&EPA
United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park NC 27711
EPA-450 3-80-035a
October 1 980
Air
Metal Coil Draft
Surface Coating
Industry —
Background Information
for Proposed Standards
-------
EPA-450/3-80-035a
Metal Coil Surface
Coating Industry —
Background Information
for Proposed Standards
Emission Standards and Engineering Division
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air, Noise, and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
October 1980
-------
This report has been reviewed by the Emission Standards and
Engineering Division of the Office of Air Quality Planning and
Standards, EPA, and approved for publication. Mention of
trade names or commercial products is not intended to constitute
endorsement or recommendation for use. Copies of this report
are available through the Library Services Office (MD-35),
U.S. Environmental Protection Agency, Research Triangle Park,
N.C. 27711, or from National Technical Information Services,
5285 Port Royal Road, Springfield, Virginia 22161.
Publication No. EPA-450/3-80-035a
ii
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ENVIRONMENTAL PROTECTION AGENCY
Background Information and Draft
Environmental Impact Statement
for Metal Coil Surface Coating
Prepared by:
_
Don R. Goodwin/ ' (We)
Director, Emission Standards and Engineering Division
U.S. Environmental Protection Agency
Research Triangle Park, NC 27711
1. The proposed standards of performance would limit emissions of vola-
tile organic compounds from new, modified, and reconstructed metal
coil surface coating operations. Section 111 of the Clean Air Act (42
U.S.C. 7411), as amended, directs the Administrator to establish
standards of performance for any category of new stationary sources of
air pollution that "... causes or contributes significantly to air
pollution which may reasonably be anticipated to endanger public
health or welfare." The industrial centers of the Northeast and
Midwest will be particularly affected by the proposed standards.
2. Copies of this document have been sent to the following Federal Depart-
ments: Labor, Health and Human Services, Defense, Transportation,
Agriculture, Commerce, Interior, and Energy; the National Science
Foundation; the Council on Environmental Quality; members of the State
and Territorial Air Pollution Program Administrators; the Association
of Local Air Pollution Control Officials; EPA Regional Administrators;
and other interested parties.
3. The comment period for review of this document is 60 days. Mr. Gene
Smith may be contacted regarding the date of the comment period.
4. For additional information contact:
Mr. Gene W. Smith
Standards Development Branch (MD-13)
U.S. Environmental Protection Agency
Research Triangle Park, NC 27711
telephone: (919) 541-5421
5. Copies of this document may be obtained from:
U.S. EPA Library (MD-35)
Research Triangle Park, NC 27711
National Technical Information Service
5285 Port Royal Road
Springfield, VA 22161
11 i
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TABLE OF CONTENTS
Page
1. SUMMARY 1-1
1.1 Regulatory Alternatives 1-1
1.2 Environmental Impact 1-1
1.3 Economic Impact 1-2
1.4 Energy Impact 1-2
2. INTRODUCTION 2-1
2.1 Background and Authority for Standards 2-1
2.2 Selection of Categories of Stationary Sources 2-4
2.3 Procedure for Development of Standards of
Performance 2-6
2.4 Consideration of Costs 2-8
2.5 Consideration of Environmental Impacts 2-9
2.6 Impact on Existing Sources 2-10
2.7 Revision of Standards of Performance 2-11
3. THE COIL COATING INDUSTRY 3-1
3.1 General 3-1
3.2 Coil Coating Processes and Emissions 3-1
3.3 Baseline Emissions 3-8
3.4 References 3-10
4. EMISSION CONTROL TECHNIQUES 4-1
4.1 Introduction 4-1
4.2 Description of Industry Control Techniques 4-1
4.2.1 Thermal Incineration 4-2
4.2.1.1 Zone Incineration 4-4
4.2.1.2 Regenerative Heat Recovery 4-5
4.2.1.3 Recuperative Heat Recovery. . 4-5
4.2.1.4 Direct Recycle Heat Recovery 4-6
4.2.2 Catalytic Incineration 4-7
4.2.3 Coating Rooms 4-8
4.2.4 Waterborne Coatings. 4-9
4.2.5 Other Control Methods 4-10
4.3 References 4-11
5. MODIFICATIONS AND RECONSTRUCTION 5-1
5.1 Descriptions of Typical Modifications and
Reconstruction 5-1
5.2 Retrofit Considerations 5-2
5.3 References 5-3
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CONTENTS (continued)
Page
6. MODEL PLANTS AND REGULATORY ALTERNATIVES 6-1
6.1 Model Plants 6-1
6,2 Regulatory Alternatives 6-7
7. ENVIRONMENTAL IMPACT 7-1
7.1 Air Pollution Impact 7-1
7.2 Water Pollution Impact 7-8
7.3 Solid Waste Disposal Impact 7-9
7.4 Energy Impact 7-9
7.5 Other Environmental Concerns 7-14
7.5.1 Irreversible and Irretrievable Commit-
ment of Resources 7-14
7.5.2 Environmental Impact of Delayed Standards . 7-14
7.6 References 7-14
8. ECONOMIC IMPACT 8-1
8.1 Industry Chacterization 8-1
8.1.1 General Profile 8-1
8.1.2 Trends 8-17
8.1.2.1 Historical Trends 8-17
8.1.2.2 Future Trends 8-19
8.2 Cost Analysis of Control Options 8-22
8.2.1 Introduction .... ^ ^^
8.2.2 New Facilities !'**'!. 8-30
8.2.2.1 Capital Costs 8-30
8.2.2.2 Annualized Costs 8-32
8.2.2.3 Cost Effectiveness ' 8-35
8.2.2.4 Base Cost of Facility . 8-40
8.2.3 Modified/Reconstructed Facilities ... 8-47
8.3 Other Cost Considerations 8-50
8.3.1 The Clean Water Act .......... 8-52
8.3.2 Occupational Exposure . . 8-52
8.3.3 Toxic Substances Control ............ 8-55
8.4 Economic Impact Analysis. .................. 8-55
8.4.1 Summary . . . . 8-56
8.4.2 Economic Conditions in the Industry. ......... 8-57
8.4.2.1 Industry Structure. ............. 8-58
8.4.2.2 Industry Performance * 8-60
8.4.3 Methodology ' Q-B2
8.4.3.1 Discounted Cash Flow Approach '.'.'.'.'.'.'' 8-62
8.4.3.2 Project Ranking Criterion .......... 8-66
8.4.3.3 Determining the Impacts of the
Regulatory Alternatives 8-67
8.4.4 Economic Impacts on New Facilities '.'.'.'.'. 8-68
8.4.4.1 Price Impacts '.'.'.['.'. 8-71
8.4.4.2 Return on Investment Impacts. ....... 8-71
8.4.4.3 Incremental Capital Requirements. ...... 8-71
8.4.4.4 Summary ' 3.75
VI
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CONTENTS (continued)
8.4.5 Economic Impacts on Modified Facilities ........ 8-76
8.4.5.1 Price Impacts ................ 8-79
8.4.5.2 ROI Impacts ................. 8-79
8.4.5.3 Incremental Capital Requirements ....... 8-79
8.4.5.4 Summary ................... 8-83
8.5 Potential Socioeconomic and Inflationary Impacts ....... 8-83
8.5.1 Annual ized Cost Criterion ............... 8-84
8.5.2 Product Price Criterion ................ 8-84
8.6 Financial Data for Coil Coating Firms ............ 8-88
8.7 References .......................... 8-91
Appendix A: Evolution of the Background Information Document ..... A-l
Appendix B: Index to Environmental Impact Considerations ....... B-l
Appendix C: Emission Source Test Data ................ C-l
Appendix D: Emission Measurement and Continuous Monitoring ...... D-l
Appendix E: Revised Regulatory Alternatives ..... ........ E-l
vn
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LIST OF FIGURES
Number
3-1 Schematic diagram of a coil coating line 3-3
6-1 Schematic diagram of model coil coating line 6-2
6-2 List of model plant parameters for small plant with
1 coating line 5-4
6-3 List of model plant parameters for medium plant with
1 coating line 5-5
6-4 List of model plant parameters for large plant with
1 coating line 6-6
7-1 List of States and major metropolitan areas currently
regulating organic solvent emissions through
specific numerical standards 7-3
7-2 List of States not regulating organic solvent emissions
through specific numerical standards 7-4
8-1 Total projected shipments of precoated metal: 1981-1985. . . . 8-20
8-2 List of parameters for model coil coating lines 8-24
8-3 Schematic diagram of a model coil coating line with
thermal incineration and primary and secondary heat
recovery (Control Option 2) 8-29
V111
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LIST OF TABLES
Number
1-1 Assessment of Environmental and Economic Impacts
for Each Regulatory Alternative Considered 1-3
3-1 Coatings Used in Coil Coating. 3-4
4-1 Emission Test Results for Thermal Incinerators on
Coil Coating Lines . 4-3
7-1 Estimated Environmental Impacts. . . .. 7-7
7-2 Rate of Fuel Energy Usage of Model Coil Coating Lines 7-10
7-3 Rate of Electrical Energy Usage of Model Coating Lines .... 7-11
7-4 Estimated Annual Increase in National Fuel Consumption
Due to Industry Growth . . . . 7-13
8-1 Domestic Coil Coating Establishments Currently
in Operation: 1979 8-3
8-2 Current and Suggested End Uses of Precoated Metal Strip. ... 8-8
8-3 Coatings, Prices, and Metals Coated 8-14
8-4 Shipments of Precoated Aluminum and Steel:
1976 and 1977. . 8-15
8-5 Major Markets for Precoated Metal: 1976 and 1977, 8-16
8-6 Estimate of Total Shipments of Prepainted or Pre-
coated Metal Coil by Coaters Located in the
United States, Canada, and Mexico. . 8-18
8-7 Regulatory Alternatives and Control Options Considered
in the Economic Analysis 8-23
8-8 Key Parameters for Control Option 1: Multiple Zone
Incinerators and Coating Rooms 8-25
8-9 Key Parameters for Control Option 2: Thermal
Incineration with Heat Recovery 8-26
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LIST OF TABLES (continued)
Number Page
8-10 Key Parameters for Control Option 3: Thermal
Incineration with Heat Recovery and Coating Rooms 8-27
8-11 Capital Costs of Control Options . . . 8-31
8-12 Component Capital Cost Factors Used in Calculating
Total Installed Costs 8-33
8-13 Calculation of Annual 1 zed Costs of Air Pollution
Control Systems 8-34
8-14 Annual Operating Costs of Control Options 8-36
8-15 Annual!zed Cost of VOC Control Options for Small
Model Line 8-37
8-16 Annualized Costs of VOC Control Options for Medium
Model Line 8_38
8-17 Annualized Costs of VOC Control Options for Large
Model Line 8-39
8-18 Marginal Cost Effectiveness of NSPS Above SIP
Regulations for Small Model Line 8-41
8-19 Marginal Cost Effectiveness of NSPS Above SIP
Regulations for Medium Model Line 8-42
8-20 Marginal Cost Effectiveness of NSPS Above SIP
Regulations for Large Model Line 8-43
8-21 Capital Costs of New Coil Coating Facilities 8-44
8-22 Annual Operating Costs of Model Coil Coating
Lines Without Emission Control Equipment 8-46
8-23 Increase in Annual Operating Costs of Existing
Lines Having CTG Control Systems Due to
Increased Production and Additional Emission
Control 8_4g
8-24 Increase in Annual Operating Costs of Existing
Lines Having 85 Percent Control Due to Increased
Production and Additional (95 Percent Overall)
Emission Control to Meet NSPS 8-51
8-25 Threshold Limit Values (TLV)'and Lower Explosive Limits
(LEL) of Typical Solvents 8-54
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LIST OF TABLES (continued)
Number Page
8-26 Concentration Ratios in the Metal Coating
and Allied Services Industry 8-59
8-27 Selected Financial Statistics for the Coil
Coating Industry, 1976-1978 8-61
8-28 Definitions 8-64
8-29 Summary Cost Data for New Facilities 8-69
8-30 Unit Prices and Rankings for New Facilities 8-70
8-31 Price Impacts of Regulatory Alternatives
on New Facilities 8-72
8-32 Return on Investment Impacts of Regulatory
Alternatives on New Facilities 8-73
8-33 Incremental Capital Requirements of Regulatory
Alternatives for New Facilities 8-74
8-34 Summary Cost Data for Modified Facilities 8-77
8-35 Unit Prices and Rankings for Modified Facilities 8-78
8-36 Price Impacts of Regulatory Alternatives on
Modified Facilities 8-80
8-37 Return on Investment Impacts of Regulatory Alternatives
on Modified Facilities 8-81
8-38 Incremental Capital Requirements of Regulatory
Alternatives for Modified Facilities 8-82
8-39 Incremental Annualized Cost of Compliance With
Regulatory Alternative III, 1985 8-85
8-40 Overall Price Impact of Regulatory Alternative III 8-87
8-41 Financial Statistics for Coil Coating Firms 8-89
8-42 Yields by Rating Class for Cost of Debt Funds, 1979 8-92
XI
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1. SUMMARY
Section 111 of the Clean Air Act (42 U.S.C. 7411) as amended directs
the Administrator to establish standards of performance for any category of
new stationary sources of air pollution that "causes or contributes signifi-
cantly to air pollution which may reasonably be anticipated to endanger
public health and welfare." The metal coil surface coating industry falls
into this classification, and standards of performance have been developed
for volatile organic compound (VOC) emissions from this industry.
