry, the panel members
agreed that regulatory and enforcement policies are designed for
firms in this tier but are applied to upper-tier firms.
The larger manufacturing units in which captive facilities are contained also
can be grouped into some form of a quality-based tiered structure. It seems
logical to conclude that the quality of the metal finishing operations within
these manufacturing operations will tend to mirror the quality of their parent
facilities.
o Chemical suppliers play a key role in the product life-cycle and influence the
environmental performance of platers (especially job shops). Supply firms
mirror the four tiers discussed above with respect to their own efforts at
developing products that are "safer" environmentally. Upper-tier suppliers
recognize the need to sell "know-how" in addition to product, realizing that
upper-tier metal finishers are aggressively looking for substitute products and
processes that are less toxic and create less waste.
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Some upper-tier suppliers appear to be moving away from their historical
sales commission incentive systems and toward a system that rewards sales
of new, proprietary, and environmentally safer products. These same
suppliers are also investigating profit-sharing relationships with more
progressive metal finishers that want new products and/or are willing to try
new products. This form of risk-sharing can provide benefits to both users
and suppliers.
Several trade associations play key roles in this industry, although
membership is generally limited to Tier 1 and 2 firms. These firms take
pride in their environmental record, arguing that major environmental
benefits have been achieved and that lower-tier firms give the entire industry
a bad name.
Metal finishers view themselves as a service industry, responding to customer
specifications and demands for quality products which, in some instances,
limit their environmental options. The industry is geographically
concentrated in regions that are highly industrialized. Competition tends to
be focused within regions; high transportation costs and customer service
requirements make it necessary, in general, for metal finishers to be located
close to their customers.
The job shop segment of the metal finishing industry seems to be relatively
stable. The effect of the decline in overall U.S. manufacturing on the
independent job shops appears to have been balanced by cutbacks among
some of the remaining manufacturers who are eliminating their captive metal
finishing operations. The service formerly provided by these captives is being
subcontracted out to the independents. In addition, the decline in what were
historically strong markets for the metal finishing industry (e.g., defense and
aerospace), has been offset by growth in such industries as electronics and
communication.
Cleaner technologies and products already exist as the result of extensive
EPA/trade association cooperation on product and process technology
development and technology transfer.
Waste streams are spread relatively evenly across three media (air, water, and
solid waste). Accordingly, permitting and reporting requirements are broader
and more complicated than if waste streams were concentrated in one media.
Uncertainty about future regulatory actions for all three media further
complicates the situation.
433. Drivers
As discussed in Chapter 2, our goal is to understand the factors that motivate an
organization's behavior with respect to investments that result in improved environmental
performance. To that end, the following list contains the most significant drivers and barriers to
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improved environmental performance at each of the four tier levels which have been discussed
during the course of our work with industry representatives and others familiar with the metal
finishing industry:
1. Top firms are driven by recognition and pride in industry performance. They
see the economic payoffs of strategic environmental investments and contend
that flexibility in compliance would promote innovative approaches and
increase their willingness to help other firms.
2. Regulatory compliance is a strong driver for firms in this large middle tier.
Barriers to proactive performance include a lack of capital and information,
a lack of positive reinforcement, and a "non-level" enforcement playing field.
Some job shops at this level are dependent on suppliers for ingredients and
process recipes that restrict their willingness and/or ability to undertake
environmental improvement activities.
3. The old, outdated shops have a strong fear of liability, and have little interest
in improving since they lack capital, information, and even space to do so.
The firms in Tiers 1 and 2 have an incentive to help close these firms down
rather than work to raise them to a higher tier.
4. The renegade shops have no incentive to improve; they do not fear
enforcement because they are difficult to track down. These firms profit by
undercutting top tier firms.
Some metal finishers (Tier 3 and some Tier 4 firms) may have a perverse incentive to remain
operational, even hi the face of disappearing profitability, due to potentially high environmental
clean-up costs associated with shutting down and liquidating a business. These facilities, though
operational, are not making any additional capital investments to improve environmental
performance. Since they lack internal capital and cannot secure external financing to fund cleanups,
these firms continue to pollute and represent a significant barrier to entry for cleaner, more efficient
firms that may have higher costs in the short term.
Drivers and barriers that are more generally applicable to some or all of the tiers are as
follows:
o Regulatory compliance and/or enforcement actions are the primary drivers
of environmental decision-making in the metal finishing industry, particularly
for the independent firms. However, many job shops lack the personnel and
capital resources to look beyond baseline compliance. Liability concerns
often are a barrier to obtaining loans for capital improvements.
o New, more environmentally safe product development by suppliers is driven
both by the metal finishing industry (in search of lower operating costs) and
the suppliers (in search of product niches and avenues to sell know-how).
There continues to be, however, a lack of understanding of the metal
finishing process on the part of many metal finishers and a reliance on their
suppliers to provide the right recipe. Suppliers, for their part, may be
reluctant to suggest environmentally proactive process or product changes
because it may mean lower product sales, at least in the short term.
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Any resistance on the part of customers (e.g., militaiy purchasers) to change
product quality specifications to allow for the use of environmentally safer
products by metal finishers can provide a barrier to the adoption of these
products. Given the right set of regulatory and/or market-based incentives
(e.g., user/discharge fees on toxics use/disposal, tax incentives for investment
in waste minimization, source reduction, and product substitution
equipment), however, this barrier can be removed.
Uncertainty about future regulatory activity and the effect this activity may
have on plant operations inhibits long-term planning/investment and
beneficial risk-taking. In addition, inconsistency in existing regulatory
requirements and enforcement actions at the federal, state, and local level
creates uncertainty at the very least and, at worst, competitive imbalances
throughout the industry. All of this creates distrust of EPA amf the states,
and inhibits meaningful communication.
For example, the proposed effluent guidelines and standards for the metal
finishing industry could leave little flexibility to accommodate the differences
between the two types of metal finishing operations (captive and
independent). It has been indicated that the effluent guidelines and
standards for electroplaters and metal finishers will be incorporated into the
effluent guidelines and standards of the metal products and machinery. The
unique characteristics of independent "job shop" operators could be
overlooked if focus is put upon the captive operations that are part of the
metal products and machinery industry.
Some industry representatives indicated that regulations are not based on
good science. Rather, they reflect a compromise among all the stakeholders,
often resulting from a lack of a comprehensive understanding of the true
risks involved with the use of many processes and substances. This lack of
understanding may create interest in banning the use of a potentially harmful
substance, and replacing it with what is thought to be a more benign
substance. Substituting one type of plating process, chemical, and/or cleaning
process with what are apparently better processes or chemicals may merely
shift the environmental control problems from one media to another.
Existing chemicals and processes, if understood and controlled, can in fact
result in less environmental effects than a substitute.
From the industry's perspective, the regulatory burdens to environmental
improvement result from (1) RCRA permitting standards and hazardous
waste definition (barriers to recycling and recovery); (2) Superfund de
minimus standards (barrier to obtaining loans and to old shops shutting
down); and (3) interpretations of CWA §§ 413 and 433 effluent guidelines.
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Military specifications continue to require the use, at least indirectly, of
environmentally harmful products and processes, even though
environmentally safer substitute products and processes are available. The
apparent high cost of making such changes is cited as a reason that changes
are implemented slowly.
A large number of metal finishing firms face significant environmental
liabilities and clean-up costs if they discontinue operations and attempt to
liquidate their business. This potential liability, in addition to creating a
barrier to exit for these firms, effectively eliminates any access to outside
capital sources for these firms.
Lower-tier firms are not active in trade association activities and are not
aware of changes in product/process technology. They are also unaware of
inexpensive, cost-effective changes that can be made to improve
environmental and financial performance. Moreover, these firms often lack
any incentive to change because any existing environmental liabilities may
continue to overwhelm their ability to pay for remediation.
There are significant research and development activities underway by
industry (e.g., AESF), EPA, and other federal departments and agencies.
These efforts to develop new metal finishing processes to achieve source
reduction can serve as a driver to some firms to improve performance.
However, the lack of information or capital to implement improvements can,
as noted above, impose a barrier to improvements by other firms.
433 Possible Policy Options
EPA can consider a number of possible policy options to promote desired changes within
the metal finishing industry. These options range from increased regulatory and enforcement
activities concentrated on certain segments of the industry, to regulatory reform, to market-based
approaches such as fees, taxes, and tax incentives. EPA will continue to keep two objectives in mind
as it evaluates the different available options: (1) EPA must consider the characteristics, needs, and
problems specific to each of the four tiers identified in the metal finishing industry and must
consider the interactions between tiers; and (2) the agency will continue and expand its initial efforts
to get its regional offices, the states, NGOs, and local POTW authorities involved in the process.
Second Expert Panel Meeting
Representatives at the second panel meeting on March 11,1994 discussed and evaluated the
many possible policy options that had been suggested during the course of this project and identified
a few options with the greatest potential for removing the most significant barriers or providing the
greatest incentive to sustained environmental improvement in the metal finishing industry. These
selected options provide the focus for ongoing work in the next phase of this project. A complete
list of the many policy options identified during the project is included as Appendix 4-B to this
chapter.
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The panel recognized the importance of the tiered structure of firms in the metal finishing
industry and identified general policies that should be pursued within specific tiers. For example,
some panelists noted that many regulations were written with the problems of Tier 4 firms in mind,
but were applied almost exclusively to Tier 1 and 2 firms. The panel also concluded that there were
a number of general issues relevant for all tiers within the industry that also should be pursued
during the next phase of the project. The panel evaluated the list of options using the following
selection criteria. Options should:
o Promote "cleaner" environmental performance - have a significant
environmental payoff;
o Identify "cheaper" solutions to environmental problems - promote cost-
effectiveness;
o Promote innovative and more effective ("smarter") actions by EPA, states,
and the industry,
o Have the capacity to affect long-term thinking and action toward
sustainability,
o Be feasible, considering the length of time required for completion, the
method of implementation, the size of the relevant audience, impact and
importance, and the effectiveness of EPA as a player, and
o Encourage cooperative involvement in the project among a variety of
stakeholders.
The panel also noted that the metal finishing industry, largely through its trade associations,
was currently working cooperatively with several offices at EPA, providing technical support on
proposed policies and programs. Among these cooperative projects are the following:
o Development of the RCRA Hazardous Waste Identification Rule: Industry
representatives (especially NAMF) are involved in ongoing dialogue with
EPA's Office of Solid Waste to expedite delisting of F-006 waste and thereby
promote greater recycling/reclamation of waste treatment residuals.
o Development of the Metal Products Effluent Guidelines (MP&M1: Industry
representatives (including NAMF) are providing comments on the proposed
Phase 1 guidelines; industry also will participate in Phase 2 development and
in CWA reconsideration of §§ 413 and 433 effluent guideline standards.
o Development of Clean Air Act MACT Standards for Chromium
Electroplating and Anodizing: Industry representatives are participating in
the MACT development and review process; productive dialogue to date; key
comments seem to be focused on associated monitoring requirements.
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The panel endorsed these efforts along with the cooperative research activities being
conducted by the federal government and the industry.
A majority of the meeting was spent discussing the tiered structure of the industry and
increasing our level of understanding of the types of firms that are found within each of the four
tiers and the drivers and barriers that are unique to each tier. We also discussed more general
drivers and barriers that are relevant to all four tiers. The panel evaluated various policy options
using the selection criteria listed above, but also devoted considerable discussion to understanding
the differences between firms in the four industry tiers and the existing drivers and barriers to
movement up the hierarchy from lower to upper tiers. We believe therefore that part of the Phase
2 work should initially focus on defining the criteria for placement into a tier and on identifying
incentives that EPA and the states could provide to encourage movement from tier to tier. This
effort could then progress to a further development of specific action steps for each tier. The
remainder of the Phase 2 work should focus on studies that are important to all firms in the metal
finishing industry.
The following sections describe each of the tier-specific and industry-wide issues that will
provide the basis for ongoing work in Phase 2 of this project We have included some suggestions
in each section to provide some initial focus in Phase 2 work. We believe that these suggestions
address the priorities of all the various stakeholders in the metal finishing industry. The tiered
structure is a new way to look at the metal finishing industry and the various stakeholders are still
trying to understand the basic dynamics of such a structure. Phase 2 work should contribute to this
understanding as well as help remove some of the barriers to environmental improvement for this
industry.
Metal Finishing Industry Policy Options for Tiers 1-4
One panel member described the regulatory and enforcement programs for the metal
finishing industry as policies that were implemented to control Tier 4 firms but have instead been
used to control Tier 1 and Tier 2 firms. This, in conjunction with the need to encourage firms to
move up the tiered hierarchy, constitute important conclusions and observations from the first phase
of this study. Attempts to regulate the activities of the worst polluting facilities that have slipped
out of the regulatory/enforcement net have instead resulted in the over-regulation of the firms in
Tiers 1 and 2. This over-regulation has resulted in higher compliance costs for upper-tier firms and
an increased fear of enforcement activities, coupled with a high level of uncertainty about the nature
and effect of future regulatory actions. Regulators, the panelists contend, tend to place unnecessary
burdens on large point sources since they cannot deal adequately with nonpoint sources of pollution.
The tier-specific discussion at the panel meeting focused on lowering the regulatory burden
placed on upper-tier firms and on eliminating both the short-term and long-term problems
associated with the lower tier firms. A key goal of proposed policies would be to help Tier 1 firms
move to higher levels of environmental protection and encourage 2A firms to move up to tier 1, and
Tier 2B to Tier 2A. The discussion was complicated, however, by a lack of explicit understanding
of the criteria for inclusion in Tiers 1 or 2. As discussed later in the section on more general issues,
a commitment to and implementation of Best Management Practices (BMP) for the metal finishing
industry can be used as a criteria for movement from a lower to an upper tier. The following sub-
sections describe the issues specific to each of the four tiers in the metal finishing industry.
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Tier 1 and Tier 2
Tier 1 metal finishing firms are characterized as environmentally proactive firms that are
actively pursuing and investing capital in strategic environmental management projects. They are
driven by recognition and pride in industry performance and see the economic payoffs of strategic
environmental investments. Tier 2 (A and B) firms are characterized as environmentally conscious
but less proactive firms that are limited in their ability or desire to actively pursue strategic
environmental management practices due to lack of capital or other factors. Uncertainty about the
nature and timing of future regulatory activity also contributes to the conservative strategy pursued
by these firms. Regulatory compliance and fear of enforcement are the primary drivers for firms
in Tier 2; barriers to improvement include lack of capital and information, and inconsistent
enforcement activities that create a non-level playing field.
A major problem, however, at least for the panel members, is the lack of criteria for
identifying membership in Tier 1. Most panel members believe that the Tier 1 firms are most likely
small, high-tech firms. This would include captive plating operations that are relatively small, both
in terms of throughput volume and value-added. The one captive metal finishing representative at
the panel meeting characterized his firm as a Tier 1 facility. He had been able to implement
environmental projects with a longer payback than specified in company guidelines because of the
longer-term view held by management. The two independent metal, finishing representatives at the
meeting characterized their firms as being in Tier 2. Although both felt that their facilities were in
compliance and they had invested in pollution prevention and end-of-pipe technologies, they were
driven by a fear of enforcement rather than by some other sustainable philosophy.
The problem of defining Tier 1 and Tier 2 membership requirements can be resolved two
ways. First, the development of industry Best Management Practices should focus on the criteria
for inclusion in the top tier, as well as the criteria for continued membership. Eligibility for
continued membership in Tier 1 should require a commitment to the full set of Best Management
Practices and a commitment to and demonstrated success in continuous environmental improvement.
The minimum requirements for Tier 2 membership should be complete regulatory compliance and
a commitment to some appropriate subset of the industry Best Management Practices. Second,
continued involvement by the stakeholders in an ongoing dialogue sponsored by EPA should lead
to an additional understanding of the metal finishing industry with respect to the differences
between Tier 1 and 2 firms and the requirements for membership in Tier 1.
What incentives are there or can be put in place to induce Tier 2 firms to move up to Tier
1? Tier 2A firms are technically in compliance and EPA can drive continued environmental
improvement through regulatory actions designed to reduce the level of discharges from the metal
finishing industry beyond current levels. The objective of the Sustainable Industry Project, however,
is to facilitate continued voluntary environmental improvement on the part of the metal finishing
industry because it makes good business sense to do so. EPA must try to remove the barriers that
currently inhibit the movement from lower tiers to upper tiers, and provide incentives for firms to
move up the hierarchy.
One method for removing barriers would be to lower the compliance costs for Tier 1 firms
from what is estimated to be 7 to 10 percent of total costs to 2 to 5 percent of costs. Tier 1 firms
would also need to make a commitment to provide a certain amount of technical assistance to lower-
tier firms. Obviously, penalties for Tier 1 firms that are found to have not met their commitments
should be severe.
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EPA can lower the compliance costs for Tier 1 firms in a number of ways, including: using
electronic reporting; requiring less frequent sampling of waste streams; eliminating some reporting
requirements; implementing longer permit periods with fewer inspections; and implementing an
even-handed enforcement policy that focuses on the environmental renegades and places more
importance on discharge violations rather than paperwork violations. In effect, EPA will be trading
a greater level of trust for continued environmental excellence. The states and the POTWs will be
very important stakeholders in this program and should be involved in every step of its development
process.
EPA can create additional incentives to attain Tier 1 status by linking Tier 1 status with
membership in some form of an environmental leadership program. EPA should examine the
applicability of ideas used in OSHA STAR and other "incentive" programs to this effort. This
leadership program could attempt to reward environmentally progressive firms by helping the best
firms gain access to financial resources; either through outside lending institutions or through
financial assistance made available by EPA in the form of loans and/or grants. It may also be
possible to link membership in this environmental leadership program with access to U.S.
government agency metal finishing contract work (e.g., DOD). One additional incentive that EPA
could consider is access by Tier 1 firms to an expedited delisting process for any RCRA listed waste
streams that are eligible for delisting.
It will be important to determine whether the investments required to upgrade to Tier 1
status are disproportionate to the rewards associated with Tier 1 status. To help avoid this, EPA
could consider assisting Tier 2 firms with their capital requirements through access to zero or low-
interest loans or grants. Qualification for these funds would require passing an environmental audit,
making a commitment to follow the set of industry Best Management Practices required for Tier
1 status, and developing a business plan that would commit the money to specific projects focused
on doing what is necessary to attain Tier 1 status. EPA can improve the willingness of Tier 2 firms
to invest their own capital in environmental improvements by reducing the uncertainty associated
with future regulatory requirements. One way to accomplish this is to create a credit system for
improvements made independent of regulatory requirements; this would eliminate the fear that
technology improvements may be rendered obsolete by future regulatory requirements.
The second panel concluded that economic benefits would accrue to Tier 1 and Tier 2 firms
as well from the implementation of policies and programs specific to Tier 3 and Tier 4 firms. The
development of any tier-specific overall policy strategy should take into consideration the importance
of linking tier-specific policies within a coherent framework to maximize benefit transfer from tier
to tier. The following subsections discuss the possible policy options for Tier 3 and Tier 4 firms that
the panel felt would, on balance, strengthen the metal finishing industry.
Tier 3
Tier 3 metal finishing firms are characterized as companies that are not environmentally
proactive firms and which face severe financial limitations. These firms may want to go out of
business but won't because of liability concerns from wastes generated by past (and in some cases,
current) operations. These old, outdated shops have a strong fear of liability, they cannot improve
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their environmental performance due to a lack of capital, information, and frequently, space. There
was a strong consensus among the second panel industry members that a significant number of firms
in Tier 3 exist.
The panel essentially concluded that while exit for these firms may be viewed as a short-term
negative because of the loss of jobs and the costs associated with site cleanups, in fact the loss of
these Tier 3 firms is a long-term positive because the jobs should be transferred to Tier 1 and Tier
2 firms that capture the business and because site remediation that is started now will prevent worse,
more costly problems in the future (i.e., a pollution prevention benefit). In addition, the firms
higher in the hierarchy operate in a more environmental sensitive manner, producing less pollution.
What is the best way to facilitate exit for those Tier 3 firms? The fear of disclosure and
subsequent reprisal must be eliminated so that Tier 3 firms will come forward. It should not be
difficult to find these firms; most are visited regularly by enforcement officials keeping tabs on their
operations. The danger from EPA's and the states' perspective in following such a strategy is that
the number of firms that come forward may far outweigh the agency's ability to either commit funds
to initiate facility closure and cleanup or to provide investment capital to make process
improvements. A necessary first step is to compile information on the population of metal finishers
within the particular geographic area under consideration to provide a first cut assessment of the
scope of the problem. Enforcement offices, trade associations, POTWs, and NPDES permit
monitoring offices should be able to provide a wealth of information.
For those Tier 3 firms that choose an exit strategy under this proposed amnesty program,
EPA and the states need to commit the necessary resources to conduct a site evaluation to
determine the nature and extent of any environmental problems, to evaluate the risks associated with
those problems in order to prioritize remediation alternatives, and to determine the level of cleanup
required commensurate with future use alternatives for the site. One possible approach might
include, hi exchange for some degree of amnesty granted under this program, a commitment from
a facility to take an active leadership role hi shutting down the facility and in completing any
remediation work at the site before it could be sold. However, this amnesty must not completely
remove a firm from liability nor remove its responsibility for cleanup. In addition, deed restrictions
on the use of the site appropriate for the level of remediation completed should be put hi place for
the facility prior to sale and/or alternative use.
There are a number of unreserved issues with such a program. Fust, the regulatory agencies
must be willing to commit financial resources to facilitate any site remediation work that is required.
Second, these same agencies must attempt to answer the question of "how clean is clean" for each
site based on the projected future use of the site. Finally, the owner of the facility must be actively
involved hi site remediation that may include on-site treatment. The owner has a detailed
understanding of the processes used at his/her facility, this individual should be able to make a
valuable contribution to site cleanup.
Tier 4
Tier 4 metal finishing firms have been characterized as not environmentally proactive firms
that are likely not in compliance with environmental regulations. These firms price their services
below Tier 1 and Tier 2 firms, creating a competitive disincentive for more proactive firms to
4-24
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continue to invest in proactive environmental strategies. These renegade shops are difficult to find
- they are probably operating without permits and do not report discharges. They have no incentive
to improve and do not fear enforcement because they are difficult to track down. They profit by
having a lower cost structure which undercuts upper-tier firms.
The second panel concluded that the major issue with Tier 4 firms is not that they represent
a significant competitive force within the metal finishing industry, but that they give the overall
industry a bad name and create additional pressure on upper-tier firms with respect to enforcement
actions and regulatory/reporting requirements. There is an over-regulation of upper tier firms to
compensate for the inability of regulatory agencies to alleviate the problems caused by Tier 4 firms
and because of a possible misunderstanding of the industry as a whole. There was a recognition by
the panel members that the extent of the environmental problems associated with the Tier 4 firms
is largely unknown. They felt, however, that this should not be a deterrent to an increased focus
on this sector of the industry.