1.1 REGULATORY ALTERNATIVES
Five regulatory alternatives are considered. The first involves
no additional regulation. Emissions from new, modified, or recon-
structed metal coil coating plants would continue to be governed by
State regulations.
The second regulatory alternative would limit emissions to those
resulting from the use of the best available emission control device in
conjunction with current industry practice for capturing VOC emissions.
The third regulatory alternative is the same as the second, except
that a separate, higher emission limit would be included for plants that
use low-VOC content coatings.
The fourth regulatory alternative would limit emissions to those
resulting from the use of the best available emission control device and
would require that coating application stations be enclosed in rooms.
The fifth regulatory alternative is the same as the fourth, except
that a separate, higher emission limit would be included for plants that
use low-VOC content coatings.
1.2 ENVIRONMENTAL IMPACT
Under Regulatory Alternative I, there would be no environmental impact,
either beneficial or adverse. Under Regulatory Alternative II, VOC emissions
1-1
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would be reduced by 1,915 megagrams (Mg) per year in 1985; under Regulatory
Alternative III, they would be reduced by 1,815 Mg; under Regulatory Alterna-
tive IV, they would be reduced by 3,605 Mg; and, under Regulatory Alterna-
tive V, they would be reduced by 3,200 Mg. No adverse impacts on water,
solid waste, or noise would be expected from any of the regulatory alterna-
tives. A matrix summarizing the environmental, energy, and economic impacts
is presented in Table 1-1.
1.3 ECONOMIC IMPACT
Under Regulatory Alternative I, no economic impact would result for
the coil coating industry. Under Regulatory Alternatives II, III, IV, or V,
the price of coil coated metal could be expected to increase by 2.0 to
3.1 percent nationally after 5 years. Price increases at individual plants
could be either higher or lower than this national figure.
1.4 ENERGY IMPACT
Under Regulatory Alternative I, no energy impact would occur, but for
Regulatory Alternatives II through V, energy consumption by the coil coating
industry would be expected to increase by about 1 percent per year above
the current level. In the fifth year, the increase in energy consumption
would be equivalent to about 200,000 barrels of oil.
1-2
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TABLE 1-1. ASSESSMENT OF ENVIRONMENTAL AND ECONOMIC IMPACTS FOR EACH REGULATORY ALTERNATIVE CONSIDERED
u>
Administrative
action
Regulatory
Alternative I
Regulatory
Alternative II
Regulatory
Alternative III
Regulatory
Alternative IV
Regul atory
Alternative V
Delayed
standards
Air
impact
0
+2a
+2a
+3
+3
-1
Water
impact
0
0
0
0
0
0
Solid waste
impact
0
0
0
0
0
0
Energy
impact
0
-la
-la
-1
-1
0
Noise
impact
0
0
0
0
0
0
Economic
impact
0
-2a
-2a
-3
-3
0
aLong-term impact.
KEY: + Beneficial impact
- Adverse impact
0 No impact
1 Negligible impact
2 Small impact
3 Moderate impact
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2. INTRODUCTION
2.1 BACKGROUND AND AUTHORITY FOR STANDARDS
Before standards of performance are proposed as a Federal regulation,
air pollution control methods available to the affected industry and the
associated costs of installing and maintaining the control equipment are
examined in detail. Various levels of control, based on different technolo-
gies and degrees of efficiency, are expressed as regulatory alternatives.
Each of these alternatives is studied by the U.S. Environmental Protection
Agency (EPA) as a prospective basis for a standard. The alternatives art
investigated in terms of their impacts on the economics and well-being of
the industry, their impacts on the national economy, and their impacts on
the environment. This document summarizes the information obtained through
these studies so that interested persons will be able to see the information
considered by EPA in the development of the proposed standard.
Standards of performance for new stationary sources are established
under Section 111 of the Clean Air Act (42 U.S.C. 7411), as amended, herein
referred to as the. Act. Section 111 directs the Administrator to establish
standards of performance for any category of new stationary source of air
pollution that "causes, or contributes significantly to air pollution which
may reasonably be anticipated to endanger public health or welfare."
The Act requires that standards of performance for stationary sources
reflect "the degree of emission reduction achievable which (taking into
consideration the cost of achieving such emission reduction, and any nonair
quality health and environmental impact and energy requirements) the Adminis-
trator determines has been adequately demonstrated for that category of
sources." The standards apply only to stationary sources, the construction
or modification of which commences after regulations are proposed by publi-
cation in the Federal Register.
2-1
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The 1977 amendments to the Act altered or added numerous provisions
that apply to the process of establishing standards of performance:
EPA is required to list the categories of major stationary sources
that have not already been listed and regulated uncier standards
of performance. Regulations must be promulgated for these new
categories on the following schedule:
25 percent of the listed categories by August 7, 1980
75 percent of the listed categories by August 7, 1981
100 percent of the listed categories by August 7, 1982.
A governor of a State may apply to the Administrator to add a
category not on the list or to have a standard of performance
revised.
EPA is required to review the standards of performance every 4
years and, if appropriate, revise them.
EPA is authorized to promulgate a standard based on design,
equipment, work practice, or operational procedures when a stand-
ard based on emission levels is not feasible.
IjLuen? standards of performance is redefined, and a new term
technological system of continuous emission reduction" is defined.
tJnr def ' "I*1 Ol«. clarify that the control system must be
nnS- may include a low-polluting or nonpolluting process
operation.
" n£Lr1Sr5*tWe??1thS pr°P°sal and Promulgation of a standard
under Section 111 of the Act may be extended to 6 months.
Standards of performance, by themselves, do not guarantee protection
of health or welfare because they are not designed to achieve any specific
air quality levels. Rather, they are designed to reflect the degree of
emission limitation achievable through application of the best adequately
demonstrated technological system of continuous emission reduction, with
the cost of achieving such emission reduction, any nonair quality health and
environmental impacts, and energy requirements being considered.
Congress had several reasons for including these requirements. First,
standards with a degree of uniformity are needed to prevent situations
where some States may attract industries by relaxing standards relative to
other States. Second, stringent standards enhance the potential for
long-term growth. Third, stringent standards may help achieve long-term
cost savings by avoiding the need for more expensive retrofitting if pollu-
tion ceilings are reduced in the future. Fourth, certain types of stand-
ards for coal-burning sources can adversely affect the coal market by
2-2
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driving up the price of low-sulfur coal or effectively excluding certain
coals from the reserve base because their untreated pollution potentials
are high. Congress does not intend that New Source Performance Standards
(NSPS) contribute to these problems. Fifth, the standard-setting process
should create incentives for improved technology.
Promulgation of standards of performance does not prevent State or
local agencies from adopting more stringent emission limitations for the
same sources. States are free under Section 116 of the Act to establish
even more stringent emission limits than those established under Section 111
or those necessary to attain or maintain the National Ambient Air Quality
Standards (NAAQS) under Section 110. Thus, new sources may in some cases
be subject to limitations more stringent than standards of performance
under Section 111, and prospective owners and operators of new sources
should be aware of this possibility in planning for such facilities.
A similar situation may arise when a major emitting facility is to be
constructed in a geographic area that falls under the prevention of signifi-
cant deterioration of air quality provisions of Part C of the Act. These
provisions require, among other things, that major emitting facilities to
be constructed in such areas are to be subject to best available control
technology. The term best available control technology (BACT), as defined
in the Act, means
... an emission limitation based on the maximum degree of
reduction of each pollutant subject to regulation under this
Act emitted from, or which results from, any major emitting
facility, which the permitting authority, on a case-by-case
basis, taking into account energy, environmental, and economic
impacts and other costs, determines is achievable for such
facility through application of production processes and avail-
able methods, systems, and techniques, including fuel cleaning
or treatment or innovative fuel combustion techniques for
control of each such pollutant. In no event shall application
of "best available control technology" result in emissions of
any pollutants which will exceed the emissions allowed by any
applicable standard established pursuant to Sections 111 or 112
of this Act. (Section 169(3))
Although standards of performance are normally structured in terms of
numerical emission limits, where feasible, alternative approaches are some-
times necessary. In some cases physical measurement of emissions from a
2-3
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new source may be impractical or exorbitantly expensive. Section lll(h)
provides that the Administrator may promulgate a design or equipment stand-
ard in cases where it is not feasible to prescribe or enforce a standard of
performance. For example, emissions of hydrocarbons from storage vessels
for petroleum liquids are greatest during tank filling. The nature of the
emissions—high concentrations for short periods during filling and low
concentrations for longer periods during storage—and the configuration of
storage tanks make direct emission measurement impractical. Therefore,
equipment specification has been a more practical approach to standards of
performance for storage vessels.
In addition, Section lll(j) authorizes the Administrator to grant
waivers of compliance to permit a source to use innovative continuous
emission control technology. In order to grant the waiver, the Administra-
tor must find (1) a substantial likelihood that the technology will produce
greater emission reductions than the standards require or an equivalent
reduction at lower economic, energy, or environmental costs; (2) the proposed
system has not been adequately demonstrated; (3) the technology will not
cause or contribute to an unreasonable risk to the public health, welfare,
or safety; (4) the governor of the State where the source is located consents;
and (5) the waiver will not prevent the attainment or maintenance of any
ambient standard. A waiver may have conditions attached to assure that the
source will not prevent attainment of any NAAQS. Any such condition will
have the force of a performance standard. Finally, waivers have definite
end dates and may be terminated earlier if the conditions are not met or if
the system fails to perform as expected. In such a case, the source may be
given up to 3 years to meet the standards with a mandatory progress schedule.
2.2 SELECTION OF CATEGORIES OF STATIONARY SOURCES
Section 111 of the Act directs the Adminstrator to list categories of
stationary sources. The Administrator "shall include a category of sources
in such list if in his judgment it causes, or contributes significantly to,
air pollution which may reasonably be anticipated to endanger public health
or welfare." Proposal and promulgation of standards of performance are to
follow.
Since passage of the Clean Air Amendments of 1970, considerable atten-
tion has been given to the development of a system for assigning priorities
2-4
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to various source categories. The approach specifies areas of interest by
considering the broad strategy of the Agency for implementing the Clean Air
Act. Often, these "areas" are actually pollutants emitted by stationary
sources. Source categories that emit these pollutants are evaluated and
ranked by a process involving such factors as (1) level of emission control
(if any) already required by State regulations, (2) estimated levels of
control that might be required from standards of performance for the source
category, (3) projections of growth and replacement of existing facilities
for the source category, and (4) the estimated incremental amount of air
pollution that could be prevented in a preselected future year by standards
of performance for the source category. Sources for which an NSPS was
promulgated or under development during 1977 or earlier were selected based
on these criteria.
The Clean Air Act amendments of August 1977 establish specific criteria
to be used in determining priorities for all major source categories not
yet listed by EPA. These are (1) the quantity of air pollutant emissions
that each such category will emit, or will be designed to emit; (2) the
extent to which each such pollutant may reasonably be anticipated to endan-
ger public health or welfare; and (3) the mobility and competitive nature
of each such category of sources and the consequent need for nationally
applicable new source standards of performance.
The Administrator is to promulgate standards for these categories
according to the schedule referred to earlier.
In some cases it may not be feasible immediately to develop a standard
for a source category with a high priority. This might happen when a
program of research is needed to develop control techniques or because
techniques for sampling and measuring emissions may require refinement. In
the development of standards, differences in the time required to complete
the necessary investigation for different source categories must also be
considered. For example, substantially more time may be necessary if
numerous pollutants must be investigated from a single source category.
Further, even late in the development process the schedule for completion
of a standard may change. For example, inablility to obtain emission data
from well-controlled sources in time to pursue the development process in a
systematic fashion may force a change in scheduling. Nevertheless, priority
2-5
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ranking is, and will continue to be, used to establish the order in which
projects are initiated and resources assigned.
After the source category has been chosen, the types of facilities
within the source category to which the standard will apply m::st be deter-
mined. A source category may have several facilities that cause air pollu-
tion, and emissions from some of these facilities may vary from insignifi-
cant to very expensive to control. Economic studies of the source category
and of applicable control technology may show that air pollution control is
better served by applying standards to the more severe pollution sources.
For this reason, and because there is no adequately demonstrated system for
controlling emissions from certain facilities, standards often do not apply
to all facilities at a source. For the same reasons, the standards may not
apply to all air pollutants emitted. Thus, although a source category may
be selected to be covered by a standard of performance, not all pollutants
or facilities within that source category may be covered by the standards.
2.3 PROCEDURE FOR DEVELOPMENT OF STANDARDS OF PERFORMANCE
Standards of performance must (1) realistically reflect best demon-
strated control practice; (2) adequately consider the cost, the nonair
quality health and environmental impacts, and the energy requirements of
such control; (3) be applicable to existing sources that are modified or
reconstructed, as well as new installations; and (4) meet these conditions
for all variations of operating conditions being considered anywhere in the
country.
The objective of a program for developing standards is to identify the
best technological system of continuous emission reduction that has been
adequately demonstrated. The standard setting process involves three
principal phases of activity: (1) information gathering, (2) analysis of
the information, and (3) development of the standard of performance.
During the information gathering phase, industries are queried through
a telephone survey, letters of inquiry, and plant visits by EPA representa-
tives. Information is also gathered from many other sources, and a litera-
ture search is conducted. From the knowledge acquired about the industry,
EPA selects certain plants at which emission tests are conducted to provide
reliable data that characterize the pollutant emissions from well-controlled
existing facilities.
2-6
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In the second phase of a project, the information about the industry
and the pollutants emitted is used in analytical studies. Hypothetical
"model plants" are defined to provide a common basis for analysis. The
model plant definitions, national pollutant emission data, and existing
State regulations governing emissions from the source category are then
used in establishing "regulatory alternatives." These regulatory alterna-
tives are essentially different levels of emission control.
EPA conducts studies to determine the impact of each regulatory alter-
native on the economics of the industry and on the national economy, on the
environment, and on energy consumption. From several possibly applicable
alternatives, EPA selects the single most plausible regulatory alternative
as the basis for a standard of performance for the source category under
study.
In the third phase of a project, the selected regulatory alternative
is translated into a standard of performance, which, in turn, is written in
the form of a Federal regulation. The Federal regulation, when applied to
newly constructed plants, will limit emissions to the levels indicated in
the selected regulatory alternative.
As early as is practical in each standard setting project, EPA repre-
sentatives discuss the possibilities of a standard and the form it might
take with members of the National Air Pollution Control Techniques Advisory
Committee (NAPCTAC). Industry representatives and other interested parties
also participate in these meetings.
The information acquired in the project is summarized in the Background
Information Document (BID). The BID, the standard, and a preamble explain-
ing the standard are widely circulated to the industry being considered for
control, environmental groups, other government agencies, and offices
within EPA. Through this extensive review process, the points of view of
expert reviewers are considered as changes are made to the documentation.
A "proposal package" is assembled and sent through the offices of EPA
Assistant Administrators for concurrence before the proposed standard is
officially endorsed by the EPA Administrator. After being approved by the
EPA Administrator, the preamble and the proposed regulation are published
in the Federal Register.
2-7
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As a part of the Federal Register announcement of the proposed regula-
tion, the public is invited to participate in the standard-setting process.
EPA invites written comments on the proposal and also holds a public hear-
ing to discuss the proposed standards with interested parties. All public
comments are summarized and incorporated into a second volume of the BID.
All information reviewed and generated in studies in support of the standard
of performance is available to the public in a "docket" on file in Washington,
D.C.
Comments from the public are evaluated, and the standard of performance
may be altered in response to the comments.
The significant comments and EPA's position on the issues raised are
included in the "preamble" of a "promulgation package," which also contains
the draft of the final regulation. The regulation is then subjected to
another round of review and refinement until it is approved by the EPA
Administrator. After the Administrator signs the regulation, it is pub-
lished as a "final rule" in the Federal Register.
2.4 CONSIDERATION OF COSTS
Section 317 of the Act requires an economic impact assessment with
respect to any standard of performance established under Section 111 of the
Act. The assessment is required to contain an analysis of (1) the costs of
compliance with the regulation, including the extent to which the cost of
compliance varies depending on the effective date of the regulation and the
development of less expensive or more efficient methods of compliance; (2)
the potential inflationary or recessionary effects of the regulation; (3)
the effects the regulation might have on small business with respect to
competition; (4) the effects of the regulation on consumer costs; and
(5) the effects of the regulation on energy use. Section 317 also requires
that the economic impact assessment be as extensive as practicable.
The economic impact of a proposed standard upon an industry is usually
addressed both in absolute terms and in terms of the control costs that
would be incurred as a result of compliance with typical, existing State
control.regulations. An incremental approach is necessary because both new
and existing plants would be required to comply with State regulations in
the absence of a Federal standard of performance. This approach requires a
2-8
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detailed analysis of the economic impact from the cost differential that
would exist between a proposed standard of performance and the typical
State standard.
Air pollutant emissions may cause water pollution problems, and cap-
tured potential air pollutants may pose a solid waste disposal problem.
The total environmental impact of an emission source must, therefore, be
analyzed and the costs determined whenever possible.
A thorough study of the profitability and price setting mechanisms of
the industry is essential to the analysis so that an accurate estimate of
potential adverse economic impacts can be made for proposed standards. It
is also essential to know the capital requirements for pollution control
systems already placed in plants so additional capital requirements necessi-
tated by these Federal standards can be placed in proper perspective.
Finally, it is necessary to assess the availability of capital to provide
the additional control equipment needed to meet the standards of performance.
2.5 CONSIDERATION OF ENVIRONMENTAL IMPACTS
Section 102(2)(C) of the National Environmental Policy Act (NEPA) of
1969 requires Federal agencies to prepare detailed environmental impact
statements on proposals for legislation and other major Federal actions
significantly affecting the quality of the human environment. The objective
of NEPA is to build into the decisionmaking process of Federal agencies a
careful consideration of all environmental aspects of proposed actions.
In a number of legal challenges to standards of performance for various
industries, the U.S. Court of Appeals for the District of Columbia Circuit
has held that environmental impact statements need not be prepared by the
Agency for proposed actions under Section 111 of the Clean Air Act. Essen-
tially, the Court of Appeals has determined that the best system of emission
reduction requires the Administrator to take into account counter-productive
environmental effects of a proposed standard, as well as economic costs to
the industry. On this basis, therefore, the Court established a narrow
exemption from NEPA for EPA determination under Section 111.
In addition to these judicial determinations, the Energy Supply and
Environmental Coordination Act (ESECA) of 1974 (PL-93-319) specifically
exempted proposed actions under the Clean Air Act from NEPA requirements.
2-9
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According to Section 7(c)(l), "No action taken under the Clean Air Act
shall be deemed a major Federal action significantly affecting the quality
of the human environment within the meaning of the National Environmental
Policy Act of 1969." (15 U.S.C. 793c(l))
Nevertheless, the Agency has concluded that the preparation of environ-
mental impact statements could have beneficial effects on certain regulatory
actions. Consequently, although not legally required to do so by Section 102
(2)(C) of NEPA, EPA has adopted a policy requiring that environmental
impact statements be prepared for various regulatory actions, including
standards of performance developed under Section 111 of the Act. This
voluntary preparation of environmental impact statements, however, in no
way legally subjects the Agency to NEPA requirements.
To implement this policy, a separate section in this document is
devoted solely to an analysis of the potential environmental impacts associ-
ated with the proposed standards. Both adverse and beneficial impacts in
such areas as air and water pollution, increased solid waste disposal, and
increased energy consumption are discussed.
2.6 IMPACT ON EXISTING SOURCES
Section 111 of the Act defines a new source as "any stationary source,
the construction or modification of which is commenced" after the proposed
standards are published. An existing source is redefined as a new source
if "modified" or "reconstructed" as defined in amendments to the general
provisions of Subpart A of 40 CFR Part 60, which were promulgated in the
Federal Register on December 16, 1975. (40 FR 58416)
Promulgation of a standard of performance requires States to establish
standards of performance for existing sources in the same industry under
Section 111 (d) of the Act if the standard for new sources limits emissions
of a designated pollutant (i.e., a pollutant for which air quality criteria
have not been issued under Section 108 or which has not been listed as a
hazardous pollutant under Section 112). If a State does not act, EPA must
establish such standards. General provisions outlining procedures for
control of existing sources under Section lll(d) were promulgated on Novem-
ber 17, 1975, as Subpart B of 40 CFR Part 60. (40 FR 53340)
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2.7 REVISION OF STANDARDS OF PERFORMANCE
Congress was aware that the level of air pollution control achievable
by any industry may improve with technological advances. Accordingly,
Section 111 of the Act provides that the Administrator "shall, at least
every 4 years, review and, if appropriate, revise" the standards. Revisions
are made to ensure that the standards continue to reflect the best systems
that become available in the future. Such revisions will not be retroactive,
but will apply to stationary sources constructed or modified after proposal
of the revised standards.
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3. THE COIL COATING INDUSTRY
3.1 GENERAL
The coil coating industry is comprised of approximately 109 plants
containing 147 coating lines that engage in the application of organic
coatings to flat metal sheet or strip that is packaged in rolls or coils.
Estimated North American shipments of coated metal coil reached nearly
3.63 million Mg (4 million tons) in 1977, representing a total product
value of $3.5 billion.1 Major markets for coil coated metal include the
transportation industry, the building products industry, and the packaging
industry. New end uses for the product are constantly emerging, and the
industry is expected to maintain a 12 percent rate of growth through 1985.
Types of metal processed by the industry are mainly cold-rolled steel,
galvanized steel, and aluminum but also include small amounts of zinc,
brass, and copper. The metal is fabricated into end products after it is
coated, thus eliminating the need for postassembly painting.
Toll and captive coaters represent the two basic industry divisions.
Toll coaters produce metal that is coated in accordance with the specifica-
tions of their multiple customers. Captive coaters both coat the metal and
fabricate it into end products within the same company. Some plants per-
form both toll and captive operations.
3.2 COIL COATING PROCESSES AND EMISSIONS
The coil coating process begins with a coil (or roll) of bare sheet
metal and terminates with a coil of metal with a dried and cured organic
coating on one or both sides. Although the physical configuration of the
equipment used in coil coating varies from one installation to another, the
individual operations generally follow a set pattern. The metal strip is
unrolled from the coil at the entry to the coil coating line and first
passes through a wet section, where the metal is thoroughly cleaned and
3-1
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given a chemical treatment (conversion coating) to promote adhesion of the
coating to the metal surface. In some installations, the wet section may
also contain an electrogalvanizing operation in which a protective zinc
coating is applied to steel by an electrocoating process. After the metal
strip leaves the wet section, it is squeegeed and air dried and then passes
to a coating applicator station. At this point, a coating is applied with
rollers to one or both sides of the metal strip. The strip then passes
through an oven where the temperature is increased to the desired curing
temperature of the coating. The strip is then quenched or cooled (usually
by a water spray) and dried. If the line is a "tandem" line, the first
coating application is a prime coat, and the metal strip next enters another
coating applicator station where a top o^ finish coating is applied by
rollers to one or both sides of the metal. The strip then enters a second
oven for drying and curing of the top or finish coat. This is followed by
a second cooling (or quench) station. The finished metal is then rewound
into a coil and packaged for shipment or further processing. Most coil
coating lines have accumulators at the entry and exit that permit the strip
to move continuously through the coating process while a new coil is mounted
at the entry or a full coil removed at the exit. Figure 3-1 is a schematic
diagram of a coil coating line.
For existing coil coating lines, the widths of the metal strip vary
from a few to 183 cm (72 in.), and thicknesses vary from approximately 0.018
to 0.229 cm (0.007 to 0.090 in.). The speed at which the metal strip is
processed is as high as 3.556 m/s (700 ft/min) on some of the newer lines.
The types of coating applied in coil coating operations include a wide
variety of formulations. Among the more prevalent types are polyesters,
acrylics, fluorocarbons, alkyds, vinyls, and plastisols. Table 3-1 lists
the coatings commonly used by the industry and gives the range of organic
solvent content normally present in each coating. As can be seen from
Table 3-1, most of the coatings contain organic solvents, which are the
major source of volatile organic compound (VOC) air emissions in the indus-
try. The majority of the coatings (estimated to be 85 percent) are organic
solvent based and have solvent contents of from 0 to 80 percent by volume,
with 40 to 60 percent being the more prevalent range. A smaller fraction
of coatings (estimated to be 15 percent) is of the waterborne type, but
3-2
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ACCUMULATOR
CO
CO
SPLICER
WET SECTION
UNCOILING
METAL
ACCUMULATOR
PRIME
COATER
PRIME
OVEN
TOPCOAT
COATER
TOPCOAT
OVEN
TOPCOAT
QUENCH
RECOILING
METAL
Figure 3-1. Schematic diagram of a coil coating line.
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TABLE 3-1. COATINGS USED IN COIL COATING2
Coatings
Volatile content,
weight percent
Acrylics
A^hesives
Al kyds
Epoxies
Fluorocarbons
Organosols
Phenolics
Plastisols
Polyesters
Silicones
Vinyls
Zincromet (TM)
Dacromet (TM)
40-45
70-80
50-70
45-70
55-60
15-45
50-75
5-30
45-50
35-50
60-75
35-40
3-4
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these coatings also contain some organic solvent, usually in the range of 2
to 15 percent by volume. The waterborne coatings generally produce a lower
mass of VOC emissions per unit of coating solids applied, but waterborne
coatings have not as yet been developed for all end-product uses. The
choice of a solvent-borne versus a waterborne coating is generally depen-
dent upon the end use of the coated metal and the type of metal used. The
most prevalent use of waterbornes is on aluminum used for siding in the
construction industry.
High-solids coatings in the form of plastisols and organosols are also
used to some extent by the coil coating industry. Because these coatings
have a low organic solvent content, VOC emissions from them are lower than
those from the more commonly used coatings. Organosols and plastisols are
used to coat residential siding, drapery hardware, and other products.
The major sources of VOC emissions in a coil coating plant are the
curing ovens. When the metal strip, wet with the freshly applied coating,
enters the oven, it passes through several zones that normally operate at
successively higher temperatures. During this passage through the oven,
the solvent contained in the coating is evaporated, and the metal is heated
to a design peak temperature to achieve proper curing of the coating. Most
curing ovens are direct fired and use natural gas as fuel. Many ovens are
designed to use propane as a backup fuel in case of natural gas curtail-
ments. Ovens heated by fuel oil or electricity are used in some plants,
but to a much lesser extent than those heated by natural gas. The heat
input to the ovens must be sufficient to evaporate the solvent in the
coatings, to bring the metal and coatings up to the design temperature
(usually in the range of 191 to 260° C [375 to 500° F]), to replace the
heat lost from the ovens by radiation and conduction, and to heat the air
used for dilution to the operating temperature of the oven. This latter
heat load (i.e., the heating of the oven ventilating air) is normally the
largest single factor in the total oven heat load. When solvent is evapo-
rated in an oven, it is necessary to keep the concentration of solvent in
the oven atmosphere below the levels at which combustion can occur. The
level at which sustained combustion can occur is referred to as the lower
explosive limit (LEL).