The panel concluded that finding and eliminating Tier 4 firms should be a priority. To help
accomplish this, it may be necessary to redirect agency and state resources currently focused on
monitoring and enforcement of upper-tier firms to identifying Tier 4 firms. Some suggested that
enforcement policies could be directed away from targeting upper-tier firms. Finally, POTWs should
be granted increased flexibility, the panel noted, in inspection, sampling, and enforcement
requirements. Presently, POTWs must inspect and sample every facility at least once per year and
are required to enforce paperwork violations with the same vigor as discharge violations. POTWs
can improve their monitoring capabilities and identify more Tier 4 firms if they have the flexibility
to use their monitoring equipment to find these firms rather than sampling the effluent of the known
Tier 1 and Tier 2 firms.
A significant unresolved issue concerns the environmental liabilities and cleanup costs
associated with shutting down Tier 4 firms. The feasibility of designing programs for Tier 4 firms
that are similar to those proposed for Tier 3 firms was not pursued by the panel and should be a
topic for further consideration.
General Metal Finishing Industry Policy Options
The second panel also discussed three possible non-tier-specific policy options that were felt
to be important with respect to drivers and barriers in the metal finishing industry. The issues
addressed by these policy options are (1) the need to develop Best Management Practices for metal
finishing facilities; (2) the inconsistencies in standard setting, permit review, administration, and
enforcement activities at the state level; and (3) the extent to which suppliers and customers are the
primary drivers of toxics use in the metal finishing industry.
Development of Best Management Practices
for The Metal Finishing Industry
The second panel endorsed the idea of an industry-managed effort to develop and implement
Best Management Practices for the metal finishing industry. This BMP would be used to develop
pollution prevention strategies for the industry and could also be used to provide a roadmap for Tier
2 firms to move up, within the second tier and to Tier 1 status. The panel felt that EPA's role
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should be limited to providing financial and administrative assistance to the effort, believing that
while it was appropriate for the government to regulate discharges and emissions, it was not
necessary or appropriate for government to dictate specific pollution prevention strategies.
In addition to providing a roadmap for lower tier firms to use to progress to the upper tiers,
the BMP would also be designed to ensure compliance for any firm that has implemented the BMP
at their facility. A commitment to follow the complete set or a subset of the BMP would be
required for membership in Tier 1 or Tier 2 respectively. In these respects, a BMP would differ
from Good Operating Practices because the latter does not necessarily guarantee success, only that
accepted practices are being followed. The BMP would also be designed to drive continuous
improvement/waste minimization strategies that Tier 1 firms would be required to commit to as a
requisite for continued membership in Tier 1.
The panel also concluded that the BMP, as envisioned, could be used to help the metal
finishing industry gain increased access to outside capital for investment in environmental
technologies and process changes required for a company to move to a higher tier. The BMP could
be used not only to educate lending institutions about the effectiveness of a given technology, but
also to alleviate any fear on the part of lenders that a particular technology would have no market
value. If it is clear that hundreds, if not thousands, of metal finishing facilities use this technology,
then there is a ready market for resale if necessary. Educating lending institutions in this way should
be linked to any ongoing efforts to weed out the bad firms in the industry and to reduce the fear
factor that inhibits Tier 2 firms from applying for loans.
Eliminating Regulatory and Enforcement
Inconsistencies ** the State Level
Existing inconsistencies in standard setting, permit review, administration, and enforcement
activities at the state level result in higher compliance costs and unnecessary uncertainty about the
regulatory process for metal finishing firms. The second panel discussed some of these issues in
detail and proposed a number of possible solutions to these problems. Perhaps the most important
issue discussed by the panel in this area concerned the non-uniformity of discharge standards at the
state and local levels.
In theory, it would be a relatively straightforward task to set uniform national discharge
standards and require states (and localities) to justify more stringent standards on a scientific basis.
In practice, this task seems difficult if not impossible. States and localities set standards based upon
site specific conditions that depend on the number and type of other dischargers and the physical,
chemical, and biological characteristics of the environment to which the pollutant is being
discharged. The relative contribution to the pollutant loading by non-point sources is an important
variable in this equation. If the discharge is to a POTW, the way in which the POTW disposes of
their sludge is an important variable the control authority considers in setting standards. The
chances that EPA could impinge upon the state's authority in this process are extremely low.
One way in which EPA can help to ensure that the process is scientifically based is through
its audit of state programs. EPA must ensure that the states are reviewing technology-based POTW
local limits, as well as making a concerted effort to set NPDES discharge levels, in a fair and
equitable fashion. One way in which metal finishers may be granted some consideration for having
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to meet regulations, more stringent than federal standards, would be to recognize their contribution
to reducing the pollutant in complying with the more stringent standards. This compensation could
take the form of adjustable water/sewer rates, for example, for discharges to POTWs.
Other issues discussed by the panel included the difficulty associated with obtaining permits
and complying with reporting requirements for multi-media discharges from state agencies that are
historically organized by media; the disincentive that arises from the requirement that permits must
be modified or reissued when process changes are implemented; the lack of enforcement policies
that are designed so that penalties reflect the seriousness of the infraction; and the lack of consistent
cross-media technical assistance and facility inspection programs. The panel felt that the simplest
and most effective solution to these problems is for the states and EPA to develop a multi-media
industry-focused perspective, where multi-media service teams trained to provide permit, reporting,
and technical assistance to a limited number of industries could assist individual firms with any
problems.
In effect, these service teams would become a one-stop shopping resource for all firms within
a particular industry. At the very least, these teams would help to ensure consistency throughout
a particular industry within a given state, would facilitate technology transfer, and would minimize
issues that arise when misapplied pollution prevention programs do not reduce emissions but merely
transfer them from one media to another.
Analysis of Customers and Suppliers as Drivers
of Toxics Use in the Metal Finishing Industry
The second panel agreed that life-cycle issues related to the use of toxic substances in the
metal finishing industry were important with respect to any discussion of drivers and barriers to
environmental improvement for this industry. In addition, an assessment of pollution prevention
and waste minimization opportunities in the metal finishing industry necessarily requires an analysis
of the effects of eliminating the use of toxic substances, either by banning their use outright or by
instituting taxes or user fees that would result in a drop in usage.
There are several potentially important issues related to eliminating the use of a particular
toxic substance, including the availability and suitability of substitute products; the overall life-cycle,
multi-media environmental effects of the substitute compared to the original substance; the effect
on the quality of the customer's product; the acceptance of any change by the ultimate consumer
of the customer's product; and the ability and motivation of the suppliers to the metal finishing
industry to develop and market a substitute product and process. On the other hand, suppliers also
need to be concerned about Superfund de minimis liabilities that may arise from the continued use
of toxic materials.
The panel agreed that the best way to begin to evaluate the issues related to product
substitution might be to initiate a pilot project that brings the suppliers, metal finishers, and
customers together to assess life-cycle issues related to the continued use of a toxic substance. The
panel thought that cadmium might constitute a good candidate for this study since the U.S.
Department of Defense was a significant user of cadmium-plated products and the agency moves
slowly in approving any changes in product specifications. Another potential pilot project might
focus more on a consumer product where it would be useful to analyze the public's reaction to
changes in appearance (and perhaps performance) of plated products.
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The panel wondered whether EPA was currently funding life-cycle analysis studies and, if
so, whether these funds could be redirected. Currently EPA's Design for the Environment program
and the President's Council on Sustainable Development are considering life-cycle issues as part of
their efforts.
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Appendix 4-A
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
-------
Appendix 4-A
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
Altmayer, Frank, "Significant Violators," Plating and Surface Finishing. August 1993.
Altmayer, Frank, The Great Lakes Initiative - Part 1," Plating and Surface Finishing. September
1993.
Bishop, Craig V., Loar, Gary W., "Practical Pollution Abatement Methods for Metal Finishing,"
Plating and Surface Finishing. February 1993.
Booz-Allen & Hamilton Inc. Economic Analysis of Proposed Effluent Standards and Limitations for
the Metal Finishing Industry. May 1982.
California Department of Health Services, Toxic Substances Control Division, Alternative
Technology Section, Waste Audit Study: Metal Finishing Industry. Prepared by PRC
Environmental Management, Inc. May 1988.
"Case Study: Moving Toward Zero," Pollution Prevention News. Spring 1993.
Dini, J.W., Steffani, C.P., "Electroplating Waste Minimization at Lawrence Livennore National
Laboratory," Lawrence Livennore National Laboratory. April 1992.
Finishing Line. NAMF Newsletter, Volume 15, Issue VL September/October 1993.
Fransaer, J., Celis, J.P., and Roos, J.R., "Mechanisms of Composite Electroplating," Metal Finishing.
June 1993.
Gallerani, Peter, Drake, David B, "Wastewater Management for the Metal Finishing Industry in the
21st Century," Plating and Surface Finishing. October 1993.
Hinton, Bruce R., "Corrosion Prevention and Chromates: The End of an Era," Metal Finishing.
October 1991.
Karrs, Stanley R., McMonagle, Michael, "An Examination of Paybacks For an Aqueous Cleaner
Recovery Unit," Plating and Surface Finishing. September 1993.
Kraft, Gerald G., The Future of Cadmium Electroplating," Metal Finishing. July 1990.
Lakshmanan, T.R., Source Reduction in the Electroplating Industry in Southeast Massachusetts: An
Economic Overview. Center for Energy and Environmental Studies, Boston University.
Massachusetts Department of Environmental Management, Office of Safe Waste Management,
Source Reduction Recommendations for Precious Metal Platers. April 1988.
4-A-l
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
Mounts, Michael L., "Converting from Vapor Degreasing to the Optimum Alternative," Metal
Finishing. August 1993.
Naziruddin, M., Patrick, G.C, and McCune, L., Treatment of an Anodizing Waste to Water-
Quality-Based Effluent Limits," Metal Finishing. February 1992.
Oregon Department of Environmental Quality, Hazardous Waste Reduction Program, Guidelines
for Waste Reduction and Recycling: Metal Finishing, Electroplating, Printed Circuit Board
Manufacturing. July 1989.
Oregon Department of Environmental Quality, Hazardous Waste Reduction Program, Guidelines
for Waste Reduction and Recycling: Solvents. August 1989.
Proactive Environmental Strategies for Industries: Symposium Summary Booklet. Held at MIT,
Wednesday November 17,1993.
Talvarides, Lawrence L., Industrial Waste Management Series: Process Modifications for Industrial
Pollution Source Reduction. Lewis Publishers, Michigan, 1985.
U.S. Department of Commerce, "Geographic Area Statistics," ASM 1991 Annual Survey of
Manufactures, Bureau of the Census, February, 1993.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1989," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, November
1991.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1990," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, April
1992.
U.S. Department of Commerce, "Pollution Abatement Costs and Expenditures, 1991," Current
Industrial Reports, Economics and Statistics Administration, Bureau of the Census, January
1993.
U.S. Department of Commerce, "Screw Machine Products, Fasteners and Washers; Metal Forgings
and Stampings, and Metal Services," 1982 Census of Manufactures, Bureau of the Census,
March 1985.
U.S. Department of Commerce, "Screw Machine Products, Fasteners and Washers; Metal Forgings
and Stampings, and Metal Services," 1987 Census of Manufactures, Bureau of the Census,
April 1990.
4-A-2
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Department of Commerce, "Statistics for Industry Groups and Industries," ASM 1989 Annual
Survey of Manufactures, Bureau of the Census, June, 1991.
U.S. Department of Commerce, "Statistics for Industry Groups and Industries," ASM 1991 Annual
Survey of Manufactures, Bureau of the Census, December, 1992.
U.S. Department of Commerce, "Survey of Plant Capacity, 1990," Current Industrial Reports,
Economics and Statistics Administration, Bureau of the Census, March 1992.
U.S. Department of Commerce, "Value of Product Shipments," ASM 1991 Annual Survey of
Manufactures, Bureau of the Census, November, 1992.
U.S. Environmental Protection Agency, An Investigation of Techniques for Removal of Chromium
U.S. Environmental Protection Agency. Assessment of Industrial Hazardous Waste Practices -
Electroplating and Metal Finishing Industries Job Shops. Final Report SW-136C 1977.
U.S. Environmental Protection Agency. Economic Impact Analysis of a Landfill Ban and a Waste-
end Tax for the Electroplating Industry. Prepared by Pope-Reid Associates, Inc., Minnesota.
February, 1984.
U.S. Environmental Protection Agency, Effluent Guidelines Division. Development Document for
Effluent Limitations Guidelines and Standards for the Metal Finishing Point Source Category.
June 1983.
U.S. Environmental Protection Agency, Effluent Guidelines Division and Permits Division, Guidance
Manual for Electroplating and Metal Finishing Pretreatment Standards. Washington, D.C,
February 1984.
U.S. Environmental Protection Agency, Environmental Pollution Control Alternatives: Centralized
Waste Treatment Alternatives for the Electroplating Industry. EPA 625/5-81-017, Industrial
Environmental Research Laboratory, Cincinnati, Ohio, June 1981.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory.
Environmental Pollution Control Alternatives: Economics ofWastewater Treatment Alternatives
for the Electroplating Industry. June 1979.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Fourth
Conference on Advanced Pollution Control for the Metal Finishing Industry. December 1982.
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Second
Conference on Advanced Pollution Control for the Metal Finishing Industry. June 1979.
U.S. Environmental Protection Agency, Industrial Environmental Research Laboratory. Third
Conference on Advanced Pollution Control for the Metal Finishing Industry. April 1980.
U.S. Environmental Protection Agency, Integrated Environmental Management Program. Draft
Analysis of State Regulations Affecting the Metal Finishing, Organic Chemicals, and Foundry
Industries: Implications for Industrial Policy Model, First Edition. Prepared by John Freshman
Associates, Inc. April 1983.
U.S. Environmental Protection Agency, Office of Environmental Engineering and Technology
Demonstration and the Office of Pollution Prevention, Case Studies from the Pollution
Prevention Information Clearinghouse (PPIC): Solvent Recovery. November 1989.
U.S. Environmental Protection Agency, Office of Environmental Engineering and Technology
Demonstration and the Office of Pollution Prevention, Case Studies from the Pollution
Prevention Information Clearinghouse (PPIC): Electroplating. November 1989.
U.S. Environmental Protection Agency, Office of Research and Development Guides to Pollution
Prevention: The Fabricated Metal Finishing Industry. October 1992.
U.S. Environmental Protection Agency, Office of Research and Development Industrial Pollution
Prevention Opportunities for the 1990s. August 1991.
U.S. Environmental Protection Agency, Office of Research and Development The Environmental
Challenge of the 1990's, Proceedings, International Conference on Pollution Prevention: Clean
Technologies and Clean Products, June 10-13,1990. September 1990.
U.S. Environmental Protection Agency, Office of Solid Waste, Analysis of the Combined Impact of
Various EPA Regulatory Initiatives on Generators of 100-1000 kg/mo. Prepared by ICF,
January 6,1986.
U.S. Environmental Protection Agency, Office of Solid Waste, Waste Minimization in Metal Parts
Cleaning. August 1989.
U.S. Environmental Protection Agency, Office of Water Planning and Standards, Environmental
Regulations and Technology: The Electroplating Industry. EPA 625/10-80-001, Washington,
D.C, August 1980.
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Appendix 4-A
(continued)
BIBLIOGRAPHY OF THE METAL FINISHING INDUSTRY
U.S. Environmental Protection Agency, TRW Environmental Engineering Division, Technical
Environmental Impacts of Various Approaches for Regulating Small Volume Hazardous Waste
Generators. December 10,1979.
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Appendix 4-B
ALL SUGGESTED POLICY OPTIONS
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Appendix 4-B
ALL SUGGESTED POLICY OPTIONS
The following is a broader list of all the policy options that were discussed throughout the
course of this project.
o Consider policies and programs that meet the unique needs of the four tiers of metal
finishing firms. Specifically:
(a) Allow for more flexibility in compliance for Tier 1 companies in exchange for
measurable commitments to work toward zero discharge, and to establish and
adhere to Best Management Practices for the industry,
(b) Reduce the uncertainty about future regulations for Tier 2 companies by
creating a credit system for improvements made independently of regulatory
requirements, and assist these firms in obtaining outside capital through grant
and/or loan programs (qualification for these funds would require an
environmental audit and a commitment to follow Best Management
practices);
(c) Provide the assistance necessary for tier 3 firms to go out of business without
fear of litigation and bankruptcy due to environmental liabilities; and
(d) Target enforcement activities and more rigid requirements at Tier 4 firms.
The following policies and programs should be considered for all metal finishing industry
members.
o Set uniform national standards, and require states and localities to justify
more stringent standards, to avoid "cleaner-than-thou" competition that leads
to unachievable and unnecessary limits; and require POTWs to target all
sources of contaminants, rather than concentrating only on industrial sources
that have already been reduced. It is important to recognize, however, that
states and localities develop standards based upon the unique set of
circumstances that are found within the jurisdiction of a particular POTW.
The creation of a level playing field for the industry must take this into
consideration. Total costs should be the criteria, not just compliance costs.
o Promote toxics regulations based on sound scientific risk-based approaches;
send clear signals to all the stakeholders about relative risks; and avoid bias
against gristing chemicals white ignoring the potential risks of unknown
substitutes. EPA can play a role in educating the general public about the
environmental impact of electroplating that will help to eliminate the fear
factor that influences the regulatory process. Above all, strive to make the
regulations simple to reduce the compliance burden on small companies.
4-B-l
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Appendix 4-B
(continued)
ALL SUGGESTED POLICY OPTIONS
Expedite the permitting process and create consistency among the states in
the permit review process.
Facilitate the cooperative development of BMP for electroplaters, and trade
flexibility in compliance for commitment to these practices for companies
with good environmental records.
Develop an enforcement strategy that is fair and reasonable. Rate
companies based upon their performance relative to some defined baseline
or benchmark and treat them accordingly. Target initial efforts at Tier 4
firms whose lack of compliance creates a competitive imbalance throughout
the industry.
Recognize positive environmental performance as a good first step toward
the creation of a spirit of cooperation and open communication between
EPA and the electroplating industry. Any recognition program, however,
must be structured in such a way as to accrue the right kinds of benefits to
environmentally proactive firms (e.g., improved credit rating and access to
capital, and higher sales). EPA must also develop such a program within the
context of changing perceptions of the industry.
Support technology transfer initiatives and environmental audit programs.
Support tax incentives for investment in waste minimization and source
reduction equipment, and support the capitalization of clean-up costs.
Support use/discharge fees to promote pollution prevention in the
electroplating industry (in lieu of environmental audits).
Strongly encourage changes in the mil specs to require the use, where
possible, of environmentally safer products and processes in the
electroplating industry.
Modify RCRA to provide incentives for greater reclamation/recycling of
waste treatment residuals and facilitate a move toward zero discharge
facilities.
Investigate further uses of information-based options, such as reporting and
public disclosure requirements. Currently, the Toxic Release Inventory is a
good example. Using this inventory effectively, specific waste stream trends
can be highlighted in a media-specific and/or faculty-specific format Publicly
disclosing facilities with poor release practices and trends could serve to
motivate facilities to improve environmental performance. Enhanced
reporting requirement in the TRI beginning in 1991 (e.g., recycling and
4-B-2
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Appendix 4-B
(continued)
ALL SUGGESTED POLICY OPTIONS
energy recovery) could potentially make this option even more useful.
Another example would be if hazardous waset generators were required to
disclose their waste minimzation plan to the public. Fear of bad publicity
could propel many of the individual generators to improve their waste
minimization practice. The EPA is currently considering this requirement.
4-B-3
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Appendix 4-C
METAL FINISHING INDUSTRY CONTACTS
-------
APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. Frank Altmayer
Scientific Control Laboratories
Mr. Todd Baldwin
Universal Fasteners, Inc. (YKK Corporation)
Environmental Engineer
Mr. Jim Berlow
EPA, Office of Solid Waste, Solid Waste Task Force
Director
Mr. Bill deary
EPA, Office of Water, Engineering & Analysis Div.
Mr. James DeWitt
Connecticut Resource Group, Inc.
President
Mr. Dan Fiorino
EPA, Waste and Chemical Policy Division, OPPE
Director
Mr. Richard Fleet
Light Metals Coloring Company, Inc.
President
Mr. Peter Gallerani
Integrated Technologies, Inc.
President (also Environ. Chair of AESF)
4-C-l
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APPENDIX 4-C
Metal Finishing Industry Contacts
Ms. Teresa Harten
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Mr. James Jacobs
Northwestern Plating Works, Inc.
President
Mr. Robert Kaliszevski
Connecticut Department of Environmental Protection
Permits Assistance Ombudsman
Mr. Ken Kirk
Association of Metropolitan Sewage Agencies (AMSA)
Washington Director
Mr. Mark LaVine
Whyco Chromium Company, Inc.
Environmental Manager
Mr. Jeffrey Lord
Simmonds Precision Aircraft Sytems (BF Goodrich)
Environmental Manager
Mr. David Marsh
Marsh Plating Corporation
President (also President NAMF)
Ms. Melissa Marshall
EPA, Office of Compliance
4-C-2
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APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. B.J. Mason
Mid-Atlantic Finishing, Inc.
President (also President of AESF)
Mr. Richard McCarvill
Pratt & Whitney, United Technologies Corp,
Environmental Project Engineer
Mr. Kevin Mills
Environmental Defense Fund
Mr. Thomas Morgan
Universal Fasteners, Inc. (YKK Corporation)
Finishing Engineer
Mr. David Norwine
Havard Corporation
(also Environmental Chair, NAMF)
Mr. Timothy Oppelt
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Director
Mr. Manik Roy
Environmental Defense Fund
Pollution Prevention Specialist
202-387-3500
Mr. Eric Schaeffer
EPA, Office of Enforcement & Compliance Assurance
Deputy Director, Office of Compliance
202-260-8636
4-C-3
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APPENDIX 4-C
Metal Finishing Industry Contacts
Mr. Paul Shapiro
EPA, Office of Research and Development
Mr- Robert Sizelove
Frederick Gumm Chemical Company
Mr. William Sonntag
National Association of Metal Finishers
Director, Government Relations
Mr. Phillip Stapleton
Stapleton Technologies
President
Mr. Robert Steidel
Hopewell Regional Wastewater Facility
Manager
Mr. David Stephan
EPA, Risk Reduction Engineering Laboratory (Cinn.)
Ms. Sue Troup-Packman
Hughes Research Labs
Ms. Lynn Vendinello
EPA, Office of Compliance
4-C-4
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APPENDIX 4-C
Metal Finishing Industry Contacts
Ms. Ernestine Wagner
Artistic Plating Company, Inc.
Environmental Manager
Mr. Michael Warner
Mid-Atlantic Finishing, Inc.
Environmental Technician
Ms. Brenda Whalen
Enthone-OMI Corporation
Azita Yazdani
Pollution Prevention International
President
Mr. John Zavodjancik
Pratt & Whitney, United Technologies Corp.
Manager, Waste Minimization Programs
4-C-5
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THERMOSET PLASTICS INDUSTRY CHAPTER 5
5.1 INTRODUCTION
Chapter 5 discusses the background information and preliminary findings of the thermoset
plastic resins sector of the Sustainable Industry Project. This introduction outlines the contents of
this chapter. The approach to our analysis, including the scope of the project, an industry profile,
and our information sources are addressed Section 5.2. Section 5.3 presents our findings to date,
including:
(1) Information on economic and environmental characteristics of the industry,
(2) Descriptions of key factors that influence environmental and economic
performance in this industry (drivers and barriers); and
(3) A list of key policy options that might enhance the drivers and reduce the
barriers to improved, more cost-effective environmental performance by
thermoset resin manufacturers.