3-5
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To ensure that an oven atmosphere is reasonably safe from fires and
explosions, dilution air is normally passed through the oven in sufficient
quantities to maintain the solvent concentration at or below 25 percent of
the LEL. Although the LEL concentration is different for different types
of solvents, a value of 283.2 m3 (10,000 ft3) of dilution air per gallon of
solvent evaporated is usually considered for design purposes to be suffi-
cient to maintain a safe oven atmosphere. In normal operations of an
uncontrolled coil coating line, this amount of hot, solvent-laden air is
exhausted to the atmosphere, and an equivalent amount of fresh air at
ambient temperature is drawn into the oven from the surrounding plant
environment. The heating of this volume of dilution air to oven operating
temperatures, which may range from 316 to 427° C (600 to 800° F), requires
a large quantity of heat. For example, 139 million joules (Jj, or 131
thousand Btu, are required to heat the dilution air for one gallon of
solvent from 21 to 427° C (70 to 800° F). Many coil coaters are now reducing
their overall energy consumption by employing techniques to recover and use
a portion of the heat that would otherwise be exhausted to the atmosphere.
When waterborne coatings are used, a portion of the coating that must
be evaporated in the ovens is water. Because water has a higher heat of
vaporization than organic solvents, the heat needed to evaporate the water
is greater than would be needed to evaporate an equivalent quantity of
solvent. However, because waterborne coatings normally contain only a
small volume fraction of solvent, the amount of dilution air required to
maintain a safe level of solvent in the ovens when waterborne coatings are
used is usually lower than the dilution air required when solvent-borne
coatings are used. Consequently, the total heat load of an oven when
waterborne coatings are used may be less than the total heat load when
solvent-borne coatings are used. However, it has been demonstrated that,
with heat recovery systems, solvent-borne coatings require less energy
input than waterborne systems. Historically, waterborne coatings have been
more expensive than equivalent solvent-borne types; however, this price
differential has decreased in recent years, because of increases in solvent
costs, and waterbornes are currently priced competitively with the solvent-
borne coatings.3
3-6
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It has been estimated that approximately 90 percent of the total
solvent content of the coatings used by the industry is evaporated in the
curing ovens.2 Of the remaining 10 percent, it is estimated that 8 percent
evaporates at the applicator station and 2 percent at the quench station.
In a study of the coil coating industry conducted by Scott Research Labora-
tories,4 measurements were made on two coil coating lines of the nonmethane
hydrocarbon emissions from the coater room, the ovens, and the quench area.
For one line, the percentages of total emissions that were measured from
each area were 11 percent, 86 percent, and 3 percent, respectively. For the
other line, the corresponding measured percentages were 0.7 percent, 99 per-
cent, and 0.3 percent, respectively. In a test conducted by Clayton Environ-
mental Consultants for Kaiser Aluminum and Chemical Corporation, the emis-
sions from the coating area accounted for 17 percent of total emissions.5
Based on these data, emissions from the coating area appear to vary substan-
tially from one installation to another. These variations are probably
related to the volatility of the coating solvents and other process parame-
ters.
In most new plants, the applicator stations are enclosed in rooms.6
Because air is drawn into the ovens from these rooms, it is generally
postulated that most (and possibly all) of the solvent that evaporates in
this area is drawn into the ovens. On lines that do not have coating
rooms, an exhaust hood is normally installed directly over the roll coaters
to exhaust the solvent that evaporates in that area. The quench stations
are also usually contained inside an enclosure adjacent to the exit end of
the ovens. Most of the solvent that evaporates in the quench area is also
generally believed to be drawn into the oven along with the dilution air.
The actual rate of VOC emissions from a coil coating line is deter-
mined by the operating parameters of the line. These parameters include
(1) the width of the metal strip, (23 the solvent content of the coating,
(3) the speed at which the strip is processed, and (4) the thickness at
which the coating is applied. For example, a line processing a strip that
is 30.48 cm (12 in.) wide at a speed of 1.778 m/s (350 ft/min) using coat-
ings that are 50 percent solvent by volume and applied at a dry thickness
of 0.0254 mm (0.001 in.) on the front side and 0.0203 mm (0.0008 in.) on the
back side would emit 89 Si (24 gaT) of solvent per hour. A line processing
3-7
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a strip that is 167.6 cm (66 in.) wide at a rate of 3.048 m/s (600 ft/min)
and using the same coating and coating thickness as above would emit 841 L
(222 gal) of solvent per hour. This illustrates the magnitude of the
variations that commonly exist in the VOC emissions from individual coil
coating lines.
3.3 BASELINE EMISSIONS
The costs directly attributable to a New Source Performance Standard
(NSPS) are computed as the difference in the costs of complying with exist-
ing regulations and the costs of complying with the NSPS. For these costs
to be computed, it is necessary to establish a baseline level of control
required by existing regulations. The recommended procedure for establish-
ing this baseline level of control is to compute the average level of control
required by existing State regulations. The following discussion is aimed
at establishing these average or baseline levels of control that are required
in the coil coating industry.
Coil coating plants are dispersed throughout 27 States. Of 109 spec-
ifically identified plants, a total of 77 are located in States or major
metropolitan air quality control regions (AQCRs) that apply specific numer-
ical limitations to organic solvent emissions. These regulations typically
require that organic solvent emissions from paint-baking ovens not exceed
3 Ib/h, or a total of 15 Ib/day, unless uncontrolled emissions are reduced
by 85 percent prior to discharge. For the purpose of computing baseline
emissions, it is assumed that all plants in these States are currently
subject to a requirement to reduce their emissions by 85 percent prior to
discharge. The remaining 32 plants are located in States that use a permit
system for controlling emissions. Most of the State Implementation Plans
(SIPs) for these States indicate that the degree of control required will
be determined on a case-by-case basis. It has not been possible during
this study to determine the degree of control that is required in these
States. It was, therefore, necessary to make an assumption regarding the
degree of control that would be required for new plants locating in these
States. EPA has prepared a series of documents, called Control Technique
Guidelines (CTGs), to provide guidance to the States in the development of
their SIPs. The CTG for coil coating2 suggests an emission limitation of
3-8
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0.31 kg VOC/£ (2.6 Ib VOC/gal) of coating, less water, stated in terms of
the solvent content of the coating at the point of application. For the
purpose of estimating baseline emissions for plants in those States that
now use the permit system, it was assumed that control to at least this
recommended level would be required.
Two separate baselines were selected for use in this study because the
two different requirements in existing SIPs are reasonably well defined and
are significantly different from one another. The SIPs for States that
operate under a permit system usually contain provisions that prohibit the
violation of ambient air quality standards for hydrocarbons and oxidants.
Estimating the degree of control that would be imposed on a coil coating
plant by such a provision would be a monumental task. Because the States
are in the process of revising their SIPs and have the CTG documents as
guidance, it was assumed that the States would incorporate provisions that
are at least as stringent as the CTG recommendation. Those States that
already have numerical limits on VOC emissions are unlikely to relax these
limits in order to conform to the CTG recommendations but would continue to
require the more stringent level of control already contained in their
SIPs. On the basis of this reasoning, this study uses two baselines from
which costs and environmental and economic impacts are computed.
Other information used in estimating baseline emissions includes the
following items:
The annual (1977) production of coil coated metal is 1.2(109) m2
[13(109) ft2].1
The annual (1977) usage of coatings by the industry is 72(106) Si
[19(106) gal].1
Approximately 15 percent of the annual production of the coil
coating industry is done using waterbornre coatings.7
The average VOC content of waterborne coatings used by the indus-
try is 10 percent by volume.
The average solids content of all coatings used by the industry
is 40 percent by volume.
The average density of coating solvents is 0.88 kg/A (7.36 Ib/gal).
3-9
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On the basis of the estimated average solvent content of the solvent-
borne coatings used by the coil coating industry (i.e., 60 percent by
volume) and the estimated annual production and coating usage, the uncon-
trolled or potential emissions when solvent-borne coatings are used are
0.032 kg/m2 (0.0065 lb/ft2) of metal processed. When waterborne coatings
are used, average uncontrolled emissions are 0.0054 kg/m2 (0.0011 lb/ft2).
In areas where emissions are subject to a numerical limit, the actual, or
baseline, emissions when solvent-borne coatings are used are 0.0048 kg/m2
(0.0010 lb/ft2). This level of emissions reflects an 85 percent reduction
from the uncontrolled level. Baseline emissions from waterborne coatings
are assumed to be equal to their uncontrolled levels because most SIPs
exempt users of waterborne coatings from the reduction requirements.
In areas not subject to a numerical limit, it is assumed that emis-
sions will be controlled to the level of the CTG recommendation of 0.31 kg
VOC/A (2.6 Ib VOC/gal) of coating as applied (less water), or equivalent.
This is equivalent to an emission rate of 0.465 kg/2 (4.0 Ib/gal) of coat-
ing solids applied. Again, if it is assumed that the average coating
formulation used by the industry has a VOC content of 60 percent by volume,
the uncontrolled, or potential, emissions are 1.279 kg/A (11 Ib/gal) of
solids applied. To reduce these emissions to the recommended level of
0.465 kg/a (4.0 Ib/gal) of solids, a control efficiency of 64 percent would
be required. Baseline emissions for plants subject to this limitation
would, therefore, be 0.012 kg/m2 (0.0023 lb/ft2) of metal processed. For a
plant that uses waterborne coatings, baseline emissions would be 0.22 kg/A
(1.84 Ib/gal) of coating solids for the coating formulation defined above.
Each of the above baseline levels of control will be given considera-
tion in later chapters of this document that describe the environmental and
cost impacts of the NSPS.
3.4 REFERENCES
1. Coil Coating: The Better Way. National Coil Coaters Association.
Philadelphia, Pennsylvania. December 1978.
2. Control of Volatile Organic Emissions from Existing Stationary Sources.
Volume II. Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles,
and Light-Duty Trucks. U.S. Environmental Protection Agency Research
Triangle Park, North Carolina. EPA-450/2-77-008. May 1977 p v.
3-10
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3. Craig, Russell W. Waterborne Coatings . . . Fact or Fantasy? Indus-
trial Finishing, p. 26-28. November 1977.
4. A Study of Emissions from the Coil Coating Process. Volume I. Emis-
sion Tests. Scott Research Laboratories, Inc. Plumsteadville,
Pennsylvania. December 1970. p. 5-4.
5. Wright, Milton. Trip Report: Kaiser Aluminum—Toledo, Ohio. Research
Triangle Institute. Research Triangle Park, North Carolina. October 31,
1979. Attachment B.
6. Letter from Whike, Alan S. B & K Machinery International Limited, to
McCarthy, J. M., Research Triangle Institute. October 10, 1979.
Equipment costs for coil coating lines.
7. Coil Coaters Consider RACT for VOC. PF Report. Products Finishing.
January 1978. p. 56-61.
3-11
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4. EMISSION CONTROL TECHNIQUES
4.1 INTRODUCTION
There are two strategies by which volatile organic compound (VOC)
emissions from coil coating operations may be reduced. One is to reduce
the amount of solvent in the coatings used by the industry, and the other
is to remove the VOCs from the exhaust gas streams through the use of
add-on control equipment.
The coatings that this industry applies to metal coil surfaces can be
divided into two general classes: waterborne coatings and solvent-borne
coatings. Approximately 85 percent of coil coating is done with solvent-
borne coatings1 2 that average 40 percent solids and 60 percent organic
solvents by volume. Waterborne coatings also contain organic solvents to
aid in wetting the pigments, to produce solubility (in the case of partially
water-soluble, film-forming components), and to promote good flow and vis-
cosity characteristics in the coating mixtures. The solvent content of
waterborne compositions varies between 2 and 15 percent of the total volume
of the coating formulation.
Estimates by the National Coil Coaters Association (NCCA)3 indicate
that approximately 72 million $, (19 million gal) of coatings are used each
year in this industry. This volume includes approximately 37.7 million &
(9.97 million gal) of solvent, all of which represents potential atmospheric
emissions totalling 33.3 Gg (36,690 tons) per year. Since there are report-
edly 146 coating lines in operation, this is an average emission potential
of 227 Mg (251 tons) per year per line.
4.2 DESCRIPTION OF INDUSTRY CONTROL TECHNIQUES
Commonly used add-on control equipment for the removal of volatile
organic emissions from industrial operations include adsorbers, incinerators,
condensers, and absorbers. During the drying, or curing, process used in
coil coating, a mixture of organic vapors and air is exhausted from the
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ovens at temperatures of 260 to 426° C (500 to 800° F), which present major
problems to the use of adsorption, condensation, and absorption as methods
of controlling VOC emissions. For removing organics from the exit streams,
therefore, the coil coating industry has almost exclusively chosen incinera-
tion. Two methods of incineration are available: thermal and catalytic.
The majority of incineration units used for control in this industry are
thermal units.
It should be noted that equipment for controlling organic emissions
through the use of afterburners (incinerators) that exhaust directly to the
atmosphere is expensive to install and results in significant increases in
fuel consumption. As fuel costs have increased rapidly in recent years,
equipment vendors have developed energy recovery systems that are combined
with incinerators to recover a major portion of the heat from the exhaust
gases and to use the flammable solvent vapors from the coatings as fuel.
4-2-l Thermal Incineration
Thermal incinerators consist of an oxidation chamber and a burner.
The waste gas stream is introduced into the incinerator where proper con-
ditions of time, temperature, and turbulence are achieved to oxidize the
solvent in the gas stream. Most solvents will oxidize with about 90 percent
conversion efficiency if a temperature of 650° C (1,200° F) and a residence
time of 0.3 to 0.5 s is achieved. To achieve conversion efficiencies of
greater than 90 percent, incinerators are normally operated at temperatures
of 760 to 815° C (1,400 to 1,500° F).* Available emission test data for
thermal incinerators indicate conversion efficiencies ranging from 87.6 to
99.6 percent. A summary of these data is given in Table 4-1.
The heating of the exhaust stream to the high incineration temperatures
requires large amounts of energy unless some means of heat recovery is
incorporated into the system. Many recent installations of thermal incine-
rators in the coil coating industry have included a means of heat recovery
to reduce the energy consumption of the systems. Several concepts of heat
recovery are in successful operation in the industry. These include direct
recycle of a portion of the oven atmosphere through internal oven burners
or incinerators, the use of regenerative heat exchangers, and the use of
recuperative heat exchangers. Waste heat boilers are also employed in
conjunction with some of the systems. Steam from these boilers can be used
in the wet section of the coil coating line or in other processes in the
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TABLE 4-1. EMISSION TEST RESULTS FOR THERMAL INCINERATORS
ON COIL COATING LINES
Total VOC concentration
Uncontrolled,
Unit sampled inlet
Precoat Metals
Finish
Prime
Scott Research
Laboratory tests
Unit 031
Unit 033
Kaiser Aluminum
SupraCote Corp.
zone incinerators
Finish (average of 5
incinerators
Prime (average of 4
incinerators
INRYCO
Average
Metal Koting
Average
Roll Coater
Prime
Finish
16,588
5,759
6,857
6,975
7,320 ppmv
7,155 ppmv
4,530 ppmv
3,718 ppmv
733 ppmv
552 ppmvc
8,100 ppmv
210 Ib/h
492 Ib/h
492 Ib/h
492 Ib/h
Percent Temperature
Controlled conversion ° C (°Fj
1,228
271
270
298
33 ppmv
800 ppmv
560 ppmv
32 ppmv
55 ppmv
29 ppmvc
109 ppmv
.005 Ib/h
1.07 Ib/h
1.28 Ib/h
.002 Ib/h
92.6
95.3
96.1
95.7
99.5
88.8
87.6
99.1
92.5
94.8
98.7
99.9
99.8
99.9
99.9
760
760
760
760
760
649
704
768
717
704
871
649
482
543
649
1,400
1,400
1,400
1,400
1,400*
l,200a
1,300
1,414
1,323
1,300
1,600
1,200
900
1,100
1,200
Estimated.
cMeasured as propane.
4-3
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plant. The use of heat recovery has no detrimental effect on the efficiency
with which the incinerator removes VOCs from the exhaust gas stream. The
following paragraphs describe several of the thermal incineration and heat
recovery systems that are currently in use in the coil coating industry.
4.2.1.1 Zone Incineration. The ovens on coil coating lines are
generally divided into zones. Each zone is equipped with a burner, and
each succeeding zone is normally maintained at a higher temperature than
the previous one. For example, a four-zone oven for a finish coat might
have a temperature gradient of 315, 343, 371, and 399° C (600, 650, 700,
and 750° F) in the four zones. In the zone incineration system, the normal
burner in each oven zone is replaced by an incinerator through which a
mixture of solvent vapor and air drawn from the oven is passed. These
gases are incinerated along with enough natural gas to bring the zone
temperature to a preset level. The exhaust gases from the incinerator are
injected directly into the oven. Approximately 60 percent of the solvent
vapor that evaporates in the oven passes through the zone incinerators and
is destroyed. The remainder is exhausted directly to the atmosphere or to
an afterburner.
Some coil coaters have stated that they can meet existing State air
quality regulations using only the zone incinerators without an afterburner.
However, it is unlikely that zone incinerators alone would be capable of
meeting the standard in States that require an 85 percent reduction in
emissions.
Recycling the oven atmosphere through the zone incinerators reduces
the amount of air that must be heated from ambient temperature to the
temperature of the oven and thus reduces the fuel required for air heating-
Substituting solvent vapor for part of the fuel further reduces fuel con-
sumption. Zone incineration coupled with recirculation of the oven atmos-
phere results in a significant reduction in the volatile organic emissions
from the metal coil coating line and results in a considerable reduction in
the energy (fuel) necessary to dry (cure) the coating film.
Adding an afterburner to the above system to oxidize the remaining
40 percent of the organic vapors results in a system that will destroy a
minimum of 90 percent of the volatile organics that enter the drying (cur-
ing) oven.6 The addition of the afterburner causes an increase in energy
4-4
5
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consumption and an increase in the cost of control unless the heat generated
by the incinerator is recovered. One means of recovering this heat is to
install waste heat boilers that use the heat to generate process steam.
When the demand for process steam is not great enough to use the amount
generated, other forms of heat recovery may be employed (for example,
preheated oven exhaust, space heating, etc.).
4.2.1.2 Regenerative Heat Recovery. A second system of incineration
and heat recovery that is suitable for coil coating installations uses a
heat sink. This heat sink is alternately used (1) to add heat to the oven
exhaust gas to raise the temperature to or near the point necessary for
thermal oxidation in a gas-fired incinerator and (2) to extract heat from
the incinerator exhaust to reduce the temperature of the gas before it is
returned to the ovens, exhausted to the atmosphere, or used for additional
heat recovery.
Solvent vapors, air, and products of combustion are exhausted from the
ovens, mixed, and transported (by means of an exhaust fan) to a heat sink,
where the gas temperature is raised through the absorption of heat from the
heat sink. The gases then pass to an incinerator operating at a temper-
ature of about 815° C (1,500° F). The products of combustion exit from the
incinerator through the heat sink, where heat is imparted to the heat sink.
Part of these cooled gases is returned to the ovens to serve as the heat
source. The remainder of the gases may be exhausted to the atmosphere or
may be passed through a heat exchanger or a waste heat boiler for additional
heat recovery. A minimum of two heat sinks is required in these systems,
and as many as seven have been reported in a single installation. The heat
sinks are generally packed with ceramic material that alternately absorbs
and releases heat energy.
A disadvantage of this system is the large space requirements for
installation of the heat sinks and combustion chamber units and their
associated ducting. This disadvantage applies primarily to retrofit in-
stallations since new plants can be designed to accommodate the system.
4.2.1.3 Recuperative Heat Recovery. A third system of heat recovery
is the use of recuperative heat exchangers. This system is very similar to
the regenerative heat exchanger but uses an air-to-air heat exchanger
instead of the packed beds. In this system, the oven exhaust gas stream
passes through the heat exchanger before entering the incinerator. The
4-5
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oven exhaust gas stream is heated by the hot exhaust gas leaving the incin-
erator. After incineration, the hot exhaust gases pass through the heat
exchanger and give up heat to the gas stream entering the incinerator.
After they are cooled, the incinerator exhaust gases may be exhausted to
the atmosphere, passed through additional heat exchangers, or returned to
the oven to supply heat. The amount of heat that can be recovered in the
recuperative heat exchanger is limited by the autoignition temperature of
the oven exhaust gases.
4.2.1.4 Direct Recycle Heat Recovery. A fourth heat recovery option
is the direct recycle of incinerator exhaust to the ovens. This technique
is sometimes employed in conjunction with regenerative of recuperative heat
exchangers, as described in preceding paragraphs, or it may b° used alone.
One unique direct recycle system is the low-oxygen system. In this system,
the solvent-rich gases from the oven are exhausted to a single afterburner,
where the solvent vapors are incinerated along with enough natural gas to
maintain a preset temperature. Only the stoichiometric requirement for air
is introduced into the incinerator so that the exhaust from the incinerator
has an oxygen content in the range of 2 to 3 percent. Most of these ex-
haust gases are returned to the oven to supply the heat necessary to cure
the coatings. A small volume of the incinerator exhaust is ducted to the
atmosphere. This volume is equal to the volume of stoichiometric air and
natural gas introduced into the incinerator. The entire system is main-
tained as a closed loop by the use of air seals at the oven openings. The
oxygen content of the oven atmosphere is maintained below the level required
for combustion of the solvent vapors, thus eliminating the need for large
quantities of dilution air. Fuel savings result from burning solvent
vapors in combination with natural gas, supplying oven heat with the recy-
cled products of combustion, and reducing the volume of dilution air that
must be heated to oven temperature. A report on one such system that is
currently in operation states that the gases exhausted to the atmosphere
have a VOC content of less than 50 ppm and that fuel savings that result
from the system are in the range of 55 to 82 percent.7
4-6
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4.2.2 Catalytic Incineration
Catalytic incinerators operate on the same basic principles as thermal
incinerators but contain a catalyst. The catalyst causes the oxidation
reaction between the solvent and air to occur at a lower temperature for
the same solvent concentration and composition. Therefore, catalytic units
require less fuel to heat the oven exhaust gases to combustion temperatures,
and they have a lower exhaust temperature than equivalent thermal incinerators.
Installation costs for catalytic incinerators are comparable to those
of thermal oxidation units, but catalytic incinerators are generally smaller
than equivalent thermal systems, resulting in a space savings over a thermal
system. These savings are offset by the cost of the catalysts, which are
noble metals or metal oxides. The most commonly used catalyst is platinum
and its salts.
In some situations, problems may be encountered with the use of cata-
lytic incineration systems. The major problem is catalyst deactivation.
Catalysts are deactivated (poisoned) when they are contacted by elements
such as lead, antimony, cadmium, zinc, phosphorus, arsenic, and copper.
Some of these elements are present in the pigment component of coil coat-
ings. In addition, the catalyst may be masked by high molecular weight
organics, alumina, and silica dusts and may be suppressed by halogens and
sulfur, each of which is present in some coating formulations.
When a catalyst becomes deactivated (poisoned) or masked, it must be
regenerated or cleaned. The time necessary for the cleaning-regeneration
can vary from a few hours to a day.
The members of the industry that have found catalytic incineration
suitable for their situations are the captive coaters that coat only a few
different products with a limited number of coatings. These coaters can
control the coating materials used to insure that no chemical poisons are
present to deactivate the catalysts. However, for toll coaters, who must
often use a wide variety of coatings specified by their customers, the
chance of catalyst poisons being introduced into the catalytic incineration
system is proportionately greater.
One coil coater stated that he plans to install a catalytic incinera-
tor and will include a filter in the gas stream ahead of the catalyst to
4-7
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remove impurities that might poison or mask the catalyst.9 He further
stated that his company has installed a similar system on a can coating
operation. That system is reportedly operating satisfactorily.
For the forseeable future, catalytic incineration will probably be
limited to captive coaters, who have greater control over the coatings
used. Thermal incineration with heat recovery may continue to be the more
appropriate system for coaters who use many different coating formulations.
Emission tests on catalytic incinerators were identified for only one
installation. In two separate tests, the average conversion efficiency was
found to be 92.2 percent and 99.5 percent.8 The incinerator operating
temperature was not reported for the first series of tests. In the second
series, measurements were made at incinerator temperatures of 238 and
393° C (460 and 740° F). Although catalytic incinerators are inherently
more energy efficient than thermal incinerators, their use is even more
efficient if a heat recovery system is added. Any of the heat recovery
techniques described above for thermal incinerators can be applied in
conjunction with catalytic incinerators.
4.2.3 Coating Rooms
When an emission control device is used to control VOC emissions, the
efficiency with which the total emissions are captured and sent to the
control device is an important factor in the overall emission reduction
that can be achieved. Emission studies indicate that as much as 8 percent
of the total VOC input to a coil coating operation may be given off at the
coating application station before the metal strip enters the oven. The
capture of these coating station emissions, therefore, plays an important
part in the overall emission reduction that can be achieved with an emission
control device. Many of the coil coating lines that were observed during
this background study have the coating application stations enclosed *n
rooms. The normal design of these rooms has the ventilation supplied from
the side of the room opposite the oven. Because a portion of the normal
oven ventilation enters the oven through the opening where the metal strip
enters, the oven ventilating air flows across the room, over the coating
application equipment, and over the wet metal strip before entering the
oven. In addition, some of the lines also employ a hood or snout that
extends from the oven opening, over the wet metal strip to a point near the
4-8
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coating rolls. Such an arrangement greatly increases the capture of VOC
emissions relative to a system that has open coating stations. One coil
coating line was identified that passes all of the coating room ventilation
through the oven, which should result in very nearly complete capture of
the emissions from the coating application station. However, many coaters
and vendors of coil coating equipment have stated that the amount of air
that enters the oven through the coating room does not adequately ventilate
the coating room. Consequently, most coating rooms have a part of their
ventilating air exhausted to the atmosphere or to the plant. Even under
these conditions, most of the VOC emissions that occur at the coating
application station can be captured by the air entering the oven from the
coating room if a hood or snout is employed. Statements submitted by
industry representatives imply that an overall capture efficiency of 95 per-
cent is achievable under these conditions, and one vendor estimated that a
capture efficiency of 98 percent could be achieved.10 ll These statements
as well as industrial ventilation standards, imply that the overall control
efficiency of an emission control system can be greatly improved by the
proper use of coating rooms and hooding to improve the overall capture
efficiency of the VOC emissions.