5.2 APPROACH TO ANALYSIS
5.2.1 Scope
The present study examined the manufacture of a subset of thermoset resins (polyurethanes
and epoxies) and composites and their subsequent use in manufacturing thermoset plastic products.
These activities fall primarily within Standard Industrial Classification (SIC) codes 2821 and 308, as
defined in the 1987 Census of Manufactures:
5-1
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SIC 2821: Establishments primarily engaged in producing synthetic resins,
plastics materials, and non-vulcanizable elastomers.1
SIC 308: Establishments primarily engaged in manufacturing plastic products from
purchased resins or resins produced in the same plant.2
The study team selected the thermoset subsector in order to explore a particular segment
of the plastics industry in more detail than would be possible in a study of the entire industry.
Nevertheless, we have highlighted general industry characteristics in order to provide context for the
more specific focus on thermosets. The selection of thermosets was influenced by the following
factors:
o A decision to emphasize "upstream" resin manufacturing processes and
procedures, instead of "downstream" recycling issues which have already
received a great deal of attention.
o A desire to involve smaller manufacturers that have more limited resources
for undertaking proactive pollution prevention actions of the type pursued
by the larger firms in the industry.
522. Overview of Industry
Exhibit 5.2-1 schematically depicts how, from a materials-flow perspective, the plastics
industry converts basic hydrocarbon feedstocks into a larger variety of monomer and polymer
intermediates, which are then used to produce an extremely diverse group of plastic products. Resin
manufacturers play a central role in this sequence by converting monomers, produced by chemical
manufacturers, into polymers. Compounders (or foimulators) mix in additives to achieve a desired
set of properties. Additives include: fillers that reduce unit cost while adding bulk; and materials
that provide color, increased flame retardance, UV stability, specific rheological characteristics, and
other properties desired for downstream processing. Resins are compounded by manufacturers (SIC
2821) in vertically integrated firms, by independent compounders (SIC 3087), and by manufacturers
at the point of product formulation. Following compounding, plastics manufacturers (or processors)
convert the resins into an almost countless spectrum of products, including such items as packaging
materials, vehicle dashboards, boat hulls, an high tolerance engine components. These products are
manufactured by firms in SIC 308, as well as other industry SIC codes (e.g., SIC 3523, SIC 3792, SIC
3995).
1 An elastomer, as defined by Patty's Industrial Hygiene and Toxicology (Volume He), is a
substance in "bale, crumb, powder, latex, and other crude forms that can be vulcanized or similarly
processed into materials that can be stretched at 68 degrees Fahrenheit to at least twice their
original length and after having been stretched and the stress removed, return with force to
approximately their original length."
2 SIC 308 comprises SIC codes 3081-3089. As defined by the 1987 Census of Manufactures
Industry Series, these SIC codes include: Industry 3081, Unsupported Plastics Film and Sheet;
Industry 3082, Unsupported Plastics Profile Shapes; Industry 3083, Laminated Plastic Plate, Sheet,
and Profile Shapes; Industry 3084, Plastic Pipe; Industry 3085, Plastic Bottles; Industry 3086, Plastic
Foam Products; Industry 3087, Custom Compounding of Purchased Plastics Resins; Industry 3088,
Plastics Plumbing Fixtures; and Industry 3089, Plastics Products N.E.C.
5-2
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Exhibit 52-1
PLASTIC INPUTS AND PRODUCTS
Petroleum,
Natural Gas,
&Coal
additives
Thermoplastics Thermosets
(90% of production) (10% of production)
5-3
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Resins produced by SIC 2821 firms fall into two categories: thermosets and thermoplastics.
The characteristics of these two resin types are as follows:
1. Thermosets: These resins are cured, set, or hardened into a permanent
shape through an irreversible chemical reaction known as "cross linking."
The cross linking that occurs in the curing reaction is brought about by the
linking of atoms between or across two linear polymers, forming a "rigidized"
three-dimensional molecular network that cannot be softened without
decomposing this network. As a result, thermosets can be recycled only
through processes such as pyrolysis, which break polymers into their basic
hydrocarbon components. Thermosets have excellent electrical properties,
are stable under extreme chemical and temperature exposure, and frequently
are used in building, construction, and transportation materials. Of the 480
establishments that manufacture plastic resins, 130 (27 percent) primarily
produce thermosets.3
2. Thermoplastics: These resins are characterized by their formation process,
known as addition polymerization, which creates a linear molecular structure.
This structure allows thermoplastics to be re-softened or remelted at high
temperatures without damage to the polymer. As a result, thermoplastics can
be recycled with relative ease. Thermoplastics accounted for approximately
90 percent (by weight) of 1990 U.S. plastics production. Forty-two percent
(203 establishments) of the total firms in SIC 2821 primarily produce
thermoplastics.4 Thermoplastic resins include both commodity resins (e.g.,
polyethylenes) and lower volume, higher priced specialty plastic products.
While most resins exclusively fall into one of these two categories, a particular resin can
belong to more than one classification depending on how it is blended, catalyzed, or cured.
Potyurethane, for example, can be either a thermoset or a thermoplastic. Likewise, composites can
be manufactured from either thermosets or thermoplastics.5 Also, a recent market trend involves
mixing thermoset resins with thermoplastics to either increase the performance of less expensive
resins or reduce the cost of specialty products.
3 1987 Census of Manufactures. Plastics Materials. Synthetic Rubber, and Manmade Fibers.
Percentage of thermoset resin manufacturing facilities represents only those firms where the primary
SIC code is representative of thermosets (SIC 28214).
4 1987 Census of Manufactures. Plastics Materials. Synthetic Rubber, and Manmade Fibers.
Percentage of thermoplastic resin manufacturing facilities represents only those firms where the
primary SIC code is representative of thermoplastics (SIC 28213).
5 Composites, or reinforced plastics, consist of a reinforcing fiber (e.g., glass, aramid, carbon,
graphite, or boron) and a plastic resin. The major plastic resin systems used are unsaturated
polyester, epoxies, silicons, vinyl esters, and various thermoplastic resins. Composites are valued for
their ability to be molded in large, complex structural shapes; their use in achieving parts
consolidation; and because of their high strength-to-weight ratios.
5-4
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5.23 Information Gathering and Panel Meetings
In order to better understand the thermoset resin industry and identify current drivers and
barriers to sustainable operating and decision-making processes, we conducted an extensive series
of discussions with trade groups and resin manufacturers.6 These discussions included:
o Numerous telephone conversations and conference calls;
o A plant tour of Allied Signal, Green Island, NY;
o Three panel meetings in 1994 in Washington, D.C - January 11, March 10
and March 15; and
o Smaller meetings with industry trade groups (e.g., The Society of the Plastics
Industry (SPI) and the Chemical Manufacturers Association (CMA)) and
focus on subgroups of the thermoset industry (e.g., epoxies, polyurethanes,
and composites).
In addition, we discussed the project and on-going developments with representatives of
environmental groups (e.g., the Environmental Defense Fund and the National Wildlife Federation)
and other non-governmental organizations (NGOs). The third panel meeting included
representatives from the EPA's program offices: the Office of Pollution Prevention and Toxics
(OPPT), the Office of Emergency and Remedial Response (OERR), and the Office of Air Quality
Planning and Standards (OAQPS).7 In Phase 2 of this project, we will continue to gather feedback
from non-industry stakeholders and appropriate EPA program and policy offices.
Our discussions with industry focused on resin production, compounding, and manufacturing
by large and small producers. While our attention has been confined to thermosets, we expect that
the policies and issues discussed in this chapter will in many respects pertain to thermoplastics as
well.
53 MAJOR FINDINGS
The thermoset industry comprises a broad range of firms in terms of size, level of
sophistication, and manufacturing techniques. For instance, one firm may produce large batches of
commodity resins, while another might manufacture specialized composite panels for architectural
and construction applications. This section serves to characterize the context within which these
diverse firms operate and compete by providing general economic and environmental information
on the plastics industry as a whole (SIC codes 2821 and 308), and information specific to the
thermoset resins segment of the industry where available.
6 For a complete list of contacts, refer to Appendix 5-C
7 For a complete list of panel participants, see Appendix 5-D.
5-5
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While reviewing this section, it is important to remember that the information provided is
based on SIC code designations, which has limitations. Thermoset operations contained within firms
primarily engaged in other manufacturing operations - SIC categories not discussed here are
subsumed by that other SIC code; data on these captive operations usually cannot be extracted.
Industry representatives stress this as a significant issue. Conversely, though likely less of a problem,
some operations unrelated to thermoset operations may be included within data for that SIC code,
because they are a small part of a firm which is predominantly a thermoset manufacturer. Thus,
while the Census of Manufactures SIC code-based information may be consistent and comparable,
its limitations in regard to this industry should be considered when analyzing the data.
53.1 Industry Characteristics
Sales of thermoset resins compared to thermoplastics - are shown for 1992 in Exhibit
5.3-1. Sales are broken out by major market area, highlighting other industries that may contain
captive thermoset formulators. Overall, thermosets occupy approximately 10 percent of the total
market, in terms of quantity.
Exhibit 53-1
THERMOSET AND THERMOPLASTIC SALES BY MAJOR MARKET 1992
(Millions of Pounds, Dry Weight)
Major Market
Transportation
Packaging
Building and Construction
Electrical/Electronic
Furniture and Furnishings
Consumer and Institutional
Products
Industrial/Machinery
Adhesive/Inks/Coatings
All Other
Exports
Total
Total Thermosets*
Quantity
364.9
52.7
4,259.3
182.7
178.8
189.7
443
558.1
311.0
1773
6319.2
Percent
5.9
0.8
67.4
2.9
2.8
3.0
0.7
8.8
4.9
2.8
100.0
Total Thermoplastics*
Quantity
2,452.1
18,230.9
7,6172
2,582.9
2379.8
5,9033
572.1
1,164.9
6366.4
6,772.2
54,242.0
Percent
43
33.6
14.0
4.8
4.4
10.9
1.1
2.1
12.1
123
100.0
* Does not include polyurethane resins.
Source: SPI 1993.
5-6
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A large number of downstream users of thermoset plastics may mix or compound resins on
site as part of their manufacture of thermoset components or products. For example, a boat yard
may buy resins that they mix on site in the process of building or patching a boat hull. These
manufacturers of thermoset products fall either into SIC 308 or into a host of SIC categories
determined by the manufacturing entity within which the thermoset component is subsumed. In a
similar fashion, resin compounders, or formulators, who work exclusively with a particular industry
may consider themselves part of that industry for SIC identification purposes. Industries outside of
the plastics industry that often contain plastic processing facilities are medical instruments and
supplies, electronic components, metal working machinery, toys and sporting goods, and motor
vehicles (Rauch 1990). While it is beyond the scope of this analysis to elaborate on each of these
industries, it is important to note their ties to thermoset resins.
Exhibit 5.3-2 highlights the major production steps from plastic monomers to compounded
resins, and indicates the different SIC codes that apply to firms that are the principal focus of this
study.8
Exhibit 53-2
THERMOSET PLASTICS INDUSTRY
Chemical
Manufacturers
SIC 281. 286
Resin
Manufacturers
SIC 2821
480 establishments
Compounders
SIC 3087
405 establishments
Finished Plastic
Products
SIC 308
(except 3087)
11.639 estabfohmer
Note: SIP's Thermoset Plastics Industry Study primarily focuses on firms (classified by SIC coda)
contained within the dashed line.
8 As industry members have pointed out and as previously addressed, SIC codes represent an
oversimplified picture of the industry. In practice, a fair amount of overlap occurs between SIC
codes and many firms fall into more than one classification.
5-7
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Thermoset Resin Manufacture
According to the 1987 Census of Manufactures survey, 130 of the 480 firms in SIC 2821 (27
percent) are dedicated thermoset resin manufacturers. These firms employ 11,300 people, of which
6,800 (60.2 percent) are production workers. On average, thermoset resin manufacturing facilities,
with 87 employees per establishment, are smaller than their thermoplastic counterparts, which have
an average of 211 employees. Likewise, on average, the value of thermoset shipments per firm
($31.3 million) is significantly less than the value of shipments for thermoplastic producers ($106.2
million). This is logical considering that thermoplastic material inputs are more expensive (by a
factor of more than three) on a per firm basis (DOC 1990). Cost of materials includes direct
charges paid or put into production during the year, such as freight charges and fuel costs.
Exhibit 53-3
THERMOSET EMPLOYMENT REIATTVE TO THERMOPLASTICS
Plastic Materials & Resins -
SIC 2821
Thermosets - SIC 28214
Thermoplastics - SIC 28213
Number of
Establishments
480
130
203
Total Number of
Employees
(1,000)
563
113
42.8
Total Number of
Production Workers
(1,000)
34.9
6.8
26.8
Source: DOC 1990.
Exhibit 53-4
THERMOSET VALUE ADDED, COST OF MATERIALS, AND VALUE OF SHIPMENTS
RELATIVE TO THERMOPLASTICS
Plastic Materials & Resins -
SIC 2821
Thermosets - SIC 28214
Thermoplastics - SIC 28213
Value Added by
Manufacture
(minion dollars)
10,873
1,547
9,083
Cost of Materials
(million dollars)
15,410
2,529
12^00
Value of Shipments
(mfllion dollars)
26,246
4,072
21,551
Source: DOC 1990.
5-8
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We were able to obtain limited information on environmental issues specific to thermoset
resin production. To a certain extent, this is because resin producers of all types -- thermoset and
thermoplastic -- face similar challenges since basic feedstock chemicals and production processes are
used universally. In fact, firm size and availability of capital are likely to be larger determinants of
a company's environmental proactiveness than the type of resin being manufactured. The following
section contains a discussion of environmental issues relevant to SIC 2821 as a whole, including both
thermosets and thermoplastics.
All Plastics Resin Manufacture
Economic
Substantial research and development investments by plastic materials manufacturers and
an intensely competitive market for resins based on price and value-added characteristics have
resulted in dynamic growth for the plastic resins sector. For the plastics industry as a whole, physical
output of plastics has grown at about 8.3 percent annually since 1960. Between 1980 and 1990, the
annual average growth rate slowed to 5.2 percent, but has remained healthy in comparison to other
manufacturing industries (Rauch 1991).
With 1992 industry shipments valued at $32.7 billion, the plastic materials and resins sector
(SIC 2821) is the fifteenth largest manufacturing industry in the U.S. (SPI 1993). In general, the
plastics industry can be characterized as pro-cyclical, with average annual growth rates greater than
real GNP. Future sales are dependent upon the strength of the economy especially the housing,
automobile, appliance, and durable goods sectors - as well as the ability of plastics to make further
inroads into other material markets. The price elasticity of demand for plastics in general is very
high because substitution for other materials, such as wood, metal, and glass, is primarily a function
of price and performance factors.
Industry Concentration and Finn Size
According to data contained in the latest (1987) Census of Manufactures report, the plastic
materials and resins sector is not heavily concentrated; the largest four manufacturers account for
20 percent of value of shipments. By comparison, in the concentrated industries of tobacco products
and motor vehicle manufacturers, the four largest companies make up 82 percent and 90 percent
of the value of shipments, respectively.
As illustrated in Exhibit 53-5, the Census of Manufacturers reports that among 480 facilities
in SIC 2821, 75 percent have fewer than 100 employees and a 33 percent have fewer than 20
employees. At the other end of the spectrum, six establishments employed more than 1,000 persons.
Thus, while most operations appear to be small scale, a handful of mega-producers exist.
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Exhibit 53-5
BREAKDOWN OF PLASTICS INDUSTRY BY NUMBER OF EMPLOYEES
SIC Code
2821
Total*
Establishments
480
Percent
establishments
with
1-4 employees
13.5
Percent
establishments
with
<20 employees
333
Percent
establishments
with
<100
employees
74.8
Percent
establishments
with
>100
employees
25.2
Source: DOC 1990.
The data suggest that a large number of small producers manufacture specialty resins for
particular end-uses. Their business is price sensitive and buyer-driven, and barriers to entry are not
capital oriented. On the other end of the scale are large, vertically integrated resins producers that
manufacture all, or most, of the chemicals and feedstocks required to produce resins. Their business
is both capital- and research and development-intensive, with high barriers to entry. For the most
part, competition takes place within each of these groups, with new competition provided principally
by overseas competitors and new resin developments.
Employment
The entire plastics industry directly employed close to 680,000 people in 1990 - about 2.7
percent of total employment for all manufacturing industries. In 1992, the plastics materials and
resins sector (SIC 2821) employed 61,400 people. Of this total, slightly more than 60 percent are
production workers. Both the total number of workers and the number of production workers has
fallen by five to six thousand since 1989, suggesting that recessionary demand has resulted in lower
production, while research and development, and sales activities have continued to operate at pre-
recessionary levels.
International Trade, and Competition
The United States - the largest producer - contributes about 36 percent of the world supply
of plastic materials. Japan and Germany follow with 16 percent and 9 percent of the global market,
respectively.
Exports of resins more than doubled during the 1980s, increasing $2.7 billion to $5.7 billion
during this time to an estimated $6.7 billion in 1992 (SPI1993). In 1991,25 percent of U.S. exports
went to Canada and Mexico, 24 percent went to East Asia, and 23 percent went to the European
Community.
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Historically, imports have not been a significant contributor to domestic supply, but the
development of natural gas-based ethylene production infrastructures in Canada and Saudi Arabia
has led to an increase in ethylene derivative imports. Although imports have increased, they
represent only 10 percent of total U.S. domestic consumption, as compared to the 24 percent of U.S.
production that is exported. Future expansions in overseas plastics production capacity are expected
in South Korea and Taiwan (Rauch 1991).
Environment
Plastics pose an environmental challenge on several fronts: solid waste disposal, non-
biodegradability, and toxic emissions and residues from incineration and some manufacturing
operations. Because plastics production processes and disposal techniques are multi-media in
nature, the Clean Air Act (CAA), the Clean Water Act (CWA), the Resource Conservation and
Recovery Act (RCRA), the Toxic Substances Control Act (TSCA), and the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA, or "Superfund") are all
relevant to the industry.
In the last several years, the issues of non-biodegradability and disposal have been the main
topics of debate among industry advocates and environmentalists. Recycling, a popular issue with
environmental groups and consumers alike, has been a money-loser for all but the polyethylene
terephthalate (PET) plastics (Chemical Marketing Reporter, June 28,1993). These are important
and relevant environmental issues; however, we have focused principally on upstream, or
manufacturing related aspects of the thermoset industry during the initial phase of the project.
Larger producers (i.e., those with more than one hundred employees) may desire regulatory
flexibility and the opportunity to use their substantial research and development funds to identify
creative, cost-effective ways to reduce waste in order to lessen their regulatory burden. Smaller
concerns (i.e., those with 20 or fewer employees), however, may be less likely to view certain types
of flexibility as a plus. Since most small firms do not have the R&D resources of their larger
counterparts, flexibility may require time and money that they can ill-afford to spend. It also may
disturb any competitive equilibrium existing prior to the introduction of more flexible, and less
certain, regulations.
While smaller firms may be less interested in flexibility than their larger counterparts, they
are likely to want more guidance and predictability from regulators. With multiple applicable
environmental regulations and limited staff and environmental expertise, these firms want and need
to minimize the amount of time that they spend deciphering and understanding new regulations.
Likewise, small firms are less likely to voluntarily move "beyond compliance" without an incentive
(e.g., adherence to industry best management practices in return for fewer on-site inspections by
regulators). It should be noted that this is a generalization and that there are exceptions to these
industry characterizations.
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Wastestreams
In addition to downstream residues, resin manufacturing generates six common wastestreams,
according to a report for the New Jersey Hazardous Waste Facilities Siting Commission (1987
Environmental Resources Management, Inc.). These wastestreams include:
o process residues;
o excess/off-spec processed materials;
o miscellaneous contaminated materials, process related;
o miscellaneous contaminated materials, other,
o laboratory wastes; and
o air pollution control residues.
Many firms, especially larger ones, have already allocated resources toward waste
minimization. At the simplest level, this may involve retraining personnel, or at a more complex and
costly level, redesigning production processes to reduce or modify inputs, and/or to reuse or recycle
wastes. In determining whether reducing/re-using/recycling result in a net cost reduction to the firm,
the liabilities and regulatory requirements associated with disposal play a large role.
The 23 percent decline between 1988 and 1990 in total Toxic Release Inventory (TRI)
chemical releases for the plastic resin manufacturing sector is indicative of industry waste
minimization efforts.9 In 1990 air releases represented 59 percent of total emissions, followed by
off-site disposal (17 percent) and underground injection (12 percent). In terms of quantity of
effluent, releases to bodies of water (three percent) and transfers to publicly owned treatment works
(POTWs) (seven percent) are less significant.
Pollution Abatement Costs
Pollution abatement costs during 1991 represented 13 percent of total capital expenditures
for SIC code 2821 (Exhibit 53-6). Air pollution control devices represented the largest portion of
pollution abatement capital expenditures for this sector (46.7 percent), while solid waste (both
hazardous and non-hazardous) accounted for the. largest share (42 percent) of operating costs
(Exhibit 5.3-7).
9 To some degree, TRI accounting and reporting changes may have created "paper" emission
and effluent reductions. There have, however, been a series of industry and EPA initiatives that
have produced actual reductions.
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Exhibit 53-6
TOTAL CAPITAL EXPENDITURES AND POLLUTION
ABATEMENT CAPITAL EXPENDITURES 1991
(Million Dollars)
SIC
Code
2821
Total
Capital
Expenditures
1990
2,436.6
Total
Capital
Expenditures
1991
2,251.7
Pollution
Abatement
Capital
Expenditures
1991
292.6
Percent
Air
46.7
Percent
Water
30.9
Percent
Solid
Waste
22.4
Sources: DOC (1991 Survey of Manufacturers; 1991 Pollution Costs and Expenditures).
Exhibit 53-7
TOTAL GROSS ANNUAL OPERATING COSTS FOR
POLLUTION ABATEMENT EQUIPMENT 1991
(Mfflion Dollars)
Total Gross Annual
Pollution Abatement
Operating Costs
Percent
Air
Percent
Water
Percent Solid
Waste
635.9
213
32.9
42.0
Source: DOC (1991 Pollution Costs and Expenditures).
Thennosct Plastic Compounding and Finished Product Manufacturing
The SIC 308 codes are not broken down according to thermoset and thermoplastic
compounding and product manufacture. Since some SIC 308 firms compound and/or manufacture
finished plastic products that are both thermosets and thermoplastics, it is not always possible to
designate facilities according to resin type. In general, we assume that as with SIC 2821 there are
fewer thermoset firms than thermoplastic firms.
The following section contains a discussion of economic and environmental issues relevant
to SIC 308 as a whole, including both thermosets and thermoplastics.
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All Plastics Compounding and Finished Product Manufacturing
Economic
Shipments of compounded plastics and finished products in 1990 were valued at $68.1 billion.
In 1987 dollars, the value of shipments rose steadily from $60.9 billion to $64.6 billion between 1989
and 1992 (up six percent), outpacing the more modest one percent increase in value of shipments
for resin manufacturing (SIC 2821).
Industry Concentration and Firm Size
Like resin manufacturing, the plastics compounding and finished product manufacturing
sector (SIC 308) is not heavily concentrated; according to data contained in the latest (1987) Census
of Manufactures report, the largest four manufacturers account for 15 percent of value of shipments.