4.2.4 Waterborne Coatings
One method of eliminating volatile organic emissions from the metal
coil coating process is to reformulate the coatings to exclude VOCs. With
this objective in mind, coating manufacturers have been formulating and
marketing waterborne coatings for some time.
All waterborne coatings contain some VOCs. These VOCs are necessary
in order to produce a coating film with properties comparable to those pro-
duced by solvent-borne coatings. The VOCs must be present to ensure wetting
of the pigment. Poor wetting results in poor distribution of the pigment
in the liquid vehicle and reduces the hiding power and gloss of the coating.
VOCs are used to adjust the rate of evaporation of the vehicle, to adjust
the viscosity of the coating, and to increase the solubility of the water-
soluble, film-forming components of the coating.
As mentioned earlier, it is estimated that approximately 15 percent of
all coil coating is currently done with waterborne coatings. Most of the
current usage is on aluminum substrates, but a significant quantity is also
used on steel substrates.12 The variety of coatings needed to produce the
4-9
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performance and aesthetic properties for the many products made from coil
coated metal are not yet available as waterborne coatings. This is one of
the more important reasons why more of the industry has not converted. A
representative of one of the major coating manufacturers estimates that the
usage of waterborne coatings will continue to increase over the next several
years but also estimates that their most important use will continue to be
on aluminum building products.2
The use of waterborne coatings results in an energy savings in the
ovens relative to an uncontrolled line that uses solvent-borne coatings,
even though the heat of vaporization for water is much higher than that for
organic solvents. The energy savings result from the fact that the amount
of dilution air that must be passed through the oven (and heated) is re-
duced when waterborne coatings are used.12
Contacts were made with a number of coating manufacturers to solicit
information on the VOC content of waterborne coatings that are used by the
coil coating industry. The data submitted by the manufacturers show the
VOC content ranging from a low of 0.07 kg/£ (0.58 Ib/gal) of coating solids
to a high of 0.54 kg/a (4.51 Ib/gal) of coating solids. This range repre-
sents 24 different coating formulations.13 14 1S 16 17 Of these 24 formula-
tions, 20 have a VOC content of 0.28 kg/2 (2.34 Ib/gal) of coating solids
or less.
4.2.5 Other Control Methods
Other emission control techniques that are sometimes used in metal
surface coating industries include high-solids coatings, powder coatings,
radiation curing, and carbon adsorption. In the coil coating industry,
none of these techniques has found widespread use. Some high-solids coat-
ings are used by the industry in specialized, limited-use applications.
For example, organosols, with a solids content in the range of 50 to 80 per-
cent by volume, and plastisols, with a solids content of 80 to 95 percent
by volume, are occasionally used by the coil coating industry. These
coatings are normally used by toll coating plants that also use many other
coating formulations with higher solvent content. Additionally, because of
the hydrostatic properties of available high-solid coatings, existing
equipment often cannot be used to apply the thinner film thicknesses needed
for many end products. Consequently, the use of high-solids coatings as the
basis for a standard does not appear to be a feasible alternative.
4-10
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The use of carbon adsorption as a means of controlling VOC emissions
from coil coating is dismissed by most knowledgeable individuals as being
unacceptafaly expensive because of the high temperatures of the exhaust gas
streams and the questionable value of the recovered solvent.18 Therefore,
this technique has not been widely considered as an option available to the
industry, and there are no known installations on coil coating lines.
Powder coatings have not been used commercially in the coil coating
industry because of technical problems in application and because of the
limited selection available.19
Radiation cured coatings are used for a few applications in coil
coating. Three small lines are reported to be in operation in the industry,
but the variety of coatings available for the process is quite limited,
and, to date, radiation cured coatings have been used only for one-coat
systems.20 Estimated VOC emissions from the process are near zero; however,
it is not considered to be a feasible control alternative for widespread
use because of the limitations cited above.
Electrodeposition (EDP) as a method of applying the prime coat on
metal coil is known to be used on one line in the United States.9 The
plant uses a wide variety of top coats with the system and reports that
formability and other characteristics of the finished metal are equivalent
to most other two-coat systems. In the EDP system, the metal strip is
passed through a liquid bath containing coating solids, water, and cosolvents.
The solids are electrodeposited on the strip, and the liquid remains in the
bath, except for a minute amount that is entrained with the coating solids
and the amount that adheres to the surface of the strip when it emerges
from the bath. The surface liquid is removed from the strip by a squeegee
and returned to the bath, and the coated strip is dry to the touch at that
point. The strip then passes to a coating station where a top coat is
applied by roll coating. The strip then passes through an oven where both
coats are cured in a single pass. Emissions from the EDP coating operation
are estimated to be near zero. The organic solvent content of the EDP bath
is generally less than 5 percent.21
4.3 REFERENCES
1. Coil Coaters Consider RACT for VOC. PF Report. Products Finishing.
January 1978. p. 56-61.
4-11
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2. Telecon. Wright, Milton, Research Triangle Institute, with Morman,
Robert, Glidden Paint Company. June 27, 1979. Amount of waterborne
13
coatings used by industry.
3* Bu1'] gating: Tne Better Way. National Coil Coaters Association.
Philadelphia, Pennsylvania. December 1978.
4. The Coating Industry-Guide to Energy Conservation Technologies When
bmploying Hydrocarbon Emission Control. Centec Corporation. Fort
Lauderdale, Florida. March 1979. p. 2-22.
5. Telecon. Kearney, James, Research Triangle Institute, with Phillips,
John, Bay Area Air Quality Management District. July 26, 1979.
ueterimning which plants are operating with control systems.
6' I?1!00!!' oifU1Sht:.M11ton' ^search Triangle Institute, with Dusil,
Richard, B&K Machinery Co., Ltd., Toronto, Canada. March 6, 1979.
Emission control systems.
7. Low-Oxygen Oven Slashes Fuel Use, Industrial Finishing. February
-. -
p. ,32-35.
8' «ll?r!SMl'lt0?' TTn>l? Report: Kaiser Aluminum-Toledo, Ohio. Re-
T ,
nr«h Institute. Research Triangle Park, North Carolina.
October 31, 1979. Attachment A.
9. Reference 8, p. 4.
10. Graziano, Frank^D. Statement by National Coil Coaters Association.
in: National Air Pollution Control Techniques Advisory Committee.
Minutes of Meeting June 4 and 5, 1980. Research Triangle Park, U.S.
Environmental Protection Agency. June 25, 1980. p. 111-14.
U' A?inC°S'«. UCSar^y' J' M" Research Triangle Institute, with Whike,
Coatin ^ C°" Ltd' ' Toronto> Ca™da. June 9, 1980.
Telecon Wright Milton Research Triangle Institute, with Miller,
M. W., DuPont. June 26, 1980. Waterborne coatings for coil.
"' JohnC°Entp!fn!.?htVhn-0ni' Jesearch Triangle Institute, with Uphoff,
coatings ?or coil Coat1n9*. Inc. June 26, 1980. Waterborne
16. Telecon Wright, Milton, Research Triangle Institute, with Chernich,
JIB, Valspar Corporation. June 26, 1980. Waterborne coatings for
4-12
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17. Telecon. Wright, Milton, Research Triangle Institute, with Kinzly,
H. B. , Cook Paint and Varnish Company. June 27, 1980. Waterborne
coatings for coil.
18. Control of Volatile Organic Emissions From Existing Stationary Sources.
Volume II. Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles,
and Light Duty Trucks. U.S. Environmental Protection Agency. Research
Triangle Park, North Carolina. EPA-450/2-77-008. May 1977. p. 3-12.
19. Moran, Edward E. New Developments in Coil Coating. Light Metal Age.
p. 12. April 1973.
20. Habersen, G. Practical Application of Electric Infra-Red Heating in
Coil Coating. Research Incorporated. Minneapolis, Minnesota. (Pre-
sented at Fall Technical Meeting of the National Coil Coaters Associ-
ation. Chicago. October 1-2, 1979).
21. Telecon. Wright, Milton, Research Triangle Institute, with Jasenoff,
Ken, Desoto Chemicals. December 12, 1979. EDP coating technology.
4-13
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5. MODIFICATIONS AND RECONSTRUCTION
New Source Performance Standards (NSPS) apply to newly constructed
facilities and to existing facilities that undergo modification or recon-
struction. Definitions of modification and reconstruction are given in
Title 40, Section 60, of the Code of Federal Regulations.1 Briefly, a
modification is defined as any physical or operational change in an exist-
ing facility that results in an increase in the emission rate from that
facility, and a reconstruction is defined as an expenditure on new compo-
nents for an existing plant that exceeds 50 percent of the capital cost
that would be required to construct a comparable, entirely new facility.
This chapter presents a discussion of modifications and reconstruction as
they relate to the NSPS for the coil coating industry.
5.1 DESCRIPTIONS OF TYPICAL MODIFICATIONS AND RECONSTRUCTION
The subject of modifications to and reconstruction of coil coating
lines was discussed with a number of industry representatives during plant
visits and through telephone calls. On the basis of these discussions, a
conclusion was reached that most modifications to coil coating lines are
made either to increase the processing rate or to reduce the energy consump-
tion of the line. Those modifications that are made to increase processing
rate (or line speed) result in an increase in emissions and therefore would
make the line subject to the requirements of an NSPS. Modifications to
increase line speed are often accomplished by replacing the drive motors,
by changing the electrical controls on the line, or by both.2 3 In many
cases, significant increases can be made in line speed without modifica-
tions to the ovens, either because the original ovens were constructed with
excess capacity or because improvements in coating technology have resulted
in improved coating curing performance. In other cases, oven modifications
5-1
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may be required in order to increase line speed. At least one plant is
planning to incorporate a curing booster on the ovens of one coil coating
line so as to increase line speed.4
Modifications to coil coating lines for the purpose of improving the
energy efficiency of the line do not cause the line to become subject to
the requirements of an NSPS because such modifications do not cause an
increase in emissions. In most cases, modifications of this type decrease
emissions by recycling a portion of the oven exhausts through the oven
burners2 or by adding an incinerator with heat recovery.5 For both types
of modifications, the capital investment required is $100,000 or less.
Therefore, they cannot be classified as reconstructions, and the facility
becomes subject to the NSPS only when an increase in emission rate results.
Only a few reconstructions of coil coating lines were identified
during this study. In some cases a line reconstruction is implemented to
convert a single-coat line to a tandem line,6 and, in one instance, a line
was reconstructed to change from vertical to horizontal ovens and from a
horizontal to a vertical wet section.6 These types of activities require a
capital investment approaching 50 percent of the cost of a new line and
could make a facility subject to the NSPS from that standpoint.
5.2 RETROFIT CONSIDERATIONS
When coil coating lines are modified to increase the line speed, VOC
emissions increase in direct proportion to the increase in speed if other
operating parameters remain unchanged. These types of modifications will
probably continue to be implemented on the older, slower lines as the
demand for additional capacity expands over the next few years. These
modifications could lead to an increase in VOC emissions in proportion to
the increase in plant capacity that is developed by the modifications
unless emission controls are installed on the modified lines.
All of the control techniques discussed in Chapter 4 are adaptable to
existing lines that undergo a modification or reconstruction. The use of
each of the control techniques as a retrofit on existing lines is well
documented in the literature. As a result, no major problems are antici-
pated in applying retrofit controls on coil coating lines that undergo
modifications or reconstructions. The installation cost of an emission
5-2
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control system as a retrofit is normally somewhat higher than the cost of a
new installation; however, this cost increment does not appear to be a
major consideration, as discussed in Chapter 8.
5.3 REFERENCES
1. U.S. Environmental Protection Agency. Code of Federal Regulations.
Title 40, Chapter I, Subchapter C, Part 60. Washington, D.C. Office
of the Federal Register. July 1, 1978. p. 19-22.
2. Telecon. Wright, Milton, Research Triangle Institute, with Ream, H. S.,
Elwin G. Smith Division. September 18, 1979. Discussion of coil
coating line modifications.
3. Telecon. Wright, Milton, Research Triangle Institute, with Raschke,
G. B., California Finished Metals. September 20, 1979. Discussion of
coil coating line modifications.
4. Wright, Milton. Trip Report: Precoat Metals--St. Louis, Missouri.
Research Triangle Institute. Research Triangle Park, North Carolina.
March 6, 1979. p. 4.
5. Telecon. Wright, Milton, Research Triangle Institute, with Dwyer,
Larry, Supracote. September 20, 1979. Discussion of coil coating
line modifications.
6. Telecon. Wright, Milton, Research Triangle Institute, with McComb,
R. S., Litho Strip. September 19, 1979. Discussion of coil coating
line modifications.
5-3
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6. MODEL PLANTS AND REGULATORY ALTERNATIVES
This chapter provides information describing model plants and regula-
tory alternatives in the metal coil surface coating industry. These model
plants are representative of new plants that are expected to be built by
the industry in the near future. The model plant parameters given are
based on information obtained during visits to eight coil coating plants,
on information obtained from literature and industry sources, and from
State and Federal governmental regulatory agencies involved in pollution
control. The model plants and regulatory alternatives presented here were
developed for the purpose of estimating the environmental, economic, and
energy impacts of a New Source Performance Standard (NSPS) for the coil
coating industry.
6.1 MODEL PLANTS
Plants that would be affected by an NSPS include all new plants and
all existing plants that undergo modification or reconstruction. Specific
operations in a coil coating plant that would be covered by a standard
include the application and curing of the coating on the metal strip. A
typical coil coating operation consists of an uncoiler station, a splicer,
an inlet accumulator, a wet section (cleaning, treating, and rinsing), a
prime coat applicator, a prime coat curing oven, a quench station, a finish
or top coat applicator, a finish coat curing oven, a quench station, an
exit accumulator, a shear, and a recoil station. Some lines also have
printing and laminating capabilities. A schematic diagram of a typical
coil coating line is given in Figure 6-1.
Information pertaining to the operating conditions of existing coil
coating plants was used to define the size ranges to be considered for the
model plants. This information was obtained from several sources, includ-
ing the National Coil Coaters Association (NCCA), industry personnel, and a
literature review. However, the most comprehensive data for this purpose
6-1
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ro
SOLVENT LOSS j
FROM PRIME I
COATING AREA I
ACCUMULATOR
SPLICER
fl
UNCOILING
METAL
SOLVENT LOSS
FROM TOPCOAT
COATING AREA
\
\
\
TO CONTROL
EQUIPMENT
AIR
\
\
\
3
3
y
\
N
L)
I
\ PRIME
\ COATING
\
\
\
\
ATURA
AS
i »
\
\
\
L \
\ ^
PNATURAL
1 GAS
\ " N
\ TOPCOAT
«• > \ COATING . ». .* .
ACCUMULATOR
WFT SECTION
PRIME PRIME PRIME TOPCOAT TOPCOAT TOPCOAT
COATING OVEN QUENCH COATING OVEN QUENCH
AREA AREA
RECOILING
METAL
Figure 6-1. Schematic diagram of model coil coating line.
-------
were obtained from the Effluent Guidelines Division (EGD) of EPA. EGD had
recently completed a survey of the coil coating industry as a part of its
activities in developing regulations governing liquid effluent from coil
coating operations. Information gathered during this survey included line
speeds and widths, annual production, number of employees, and other items
of interest to the current study. Data from this survey were used to
establish the size ranges for small, medium, and large coil coating plants.
These general size ranges are discussed below; a description of the specific
model plants then follows. All of the model plants consist of a single
coil coating line. In reality, plants often operate more than one coil
coating line.
A small plant is estimated to have an annual production of approxi-
mately 4.6 million m2 (50 million ft2) of metal. Such a plant may operate
coil coating lines capable of processing metal in widths of 0.46 m (18 in.)
or less at line speeds up to 1.78 m/s (350 ft/min). The maximum solvent
capacity of the ovens in such a plant would be about 0.032 t/s (30 gal/h).
Annual operating hours may range from 3,000 to 6,000.
A medium size plant is estimated to have an annual production of
14 million m2 (150 million ft2) of metal. Such a plant may operate coil
coating lines with the capability of coating metal strip up to 1.22 m
(48 in.) wide at line speeds up to 2.03 m/s (400 ft/min). Maximum oven
solvent capacity for these lines would be about 0.095 £/s (90 gal/h).
Annual operating hours may range from 3,000 to 6,000.
A large coil coating plant is estimated to have an annual production
of 28 million m2 (300 million ft2) of metal. A plant of this size may
operate coating lines capable of processing metal in widths up to 1.83 m
(72 in.) at speeds as high as 3.56 m/s (700 ft/min). Maximum solvent capa-
city of the ovens on these lines would be about 0.210 A/s (200 gal/h).
Annual operating hours may range from 3,000 to 6,000.
Information obtained during several plant visits indicates that coating
is actually being applied during approximately 70 percent of the plant
operating hours. The remaining time is spent performing maintenance and
making color changes. These figures, along with the plant size ranges
given above, were used to develop the three model plants. Parameters for
these plants are listed in Figures 6-2, 6-3, and 6-4.
6-3
-------
Annual operating time: 4,000 h
Annual coating time: 2,780 h
Total metal processed: 4.6 X 106 m2/yr (50 X 106 ft2/yr)
Metal: Aluminum, 0.46 m (18 in.) wide
0.30 mm (0.012 in.) thick
Line speed: 1.02 m/s (200ft/min)
Coating: Solvent based, with 60 percent by volume solvent (toluene)
Total dry film thickness, prime coat, 0.0114 mm (0.00045 in.) each side
Total dry film thickness, top coat, 0.0114 mm (0.00045 in.) each side
Ovens:
Number 2
Maximum solvent input8 0.32 £/s (30 gal/h) each oven
Average solvent input 0.16 £/s (15.1 gal/h) each oven
Air flowb 2.4 m3/s(5,000 SCFM) each oven
Exhaust temperature 316° C (600° F)
Uncontrolled emissions: 275 Mg/yr (303 ton/yr}
Baseline emissions:
States using numerical limits: 41.2 Mg/yr (45.4 ton/yr)
States using CTG limits: 99.0 Mg/yr (109 ton/yr)
"Solvent rate* are given per unit of actual coating time.
Air flow rate is given at standard conditions of 15.6° C (60° F) and 101 kPa (14.7 psia).
Figure 6-2. List of model plant parameters for small plant with 1 coating line.
6-4
-------
Annual operating time: 4,000 h
Annual coating time: 2,780 h
Total metal processed: 14 X 106 m2/yr (150 X 106 ft2/yr)
Metal: Steel, 0.91 m (36 in.) wide
0.43mm (0.017 in.) thick
Line speed: 1.5 m/s (300 ft/m)
Coating: Solvent based, with 60 percent by volume solvent (toluene)
Total dry film thickness, prime coat, 0.01 T4 mm (0.00045 in.) each side
Total dry film thickness, top coat, 0.0114 mm (0.00045 in.) each side
Ovens:
Number 2
Maximum solvent Input3 0.095 ft/s (90 gal/h) each oven
Average solvent input 0.048 J2/s (45.4 gal/h) each oven
Air flowb 7.1 m3/s (15,000 SCFM) each oven
Exhaust temperature 316° C (600° F)
Uncontrolled emissions: 828 Mg/yr (912 ton/yr)
Baseline emissions:
States using numerical limits: 124 Mg/yr (137 ton/yr)
States using CTG limits: 298 Mg/yr (328 ton/yr)
aSolvent rates are given per unit of actual coating time.
bAir flow rate is given at standard conditions of 15.6° C (60° F) and 101 kPa (14.7 psia).
Figure 6-3. List of model plant parameters for medium plant with 1 coating line.
6-5
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Annual operating time: 4,000 h
Annual coating time: 2,500 h
Totai metal processed: 28 X 1C8 m2/yr (300 X 106 ft2/yr)
Metal: Steel, j.22 m (48 in.) wide
0.48mm (0.019 in.) thick
Line speed: 2.5 m/s {500 ft/min)
Coating: Solvent based, with 60 percent by volume solvent (toluene)
Total dry film thickness, prime coat, 0.0114 mm (0.00045 in.) each side
Total dry film thickness, top coat, 0.0144 mm (0.00045 in.) each side
Ovens:
Number 2
Maximum solvent input3 0.21 K/s (200 gal/h) each oven
Average solvent input 0.11 8/s (101 gal/h) each oven
A'r f'owb 15.6 m3/s (33,000 SCFM) each oven
Exhaust temperature 316° C (600° F)
Uncontrolled emissions: 1,650 Mg/yr (1,820 ton/yr)
Baseline emissions:
States using numerical limits: 248 Mg/yr (273 ton/yr)
States using CTG limits: 594 Mg/yr (655 ton/yr)
•Solvent rates are given per unit of actual coating time.
Air flow rate is given at standard conditions of 15.6° C (60° F) and 101 kPa (14.7 psia).
Figure 6-4. List of model plant parameters for large plant with 1 coating lina
6-6
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In the small model plant, total annual production is 4,110 Mg/yr
(4,080 ton/yr), and uncontrolled or potential emissions are 275 Mg/yr (303
ton/yr). Baseline emissions for States having numerical limits are 41.2 Mg/
yr (45.4 ton/yr); for States using Control Technique Guideline (CTG) limits,
baseline emissions are 99.0 Mg/yr (109 ton/yr).
In the medium size plant, annual production is 54,800 Mg/yr (60,300
ton/yr), and uncontrolled emissions are 828 Mg/yr (912 ton/yr). Baseline
emissions for States having numerical limits are 124.2 Mg/yr (136.8 ton/yr);
for States using CTG limits, baseline emissions are 298 Mg/yr (328 ton/yr).
In the large plant, annual production is 104,000 Mg/yr (116,000 ton/yr),
and uncontrolled emissions are 1,650 Mg/yr (1,820 ton/yr). Baseline emis-
sions for States having numerical limits are 247.5 Mg/yr (273 ton/yr); for
States using CTG limits, baseline emissions are 594 Mg/yr (655 ton/yr).
The annual operating time of 4,000 hours for each plant is the equiva-
lent of 2 shifts per day, 5 days per week, 50 weeks per year. Actual
coating times were calculated from industry averages and are 2,780 hours
per year for the small and medium size plants and 2,500 hours per year for
the large plant.
Water usage of the model lines is estimated using an overall factor of
4.0 £/m2 obtained from EGD. The water requirements are as follows: small
plant, 4,600 A/h (1,200 gal/h); medium plant, 14,000 £/h (3,700 gal/h); and
large plant, 28,000 £/h (7,400 gal/h).
The enclosed area of structures housing the model coil coating lines
will be approximately 6,690 m2 (72,000 ft2) for the small plant, 9,290 m2
(100,000 ft2) for the medium plant, and 12,800 m2 (138,000 ft2) for the
large plant.
6.2 REGULATORY ALTERNATIVES
This section presents a discussion of the regulatory alternatives to
be considered for the coil coating industry. The discussion is based on
information obtained from industry and literature sources. The impacts on
emissions for each regulatory alternative are discussed in Chapter 7 of
this document. A set of revised regulatory alternatives is discussed in
Appendix E.
6-7
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The first regulatory alternative to be considered is no additional
regulation. Under this alternative, emissions from coil coating plants
would continue to be governed by State regulations. There are no compli-
ance costs associated with this alternative. However, as discussed in
Chapter 7, the no-regulation alternative also has no positive impact on
emissions and may lead to a degradation of the ambient air quality.
A second regulatory alternative is to require that overall emissions
be reduced by 85 percent or to limit emissions to the equivalent (on the
basis of the coating solids applied) of that obtained by an overall reduc-
tion of 85 percent in the emissions from the average industry coating
formulation of 40 percent solids and 60 percent organic solvent by volume.
A standard based on this alternative would be approximately equal to exist-
ing State regulations that have numerical limits on volatile organic compound
(VOC) emissions. Compliance with the 85 percent alternative could be
achieved by using an incinerator with a 95 percent destruction efficiency
in conjunction with 90 percent capture of the total emissions. This capture
efficiency is normally achieved without a coating room. Compliance could
also be achieved by using a less efficient incinerator and a more efficient
capture system. Compliance with a limit based on an 85 percent reduction
in the emissions from the average industry coating formulation could be
achieved by incineration or by using low-solvent coatings.
A third regulatory alternative is to require that overall emissions be
reduced by 95 percent or to limit emissions to the equivalent (on the basis
of the coating solids applied) of that obtained by an overall reduction of
95 percent in the emissions from the average coating formulation used by
the industry (40 percent solids and 60 percent solvent by volume). Compli-
ance with the 95 percent alternative could be achieved by using an inciner-
ator with a 95 percent destruction efficiency in conjunction with a coating
room to insure that 100 percent of the VOC emissions are captured by the
ovens. Compliance with a limit based on a 95 percent reduction in the
ennssions from the industry average coating formulation could be achieved
by incineration or by using low-solvent coatings.
Appropriate parameters for incinerators that meet the requirements of
the above control alternatives are given in Chapter 8 along with their
estimated costs. Costs are presented for both the installation and the
operation of the incineration systems.
6-8
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7. ENVIRONMENTAL IMPACT
This chapter presents a discussion of the environmental impact of each
of the regulatory alternatives presented in Chapter 6. The discussion
includes the impact of each regulatory alternative on air emissions, water
quality, solid waste, and energy. All calculations and conclusions regard-
ing environmental impact are based on the model plants described in Chapter
6 and on the industry growth projections given in Chapter 8.
The regulatory alternatives for which impacts are discussed are as
follows:
No NSPS.
Reducing overall emissions by 85 percent or limiting emissions to
the equivalent of that obtained by an overall reduction of 85 per-
cent in the emissions from the average industry coating formulation
of 40 percent solids and 60 percent organic solvent by volume.
Reducing overall emissions by 95 percent or limiting emissions to
the equivalent of that obtained by an overall reduction of 95 per-
cent in the emissions from the average industry coating formula-
tion of 40 percent solids and 60 percent organic solvent by
volume.
The impacts of a set of revised regulatory alternatives are presented in
Appendix E.
7.1 AIR POLLUTION IMPACT
As discussed in Chapter 8, it is estimated that the coil coating
industry is currently operating at approximately 65 percent capacity and
that the industry will maintain a growth rate of approximately 12 percent
per year over the next several years. Although a portion of this projected
growth can be absorbed by existing plant capacity, new plant capacity will
be needed to maintain this growth rate over an extended period. This
additional capacity can be achieved by increasing the production of exist-
ing coil coating lines or by building new lines.