The Census of Manufacturers reports that among 12,044 facilities in SIC 308, 87 percent
have fewer than 100 employees and 50 percent have less than 20 employees. Only 11 establishments
employed more than 1,000 persons. Thus, it appears that the range of firm sizes also is similar to
SIC 2821.
Exhibit 53-8
BREAKDOWN OF PLASTICS INDUSTRY BY NUMBER OF EMPLOYEES
SIC Code
308
Total*
12,044
Percent
establishments
with
1-4 employees
20.5
Percent
establishments
with
<20 employees
502
Percent
establishments
with<100
employees
86.9
Percent
establishments
with>100
employees
13.1
Source: DOC 1990.
Employment
In 1992, the compounding and finished plastic products sector (SIC 308) employed 585,000
people. Of this total, nearly 78 percent are production workers.
Between 1989 and 1992 the total number of workers fell two percent, while the number of
production workers dropped 1.3 percent during the same period (SPI 1993). This suggests that
weaker recessionary demand had less of an effect on the compounding and finished plastic products
sector than it had on the resin manufacturing sector. Strong demand for exports may have
cushioned the industry from more of a recessionary slump.
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International Trade
Exports of compounded resins and finished plastic products were $4.7 billion in 1992, up 58
percent from $3.0 billion in 1989, based on strong overseas demand. Imports rose as well during
this period, but less significantly, from $3.5 billion to $4.4 billion (24 percent).
Compared to the resin manufacturing sector (SIC 2821), exports of compounded and finished
plastic products rose by more than twice as much on a percentage basis. Imports, however, rose at
the same pace for both SIC 2821 and SIC 308.
Environment
Total TRI releases for SIC 308 rose by nearly 200 percent between 1988 and 1989, and then
fell by 23 percent between 1989 and 1990. Overall, total TRI releases rose 129 percent between
1988 and 1990.
In 1990, air releases represented 63 percent of total emissions, followed by off-site disposal
(30 percent), and transfers to POTWs (seven percent). Releases to bodies of water, underground
injection (on site), and on-site land disposal were less significant, at less than half of one percent
each.
Pollution Abatement Costs
Pollution abatement costs represented a modest 2.1 percent of total capital expenditures for
SIC 308 during 1991, versus 13 percent for SIC 2821 (Exhibit 53-9). Air pollution control devices
represented the largest portion of pollution abatement capital expenditures (683 percent), while
solid waste (both hazardous and non-hazardous) accounted for the largest share (48.1) of operating
costs (Exhibit 53-10).
Exhibit 53-9
TOTAL CAPITAL EXPENDITURES AND POLLUTION
ABATEMENT CAPITAL EXPENDITURES 1991
(Million Dollars)
SIC
Code
308
Total
Capital
Expenditures
1990
3,200.8
Total
Capital
Expenditures
1991
3,293.3
Pollution
Abatement
Capital
Expenditures
1991
683
Percent
Air
623
Percent
Water
23.0
Percent
Solid
Waste
14.7
Sources: DOC (1991 Survey of Manufacturers, and 1991 Pollution Costs and Expenditures).
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Exhibit 53-10
TOTAL GROSS ANNUAL OPERATING COSTS FOR
POLLUTION ABATEMENT EQUIPMENT 1991
(Million Dollars)
Total Gross Annual
Pollution Abatement
Operating Costs
Percent
Air
Percent
Water
Percent Solid
Waste
3343
29.7
48.1
Source: DOC (1991 Pollution Costs and Expenditures).
53.2 Drivers and Barriers
The following thermoset plastics industry drivers and barriers were developed through
discussions with industry representatives. As discussed in Chapter 2, these factors motivate or
discourage resin manufacturers, compounders, and plastic product manufacturers in their
considerations regarding sustainable industry practices. The policy options that are identified for
the thermoset industry in the next section are designed to reinforce the drivers or mitigate the
barriers.
Significant Drivers
o Product Innovation and Customer Specifications: Product innovation is
driven by customer needs and specifications. Because consumers are
increasingly emphasizing "green products," new products that satisfy
environmental criteria (e.g., recyclability, freedom from consent orders) gain
a competitive edge.
o Environmental Regulations: For many small and medium thermoset plastics
firms, environmental performance is driven by compliance with existing
regulations. Lacking the staff or the expertise to engage in long-range
planning, these operations for the most part modify processes only when such
a change is mandated.
o Public Image: Public image is a key driver in the chemicals/resins industry.
In response to public perception that petrochemical industry operations are
unsafe and have an adverse impact on the environment (i.e., images of Love
Canal, Times Beach, and Bhopal), industry has initiated unilateral, proactive
environmental and safety programs (e.g., the Chemical Manufacturers
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Association's "Responsible Care" program).10 In its continuing effort to
educate the public, the plastics industry recently launched a media campaign
highlighting the benefits and important uses of plastic materials.
Life-Cycle Analysis and Product Stewardship: Emerging concepts of life-
cycle analysis and product stewardship from "cradle to grave" (conceived and
nurtured in Europe) are forcing resin manufacturers to consider ways to
either recycle or reuse their products. Furthermore, purchasers of resins,
who strive to meet public and government recycling demands, are pushing
plastic makers to develop an infrastructure that can collect and recycle or re-
use post-consumer plastics - even thermosets. This driver poses a complex
challenge for the thermoset sector because of the chemical and physical
properties of the resins.
Significant Barriers
Environmental Regulations: Compliance with existing regulations can also act
as a barrier to further innovation. At smaller firms especially, the cost of
compliance (e.g., monitoring, filling out paperwork) can absorb the full effort
of the allotted staff and prevent investment in innovative source reduction
technology. The mentality of many small resin manufacturers is, How can
I survive until the next quarter?, not How can I plan for the future, increase
efficiency, and pollute less? However, regardless of firm size, excessive
compliance procedures and duplicative efforts waste resources that could be
employed more productively elsewhere within the firm.
Regulatory Disincentive for Innovation: Regulation creates another barrier
for firms that might wish to experiment with new, unproven technologies and
move ahead of the regulatory curve, in that complying with all applicable
regulations frequently leaves little room for tradeoffs. For example, if a firm
moves well beyond compliance in one aspect of production, but is unable to
achieve compliance in another, there is little room for negotiation even if
there is a net environmental gain. Instead, the firm may be required to
install the end of pipe controls it was trying to avoid in the first place by
embarking in pollution prevention/sustainability efforts. Such rigidity of
regulation serves as a disincentive to innovation and proactive firm behavior.
Overlapping Federal/State/Local Regulations: Multiple, overlapping, and
sometimes conflicting regulations at the federal, state, and local levels pose
a significant burden for this industry. Even within a single state, operations
can be complex (e.g., California's 34 different air quality districts). On the
federal level, the interaction between statutes (e.g., the CAA and CERCLA)
10 Smaller firms that are privately owned and do business with a limited number of customers
may be somewhat less affected by public opinion, but still must answer to the community in which
they operate, and to their employees.
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can trigger new restrictions on industry with little warning and limited
explanation. Keeping up with multiple federal/state/local requirements and
the interactions between federal statutes takes time and resources.
Pre-Manufacturing Notice Process: The Pre-Manufacturing Notice (PMN)
process causes delays in the commercialization of safer, cleaner chemical
inputs to thermoset plastic production. The already risky R&D process is
complicated by having to deal with a PMN process that is time intensive and
uncertain in outcome. If a substance fails the PMN test, then virtually all of
the sponsor firm's investment is lost. If a chemical does satisfy the PMN
criteria, it may still be subject to a TSCA Section 5(e) consent order, which
requires certain restrictive actions by users of the substance. This may create
a competitive disadvantage for the new substance because it is subject to
more use restrictions than older, currently used (and perhaps less
environmentally safe) compounds.
533 Possible Policy Options
Two sets of panel meetings were held to address the issues, barriers, and drivers specific to
large and small thermoset plastics firms. The meeting with small manufacturers was held on March
10; the large manufacturers' meeting was held on March 15. The discussion at each meeting was
initially framed by a set of criteria EPA formulated to guide the selection of policy issues. These
criteria are summarized in Exhibit 53-11. Each panel added criteria that addressed their specific
concerns.
Exhibit 53-11
EPA CRITERIA FOR IDENTIFYING POLICY ISSUES
Criteria
Cleaner
Cheaper
Smarter
Do-able
Long-term Effects
Definition
Promote compliance and commitment to continuous
improvement across industry.
Reduce compliance costs, identify cost-effective
approaches, enable firms to redirect resources to the
most beneficial uses.
Promote eco-efficiency through flexibility, certainty,
consistency, simplicity, and sound science. Reward
firms that perform well. Help firms that need help.
Enforce against firms that cause environmental harm.
Eliminate options that are impossible not those that
have promise but may face obstacles.
Promote long-term cultural change, not short-term
fixes.
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Small Business
The small business panel meeting primarily included representatives from industrial firms
manufacturing plastic products. These firms are classified in SIC 308, or in the SIC sector
corresponding to the manufactured product employing thermoset resins as one or more of the
inputs, e.g., boat manufacturing (SIC 3732). In addition, other participants in the March 10 meeting
included representatives from the Society of the Plastics Industries, the Composites Fabricators
Association, the Small Business Administration, and EPA's Small Business Ombudsman's office.
All attendees are identified in Appendix 5-D.
The small business panel participants added the following three criteria to those listed in
Exhibit 5.3-11:
o Enhance businesses' ability to compete in a changing marketplace (i.e.,
"survivability");
o Better define EPA's mission statement and encourage outreach and service
by the Agency; and
o Provide consistent guidance to the regulated community.
Using the selection criteria, the small business panel members identified more than 20 policy
options that they feel would enable the thermoset industry to achieve better economic and
environmental performance. After further discussion, the panel members selected the ten best
candidates, including five policy options that they give highest priority.
Top Five Policy Options:
o Evaluate potential for Best Management Practices (BMP)-based regulations
incorporating provisions such as CMA's "Responsible Care." Complying
BMP subscribers would receive a negotiated amount of regulatory rek'ef as
incentive to continually move beyond compliance.
o Promulgate National Emissions Standards for Hazardous Air Pollutants
(NESHAP). This could be accomplished by re-funding development of
NESHAPs, or by orchestrating an industry/EPA cooperative effort to
determine interim Maximum Achievable Control Technology (MACT)
standards.
o Establish systematic process to review reasonableness of paperwork fines.
Assess the need for paperwork fines (versus risk-based fines) and seek
alternatives to paperwork that encourage compliance without placing a drain
on limited firm resources. (This priority could be linked to BMP-based
regulations.)
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Allow for in-piant treatment of "non-product output" without a Treatment
Storage, and Disposal Facility (TSDF) designation. This proposal would
allow resin and product producers to combine waste materials using their
standard manufacturing techniques to render wastes inert.
Expand polymer PMN exemption to cover pre-polymers so that resin
manufacturers and compounders could pre-mix monomers to form safer,
more stable intermediaries. The PMN process is presently too lengthy and
too costly for most small and medium-sized firms.
Other Recommended Policy Options:
o Consider exemptions from Local Emergency Planning Committee (LEPC)
and TRI reporting based on facility-specific demonstration of de minimis
emissions, in order to reduce the reporting/paperwork burden on the smallest
firms.
o Invoke federal preemption except in special cases. This proposal seeks to
eliminate the discrepancies between federal, state, and local regulations.
o Establish EPA "Green Teams" for technology assistance to small and medium
sized businesses (as in the "OSHA Services" model). State/local Green
Teams would be distinct from enforcement and would be designed to serve
the regulated community, as well as educate environmental agency staff
about industry problems and concerns.
o Promote realistic risk assessment based on "sound science" and consider
cost/benefit implications of regulatory decisions.
o Communicate rule-making information in "plain english." Currently, trade
associations translate regulations from legal and technical jargon to plain
english for their members. However, trade associations only cover a
percentage of the industry, leaving many small firms to either decipher the
new rules, or ignore them.
Large Business
The March 15 panel primarily consisted of representatives from large thermoset resin
manufacturers, categorized in SIC 2821. In addition, representatives from The Society of the
Plastics Industries, the Composites Fabrications Association, and several EPA program offices also
participated in this meeting. All attendees are identified in Appendix 5-D. The panelists augmented
the selection criteria in Exhibit 5.3-11 by adding the following eight criteria:
o Emphasize getting products to market;
o Cut through red tape and make a difference;
o Build an EPA/industry partnership;
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o Provide significance and relevance;
o Satisfy all stakeholders;
o Enhance the service orientation of EPA;
o Provide consistent guidance to the regulated community; and
o Demonstrate EPA commitment to the sustainable industry/partnership
approach to regulation.
Having agreed upon selection criteria, the large business panel reviewed the policy options
suggested by the small business panel, and identified additional candidate policies. From among
these candidates, the panel identified 13 policy options they recommend, including five on which
they place highest priority. All candidate policy options identified by the two panels are listed in
Appendix 5-B.11 The top 13 candidates identified by the large business panel are as follows:
Top Five Policy Options:
o Study impact of 5(e) designation on product development and marketing, and
determine viable alternatives to 5(e) stigma. The 5(e) consent orders have
a negative affect on the marketability of new chemical substances, and are
time consuming from the Agency's perspective.
o Involve stakeholders in the standard-setting process at the earliest possible
stage. Often industry is invited to participate in the regulatory dialogue after
standard-setting has begun. Earlier participation by industry might provide
EPA with better insights into risk, exposure, manufacturing methods, and
alternatives to standard end-of-pipe prescriptions.
o Allow for in-plant treatment of "non-product output" without TSDF
designation. (See description of this issue in notes on the small business
meeting.)
o Establish systematic process to review reasonableness of paperwork fines.
(See description of this issue in notes on the small business meeting.)
o Communicate rulemaking information in "plain english" and focus on
dissemination to small businesses. (See description of this issue in notes on
the small business meeting.)
11 The potential policy options identified by the small and large firm panel members represent
an initial set of candidates. These candidates will be subjected to review and potential revision by
industry, EPA, and other stakeholders during the second phase of the Sustainable Industry Project.
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Other Recommended Policy Options:
o Provide a clearer explanation of new chemical evaluation criteria. This would
enable industry to better understand which new chemicals would have little
or no chance of passing EPA's screen, and would save firms the trouble and
cost of developing and/or testing these "high risk" substances.
o Coordinate international registration and review of new chemicals. By
allowing firms to complete a single registration process for all markets for a
new chemical, the cost and effort of this process would be significantly
reduced.
o Reward proactive behavior and establish forgiveness provisions for firms that
undertake innovative pollution prevention strategies. This would encourage
firms to take the risks frequently involved in developing new, improved
control technologies and methods of pollution prevention by allowing for tax
breaks, extended compliance schedules, and relaxed fines if firms meet
appropriate EPA criteria.
o Consider potential for BMP-based regulations. (See description of this issue
in notes on the small business meeting.)
o Consider TRI reporting exemptions based on facility-specific demonstration
of de minimis emissions. (See description of this issue in notes on the small
business meeting.)
o Place greater emphasis on EPA technical assistance to state environmental
regulatory agencies, in order to facilitate outreach where it is most needed
and most likely to be used.
o Coordinate uniformity among state reporting forms to the extent possible.
Such a proposal might make sense when a cluster of states have similar
environmental regulations and reporting requirements to begin with. For
example, it may not be possible to reduce all 50 states to a single form, but
it may be possible to consolidate to 10 -15 different versions.
o Extend coverage provided by TSCA testing consent orders to all parties -
not just those who use the substance at the time of testing. This would
ensure that when it is necessary to write a consent order for a new chemical,
all users of that substance going forward would be forced to comply with the
order, and reimburse the sponsoring company(s) for the cost of PMN
submission and testing.
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53.4 High Priority Policy Options
The top five industry priorities from each of the large and small business panel meetings,
when combined, result in eight candidate policy options. This section provides additional detail on
each of these high priority policy options and shows how they are related to the thermoset drivers
and barriers discussed earlier.
BMP-Based Regulations
Under this proposal, resin manufacturers, EPA, and other stakeholders would define best
management practices for each of the major resin types or production processes, subject to approval
by EPA and other stakeholders. These BMPs would describe principles, processes, and procedures,
not specific technologies. In return, resin manufacturers, compounders, and product manufacturers
that subscribe to the approved BMP would be eligible to receive a negotiated amount of regulatory
relief. In order for BMPs to be effective they would need to combine the Agency's need for
documented proof of results, with industry's desire for less cumbersome and repetitive reporting and
paperwork.
BMP-based regulations have the potential to address the following drivers and barriers for
the thermoset plastics industry:
Product Innovation and Customer Specifications (Driver): An important advantage
of BMP would be the evolving nature of the specified practices as additional
information is gained regarding risks and new technological approaches are
developed. The BMP could be developed in such a way to provide an incentive for
product innovation that generates more environmentally friendly products or
manufacturing practices.
Life-Cycle Analysis and Product Stewardship (Driver): Life-cycle analysis and
product stewardship would be important components of developing BMP within a
sustainable industry framework.
Environmental Regulations (Driver): Small and medium size manufacturers would
benefit from clear specification of management practices that conform to acceptable
environmental performance. Industry trade and professional organizations would be
able to provide more focused technical support to manufacturers that have limited
internal technical resources.
Public Image (Driver): The public would be reassured by clear definition of the
management practices being applied by complying firms. Concerns regarding safety
could be addressed within the process for specifying and reviewing the BMP.
Environmental Regulations (Barrier): The evolving nature of BMP would enable
both continuous improvement in environmental performance and adjustment to
eliminate non-productive elements of the BMP. It would also potentially provide an
opportunity for some degree of regulatory relief for BMP-certified facilities.
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Regulatory Disincentive for Innovation (Barrier): The evolving nature of BMP
would provide flexibility to assess innovative technologies in terms of their multi-
media life-cycle implications.
Overlapping Federal/State/Local Regulations (Barrier): Development of BMPs that
are widely accepted within the technical, regulatory, and environmental communities
would provide a basis for minimizing divergent regulations at the federal/state/local
levels.
Unlike negotiated rulemakings (or "reg-negs"), where stakeholders debate a certain level of
performance, BMP would seek to map out ways for resin manufacturers to continually manage and
improve their performance, incorporating both environmental and economic goals. BMP was
described by one member of the discussion as a "Irving and on-going process," as opposed to a fixed
set of standards.
Trade organizations might play a significant role in developing BMPs and educating the
various industry sub-sectors - especially those industries where most manufacturers or compounders
are small businesses. One possible approach could involve a modification of the Chemical
Manufacturers Association's "Responsible Care" program. Under Responsible Care, CMA members
pledge to manage their businesses according to 106 expected management practices in the following
areas: pollution prevention, community awareness and emergency response, process safety,
distribution, employee health and safety, and product stewardship. EPA would need to implement
a system for reliably verifying that the stated practices were in place and the necessary management
systems were operational. Verification might also involve the establishment of a Community
Advisory Panel for each site.12
Under the BMP scenario, facilities that are certified as in compliance with the program
would be eligible for regulatory relief and other privileges that would not require statutory changes.
For instance, firms might not be subject to targeted inspections, and a more direct framework for
resolving compliance/complaint issues might be established. Paperwork requirements might also be
reduced in instances where BMP provides assurance that the facility is seeking full compliance, as
opposed to monitoring requirements which focus on a facility's non-compliance.
The following example was put forth to illustrate the type of changes that could benefit both
the regulated community and EPA:
Under the Boilers and Industrial Furnaces (BIF) rule, when unloading a tank truck
that is directly hooked up to a boiler, the operator is required to walk the line each
hour if the line is not double walled. Thus, if a leak develops one minute after the
walk, it could continue for 59 minutes unchecked. An alternative that would seek
to assure compliance versus measuring non-compliance (i.e., checking to see if the
a This scenario was provided by Fred Moore, Assistant Director, Environment of Union Carbide
and member of CMA's Pollution Prevention Task Force, in a letter to Jerry Newsome, EPA/OPPE,
March 15,1994.
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operator checked off the check sheet) might require the implementation of a
maintenance test and inspection program that would drastically reduce the likelihood
that a leak would ever occur.13
In conjunction with the BMP approach, EPA might establish an office of technical support
for regulatory interpretation and implementation (e.g., Washington State's "WISHA" program). This
office would clarify regulatory issues and recommend compliance and pollution prevention
alternatives without involving EPA enforcement officials, so long as non-compliance issues are
resolved on a timely basis, and there is no imminent hazard.
Another example of industry/stakeholder cooperation and consensus is the Memorandum
of Understanding (MOU) recently signed with EPA by Dow, Shell, and Ciba-Geigy. While this
agreement is limited to the three largest epoxy resin manufacturers, it covers 95 percent of domestic
epoxy resin production, and serves as an example of how Agency/industry teamwork can result in
benefits for both manufacturers and EPA.
The development of thermoset resin BMPs for the different industry sectors would be a long-
term process with risks for industry and the Agency. If successful, however, a BMP-based regulatory
system might help industry move toward a more flexible, efficient means of complying with
environmental standards. From the Agency's perspective, this quasi-regulatory approach could give
firms the flexibility to move beyond compliance while using limited resources more effectively.
In-Plant Treatment of Non-Product Output
This proposal addresses on-site treatment of thermoset resin non-product outputs (NPO).
Much of the NPO from thermoset facilities consists of reactive materials that could be stabilized
prior to disposal or incineration using the same technologies and processes as those used to
manufacture thermoset resin products. In doing this, manufacturers could render significant
portions of the NPO inert, making it acceptable for disposal in municipal landfills or conversion to
functional items. Currently, manufacturers are not allowed to treat (or combine) these feedstocks
without a Treatment, Storage, and Disposal Facility permit, which is prohibitively expensive for small
and medium size resin manufacturers.
Since manufacturers are not allowed to in-plant treat NPO materials, the untreated wastes
are currently considered hazardous and must be disposed of following RCRA guidelines. This is
expensive and requires that reactive substances be transported to and from approved TSDFs.
Furthermore, the NPO is eventually either landfilled, where it may leach into soil and groundwater,
or incinerated; in either case, it may do more damage than if it had been neutralized on-site.
Allowing in-plant treatment of NPO without TSDF designation would address the following
drivers and barriers:
"Ibid.
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Life-Cycle Analysis and Product Stewardship (Driver): This option facilitates
product stewardship through minimization of risk and waste. Allowing in-plant
treatment of NPO that is not recyclable or reusable could enable small and medium
size firms to dispose of waste in an inert and benign form. Through consideration
of factors relevant to how this waste should be transported (e.g., risk of accident or
spill) and disposed of (e.g., leaching and long-term stability), this proposal would
allow manufacturers to consider the post-disposal -- or downstream life-cycle -
impact of waste NPO.
Environmental Regulations (Barrier): Since small and medium size firms do not
have the staff, time, or financial resources to apply for TSDF permits that would
allow them to treat in-plant NPO, they continue to dispose of this waste in a
hazardous, unreacted form. This is not only environmentally unsound, but it is
expensive as well. This proposal would enable firms to avoid hazardous waste
compliance and/or disposal costs by rendering these substances inert prior to
transport and disposal.
If on-site treatment were permissible, two issues would need to be addressed: concerns
regarding sham recycling, and maintaining the economic incentive to reduce waste. Related research
would analyze the current status of the existing applicable treatment exemption for labs and small
quantity generators under RCRA. It appears that not all states have adopted this exemption.
Expansion of Polymer PMN Exemptions to Cover Pre-Polymers
In the intermediate stages of creating a plastic resin, monomers are mixed together to form
pre-polymers (e.g., MonomerA and MonomerB are combined to form PrepolymerAB). While
polymers are presently covered by a PMN exemption, pre-polymers are not This means that
although the inputs are the same and the molecular weight (and, typically, stability) have increased
through the creation of the pre-polymer intermediary, the pre-polymer is subject to PMN review.
The PMN process is costly and lasts a minimum of 90 days. For these reasons, most firms -
- especially smaller firms - are reluctant to pre-mix monomers, even though the pre-polymer mix
may be a superior ingredient for certain customer or equipment specifications. It may also be less
volatile and less skin sensitizing. However, because most firms exceed the low volume exemption
clause, they would not be able to pre-mix without PMN approval. Lacking this, they are restricted
in how they make their product.
Expanding the polymer PMN process to cover pre-polymers would address the following
drivers and barriers:
Product Innovation and Customer Specifications (Driver): Through inclusion of pre-
polymers in the polymer PMN exemption, small and medium size businesses that
cannot afford to go through the expensive, time-consuming PMN process would be
allowed to create pre-polymer compounds that are possibly safer and more
efficacious than the current monomer options.
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Regulatory Disincentive for Innovation (Barrier): The time and expense associated
with the new chemical PMN process inhibits small and medium-size firms from
developing pre-polymers that might be safer and more stable than the monomer
inputs. This is both a barrier to safety and innovation.
Pre-Manufacturing Notice Process (Barrier): Examination of whether pre-polymers
should be granted a Section 5 exemption review would contribute to the overall
assessment of the PMN process and its affect on firms that manufacture and mix
resins.
The present system for evaluating new chemicals under the PMN process does not consider
comparative risk. It is possible that consideration of pre-polymer exemptions could include
information of the relative toxicity or the monomer and pre-polymer inputs. For example, if pre-
polymerAB were less toxic than monomerA and/or monomerB then it would be approved in a timely
and less costly manner.
The Office of Pollution Prevention and Toxics (OPPT) has expressed a willingness to
consider changes to the rules governing implementation of Section 5 of the Toxics Substance
Control Act. One possibility is that a working sub-group within the Sustainable Industry Project's
thennoset plastics group could advise and work with OPPT on proposed changes to the PMN rules
to incorporate changes like the pre-polymer exemption. In the short run, a proposed change to the
small volume exemption may somewhat alleviate the pre-polymer problem.14
Impact of 5fc) Designation on Product Development and Marketing
EPA processes about 2500 Pre-Manufacturing Notices (PMNs) each year." Of this annual
total, the Agency writes 40 to 50 5(e) consent orders.16 The 5(e) consent process is both time and
energy intensive from an EPA perspective, and has significant negative marketing implications for
the product so designated.
Examination of the impact of 5(e) designation on product development and marketing has
the potential to address the following barriers:
Regulatory Disincentive for Innovation (Barrier): Examining the impact of 5(e)
consent orders would allow for a better understanding of how this designation may
reduce firm innovation and encourage customers to continue to use chemical
products that are less safe simply because they are "grandfathered" and do not have
5(e)s.
14 The low volume exemption currently stands at 10,000 pounds. According to the panel
discussion on March 10,1994, the ceiling will shortly be raised to 25,000 pounds.
u Paul Campanella, EPA, OPPT, New Chemicals Program. From discussion of TSCA 5(e)
designation and the 'PMN process at SIP Stakeholders' meeting, March 15,1994.
16 Ibid.
5-27
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Pre-Manufacturing Notice Process (Barrier): Addressing industry concerns regarding
5(e) consent orders would be a step toward removing the perceived barrier posed by
the PMN process.
From industry's perspective, the biggest problem lies in the chain of distribution. If the
company that submitted the chemical for review planned to use it only for its own production
processes then it would prefer to work with the Agency to agree on a Significant New Use
Restriction, or SNUR. A SNUR is a generally applicable rule that removes the need for the
manufacturer to take responsibility for its customers' actions. A 5(e) designation, however, means
that (1) the company must take responsibility for the appropriate use of the substance by any
customers and/or downstream users, and (2) any purchaser of this substance is restricted in terms
of use, application, and disposal.
Under this proposal, a necessary level of regulatory oversight would be maintained over the
use of new chemicals, but various types of restrictions and their impact on chemical sales and use
would be considered. As a first step, large resin manufacturers recommend that the Agency study
the effect of 5(e) designations of the sale of chemicals. While EPA may not perceive any difference
in the percentages of 5(e) and non-5(e) chemicals that ultimately advance to market, industry's
experience is that new substances with restrictions attached are inherently disadvantaged.
According to industry, the stigma of a Section 5(e) order significantly diminishes the
commercial potential for a new chemical since, given a choice between a non-5(e) and a 5(e)
substance, most potential customers would rather purchase the compound with the fewest regulatory
restrictions and responsibilities. This has two potential impacts. First, it discourages innovation in
the form of developing and distribution of new chemicals. Second, if the issuance of a Section 5(e)
consent order results in the continued use of an existing chemical that is more toxic than the new
chemical, increased risk to society can result. OPPT is already changing the PMN rules by allowing
companies to skip the Section 5(e) step in some instances, and instead issuing SNURs for new
chemicals. Under this proposal, other alternatives to SNURs and 5(e)s would be discussed and
explored by EPA program representatives, industry representatives, and other stakeholders familiar
with the PMN process.
Involvement of Stakeholders in Standard-Setting Process
Panelists were concerned with the method by which the EPA gathers information about the
industry targeted for regulation. Currently, industry is invited to participate in the regulatory
dialogue after the standard-setting process has begun, instead of before, when the regulated
community might be able to provide insight into risk, exposure, and manufacturing processes, or
suggest more efficient or innovative alternatives to end-of-pipe prescriptions.
Certain restrictions have been imposed upon EPA by the Administrative Procedures Act
(APA). The APA governs the behavior of federal regulatory agencies during these rulemaking
discussions, and stipulates when contact between industry and EPA may and may not occur during
this process. However, the suggestion discussed at the March 15 Stakeholders' Meeting goes beyond
rulemaking procedures and considers the longer-term relationship between EPA and industry.
The barriers and drivers addressed by involving stakeholders throughout the standard-setting
process include the following:
5-28
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Environmental Regulations (Driver): Through industry participation in the
rulemaking process, environmental regulations could be crafted to further enhance
incentives for compliance, and beyond.
Environmental Regulations (Barrier): Early and active participation by industry
members and trade groups would benefit both industry members (e.g., opportunity
for comment; reduction of resources expended to keep up with regulatory efforts;
and enhancement of planning capabilities) and EPA (e.g., better understanding of
industry processes and economics; and potential for industry buy-in). This
interaction is likely to produce effective, well-designed regulation.
Overlapping Federal/State/Local Regulations (Barrier): By improving the
regulatory/industry dialogue and facilitating industry participation in the regulatory
process, there will be an opportunity to discuss overlaps and possible inconsistencies
between federal/state/local, federal/federal, or state/state regulations. If overlap
cannot be eliminated, reporting and/or monitoring efficiencies may be achievable.
By "re-engineering" the traditional relationship between the regulators and the regulated, and
incorporating means of on-going information flow and better understanding of environmental goals
on the one hand, and industry processes and economics on the other, regulatory outcomes might
be more effective and more palatable. This approach involves asking two questions: (1) where are
the disconnects today, and (2) how can a process be designed that encourages the "right" types of
interactions?
This proposal could be approached in several ways:
o Enhancing and encouraging negotiated rulemaking (or "reg-neg") procedures.
This established process brings all stakeholders to the table to determine a
rule that is fair to all parties. Stakeholders who sign off on the reg-neg agree
not to challenge the rule in court.
o Developing BMP-based approach to regulation. This concept would
encourage a great deal of interaction between EPA and the industry. (See
previous discussion of BMP-based regulations.)
o Establishing sector-specific "industry desks" within EPA. For example, a
plastics desk would facilitate the flow of information between industry and
the Agency. This staff person would be able to refer rulemaking bodies
within EPA (e.g., OAQPS) to industry sources, and conversely, would be able
to notify the plastics industry of any opportunities for comment and input.
5-29
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This proposal would reduce the resources expended by industry to keep up with regulatory
efforts, and would instead allow firms, tradegroups, and other stakeholders to be openly and
proactively involved in rule-making. Furthermore, it could enable stakeholders to help rule-makers
craft environmental regulations that offer incentives for environmental improvement.
Process to Review Reasonableness of Paperwork Fines
Facilities are fined for two types of violations: (1) those associated with some increase in risk
(e.g., the release of a toxic substance to the environment in excess of permitted levels), and (2) those
that are in response to missing, or incorrectly filled-out paperwork. Since EPA has limited staff,
paperwork allows the Agency to assess whether or not industry is in compliance with the law. The
fines serve to discourage firms from avoiding this onerous requirement.
Industry asserts, however, that more efficient means of assuring compliance can be identified,
and the existing level of paperwork imposes unreasonably large burdens on business. According to
industry sources, fines for a single missing valve plug or tag can be as high as $5,000.17 In a facility
with thousands of valves, which already has a documented inspection process and/or an on-line
monitoring system, the fines for missing paper work can be large. Industry contends that, rather
than encouraging the facility to improve inspections and preventative maintenance, these fines often
lead firms to allocate staff to patrol the facility full-time to prevent future paperwork transgressions.
A process to review the reasonableness of paperwork fines would address the following
barrier to improved environmental performance:
Environmental Regulations (Barrier): The effort necessary to properly complete
paperwork and the fines that are levied when required paperwork is inadequate use
up resources that might be employed more productively elsewhere within the firm.
Evaluating this policy option requires ascertaining the extent to which, and circumstances in
which, paperwork requirements could be reduced while measures such as continuous monitoring
insure that the same or a greater level of environmental protection is available. This issue might
be examined within the overall context of BMP-based regulation, as discussed above.
Communicate Rulemaldng Information in "Plain English"
The participants in the small business panel meeting felt strongly that "plain english"
communication of regulations is EPA's responsibility. Presently, EPA places greatest emphasis on
writing and promulgating rules, with less emphasis given to facilitating their implementation. EPA's
choice of emphasis is made in response to an expanding set of regulatory requirements, limited staff,
and the threat of legal action by NGOs when statutes are not issued according to the legislated
17 Letter from Fred Moore, Assistant Director, Environment of Union Carbide to Jerry
Newsome, EPA/OPPE, March 15,1994.
5-30
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schedule. As a result, industrial firms - especially small businesses - rely on trade groups to
interpret regulations and keep members apprised of any changes. These groups, which also have
limited resources, must rapidly interpret rules that EPA has spent months or years developing.
Communication of rulemaking information in plain english would address the following
barrier to improved environmental performance:
Environmental Regulations (Barrier): By converting legally complex jargon to plain
english, thereby reducing the amount of time required to decipher new statutes, firms
would be able to shrink the cost of regulatory compliance and devote additional
resources to proactive environmental actions. This would be especially helpful for
small and medium size firms.
Implementation of this policy is conceptually straightforward, but would require EPA to fund
translation of rules by outside parties (e.g., trade groups, contractors) or to allocate Agency staff to
this effort. The recent reorganization of the Office of Enforcement ~ now the Office of
Enforcement and Compliance Assistance may provide a context within which to address this issue.
Fund Study of National Emissions fttanHards for Hazardous Air Pollutants (NESHAPs^
Under the Gean Air Act Amendments of 1990, EPA is required to promulgate source
category NESHAPs for manufacture of plastic composites and some polyurethane resins by
November 1990. However, while the responsibility for developing source category NESHAPs is
placed on EPA, the ramifications of failure to fulfill this responsibility fall heavily on the states and
regulated community. This occurs because under the Section 112 "MACT Hammer" provisions of
the Act individual states and facilities must, in the absence of a source category NESHAP, conduct
case-by-case MACT determinations prior to constructing new sources or modifying existing sources.
Such case-by-case determinations will be expensive and time consuming for both states and facilities,
and at smaller firms may effectively freeze new construction or modifications.
NESHAPs funding for several subsectors of the thermoset plastics industry, including
composites and polyurethanes, was eliminated from the EPA budget in October, 1993. Industry
maintains that without EPA funding for this effort, growth opportunities for all but the largest firms
will be compromised. Furthermore, since case-by-case NESHAPs determinations are only
temporary, firms that achieve interim standards may be required to modify their practices once the
negotiated MACTs are replaced by overall source category standards. Based on these
considerations, the small business panel urged that EPA restore funding of the NESHAPs effort.
Funding the study of NESHAPs would potentially address the following driver and barrier
for the thermoset plastics industry:
Environmental Regulations (Driver): Funding for the development of NESHAPs
would allow industry and other stakeholders to participate in a dialogue with the
Agency whereby the most efficient, effective standards could be promulgated for all
firms within a particular source category. In addition, industry would become
knowledgeable regarding the regulatory requirements in a timely fashion.
5-31
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Environmental Regulations (Barrier): Without EPA funding for the development of
source category NESHAPs, firms would be required to allocate significant resources
to negotiating facility-level MACT standards.
533 Relationship Between High Priority Policy Options and Drivers/Barriers
The relationships between the major thermoset plastics industry drivers/barriers and the eight
high priority policy options are summarized in Exhibit 5.3-12. BMP-based regulation is the most
comprehensive policy option, addressing four drivers and three barriers. How the relevant
driver/barriers relate to each of the high priority policy options is discussed in Section 5.3.4.
5-32
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Exhibit 53-12
LINKAGE BETWEEN DRIVERS/BARRIERS
AND HIGH PRIORITY POLICY OPTIONS
Drivers
Product Innovation and Customer Specifications
Environmental Regulations
Public Image
Life-Cycle Analysis and Product Stewardship
Barriers
Environmental Regulations
Regulatory Disincentive for Innovation
Overlapping Federal/State/Local Regulations
Pre-Manufacturing Notice Process
Policy Options
Implement BMP-Based Regulations
Expand Polymer PMN Exemptions to
Cover Pre-Polymers
Implement BMP-Based Regulations
Involve Stakeholders in Standard Setting
Process
Fund Study of NESHAPs
Implement BMP-Based Regulations
Implement BMP-Based Regulations
Allow In-Plant Treatment of Non-
Product Output
Policy Options
Implement BMP-Based Regulations
Involve Stakeholders in Standard Setting
Process
Allow In-Plant Treatment of Non-
Product Output
Review Reasonableness of Paperwork
Fines
Communicate Rulemaking Information
in "Plain English"
Fund Study of NESHAPs
Implement BMP-Based Regulations
Expand Polymer PMN Exemptions to
Cover Pre-Polymers
Study Impact of 5(e) Designation on
Product Development and Marketing
Implement BMP-Based Regulations
Involve Stakeholders in Standard Setting
Process
Expand Polymer PMN Exemptions to
Cover Pre-Polymers
Study Impact of 5(e) Designation on
Product Development and Marketing
5-33
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Appendix 5-A
BmiJOGRAPHY FOR THE THERMOSET PIj^STICS INDUSTRY
-------
Appendix 5-A
BmUOGRAPHY FOR THE THERMOSET PLASTICS INDUSTRY
Bland 1967. Bland, William F., and Robert L Davidson, co-editors, Petroleum Processing Handbook,
McGraw-Hill, 1967.
CMA 1993a. Chemical Marketing Reporter, The Green Report," Schnell Publishing Co., June 28,
1993.
CMA 1993b. Chemical Marketing Reporter, Schnell Publishing Co., July 26,1993.
CMA 1992-93. Responsible Care Progress Report, On the Road to Success. Along with other
Responsible Care program materials.
Cole, Henry S., Ph.D., and Kenneth A. Brown, Advantage Glass! Switching to Plastic Is An
Environmental Mistake, sponsored by the Glass Packaging Institute, September 15,1993.
DOC 1990a. 1987 Census of Manufacturers, "Plastics Materials, Synthetic Rubber, and Manmade
Fibers," Industries 2821, 2822, 2823, and 2824, U.S. Department of Commerce, Bureau of
the Census, March 1990.
DOC 1990b. U.S. Commodity Exports and Imports as Related to Output: 1986 and 1985, U.S.
Department of Commerce, Bureau of the Census, June 1990.
DOC 1990c. 1987 Census of Manufactures, "Miscellaneous Plastics Products, Not Elsewhere
Classified," Industries 3081, 3082, 3083, 3084, 3085, 3086, 3087, 3088, and 3089, U.S.
Department of Commerce, Bureau of the Census, May 1990.
DOC 1992a. 1991 Annual Survey of Manufacturers, "Statistics for Industry Groups and Industries
(Including Capital Expenditures, Inventories, and Supplemental Labor, Fuel, and Electric
Energy Costs)," U.S. Department of Commerce, Bureau of the Census, December 1992.
DOC 1992b. 1991 Annual Survey of Manufacturers, "Value of Product Shipments," U.S.
Department of Commerce, Bureau of the Census, November 1992.
DOC 1992c. 1987 Census of Manufacturers, "Concentration Ratios In Manufacturing," U.S.
Department of Commerce, Bureau of the Census, February 1992.
DOC 1992d. Current Industrial Reports, "Survey of Plant Capacity, 1990," U.S. Department of
Commerce, Bureau of the Census, March 1992.
DOC 1993a. 1991 Annual Survey of Manufacturers, "Geographic Area Statistics," U.S. Department
of Commerce, Bureau of the Census, February 1993.
5-A-l
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Appendix 5-A
(continued)
BmiJOGRAPHY FOR THE THERMOSET PLASTICS INDUSTRY
DOC 1993b. Current Industrial Reports, "Pollution Abatement Costs and Expenditures, 1991," U.S.
Department of Commerce, Bureau of the Census, January 1993.
DOC 1993c. U.S. Industrial Outlook 1993, "Plastics and Rubber," U.S. Department of Commerce,
International Trade Administration, p.p. 12-1 to 12-3.
EPA 1984a. EPA Guideline Series, "Control of Volatile Organic Compound Leaks from Synthetic
Organic Chemical and Polymer Manufacturing Equipment," U.S. Environmental Protection
Agency, Office of Air Quality Planning and Standards, March 1984.
EPA 1984b. EPA Guideline Series, "Control of Volatile Organic Compound Emissions from Air
Oxidation Processes in Synthetic Organic Chemical Manufacturing Industry," U.S.
Environmental Protection Agency, Office of Air Quality Planning and Standards, December
1984.
EPA 1990. Methods to Manage and Control Plastic Wastes, Report to Congress, U.S. Environmental
Protection Agency, Office of Solid Waste and Emergency Response, Office of Water,
February 1990.
EPA 1993. EPA Guideline Series, "Control of Volatile Organic Compound Emissions from
Manufacture of High-Density Polyethylene, Polypropylene, and Polystyrene Resins," U.S.
Environmental Protection Agency, Office of Air Quality Planning and Standards, November
1983.
FR 1992a. Federal Register, "Initial List of Categories of Sources Under Section 112(c)(l) of the
Clean Air Act Amendments of 1990", Vol. 57, No. 137, Thursday, July 16,1992, p.p. 31576-
31592.
FR 1992b. Federal Register, "National Emission Standards for Hazardous Air Pollutants; Availability:
Draft Schedule for the Promulgation of Emission Standards," Vol. 57, No. 186, Thursday,
September 24,1992, p.p. 44147-44149.
Hollod 1988. Hollod, GJ. and R.F. McCartney, "Waste Reduction in the Chemical Industry, Du
Font's Approach," JAPCA, Vol. 38, No. 2, February 1988, p.p. 174-179.
Modem Plastics 1992. Modem Plastics, "Special Buyers' Guide & Encyclopedia Issue for '93,"
McGraw-Hill, December 1992.
Modem Plastics 1993a,b,c. Modem Plastics, McGraw-Hill, April, May, July, August 1993 issues.
RMA1992. RMA Annual Statement Studies, 1992, Fiscal Year Ends 4/1/91 through 3/31/92, Robert
Morris Associates.
5-A-2
-------
Appendix 5-A
(continued)
BmLIOGRAPHY FOR THE THERMOSET PLASTICS INDUSTRY
Rauch 1991. The Rauch Guide to the U.S. Plastics Industry, Rauch Associates, Inc., 1991.
SPI 1993a. Facts & Figures of the U.S. Plastics Industry, The Society of the Plastics Industry Inc.,
1993 edition, Washington, D.C., August 1993.
SPI 1993b. SPI Issues, The Society of the Plastics Industry, Inc., Vol. IV, No. 9, June 25,1993.
SRI 1967. Chemical Origins and Markets, Chemical Information Services, Stanford Research
Institute, Menlo Park, CA, 1967.
SRI 1987. 1987 Directory of Chemical Producers, United States of America, SRI International,
Menlo Park, CA, 1987.
Ulrich 1982. Ulrich, Henri, Introduction to Industrial Polymers, Hanser Publishers, distributed by
Macmillan Publishing Company, New York, 1982.
Waddams 1980. Waddams, A.L., Chemicals from Petroleum, 4th edition, Gulf Publishing Company,
1980.
Wirka, Jeanne, Wrapped In Plastics, The Environmental Case for Reducing Plastics Packaging,
Environmental Action Foundation, August 1988.
5-A-3
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Appendix 5-B
ALL SUGGESTED POLICY OPTIONS
-------
Appendix 5-B
ALL SUGGESTED POLICY OPTIONS
Evaluation of New Chemicaly
Base evaluations of new chemicals on comparative risk assessment
Promote realistic risk assessment based on sound science
Accept epidemiologies! data for risk assessment where available
Establish pre-PMN advisory service
Expand polymer PMN exemption to cover pre-polymers
Evaluate impact of TSCA section 5(e) on product development and marketing
Designate SNURs based on existing practices rather than 5(e)s
Coordinate international registration and review of new chemicals
Provide clear explanation of new chemical evaluation criteria
Development of Regulations
Involve stakeholders in standard setting process (e.g., MACTs)
Consider potential for BMP-based regulations incorporating provisions such as CMA's
"Responsible Care"
Fund study of NESHAP standards
Allow for in-plant treatment of "non-product output" (NPO) without TSDF designation
Rcevaluate CAA definition of Volitile Organic Compounds (VOCs) taking volatility into
account
Make special efforts to include small businesses in rulemaking process
Consider exemptions from TRI and LEPC reporting based on facility-specific demonstration
of de minimis emissions
Reward proactive behavior that leads to advanced compliance
5-B-l
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Appendix 5-B
(continued)
ALL SUGGESTED POLICY OPTIONS
Establish forgiveness provisions for firms that undertake innovative pollution prevention
technologies
Invoke federal preemption except in special cases
Establish a "Carol Browner Award" for Total Quality Environmental Management (TQEM)
Provision of Technology and/or Financial Assistance
Provide small business loans for pollution prevention
Establish EPA "Green Teams" for technology assistance to small and medium-sized
businesses
Establish EPA outreach to regions/states on risk and technology assessment
Augment outreach with retiree and/or insurance company expertise
Offer voluntary inspections by state personnel (unrelated to enforcement)
Enhance service orientation of EPA
Reinforce EPA mission statement of environmental protection
Streamline Information Collection and Processing
Establish an electronic data management system to facilitate submission of required reports
Reduce paperwork-intensive nature of T.F.PC reporting
Accept report-by-exception if firms have approved BMP program
Reduce record-keeping requirements in situations covered by area monitors
Establish systematic process to review reasonableness of paperwork fines
Communicate rulemaking information in "plain english"
Make special efforts to disseminate rulemaking information to small businesses
5-B-2
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Appendix 5-B
(continued)
ALL SUGGESTED POLICY OPTIONS
Coordinate uniformity among state reporting forms to extent possible
Inform small companies of their rights prior to inspection by regulatory agencies
5-B-3
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Appendix 5-B
(continued)
TOP 10 INDUSTRY PRIORITIES
SELECTED DURING SMALL BUSINESS PANEL MEETING
March 10,1994
1. Fund study of NESHAP standards (a)
2. Consider potential for BMP-based regulations incorporating provisions such as CMA's
"Responsible Care" (a) (b)
3. Allow for in-plant treatment of "non-product output" without TSDF designation (a) (b)
4. Expand polymer PMN exemption to cover pre-polymers (a) (b)
5. Establish systematic process to review reasonableness of paperwork fines (a)
6. Consider exemptions from TRI and LEPC reporting based on facility-specific demonstration
of de minimis emissions
7. Invoke federal preemption except in special cases
8. Establish EPA "Green Teams" for technology assistance to small and medium sized
businesses (as in the "OSHA Services" model)
9. Promote realistic risk assessment based on sound science
10. Communicate rule-making information in "plain cnglish"
(a) Selected by panel participants as one of top five policy options
(b) Discussed aspects of implementation in-depth at second panel meeting. See section
53.3 for more details.
5-B-4
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Appendix 5-B
(continued)
TOP 13 INDUSTRY PRIORITIES
SELECTED DURING LARGE BUSINESS PANEL MEETING
March 15,1994
1. Study impact of 5(e) designation on product development and marketing, and determine
viable alternatives to 5(e) stigma (a)
2. Provide (more) clear explanation of new chemical evaluation criteria
3. Coordinate international registration and review of new chemicals
4. Involve stakeholders in standard-setting process at earliest possible stage (a)
5. Reward proactive behavior and establish forgiveness provisions for firms that undertake
innovative pollution prevention strategies
6. Allow for in-plant treatment of "non-product output" without TSDF designation (a)
7. Consider potential for BMP-based regulations
8. Consider exemptions from TRI reporting based on facility-specific demonstration of de
minimis emissions
9. Place greater emphasis on EPA technical assistance to state environmental regulatory
agencies
10. Establish systematic process to review reasonableness of paperwork fines (a)
11. Coordinate uniformity among state reporting forms to the extent possible
12. Communicate rulemaking information in "plain english" and focus on dissemination to small
businesses (a)
13 Extend coverage provided by TSCA testing consent orders to all parties - not just those who
use the substance at the time of testing
(a) Selected by panelists as one of top five policy options and discussed in detail at
March 15,1994 meeting. See section 53.3 for further details.
5-B-5
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Appendix 5-C
ALL PLASTICS INDUSTRY CONTACTS
-------
APPENDIX 5-C
Thernoset Plastics Industry Contacts
Mr. Ed Abrams
Harcros Organics
Mr. Charles Bartish
Air Products and Chemicals
Dr. Gert Baumann
Miles (Polymers Division)
Director, Environment & Industry Issues
Mr. Scott Berner
Allied-Signal, Inc.
518-270-0200
Mr. Don Billheimer
Thermoset Plastics, Inc.
Ms. Lynne Blake-Hedge
EPA, OPPT
202-260-7241
Mr. Paul Campanella
EPA, OPPT, New Chemicals Program
Mr. Charlie Cappannari
American Cyanamid or Cytec Industries
203-284-4210
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. Jim Casey
EPA, OPPE
Mr. James Chapman
Miles (Polymers Division)
Manager, Product Safety
Ms. Marian Chertow
Yale University, Program of Solid Waste Policy
Director, Partnership for Enviro Mgmnt.
203-432-3253
Mr. Peter Davies
Dow Chemical Company (Dow Plastics)
Business Operations Mgr., Polyurethanes
Mr. Richard Doyle
Chemical Manufacturers Association
Vice President
202-887-1100
Ms. Sharon Eisel
Dow Chemical
Manager, Environmental Reg. Activities
517-636-8291
Mr. Lew Freeman
Society of the Plastics Industry
Ms. Edie Grashik
Foam Seal
5-C-2
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. David Griffen
Plastics Engineering Corporation
Director, Environmental Department
414-458-2121
Mr. Paul Haas
Allied-Signal, Inc.
Sr. Safety and Health Administrator
Mr. Thomas Harrick
Miles (Polymers Division)
Senior Vice President, Polyurethanes
Mr. Lynn Harris
Society of the Plastics Industry
Associate Technical Director
202-371-5200
Ms. Maureen Healy
Society of the Plastics Industry
Director, Federal Env. and Trans Issues
Ms. Lynn Hutchinson
EPA, OAQPS
919-541-5624
Mr. Larry Jackson
Dow Chemical Company (Dow Plastics)
Manager, Health, Env. and Reg. Affairs
Mr. Lance King
Californians Against Waste
914-943-5422
5-C-3
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. Greg Koontz
Small Business Administration
Mr. Robert Lacovara
Composites Fabricators Association
Mr. Craig Larson
Allied-Signal, Inc.
Manager, Environmental Quality
Mr. Robert Lawrence
BASF Corporation
Group Vice President
Ms. Fran Lichtenberg
Society of the Plastics Industry
Executive Director, Polyurethane Div,
212-351-5424
Mr. Reid Lifset
Yale University/ Program on Solid Waste Policy
203-432-3253
Ms. Theresa Maene
Flexible Products Company
Mr. Stephen McNally
Composites Fabricators Association
Director, Government Affairs .
5-C-4
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. Patrick McNamara
ICI (Polyurethanes)
Manager, Public Affairs
Mr. Dennis Miller
BASF Corporation
Environmental Coordinator, Urethanes Grp
Ms. Denby Misurelli
US International Trade Commission
Rep., Syn. Org. Chem.,Plas., & Resin
202-205-3362
Mr. Frederick Moore
Union Carbide Corporation
Asst. Dir., Env. Chair-CMA P2 Task Force
Ms. Christine Mueller
League of Women Voters, Natural Resources Division
202-429-1965
Mr. Geraine Perry
EPA, Office of Solid Waste & Emergency Response
Mr. William Robert
BASF Corporation
Manager, Product Stewardship & Reg. Comp
Mr. Robert Rose
EPA, Office of the Admin., Small Business Office
5-C-5
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. Manik Roy
Environmental Defense Fund
Pollution Prevention Specialist
202-387-3500
Mr. Richard Sayad
Dow Chemical Company (Dow Plastics)
Manager, Health, Env. and Reg. Affairs
Mr. John Schweitzer
Society for the Plastics Industry
Technical Director, Composites Institute
Mr. John Shafer
EPA, OAQPS (Research Triangle Park)
919-541-2096
Ms. Betsy Shirley
Society of the Plastics Industry
Executive Director, Styrene Info Center
Mr. Earl Simpson
Independent consultant
713-558-1031
Mr. Jack Snyder
Society of the Plastics Industry
Asst. Manager, Styrene Scientific Affair
Mr. Martin Spitzer
EPA, Pollution Prevention and Toxics
5-C-6
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APPENDIX 5-C
Thermoset Plastics Industry Contacts
Mr. David Svensgaard
EPA, OAQPS (Research Triangle Park)
919-514-2380
Mr. David Tarnowski
Allied-Signal, Inc.
Manager, Health, Safety, and Environment
Mr. Robert Thoma
BASF Corporation
Vice President, Government Relations
Mr. Thomas Walsh
Bendix (Allied-Signal)
Project Engineer
Mr. Bernie Weckstrom
Perstorp Incorporated
413-584-2472
Mr. Jonas Weiss
CIBA-Geigy
Dr. George Youngblood
Shell Oil and Society of the Plastics Industry
Chair, Epoxy Resins Task Group
Mr. David Zoll
Chemical Manufacturers Association
General Counsel
5-C-7
-------
Appendix 5-D
PANEL MEETING PARTICIPANTS
-------
Appendix S-D
PANEL MEETING PARTICIPANTS
Organization
Representative
Attended Panel Meetings
1 - Jan. 11, 1994,
2 - March 10, 1994 or
3 - March 15, 1994
Industiy Trade Groups and Resin Manufacturers
The Society of the Plastics Industry (SPI)
SPI
SPI
SPI
SPI
Air Products and Chemicals
Dow Chemical Company
Dow Chemical Company
Dow Chemical Company
Miles, Inc.
Miles, Inc.
OBAGeigy
BASF
Composites Fabricators Association
Composites Fabricators Association
Shell Chemical Company/SPI
Union Carbide/Chemical Manufacturers Association
(CMA)
Thermoset Plastics, Inc.
Harcos Organics
Foam Seal
Flexible Products Company
Lew Freeman, Government Affairs
Fran Lichtenberg, Polyurethane Division
John Schweitzer, Composites Institute
Maureen Healey, Government Affairs
Lynne Harris, Technical Affairs
Charles M. Bartish
Richard Sayad
Larry Jackson
Peter Davies
Gert Baumann
James Chapman
Jonas Weiss
Dennis Miller
Robert Lacovara
Steve McNally
George Youngblood
Fred Moore
Don Billheimer
Ed Abrams
Edie Grashik
Theresa Maene
2
1,2,3
1,2
1,3
1,2,3
3
3
3
3
3
3
3
3
3
2,3
1,2,3
1
2
2
2
2
5-D-l
-------
Appendix S-D
(continued)
PANEL MEETING PARTICIPANTS
Organization
Representative
Attended Panel Meetings
1 - Jan. 11, 1994,
2 - March 10, 1994 or
3 - March 15, 1994
Other Stakeholders
Yale University, Partnership for Environmental Policy
Small Business Administration
Reid Lifset
Greg Koontz
1
2
U.S. Environmental Protection Agency
EPA, Office of Solid Waste and Emergency Response
EPA, OPPT, Pollution Prevention
EPA, OPPT, New Chemicals Program
EPA, Office of Air Quality Planning and Standards
(OAQPS)
EPA, OAQPS
EPA, OAQPS
EPA, Office of the Administrator, Small Business
Ombudsman (OASBO)
EPA, Office of Policy Planning and Evaluation (OPPE)
EPA, OPPE
EPA, OPPE
EPA, OPPE
Geraine Perry
Martin Spitzer
Paul Campanella
Bob Rosensteel
Randy McDonald
Madeleine Strum
Robert Rose
Jerry Newsome, Project Lead, Plastic Resin
Manufacturing Sector
Bob Benson, Branch Chief, Project Lead,
Metal Finishing Sector
Jim Casey
Julie Frieder, Project Lead, Photoimaging
Sector
3
3
3
3
3
3
2
1.2,3
1.3
2
1.3
EPA Contractor Support
Industrial Economics, Incorporated (lEc)
lEc
James Cummings-Saxton, Principal
Meg Kelly, Associate
1.2,3
1,2,3
5-D-2
-------
APPENDIX
PRELIMINARY SELECTION OF
INDUSTRY SECTORS
-------
MEMORANDUM
July 26, 1993
TO: Robert Benson and Julie Frieder
FROM: Industrial Economics, Incorporated
SUBJECT: Preliminary Selection of Industry Subsectors
Introduction
This memo outlines the criteria we are using to screen industry subsectors, presents our
preliminary subsector recommendations, and compares these subsectors on the basis of a number
of key characteristics. We have selected ten subsectors from among those that satisfy the selection
criteria. With your input, we want to narrow these selections to a field of 5 to 8. This will enable
us to focus our resources on a smaller group of subsectors from which to choose up to five industries
for detailed evaluation and case studies.
The first section of this memo outlines our selection criteria and discusses their relevance
to the identification of non-regulatory approaches to promoting strategic environmental
management. Section 2 lists our ten preliminary subsector recommendations and Section 3 discusses
the relevance of key industry characteristics and compares them among all ten subsectors. This
memo also contains two appendices. Appendix A summarizes important subsector characteristics
that indicate the rationale for each subsector selection. Appendix B contains data for all
manufacturing sectors aggregated by industry (2-digit SIC). These data are similar to those
presented for the ten subsectors, and thus allow comparison across all manufacturing industries.
Section 1: Selection Criteria
Our initial survey of industrial sectors focused on the manufacturing sector because it is the
most pollution-intensive sector, it already bears a heavy regulatory burden, and extensive data are
available. However, we have kept in mind your potential interest in the construction industry, and
have begun to assemble data on that industry. We could expand our analysis to include other
service industries if you desire.
We employed two primary screening criteria to select industry subsectors. First, we wanted
to select subsectors presenting significant opportunities for EPA to motivate strategic environmental
management. The following factors were used to screen industries for this characteristic:
1
-------
substantial Toxics Release Inventory (TRI) releases and transfers;
portion of product life cycle with environmental impacts;
significant historical expenditures on pollution abatement and control;
diverse pollution abatement and control technology requirements; and
significant current and prospective regulatory activity.
Second, we attempted to select a diverse group of industries that would allow our findings
to be generalized across as many other sectors as possible. We sought industries that differ in a
number of the following characteristics that may affect the design of non-regulatory measures:
establishment size distribution;
ratio of capital to labor expenditures;
type of production processes;
degree of market concentration;
degree of geographic concentration;
capacity utilization;
extent of international competition;
industry growth rate;
financial characteristics;
medium that receives predominant share of environmental loadings;
energy consumption; and
type of products.
Section 2: Subsector Recommendations
Using the above selection criteria, the following ten manufacturing subsectors were selected.
These selections are by no means definitive and other subsectors could be chosen to represent
similar characteristics.
Wood Household Furniture (SIC 2511)
Paper Mills (SIC 2621)
Commercial Printing, Lithographic (SIC 2752)
Plastics Materials and Resins (SIC 2821)
Pesticides and Agricultural Chemicals, Not Elsewhere Classified (SIC 2879)
Petroleum Refining (SIC 2911)
Leather Tanning and Finishing (SIC 3111)
Electroplating, Plating, Polishing, Anodizing, and Coloring (SIC 3471)
Printed Circuit Boards (SIC 3672)
Photographic Equipment and Supplies (SIC 3861)
Appendix A summarizes the important characteristics underlying the selection of each subsector.
-------
Section 3: Comparison of Subsector Characteristics
As discussed above, we attempted to select a diverse group of industries that would allow
our findings to be generalized across as many other sectors as possible. Therefore, we sought
industries differing in characteristics that may affect the types of non-regulatory measures that would
be most effective. During the screening stage, we used industry-level data to represent these
characteristics. This section briefly discusses characteristics that may be considered in designing non-
regulatory options and compares the ten preliminary subsectors on the basis of these characteristics.
We are continuing to collect financial and other data that will supplement our measures of industry
characteristics and potentially allow use of additional criteria (e.g., urban-versus-rural location or
compliance rates).
Establishment Size Distribution
Using data from the 1987 Census of Manufactures, we analyzed the number of
establishments in different size groupings (where size is defined by number of employees) and the
value of shipments by establishments in each size grouping.1 We evaluated three factors: total
number of establishments, distribution of establishment sizes, and variation in value of establishment
shipments. Our subsector selections cover a wide range of values for each factor, as shown in
Exhibits 1 and 2 and Tables 1 to 4.
Total number of establishments:
The total number of establishments ranges from 24,980 for Printing (2752) to 277 for
Pesticides (2879).
Distribution of establishment sizes:
A large proportion of Paper Mills (2621) and Petroleum Refineries (2911) (52
percent and 29 percent respectively) are large establishments with more than 249
employees;
Industries with a majority of mid-sized establishments (those employing between 20
and 249) include Plastics (2821) (55 percent) and Printed Circuit Boards (PCBs)
(3672) (50 percent); and
Furniture (2511), Printing (2752), and Electroplating (3471) have a majority of small
establishments, (71 percent, 84 percent, and 70 percent respectively) with less than
20 employees.
1The Census aggregates value of shipments data in order to avoid disclosing information about
individual companies. For example, if there is only one establishment with 1000 or more employees,
then the value of that establishment's shipments is included in the total for establishments with 500
to 999 employees. This must be considered when interpreting these data (for example, see SIC
2879).
-------
Diversity in value of establishment shipments:
The only two subsectors in which small establishments (those with 1 to 19
employees) account for a significant portion of the industry's value of
shipments are Printing (2752) (20 percent) and Electroplating (3471) (21
percent);
Mid-sized establishments (those with 20 to 249 employees) contribute over
50 percent of the value of industry shipments in Printing (2752), Leather
Tanning (3111), Electroplating (3471), and PCBs (3672); and
Large establishments (those with 250 or more employees) account for over
80 percent of the value of industry shipments in Paper Mills (2621),
Petroleum Refining (2911), and Photographic Equipment (3861).
Production Characteristics
The role of capital equipment in the production process can affect a firm's ability to modify
its production process. Capital intensive processes are highly automated and rely heavily on
machinery and equipment, whereas labor intensive processes involve proportionally less investment
in machinery and equipment. Using data from the 1991 Annual Survey of Manufactures, we
characterized the capital intensity of production processes based on the ratio of total capital
expenditures to total labor expenditures.2 Our subsector selections include production techniques
with diverse relative capital intensity. The following observations are illustrated in Exhibit 3 and
Table 5:
Subsectors with capital intensive production processes include Paper (2621), Plastics
(2821), Pesticides (2879), and Petroleum Refining (2911); and
Subsectors with relatively labor intensive production processes include Furniture
(2511), Printing (2752), Leather Tanning (3111), Electroplating (3471), and PCBs
(3672).
To place the ten subsectors within the context of all manufacturing industries, capital-to-labor
expenditure ratios aggregated at the two-digit SIC level are presented in Table B-l in Appendix B.
Two-digit industry averages range from 0.05 to 1.04. In comparison to these industry data, Leather
Tanning (3111) is among the least capital intensive industries, while the Petroleum Refining (2911)
subsector exceeds even the most capital intensive two-digit industry average.
*The Annual Survey of Manufactures reports annual capital expenditures on new and used
buildings and other structures, and machinery and equipment. This value does not include annual
depreciation expenses on existing plant and equipment. Therefore, comparisons may be distorted
if one industry had particularly large capital expenditures in the reporting year. We are collecting
trend data on capital expenditures that will be less sensitive to single-year expenditures.
-------
Competitive Context
An industry's competitive environment may have an important influence on the effectiveness
of different non-regulatory mechanisms. We have characterized several aspects of each subsector's
competitive environment, including market concentration, geographic concentration, capacity
utilization, international competition, growth rate, and financial characteristics. In each case, our
preliminary subsector selections include a diverse sampling of these characteristics.
Market Concentration
Market concentration can affect a firm's flexibility to respond to changes in the market place.
Market concentration is expressed in terms of the market shares of the largest companies in a
subsector. It is important to note that a single company may be composed of any number of
establishments. Concentrated markets are markets in which a small number of companies account
for a large fraction of the value of that industry's shipments, while in unconcentrated markets a large
number of companies account for the bulk of industry shipments. Exhibit 4 and Table 3 illustrate
the value of industry shipments for each subsector in 1987 and 1991. These data show that:
The 1991 value of industry shipments ranges from $145.5 billion for Petroleum
Refining (2911) to $2.2 billion for Leather Tanning (3111).
We analyzed market concentration using data from the 1987 Census of Manufactures.
Exhibit 5 and Table 6 show that:
Paper (2621), Pesticides (2879), Petroleum Refineries (2911), and Photographic
Equipment (3861) are relatively concentrated markets in which the eight largest
companies account for at least 50 percent of the value of industry shipments; and
Printing (2752) and Electroplating (3471) are relatively unconcentrated markets in
which the 20 largest companies account for only 16 percent of the value of industry
shipments.
We are collecting data on imports that will provide a more accurate picture of competitiveness than
is provided by concentration of domestic production. To place the ten subsectors within the context
of all manufacturing industries, concentration ratios aggregated at the two-digit SIC level are
presented in Table B-2 in Appendix B.
Geographic Concentration
Geographic concentration can influence the regional competitive dynamics of some industry
subsectors, depending on the nature of regional and national product markets. In addition,
industries concentrated in a few states may have received more targeted regulatory attention at the
state level than industries scattered across a large number of states. Data from the 1987 Census of
Manufactures were used to analyze this competitive factor. We estimated geographic concentration
for each subsector by evaluating the percent of total establishments located in the top five states.
-------
Our subsector selections include a range of geographic concentrations. Exhibit 6 and Table 7 show
that:
Leather Tanning (3111), PCBs (3672), and Photographic Equipment (3861) are
relatively concentrated geographically, all with over 55 percent of the total
establishments located in five states; and
Printing (2752) and Pesticides (2879) are the least geographically concentrated
subsectors, both with less than 40 percent of the total establishments located in five
states.
We are investigating ways to assess other geographic characteristics, such as the urban-versus-rural
distribution of industry sectors.
Capacity Utilization
Capacity utilization is defined as the percent of available capacity in use. Capacity utilization
can affect the competitive dynamics of an industry since excess capacity acts as a barrier to entry by
new establishments and discourages new investment by existing firms, while capacity shortages act
as a signal for new firms to enter a market or for existing firms to invest in capacity additions.
Capacity utilization was analyzed using the 1990 Bureau of the Census report. As with other key
characteristics, our preliminary subsector selections include a diverse range of values. Exhibit 7 and
Table 8 show that:
High capacity utilization is evident in Paper (2621) and Plastics (2821), both of which
exhibited utilization rates in excess of 90 percent; and.
Furniture (2511) and Pesticides (2879) have under-utilized capacity, both using less
than 70 percent of available capacity.
To place the ten subsectors within the context of all manufacturing industries, capacity utilization
averages aggregated at the two-digit SIC level are presented in Table B-3 in Appendix B.
Tnteniational Competition
The level of international competition can influence a firm's ability to react to changes in
the market place. For example, a domestic firm is at a disadvantage if it directly competes with
firms from foreign countries that are not as heavily regulated. The level of international competition
will be estimated with two ratios: the value of imports over the value of shipments plus the value
of imports less the value of exports (i.e., the import share of domestic sales); and the value of
exports over the value of shipments. These data are currently being collected and evaluated.
-------
Growth Rate
Industry growth rates affect the firm's strategic options. For example, a firm's decision
regarding a capital investment will differ depending on the prospects for industry growth. Growth
rates are measured by evaluating the change in the value of industry shipments (adjusted for
inflation). These data are currently being collected and evaluated.
Financial Characteristics
Financial characteristics, such as profitability, solvency, and financial leverage, can affect a
firm's ability to fund environmental improvements. Return on assets and other measures can be
used to assess profitability, while solvency is estimated using the current ratio (current assets over
current liabilities), and financial leverage is defined as the ratio of total liabilities to total assets.
These characteristics may determine the types of non-regulatory mechanisms that would be effective.
These data are currently being collected and evaluated.
Environmental Context
Environmental factors play a central role in the development of non-regulatory methods to
encourage strategic environmental management. We have characterized each subsector"s
environmental context using TRI releases and transfers, expenditures on pollution abatement and
control, and energy consumption.
TRI Releases and Transfers
Evaluating releases and transfers of toxic chemicals is one means of comparing the
environmental burdens imposed by different production activities. The types of toxic releases and
transfers may determine which non-regulatory alternatives are feasible. For example, different
mechanisms may be desirable for releases of different substances or to different media. We
analyzed releases and transfers using data from the 1990 Toxics Release Inventory (TRI) database.
TRI data, however, are not comprehensive and should be evaluated with respect to several
caveats. The TRI reporting requirements apply only to manufacturing firms (SIC 20 to 39) with 10
or more full-time employees. Therefore, TRI releases do not adequately characterize industries with
a large number of small establishments, such as Printing (2752). In addition, firms are only required
to report releases and transfers of the 302 individual toxic chemicals and 20 categories of chemical
compounds listed as toxic under Section 313 of EPCRA. TRI data do not cover other substances
that may impose environmental burdens. Furthermore, since TRI reporting applies only to
manufacturing facilities, upstream releases from raw materials acquisition and downstream releases
from final disposal are not measured.
The average TRI releases and transfers per establishment were analyzed, as well as the total
for each subsector. Exhibits 8 and 9 and Table 9 show that:
-------
Paper Mills (2621), Plastics (2821), and Petroleum Refineries (2911) account for the
largest portion of TRI releases and transfers by subsector, while also exhibiting the
largest average per establishment;
Furniture (2511) and Printing (2752) are single medium polluters, both with air
releases that account for over 90 percent of total releases and transfers; and
Paper (2621), Plastics (2821), Pesticides (2879), Petroleum Refineries (2911), and
Leather Tanning (3111) are multi-media polluters, each having a significant portion
of total releases and transfers to more than one medium.
To place the ten subsectors within the context of all manufacturing industries, TRI releases and
transfers aggregated at the two-digit SIC level are presented in Table B-4 in Appendix B.
Pollution Abatement and Control
The cost of pollution abatement and control activities is an essential consideration in
environmental regulation. Using data from the 1990 Bureau of the Census report, we evaluated
pollution abatement and control expenditures as a percentage of total expenditures.3 Large
expenditures on pollution abatement and control may indicate subsectors that require relatively
expensive control technologies or those that are already heavily regulated. As with other key
characteristics, our subsector selections include a diverse range of values. Exhibit 10 and Table 10
show that:
Subsectors with significant expenditures on pollution abatement and control include
Paper Mills (2621) (5.6 percent), Pesticides (2879) (6.1 percent), and Electroplating
(3471) (7.0 percent); and
Subsectors with smaller expenditures on pollution abatement and control include
Furniture (2511) (0.9 percent) and Printing (2752) (03 percent).
To place the ten subsectors within the context of all manufacturing industries, expenditure ratios
aggregated at the two-digit SIC level are presented in Table B-5 in Appendix B.
Energy Consumption
Energy consumption can be used to identify subsectors that have substantial emissions from
fuel combustion or large potential benefits from energy efficiency improvements. Energy intensity
can be evaluated using the percentage of total expenditures spent on fuels and purchased electricity.
1991 Bureau of the Census report includes annual capital expenditures on pollution
abatement and control equipment This value does not include annual depreciation expenses on
existing equipment Therefore, comparisons may be distorted if one industry had particularly large
capital expenditures in the reporting year. We are collecting trend data on capital expenditures that
will be less sensitive to single-year expenditures.
-------
We used data from the 1991 Annual Survey of Manufactures to evaluate energy intensity. Exhibit
11 and Table 10 show that:
The most energy intense subsectors are Paper Mills (2621) and Electroplating (3471),
where 9.8 percent and 6.2 percent of total expenditures, respectively, was for fuels
and purchased electricity, and
The least energy intense subsectors are Printing (2752), Leather Tanning (3111), and
Photographic Equipment (3861), all with less than 1.7 percent of total expenditures
going towards fuels and purchased electricity.
To place the ten subsectors within the context of all manufacturing industries, expenditure ratios
aggregated at the two-digit SIC level are presented in Table B-5 in Appendix B.
Regulatory Context
The current and future regulatory environments must be considered when designing non-
regulatory methods of encouraging strategic environmental management. Future rule-makings offer
the opportunity to integrate creative non-regulatory approaches. Table 11 summarizes the major
future Federal regulatory activity in each subsector. This summary supports the following
observations:
Each subsector will be subject to future rule-makings under the 1990 Clean Air Act
Amendments;
Each subsector will be subject to future rule-makings under at least two of the three
major legislative acts underpinning EPA regulatory authority; and
Six of the subsectors are included in the Source Reduction Review Program (SRRP).
A complete description of each subsector's future regulatory activity is included in Appendix A. We
are currently collecting and evaluating information on each subsector's existing regulatory
environment.
-------
Exhibit 1
Percent Distribution of Establishments
by Facility Size Groupings
2,949 282 24,984 480 277 308 344 3,451 1,009 787
OJ
»«
o
+
o
«
c
CD
o
CD
Q_
100%-
80%-
60%-
40%i
20%-
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
1-19 Employees
20-249 Employees \%%A 250+ Employees
Moto: Th» numbors abova «acH «tack«d bar rapraaont th« total numbor of establishments.
-------
Exhibit 2
Percent Distribution of Value of
Shipments by Facility Size Groupings
7,982 28,918 32,832 26,246 6,300 118,186 2,219 3,867 4,673 19,241
03
4
O
c
0)
o
CD
Q_
100%-
80%-
60%-
40%-
20%-
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
1-19 Employees |H 20-249 Employees \//M( 250+ Employees
Note: The numbers above each stacked bar represent the total value of shipments (mlllions$).
-------
Exhibit 3
1.6-
0-
Capital/Labor Expenditure Ratios
by SIC (1991)
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
-------
Exhibit 4
Value of Shipments by SIC
for 1987 and 1991
-------
Exhibit 5
CO
O
"oj
+-
O
c
0
O
0
Q_
Concentration of Value of Shipments
of the Top 4, 8, & 20 Companies (1987)
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
I ^Bl Top 4 Companies |H Top 8 Companies t%2%\ Top 20 Companies I
-------
Exhibit 6
60%-
30%
Percent of Total Establishments
in the Top 5 States by SIC
CO 40%-
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
-------
Exhibit 7
100%-
-------
Exhibit 8
1990 TRI Releases
by Release or Transfer Category
CO
0)
CO
05
JD
CD
CC
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
-------
Exhibit 9
1990 TRI Releases per Establishment
by Release or Transfer Category
400
2511 2621 2752 2621 2879 2911 3111 3471 3672 3861
SIC
Air mi Water & POTWs ^^ Land & Underground ^ffl Offsite Transfers |
-------
Exhibit 10
Ratio of Total Pollution Abatement
to Total Expenditures (1991) by SIC
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
-------
Exhibit 11
12%Y
0°/c
Ratio of Fuels to Total Expenditures
by SIC (1991)
2511 2621 2752 2821 2879 2911 3111 3471 3672 3861
SIC
-------
Table 1 - Distribution of Establishments by Facility Size
SIC
Coda
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing. Lithographic
Plastics Materials. Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograplc Equipment and Supplies
1987
Tot. * of
Estab.
2.949
262
24.984
480
277
308
344
3.451
1.009
787
1987
Estabs.
W/1-4
Emplys.
1.214
3
11.108
65
69
46
107
943
156
235
1987
Estabs.
w/5-9
Emplys.
513
1
5.954
44
47
22
48
706
116
134
1987
Estabs.
W/ 10-19
Emplys.
357
2
3.819
51
56
20
50
759
171
139
1987
Estabs.
W/ 20-49
Emplys.
383
21
2.533
121
50
53
55
719
244
145
1987
Estabs.
W/ 50-99
Emplys.
191
38
897
78
31
27
46
233
145
60
1987
Estabs.
W/ 100-249
Emplys.
153
71
516
67
10
51
29
80
117
37
1987
Estabs.
W/ 250-499
Emplys.
84
56
114
27
7
43
8
8
44
16
1987
Estabs.
w/ 500-999
Emplys.
40
54
34
21
2
31
1
3
15
10
1987
Estabs.
W/1000+
Emplys.
14
36
11
6
5
16
0
0
1
11
Source: 1987 Census of Manufactures
-------
Table 2 - Distribution of Establishments by Facility Size Groupings
*
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
Total
Estabs.
1987
2,949
282
24,984
480
277
308
344
3,451
1,009
787
Establishments
Group 1
1-19
Emplys.
2,084
6
20,881
160
172
88
205
2,408
443
508
%of
total
70.7%
2.1%
83.6%
33.3%
62.1%
28.6%
59.6%
69.8%
43.9%
64.5%
Group 2
20-249
Emplys.
727
130
3,946
266
91
131
130
1,032
506
242
%of
total
24.7%
46.1%
15.8%
55.4%
32.9%
42.5%
37.8%
29.9%
50.1%
30.7%
Group 3
250+
Emplys.
138
146
159
54
14
90
9
11
60
37
%of
total
4.7%
51 .8%
0.6%
1 1 .3%
5.1%
29.2%
2.6%
0.3%
5.9%
4.7%
Source: 1987 Census of Manufactures
-------
Table 3 Distribution of Value of ShlpmwiU by Facility Sl*e
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3661
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials. Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1991
Value of
Shipments
(IMM)
7,979.6
33,344.0
37,718.9
29,565.8
8,345.5
145,391.5
2,163.1
4,124.0
6.352.9
21.397.8
1987
Value of
Shipments
(IMM)
7,982.0
28,918.0
32,832.0
26,245.5
6,299.7
118.166.2
2,216.6
3,866.9
4,672.6
19,240.5
1987 VOS
for Eetabe.
w/1-4
Emplye.
123.1
7.8
1,323.0
39.2
32.3
82.3
38.4
100.6
25.1
58.1
1987 VOS
for Eetabe.
W/B-9
Emplye.
162.4
0.0
2,205.2
97.3
99.3
225.1
47.7
228.1
56.0
99.9
1987 VOS
for Eetabe.
W/ 10-19
Emplye.
245.6
0.0
3,037.0
234.8
331.6
3147
758
500.6
151.6
213.2
1987 VOS
for Eetabs.
W/ 20-49
Emplye.
668.8
101.5
5.542.8
2.037.1
507.6
2.069.7
207.9
1,100.2
524.5
530.4
1987 VOS
for Eetabe.
W/ 60-99
Emplye.
805.9
645.3
5.370.8
2.828.5
576.4
2,240.0
506.6
924.6
664.5
640.8
1987 VOS
for Estabs.
w/ 100-249
Emplye.
1,429.9
2,580.8
7,639.7
5,910.7
597.6
13,639.3
623.4
732.0
1,156.6
713.6
1987 VOS
for Eetabs.
w/ 250-499
Emplye.
1.760.7
4,775.3
4,112.9
4.729.5
2.055.4
26.805.4
718.7
280.7
1.077.8
1.011.0
1987 VOS
for Estabe.
w/ 600-999
Emplye.
1.520.2
9,304.2
2.265.3
6.643.3
(D)
35.304.0
(D)
(D)
1.014.3
15,973.5
1987 VOS
for Eetabe.
W/1000+
Emplye.
1,263.6
11,500.8
1.201.5
3,725.2
2.099.5
37.535.6
(D)
(D)
(D)
(D)
Data shown as a (D) are Included In underscored figures to the left.
Source: 1987 Census of Manufactures
-------
Table 4 - Distribution of Value of Shipments by Facility Size Groupings
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1987
Value of
Shipments
($MM)
7,982
28,918
32,832
26,246
6,300
118,186
2,219
3,867
4,673
19,241
Value of Shipments
Group 1
1-19
Emplys.
531
8
6,565
371
463
622
162
829
233
371
%of
total
6.7%
0.0%
20.0%
1.4%
7.4%
0.5%
7.3%
21 .4%
5.0%
1 .9%
Group 2
20-249
Emplys.
2,905
3,328
18,553
10,776
1,682
17,949
1,338
2,757
2,348
1,885
%of
total
36.4%
1 1 .5%
56.5%
41.1%
26.7%
15.2%
60.3%
71 .3%
50.2%
9.8%
Group 3
250+
Emplys.
4,545
25,580
7,580
15,098
4,155
99,645
719
281
2,092
16,985
%of
total
56.9%
88.5%
23.1%
57.5%
66.0%
84.3%
32.4%
7.3%
44.8%
88.3%
Source: 1987 Census of Manufactures
-------
Table 5 - Capital/Labor Expenditure Ratio
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1991
Total Capital
Expenditures
($MM)
175.5
3,702.3
1 ,528.5
2,264.8
482.8
5,864.4
44.3
177.8
338.6
1,097.1
1991
Total Labor
Costs
($MM)
2,439.9
6,601 .8
12,339.9
3,137.9
779.2
4,344.0
357.7
1,776.4
2,320.7
3,618.3
1991
TCE/TLC
(%)
7.2%
56.1%
12.4%
72.2%
62.0%
135.0%
12.4%
10.0%
14.6%
30.3%
TCE/TLC = Total Capital Expenditures/Total Labor Costs
Source: 1991 Annual Survey of Manufactures
-------
Table 6 - Concentration Ratios
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1987
% VOS by
4 Largest
Companies
20%
33%
7%
20%
49%
32%
28%
7%
14%
77%
1987
% VOS by
8 Largest
Companies
29%
50%
10%
33%
69%
52%
44%
10%
22%
84%
1987
% VOS by
20 Largest
Companies
43%
78%
16%
61%
88%
78%
67%
16%
36%
90%
Source: 1987 Census of Manufactures
-------
Table 7 - Geographic Distribution Ratios
*
SIC
Cod*
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1087
Total Number of
Establishments
2,949
282
24,984
480
277
308
344
3,451
1,009
787
1987
Number of
Establishments
In Top 5 States
1,264
133
9,831
221
98
155
197
1,692
559
436
Percent of
Total
42.9%
47.2%
39.3%
46.0%
35.4%
50.3%
57.3%
49.0%
55.4%
55.4%
Top 5 States
CA,NY,NC,FL,PA
WI,NY,MA,MI,PA
CA,NY,TX,FL,IL
CA,TX,NJ,IL,OH
CA,TX,MO,IL,NY
TX,CA,LA,PA,OK
NY,MA1CA,WI,(NY,PA,TX - tie)
CA,OH,MI,IL,NY
CA,IL,TX,MA,NY
CA,NY,IL,NJ,MA
Source: 1987 Census of Manufactures
-------
Table 8 - Capacity Utilization Ratios
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1989
Capacity
Util.
(%)
77%
93%
81%
96%
72%
90%
85%
83%
83%
82%
1990
Capacity
Util.
(%)
70%
93%
81%
96%
67%
87%
84%
82%
82%
77%
Source: Current Industrial Reports
Survey of Plant Capacity, 1990
-------
Table 9
TRI Releases by Media Groupings
1990 Data
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
Air
38,795,868
50,127,027
12,304,260
102,874,467
4,976,568
56,681,935
8,199,809
11,830,549
4,628,711
29,968,807
Water APOTWs
22,352
19,195,460
51,636
16,227,877
952,620
10,619,299
8,204,869
3,963,623
2,553,136
1,153,916
Land & Underground
17,056
1,181,327
1,045
4,452,326
6,661,297
32,102,604
20,601
45,252
3,310
115.244
Offslte
Transfers
1,032,585
5,131,360
726.727
39,730,186
11,880,897
8,483,468
2,263,704
16,480,193
5.726.932
6.156.799
Total
39,867,861
75.635,174
13,083,668
163.284.856
24,471,382
107,887,306
18,688,983
32,319,617
12,912,089
37.394.766
Source: EPA Toxic Release Inventory, CD-ROM (1987-90)
-------
Tablo 10 Pollution Abatement and Energy Expenditures
SIC
Code
2511
2621
2752
2821
2879
2911
3111
3471
3672
3861
Industry Sector
Household Furniture: Wood
Paper Mills
Commercial Printing, Lithographic
Plastics Materials, Synthetic Resins, etc.
Pesticides & Agricultural Chemicals, n.e.c.
Petroleum Refining
Leather Tanning and Finishing
Electroplating and Polishing
Printed Circuit Boards
Photograpic Equipment and Supplies
1991
Total Expenditures
[CE+L+MJ
($MM)
6,450
28,287
30,656
23,996
4,661
134,125
1,888
3,351
5,337
11,402
1991
Total Pollution
Abatement
($MM)
59
1,591
102
929
285
4,178
52
236
109
157
1991
TPA/TE
(%)
0.91%
5.62%
0.33%
3.87%
6.10%
3.12%
2.77%
7.03%
2.03%
1.38%
1991
Purchased
Fuels & Elec.
($MM)
140
2,774
510
1,065
146
3.536
26
208
127
190
1991
Fuela/TE
(%)
2.17%
9.80%
1.66%
4.44%
3.13%
2.64%
1.36%
6.19%
2.38%
1.66%
Sources: 1991 Annual Survey of Manufactures
and Current Industrial Report, Pollution Abatement Costs & Expenditures, 1991
-------
Table 11
Examples of Future Federal Rule-Makings by Industry Sector
Subsector
Wood Household
Furniture (SIC 251 1)
Paper Mills (SIC 2621)
Commercial Printing,
Lithographic (SIC 2752)
Plastics Materials and
Resins (SIC 2821)
Pesticides and
Agricultural Chemicals,
NEC (SIC 2879)
Petroleum Refining
(SIC 2911)
Leather Tanning and
Finishing (SIC 3111)
Electroplating, Plating,
Polishing, Anodizing,
and Coloring (SIC 3471)
Printed Circuit Boards
(SIC 3672)
Photographic Equipment
and Supplies (SIC 3861)
Regulation
dean Air Act
VOC limits for finishing operations
MACT Standard: Surface coating,
formaldehyde use, etc.
Limits on ozone, CO, and paniculate
matter in NAAQS non-compliance areas
MACT Standard: Pulp and paper
combustion and non-combustion sources
Limits on VOC emissions
MACT Standard: Printing ink
manufacturing
MACT Standard: Numerous individual
plastics and resins categories
MACT Standard: Pesticide production
Requirements for low-sulfur diesel fuel
and reformulated gasoline
VOC limits targeting solvents in
finishing processes
MACT Standard: Surface coating,
degreasing/metal cleaning
Limits on VOC emissions (?)
VOC limits (?); phaseout of Class I
chemicals (?)
RCRA
Listing solvents as hazardous
waste
Minimum recycled fiber
guidelines, revised gov't
purchasing requirements
Listing solvents as hazardous
waste; recycled fiber guidelines
Solid waste legislation affecting
end-use plastics
Listing some refining process
wastes as hazardous
Proposal to list scrap leather as
hazardous waste (chromium)
Listing solvents as hazardous
waste
Listing solvents as hazardous
waste
Listing solvents as hazardous
waste (?)
dean Water Act
Effluent guidelines for
dioxins, etc.
Effluent guidelines for
organic chemicals, plastics,
synthetic fibers
Effluent guidelines and
pretreatment standards for
manufacturers, formulators,
packagers
Revision of effluent
guidelines
SRRP
Yes
Yes
Yes
Yes
Yes
Yes
(?)
LEGEND
VOC = Volatile Organic Compound
MACT = Maximum Achievable Control Technology
NAAOS = National Ambient Air Quality Standards
RCRA = Resource Conservation and Recovery Act
SRRP = Source Reduction Review Program
-------
APPENDIX A
RATIONALE FOR SUBSECTOR SELECTION
-------
Wood Household Furniture (SIC 2511): This industry includes establishments primarily engaged
in manufacturing wood household furniture (except upholstered) commonly used in dwellings. This
industry also includes establishments manufacturing camp furniture.
Significant pollution problem - single medium: Total 1990 TRI releases and transfers were
39.9 million pounds. Air releases accounted for 97 percent of total.
Pollution results from production process: Primary source of air emissions is solvent
evaporation during finishing operations. Analysis of this industry will provide insights into
pollution prevention opportunities for other industries using solvents in wood finishing.
Labor intensive production process: Ratio of capital expenditures to labor expenditures is
0.07.1 Large establishments use continuous production processes, while small establishments
use batch processes.
Moderately diffuse industry: Some consolidation during the 1980s; 8 largest companies
account for 29 percent of industry shipments.
Establishment size: 2,948 establishments; 70 percent have less than 20 employees, but 75
percent of value of industry shipments is from establishments with more than 100 employees.
Regulatory environment The 1990 Clean Air Act Amendments included new standards for
VOCs emitted during finishing operations. A Clean Ah- Act air toxics Maximum Available
Control Technology (MACT) standard will regulate surface coating operations,
miscellaneous formaldehyde uses, and other processes that may affect this industry. Industry
estimates compliance costs of $309 million to $2.4 billion hi capital equipment, and $50
million to $600 million in annual operating costs. No uniform technologies can be applied.
An expanded listing of solvents regulated under RCRA (final rule proposed for 1995) may
also affect this industry. This industry is included in the Source Reduction Review Program
(SRRP).
'A relative rule of thumb was developed for capital intensity on the basis of the values for the
2-digit SIC sectors. The more capital intensive sectors were found to have capital-to-labor
expenditure ratios greater than 0.2, and the more labor intensive industries were found to have ratios
less than 0.1.
A-l
-------
Exhibit A-1
Dist. of Establishments and VoS
by Facility Size (SIC 2511)
1400
50-99 100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Paper Mills (SIC 2621): This industry includes establishments primarily engaged in manufacturing
paper from wood pulp and other fiber pulp, and which also may manufacture converted paper
products. Establishments primarily engaged in integrated operations of producing pulp and
manufacturing paper also are included in this industry if primarily shipping paper or paper products.
This industry does not include establishments primarily engaged in manufacturing pulp or converted
paper products from purchased paper stock.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
75.6 million pounds. Air releases accounted for 66 percent of total, water releases and
POTW transfers accounted for 25 percent of total.
Significant expenditures on pollution abatement and control: Total pollution abatement and
control expenditures were 5.6 percent of total expenditures.
Pollution results from production process and end-use: Primary sources of emissions are
pulping and bleaching stages of production process. Large quantities of solid waste result
from downstream disposal of paper products.
Capital intensive production process: Ratio of capital expenditures to labor expenditures is
0.56.
Energy intensive production process: Expenditures on fuels and electricity were 9.8 percent
of total expenditures.
Concentrated industry: The 8 largest companies account for 50 percent of the value of
industry shipments.
Establishment size: 282 establishments; 77 percent have more than 99 employees and these
establishments account for 97 percent of the value of industry shipments.
Regulatory environment Revised effluent standards for dioxins and other substances are
being developed under the Clean Water Act, and the 1990 Clean Air Act Amendments
contain new source requirements regarding ozone, carbon monoxide, and paniculate matter
that will affect establishments in regions in non-compliance with the National Ambient Air
Quality Standards (NAAQS). An air toxics MACT standard for the pulp and paper industry
(non-combustion sources) is scheduled for 1993, and a MACT standard for pulp and paper
process heaters (combustion sources) is scheduled for 1994. Strict packaging legislation in
the European community is affecting the industry, and RCRA reauthorization will likely
revise minimum recycled fiber guidelines and government purchasing requirements for
recycled paper. This industry is included in the SRRP.
A-2
-------
Exhibit A-2
Dist. of Establishments and VoS
by Facility Size (SIC 2621)
12000
1-4
5-9
10-19
20-49
50-99 100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Commercial Printing, Lithographic (SIC 2752): This industry includes establishments primarily
engaged in printing by the lithographic process. The majority of the work in this industry is
performed on a job or custom basis, but in some cases lithographed products (such as calendars,
maps, posters, etc.) are made for sale. Offset printing, photo-offset printing, and photo-
lithographing also are included in this industry. Establishments primarily engaged in lithographing
books and pamphlets (without publishing), printing or publishing greeting cards, preparing
lithographic or offset plates and related services, or providing photocopying services are not included
in this industry.
Significant pollution problem - single medium: Total 1990 TRI releases and transfers were
13.1 million pounds; 94 percent were air releases. However, since only establishments with
10 or more employees are required to report TRI data, 68 percent of all establishments in
this subsector did not report TRI releases.
Pollution results from production process: Primary source of pollution is solvent evaporation
during printing process. Analysis of this industry will provide insight into pollution
prevention incentives for other small establishments using solvents.
Intermediate production process: Ratio of capital expenditures to labor expenditures is 0.12.
Diffuse industry: The 8 largest establishments account for only 10 percent of the value of
industry shipments.
Establishment size: 25,000 establishments; 94 percent have less than 50 employees, but these
establishments account for only 37 percent of the value of industry shipments.
Regulatory environment Limits on VOC emissions under the 1990 Clean Air Act
Amendments will likely increase industry costs, as will changes to minimum recycled fiber
legislation. Ink quality and costs may be affected by a forthcoming air toxics MACT
standard for printing ink manufacturing, and an expanded listing of solvents under RCRA
(final rule proposed for 1995) may also affect this industry. This industry is a subject of the
SRRP, which is addressing the MACT standard and the potential RCRA solvent listings.
A-3
-------
Exhibit A-3
Dist. of Establishments and VoS
Facility Size (SIC 2752)
8000
in
1000
1-4
10-19
20-49
50-99
100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Plastics Materials and Resins (SIC 2821): This industry includes establishments primarily engaged
in manufacturing synthetic resins, plastics materials, and non-vulcanizable elastomers. This industry
does not include establishments primarily engaged in manufacturing fabricated plastics products or
plastics film, sheet, rod, non-textile monofilaments and regenerated cellulose from purchased resins
or from resins produced in the same plant or establishments primarily engaged in compounding
purchased resins or manufacturing adhesives.
Significant pollution problem -multiple media: Total 1990 TRI releases and transfers were
over 163 million pounds. Air releases accounted for 63 percent of total, water releases and
POTW transfers accounted for 10 percent, land releases and underground injection
accounted for 3 percent, and 24 percent were off-site transfers.
Pollution results from production and end-use: Emissions and wastes result from production
processes. Solid waste results from downstream disposal of plastic products.
Capital intensive industry: Ratio of capital expenditures to labor expenditures is 0.72.
Energy intensive production process: Expenditures on purchased fuel and electricity were
4.4 percent of total expenditures. This does not include fuels used as process feedstocks.
Relatively low market concentration: The 8 largest companies account for 33 percent of the
value of industry shipments; this is low compared to other capital intensive industries.
Establishment size: 480 total establishments; 25 percent of total have more than 99
employees and these establishments account for 80 percent of the value of industry
shipments.
High capacity utilization: During both 1989 and 1990, 96 percent of available industry
production capacity was in operation.
Regulatory environment- Disclosure of TRI data has generated public pressure to reduce
emissions. While solid waste legislation may reduce some end-uses of plastics, advances in
plastics recycling technologies may partially offset this effect, dean Air Act air toxics
MACT standards will be developed for a long list of individual plastics and resins categories.
Also, EPA is repromulgating sections of the remanded 1987 effluent guidelines for the
Organic Chemicals, Plastics and Synthetic Fibers category; repromulgation is scheduled for
1993. This industry is included in the SRRP.
A-4
-------
Exhibit A-4
Dist. of Establishments and VoS
Facility Size (SIC 2821)
W
**
0)
-------
Pesticides and Agricultural Chemicals, Not Elsewhere Classified (SIC 2879): This industry includes
establishments primarily engaged in the formulation and preparation of ready-to-use agricultural and
household pest control chemicals, including insecticides, fungicides, and herbicides, from technical
chemicals or concentrates; and the production of concentrates which require further processing
before use as agricultural pesticides. This industry also includes establishments primarily engaged
in manufacturing or formulating agricultural chemicals, no elsewhere classified, such as minor or
trace elements and soil conditioners. This industry does not include establishments primarily
engaged in manufacturing basic or technical agricultural pest control chemicals (both organic and
inorganic) or in manufacturing agricultural lime products.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
24.5 million pounds; 20 percent were air releases, 27 percent were injected underground, and
49 percent were transferred offsite.
Significant expenditures on pollution abatement and control: Expenditures on pollution
abatement and control were 6.1 percent of total expenditures.
Pollution results from production process and end-use: Emissions and wastes result from
production processes. Groundwater contamination results from pesticide use, and human
health effects result from residues on foods.
Formulating industry: Production process combines active ingredients, but does not
manufacture them.
Low capacity utilization: In 1990, only 67 percent of available production capacity was in
operation.
Capital intensive: Ratio of capital expenditures to labor expenditures is 0.62.
R&D intensive industry: Total R&D costs for a single new pesticide are estimated to be $35
million to $50 million. On average, only 1 in 20,000 chemicals make it to the field.
Concentrated industry. The 8 largest firms account for 69 percent of the value of shipments.
Establishment size: 277 establishments; only 5 percent of total have more than 249
employees, but these establishments account for 66 percent of the value of shipments.
Regulatory environment: Growing concern regarding groundwater contamination, potential
for stricter FDA regulations regarding permissible trace levels, and a recent Supreme Court
decision allowing states and municipalities to impose restrictions more stringent than Federal
regulations all have the potential to reshape the regulatory environment. Upcoming
regulations include: a Clean Air Act air toxics MACT standard for the Pesticide Production
category, final action on Clean Water Act effluent guideline and pretreatment standards for
facilities that manufacture active pesticide ingredients (scheduled for 1993); and an NPRM
for effluent guidelines for pesticide formulators and packagers (scheduled for 1994). In
addition, a variety of forthcoming FTFRA rules will affect the demand for individual
pesticides. The pesticides industry also is included in the SRRP, which is addressing the
MACT and effluent guidelines standards.
A-5
-------
Exhibit A-5
Dist. of Establishments and VoS
by Facility Size (SIC 2879)
2500
1-4
5-9
10-19
20-49 50-99 100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Petroleum Refining (SIC 2911): This industry includes establishments primarily engaged in
producing gasoline, kerosene, distillate fuel oils, residual fuel oils, and lubricants, through
fractionation or straight distillation of crude oil, redistillation of unfinished petroleum derivatives,
cracking or other processes. Establishments of this industry also produce aliphatic and aromatic
chemical as byproducts. This industry does not include establishments primarily engaged in
producing natural gasoline from natural gas, manufacturing lubricating oils and greases by blending
and compounding purchased material, re-refining used lubricating oils, or manufacturing cyclic and
acyclic organic chemicals.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
107.8 million pounds; 53 percent were air releases, 30 percent were land or underground
releases, and 10 percent were water releases or transfers to POTWs.
Pollution results from production process and end use: Emissions and wastes result from
refining process, as well as from the combustion of fuels and disposal of lubricants.
Very capital intensive industry: Ratio of capital expenditures to labor expenditures is 1.35;
industry uses a highly automated continuous production process.
Concentrated industry: The 8 largest companies account for 52 percent of the value of
industry shipments.
Establishment size: 309 total establishments; 46 percent have more than 99 employees and
these establishments account for 96 percent of the value of industry shipments.
Domestic product market Although a substantial portion of crude oil feedstock is purchased
from abroad, the industry produces essentially all of its output for domestic markets and
accounts for roughly 90 percent of the total product supplied to the U.S. market.
Regulatory environment: Clean Air Act Amendment requirements for low sulfur diesel fuel
and reformulated gasoline are causing some smaller refiners to shut down. EPA is
considering listing a number of petroleum refining process wastes as hazardous in a RCRA
rule-making that is scheduled for 1995. This industry is also the subject of an EPA cluster
group, which has been investigating multi-media approaches for controlling benzene
emissions.
A-6
-------
15
Exhibit A-6
Dist. of Establishments and VoS
by Facility Size (SIC 2911)
40000
100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Leather Tanning and Finishing (SIC 3111): This industry includes establishments primarily engaged
in tanning, currying, and finishing bides and skins into leather. This industry also includes leather
converters, who buy hides and skins and have them processed into leather on a contract basis by
others.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
18.7 million pounds; 44 percent were air releases and 42 percent were transfers to POTWs.
Pollution results from production process: Primary emissions are metal and aqueous wastes
from tanning processes and VOCs from finishing operations.
Intermediate industry: Ratio of capital expenditures to labor expenditures is 0.12.
Fairly concentrated industry: Recent contraction and consolidation; the 8 largest companies
account for 44 percent of value of industry shipments.
Establishment size: 344 total establishments; 24 percent have 50 or more employees and
these establishments account for 83 percent of the value of industry shipments.
Regulatory environment EPA is preparing to study and revise Clean Water Act effluent
limitation guidelines and pre-treatment standards. Industry feels that proposed measures
will not significantly reduce risk yet impose large financial burdens. Proposed listing of scrap
leather as a hazardous waste under RCRA has stimulated research into organic tanning
substitutes for chromium. VOC reduction requirements in the Clean Air Act Amendments
are encouraging the industry to adopt solvent-free or low-solvent finishing technologies.
A-7
-------
Exhibit A-7
Dist. of Establishments and VoS
by Facility Size (SIC 3111)
800
c
0)
(0
5
2
To
LU
-------
Electroplating. Plating, Polishing, Anodizing, and Coloring (SIC 3471): This industry includes
establishments primarily engaged in all types of electroplating, plating, anodizing, coloring, and
finishing of metals and formed products for the trade. Also included in this industry are
establishments that perform these types of activities, on their own account, on purchased metals or
formed products. Establishments that both manufacture and finish products are classified according
to the products.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
32.3 million pounds; 37 percent were air releases and 12 percent were water releases or
transfers to POTWs, while 51 percent were transferred offsite.
Significant expenditures on pollution abatement and control: Expenditures on pollution
abatement and control were 7 percent of total expenditures.
Pollution results from production process: Emissions and wastes result from production
processes.
Energy intensive: Expenditures on purchased fuel and electricity were 6.2 percent of total
expenditures.
Labor intensive: Ratio of capital expenditures to labor expenditures is 0.10.
Diffuse industry: The 8 largest firms account for only 10 percent of the value of industry
shipments.
Establishment size: 3,451 establishments; 30 percent of total have more than 19 employees
and these establishments account for 79 percent of the value of industry shipments.
Regulatory environment: Clean Air Act air toxics MACT standards will be developed for
surface coating operations and degreasing/metal cleaning processes. An expanded listing of
solvents under RCRA (final rule proposed for 1995) also may affect this industry.
Degreasing operations are being addressed under the SRRP, which is focusing on the MACT
standard and the potential RCRA solvent listings.
A-8
-------
Exhibit A-8
Dist. of Establishments and VoS
by Facility Size (SIC 3471)
1000
5-9
10-19 20-49 50-99 100-249 250-499 500-999
Facility Size (by No. of Employees)
1000+
No. of Estabs.
Value of Shipments
-------
Printed Circuit Boards (SIC 3672): This industry includes establishments primarily engaged in
manufacturing printed circuit boards.
Significant pollution problem - multiple media: Total 1990 TRI releases and transfers were
12.9 million pounds; 36 percent were air releases and 20 percent were water releases or
transfers to POTWs, while 44 percent were transferred offsite.
Intermediate Industry: Ratio of capital expenditures to labor expenditures is 0.15.
Diffuse industry: The 8 largest firms account for 22 percent of the value of industry
shipments.
Establishment size: 1,009 establishments; 6 percent of total have more than 249 employees,
but these establishments account for 70 percent of the value of industry shipments.
Regulatory environment: In response to California's tougher air and water quality standards,
the California Circuit Association was formed to participate in the creation and
implementation of pollution reduction regulations affecting the industry. A recently formed
group of PCB users, manufacturers, and suppliers called The October Project" is seeking
changes that improve product quality, reduce environmental effects, and increase process
cost-effectiveness. An expanded listing of solvents under RCRA (final rule proposed for
1995) may affect this industry.
A-9
-------
Exhibit A-9
Dist. of Establishments and VoS
by Facility Size (SIC 3672)
250
1200
5-9
10-19
20-49
50-99 100-249 250-499 500-999 1000+
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
Photographic Equipment and Supplies (SIC 3861): This industry includes establishments primarily
engaged in manufacturing: (1) photographic apparatus, equipment, parts, attachments, and
accessories, such as still and motion picture camera and projection apparatus; photocopy and
microfilm equipment; blueprinting and diazotype (white printing) apparatus; photocopy and
microfilm equipment; other photographic equipment; and (2) sensitized film, paper, cloth, and
plates, and prepared photographic chemicals for use therewith. This industry does not include
establishments primarily engaged in manufacturing photographic paper stock (unsensitized), and
paper mats, mounts, easels, and folders for photographic use; those manufacturing photographic
lenses; those manufacturing photographic glass; those manufacturing chemicals for technical
purposes, not specifically prepared and packaged for use in photography, and those manufacturing
photographic flash, flood, enlarger, and projection lamp bulbs.
Significant pollution problem - single media: Total 1990 TRI releases and transfers were
37.4 million pounds; 80 percent were air releases and 16 percent were transferred offsite.
Pollution results from production process: Primary emissions are VOCs.
Moderately capital intensive: Ratio of capital expenditures to labor expenditures is 0.30.
Concentrated industry: The 8 largest firms account for 84 percent of the value of industry
shipments.
Establishment size: 787 establishments; only 3 percent of total have more than 499
employees, but these establishments account for 77 percent of the value of industry
shipments.
Regulatory environment: More information is needed on the specific chemicals used in this
industry or incorporated hi its products to determine whether a variety of chemical-specific
rule-makings (such as expanded RCRA listings of solvents, dean Air Act section 606
phaseout of Class I chemicals, or potential Clean Air Act restrictions on VOC emissions
from consumer and commercial products) will affect this industry.
A-10
-------
Exhibit A-10
Dist. of Establishments and VoS
by Facility Size (SIC 3861)
250
16000
10-19 20-49 5040 100-249 250-499 500-999 1000+
1-4
Facility Size (by No. of Employees)
No. of Estabs.
Value of Shipments
-------
APPENDIX B
INDUSTRY-LEVEL DATA FOR MANUFACTURING SECTORS
-------
Table B-1 Total Capital Expenditure Ratio
SIC Coda
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Industry Sector
Food and Kindered Products
Tobacco Products
Textile Mill Products
Apparel and Other Textile Products
Lumber and Wood Products
Furniture and Fixtures
Paper and Allied Products
Printing and Publishing
Chemicals and Allied Products
Petroleum and Coal Products
Rubber and Misc. Plastic Products
Leather and Leather Products
Stone, Clay, and Glass Products
Primary Metal Industries
Fabricated Metal Products
Industrial Machinery and Equipment
Electronic and Other Electric Equipment
Transportation Equipment
Instruments and Other Related Products
Misc. Manufacturing Industries
TOTAL
1991
Total Capital
Expendlturea
($MM)
9,662
432
2,219
805
1,767
792
9,278
5,426
16,188
6,187
4,467
115
2,531
6,075
4,482
7,841
8,449
10,934
4,619
885
103,153
1991
Total Labor
Coata
($MM)
43,973
2,071
13,726
16,916
15,679
11,680
24,342
46,580
38,803
5,938
25,703
2,137
15,960
26,941
46,978
68,472
52,255
79,631
39,403
9,423
588,609
1991
TCE/TLC
(%)
0.22
0.21
0.16
0.05
0.11
0.07
0.38
0.12
0.42
1.04
0.17
0.05
0.16
0.21
0.10
0.11
0.16
0.14
0.12
0.09
0.18
Source: Annual Survey of Manufactures, 1991
-------
Table B-2 Concentration Ratios
SIC Coda
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Industry Sector
Food and Klndered Products
Tobacco Products
Textile Mill Products
Apparel and Other Textile Products
Lumber and Wood Products
Furniture and Fixtures
Paper and Allied Products
Printing and Publishing
Chemicals and Allied Products
Petroleum and Coal Products
Rubber and Misc. Plastic Products
Leather and Leather Products
Stone, Clay, and Glass Products
Primary Metal Industries
Fabricated Metal Products
Industrial Machinery and Equipment
Electronic and Other Electric Equipment
Transportation Equipment
Instruments and Other Related Products
Misc. Manufacturing Industries
AVERAGE
1987
% VOS by
4 Largest
Companies
11%
82%
15%
10%
11%
10%
18%
7%
14%
30%
9%
13%
11%
17%
9%
13%
19%
52%
19%
6%
19%
1987
% VOS by
8 Largest
Companies
18%
94%
25%
14%
16%
15%
30%
13%
21%
49%
13%
21%
18%
26%
13%
17%
27%
64%
28%
10%
27%
1987
% VOS by
20 Largest
Companies
32%
99%
38%
20%
23%
25%
52%
23%
34%
72%
21%
36%
30%
41%
18%
26%
39%
76%
44%
16%
38%
Source: 1987 Census of Manufactures
-------
Table B-3 Capacity Utilization Ratloa
SIC Coda
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Industry Soctor
Food and Kindered Products
Tobacco Products
Textile Mill Products
Apparel and Other Textile Products
Lumber and Wood Products
Furniture and Fixtures
Paper and Allied Products
Printing and Publishing
Chemicals and Allied Products
Petroleum and Coal Products
Rubber and Misc. Plastic Products
Leather and Leather Products
Stone, Clay, and Glass Products
Primary Metal Industries
Fabricated Metal Products
Industrial Machinery and Equipment
Electronic and Other Electric Equipment
Transportation Equipment
Instruments and Other Related Products
Misc. Manufacturing Industries
AVERAGE
1989
Capacity
Utll.
(%)
77%
88%
86%
83%
79%
76%
86%
84%
78%
84%
77%
82%
77%
82%
76%
73%
76%
73%
74%
77%
79%
1990
Capacity
Utll.
(%)
77%
92%
80%
79%
77%
70%
85%
83%
79%
82%
75%
79%
74%
80%
72%
71%
72%
72%
73%
76%
77%
Source: Current Industrial Reports
Survey of Plant Capacity, 1990
-------
Table B-4
TRI Release* by Media Grouping*
1890 Data
SIC Cod*
20
21
22
23
24
25
28
27
28
20
30
31
32
33
34
35
38
37
38
39
Industry Sector
Food and Klndered Product*
Tobacco Products
Textile MMI Product*
Apparel and Other T*xtH* Product*
Lumber and Wood Product*
Furniture and Fixture*
Paper and Allied Product*
Printing and Publishing
Chemical* and Allied Product*
Petroleum and Coal Product*
Rubber and Misc. Plastic Product*
Leather and Leather Product*
Stone, Clay, and Gla** Product*
Primary Metal Industrie*
Fabricated Metal Product*
Industrial Machinery and Equipment
Electronic and Other Electric Equipment
Transportation Equipment
Instrument* and Other Related Product*
Misc. Manufacturing Industrie*
TOTAL
Air
11,735,047
2.283,058
25,287,090
1,228,418
31,250,085
52,088,058
205,820,703
25,810,000
407,418,075
26,100.028
120,881,310
8.384,347
15,238,880
180,140,360
80,385,463
31.316.333
55,530,407
124,106,602
33.462,536
17,502,800
1,534,460,200
Water ft POTWs
47,511.854
31,733
8,402,126
107,488
311.705
341.461
80,887,120
351,241
405,434,280
11,250,650
0,322,487
8,353,727
1,043,240
21,604.680
7,805,481
2,076,175
12,834,505
0,003.674
2,003,308
655,816
641,172,875
Land A Underground
8,646,020
1.500
36,766
770
126,774
76.301
7.371.541
4,684
774.802.467
32.110,853
214.400
20.603
0.836,375
334,138,545
005,117
140,126
2.752.576
1.040.685
117.645
40.334
1,173,392,264
Offsrte
Transfer*
0,048,554
38,663
3,117,050
160.772
7.155,703
4,363,021
18,474,041
4,403,815
252,042,067
8,040,004
22,407.000
2,480,828
11,086.130
208,102,102
70.131,477
13.658,221
35,317.742
30.685.231
10,108,224
8,456.588
818,107,113
Total
76,041.475
2,354,054
38,034,852
1,506,444
38,844.267
56,840.620
321,142.414
30.360.830
1,020.606.806
78.421.423
161,826.277
10,248.505
30.004.423
814.075,705
150.317.538
48.000,857
106.444.230
175.735.102
45.781,803
24.655.547
4,167,132,472
Source: EPA Toxic Release Inventory. CO-ROM (1087-00)
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Table B-5 Pollution Abatement and Energy Expendlturee
SIC Code
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Industry Sector
Food and Kindered Products
Tobacco Products
Textile Mill Products
Apparel and Other Textile Products
Lumber and Wood Products
Furniture and Fixtures
Paper and Allied Products
Printing and Publishing
Chemicals and Allied Products
Petroleum and Coal Products
Rubber and Misc. Plastic Products
Leather and Leather Products
Stone, Clay, and Glass Products
Primary Metal Industries
Fabricated Metal Products
Industrial Machinery and Equipment
Electronic and Other Electric Equipment
Transportation Equipment
Instruments and Other Related Products
Misc. Manufacturing Industries
TOTAL
1991
Total Expendlturee
[CE+L+M]
($MM)
296,115
10,054
54,698
49,670
60,911
31,821
104,225
104,943
193,051
144,514
80,253
7,070
46,118
119,865
131,587
195,199
150,470
300,303
87,263
27,558
2,195,687
1991
Total Pollution
Abatement
($MM)
1,735
54
271
N/A
440
160
2,868
265
6,113
4,312
523
61
619
2,676
1,020
702
1,067
1,420
384
88
24,776
1091
TPA/TE
(%)
0.59%
0.54%
0.49%
0.00%
0.72%
0.50%
2.75%
0.25%
3.17%
2.98%
0.65%
0.86%
1.34%
2.23%
0.77%
0.36%
0.71%
0.47%
0.44%
0.32%
1.01%
1991
Purchased
Fuele & Elec.
($MM)
5,012
127
1,997
491
1,584
480
5,483
1,346
9,394
3,900
2,479
81
3,377
7,668
2,787
2,569
2,268
2.780
1,098
423
55,342
1991
Fuele/TE
(%)
1.69%
1.26%
3.65%
0.99%
2.60%
1.51%
5.26%
1 .28%
4.87%
2.70%
3.09%
1.14%
7.32%
6.40%
2.12%
1.32%
1.51%
0.93%
1.26%
1.54%
2.62%
Sources: 1991 Annual Survey of Manufactures
and Current Industrial Report, Pollution Abatement Costs & Expenditures, 1991
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