7-1
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The impact of a promulgated New Source Performance Standard (NSPS) on
air emissions of volatile organic compounds (VOCs) is calculated as the
difference between the emissions that are permitted by existing regulations
and the emissions allowed under the NSPS. Currently there are 21 States or
parts of States that have existing regulations that include a specific
numerical limit o.. VOC emissions.1 These States are listed in Figure 7-1.
Although the limits for these States vary somewhat, most of them specify
that uncontrolled emissions be reduced by 85 percent prior to discharge.
This limit was used to estimate the baseline emissions for coil coating
plants located in States that have numerical limits.
There are 36 States or parts of States that currently control VOC
emissions through the use of a permit system. These States are listed in
Figure 7-2. Most of the regulations for these States indicate that the
degree of control required for VOC emissions is determined on a case-by-case
basis at the time an application for a permit is made. For the purpose of
computing baseline emissions, it was assumed that these States would require
that VOC emissions be controlled to at least the level recommended by EPA
in its Control Technique Guideline (CTG) document.2
The CTG-recommended limit is 0.31 kg/2 (2.6 Ib/gal) of coating, minus
water. The limit is expressed as a coating formulation and is equivalent
to a coating that is 65 percent solids and 35 percent organic solvent. The
limit was derived on the basis of the incineration of the emissions from an
organic solvent-borne coating that contains 25 percent solids by volume.
The emission limit can be achieved in this situation by capturing 90 percent
of the emissions and directing them to a control device, which must operate
with at least a 90 percent destruction efficiency. To achieve the CTG
liait when the industry's average coating formulation (i.e., 60 percent
organic solvent and 40 percent solids) is being used, an overall emission
reduction of 64 percent would be required.
As discussed in Chapter 8, it is estimated that, over the next 5
years, the coil coating industry will expand at an annual rate of approxi-
mately 12 percent per year. With the current (1977) annual production of
1.2 billion m* (13 billion ft*) per year being used as a base, this would
amount to an annual increase in capacity of 0.11 billion m^ (1.5 billion
ft*). It is further estimated that this new plant capacity will be achieved
7-2
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I
CO
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Alabama3
Arizona (Maricopa County)3
California (S. Coast AQCR)3
Colorado
Connecticut3
District of Columbia
Illinois3
Indiana3
Kentucky3
Louisiana
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Massachusetts (Boston AQCR)3
New York (NYC)3
North Carolina3
Ohio3
Oklahoma
Pennsylvania (Philadelphia)3
Puerto Rico
Rhode Island
Virginia3
Wisconsin3
11. Maryland (National Capital AQCR)3
aDenotes States in which coil coating plants are currently in operation.
Figure 7-1. List of States and major metropolitan areas currently regulating organic
solvent emissions through specific numerical standards.
-------
1. Alaska
2. Arkansas3
3. Arizona3
4. Delaware3
5. Florida3
6. Georgia3
7. Hawaii
a Idaho
9. Iowa3
10. Kansas
11. Maine
12. Maryland3
13. Massachusetts3
14. Michigan3
15. Minnesota3
16. Mississippi
17, Missouri3
18. Montana
19. Nebraska
20. Nevada
21. New Hampshire
22. New Jersey3
23. New Mexico
24. New York3
25. North Dakota
26, Oregon
27. Pennsylvania3
28. South Carolina3
29. South Dakota
30. Tennessee3
31. Texas3
32. Utah
33. Vermont
34. Washington3
35. West Virginia3
36. Wyoming
3 Denotes States in which coll coating plants are currently in operation.
Figure 7-2. List of States not regulating organic solvent emissions through
specific numerical standards.
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by modifying nine existing coil coating lines each year and by constructing
seven new lines each year.
All emission calculations are based on the following values:
Annual (1977) production of coil 1.2 (109)m2 (13 (109) ft2)
coated metal
Annual (1977) coating usage
Average organic solvent content
of coatings (by volume)
Solvent-borne
Waterborne
Average solids content of all
coatings (by volume)
Average solvent density
Fraction of plants subject to
85 percent control
Fraction of plants subject to
CTG limits
Fraction of coatings that are
waterborne (by total volume)
72 (106)£ (19 (106) gal)
60 percent
10 percent
0.88 kg/2
40 percent
(7.36 Ib/gal)
0.70
0.30
0.15
With these values, average uncontrolled (or potential) emissions from coil
coating activities can be computed as 0.032 kg/m2 (0.0065 lb/ft2) when
solvent-borne coatings are used and as 0.0054 kg/m2 (0.0011 lb/ft2) when
waterborne coatings are used. If plant capacity increases by 0.11 billion
m2 (1.5 billion ft2) per year, the annual increase in uncontrolled emis-
sions would be 3,872 Mg (4,268 tons). If it is assumed that the relative
usage of waterborne and solvent-borne coatings remains the same, that the
geographic distribution of new plant capacity will be the same as that of
existing plants, and that no add-on controls are required when waterborne
coatings are used, baseline emissions from new plant capacity amount to 914
Mg (1,007 tons) per year. If no NSPS were promulgated, emissions from coil
coating operations would be expected to increase by this amount annually.
At the end of 5 years, the total annual increase in emissions would amount
to 4,570 Mg (5,035 tons).
7-5
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If an NSPS were promulgated based on the second regulatory alternative
(i.e., the equivalent of an 85 percent reduction in emissions for the aver-
age industry coating formulation), emissions from new plant capacity would
be 676 Mg (745 tons) per year. This is a reduction of 238 Mg (262 tons)
per year from the baseline case. At the end of the fifth year, total
annual emissions from new plant capacity under this regulatory alternative
would amount to 3,380 Mg (3,726 tons), which is a reduction of 1,187 Mg
(1,309 tons) from the baseline case. These emissions are the result of new
plant capacity that becomes available each year. A portion of this new
capacity is the result of modifications to existing lines. When an affected
facility is modified, the existing capacity of that facility also becomes
subject to the NSPS limits. The existing line capacity that annually
becomes subject to these limits because of modifications is estimated to be
74 million m2 (795 million ft2). Baseline emissions from this volume of
production are estimated to be 483 Mg (533 tons). Reductions in emissions
that result from control of the existing capacity of modified lines would
amount to 125 Mg (138 tons) per year under this regulatory alternative.
When combined with the results of new plant capacity, the overall effect is
a net increase of 551 Mg (607 tons) per year for the entire industry. This
is a reduction of 363 Mg (400 tons) per year from the baseline emissions.
At the end of the fifth year, the net annual increase in emissions would
amount to 2,755 Mg (3,035 tons), which is a decrease of 1,815 Mg (2,000 tons)
per year from the baseline emissions. The environmental impact for each
regulatory alternative is summarized in Table 7-1.
If an NSPS were promulgated based on the third regulatory alternative
(i.e., the equivalent of a 95 percent reduction in emissions for the average
industry coating formulation), emissions from new plant capacity would be
300 Mg (331 tons) per year. This is a reduction of 613 Mg (676 tons) per
year from the baseline case. At the end of the fifth year, annual emis-
sions from new plant capacity under this regulatory alternative would total
1,500 Mg (1,655 tons), which is a reduction of 3,066 Mg (3,380 tons) from
the baseline case. After control of the existing capacity of modified
lines, the estimated emissions under the third regulatory alternative are
160 Mg (176 tons) per year. This is a reduction of 325 Mg (358 tons) per
7-6
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TABLE 7-1. ESTIMATED ENVIRONMENTAL IMPACTS
Regulatory alternative
I. No NSPS
II. 85 percent control
III. 95 percent control
Emissions
plant capacity
1st year
914 (1,007)
676 (745)
300 (331)
from new
, Hg/yr (ton/yr)
5th year
4,570 (5,035)
3,380 (3,726)
1,500 (1,655)
Reduction in emissions from
modified plants^Mg/yr (ton/yr)
1st year
-125 (-138)
-325 (-358)
5th year
-625 (-690)
-1,625 (-1,790)
Overal 1
on emissions,
1st year
+914 (+1,007)
+551 (+607)
-25 (-27)
impact
Hg/yr (ton/yr)
5th year
+4,570 (+5,035)
+2,755 (+3,035)
-125 (-135)
-------
year in overall emissions. When this reduction is combined with the emis-
sions from new plant capacity, the result is a net decrease in emissions of
25 Mg (27 tons) per year. At the end of the fifth year, the net annual
decrease in emissions would amount to 125 Mg (135 tons).
There are a number of potential inaccuracies in the above discussion
that are due mainly to a lack of detail in the available data. First of
all, the separate calculations of emissions from solvent-borne and water-
borne coatings carry an underlying implication that each type of coating is
used in plants that exclusively use one or the other type of coating. It
is known that this is not, in fact, the true situation. Some plants that
mostly use solvent-borne coatings also use small quantities of waterborne
coatings,3 and some plants that mostly use waterborne coatings also use
small quantities of solvent-borne coatings.4 Information relating to the
distribution of coating usage is not available in sufficient detail to
permit more precise calculations of emissions from each type of coating.
There are also potential inaccuracies in the estimates of baseline
emissions from coil coating plants. These estimates were made by assuming
that existing and new plants exactly meet the standards that are in effect
in the States in which they are located. It is very likely that those
plants that use incineration as a method of controlling emissions are
achieving a greater degree of control than state regulations require.
However, it is also known that some coil coating plants now operate with no
controls, either because they have been granted a variance or because the
State has not required any controls. These two sources of potential inac-
curacies would tend to offset one another, and it has not been possible to
determine which would have the greater impact. The potential inaccuracies
in the estimates of baseline emissions lead to corresponding potential
inaccuracies in the estimates of the impact of an NSPS on air emissions of
VOCs. However, the potential inaccuracies tend, again, to offset one
another, and it is felt that the estimated impact is reasonable.
7.2 WATER POLLUTION IMPACT
Liquid effluent from coil coating operations is generated in the wet
sections of coil coating lines. In the wet section, the metal is thoroughly
cleaned and chemically treated to enhance the bonding of the coatings to
7-8
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the metal. The application of control devices on oven exhaust streams does
not affect the operation of the wet section. Consequently, it is estimated
that none of the regulatory alternatives would have any effect on water
pollution or the liquid effluents from coil coating operations.
7.3 SOLID WASTE DISPOSAL IMPACT
The techniques available to the coil coating industry to achieve
compliance with the regulatory alternatives proposed in this study include
the use of incinerators and the use of low-solvent coatings. Neither of
these control techniques generates additional solid wastes. It is there-
fore estimated that none of the regulatory alternatives would have an
impact on solid waste disposal.
7.4 ENERGY IMPACT
Data on the energy consumption of existing facilities are sparse. To
make estimates of the effect of regulatory alternatives on national fuel
consumption, the fuel inputs to the model plants in Chapter 6 were calcu-
lated. These fuel usage rates were then converted to a basis of energy
used per unit area coated and applied to the expected new production rates
and modified/reconstructed production rates discussed in Section 7.1.
The fuel energy requirements of each model plant at different levels
of emission control are summarized in Table 7-2. The predominant fuel for
ovens and afterburners in the industry is natural gas, followed by fuel
oil. Many plants burn propane when natural gas is unavailable. Electrical
energy requirements of each model plant are given in Table 7-3, based on an
average energy requirement of 0.26 kWn/m2 (0.024 ktfn/ft2) coated.5 6
Many coating lines located in States with CTG limits could achieve the
required levels of control using only an internal, oven-mounted incineration
control scheme. Because 64 percent reduction is at the upper limit of
solvent destruction for these systems, each new or modified/reconstructed
Tine must be evaluated individually. For purposes of these estimates, it
is assumed that all new facilities in States with CTG limits can meet those
limits with such a control system.
Plants located in States with numerical limits would have fuel and
electrical needs according to the type(s) of emission control system used.
With thermal incineration systems, the requirements would range from the
7-9
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TABLE 7-2. RATE OF FUEL ENERGY USAGE OF MODEL COIL COATING LINES4
I
M
O
Level of Control
Model line
Small
Medium
Large
No emission
control
size kW (106Btu/h)
2,100 (7.3)
6,700 (23)
14,000 (49)
64 percent reduction
by incineration at
ovens
kW (106Btu/h)
1,000 (3.4)
3,200 (11)
7,000 (24)
85 percent overall
reduction by incin-
eration at after-
burner
kW (106Btu/h)
1,600 (5.3)
4,700 (16)
10,000 (34)
95 percent overall
reduction by incin-
eration at after-
burner with coating
rooms
kW (106Btu/h)
1,500 (5.0)
4,400 (15)
9,400 (32)
Energy rates during plant operating time.
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TABLE 7-3. RATE OF ELECTRICAL ENERGY USAGE OF MODEL COATING LINES4
Level of Control
Model line size
Small
Medium
Large
No emission
control
kW
190
680
1,300
64 percent reduction
by incineration at
ovens
kW
190
680
1,300
85 percent overall
reduction by incin-
eration at after-
burner
kW
300
900
1,800
95 percent overall
reduction by incin-
eration at after-
burner with coating
rooms
kW
300
900
1,800
Energy rates during plant operating time.
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higher fuel needs and lower electrical needs of a system with an afterburner
only to the lower fuel needs and higher electrical needs of a system with
an afterburner and primary and secondary heat exchangers. In this chapter,
the estimates of energy usage for control systems meeting numerical limits
and NSPS limits are based on the use of thermal incineration with primary
and secondary heat recovery. This basis reflects the trend in the industry
toward energy savings by heat recovery. Although the economics of the
systems generally favor the use of heat recovery, the actual type of system
installed on a line will depend on corporate policy, the availability of
fuel, and other factors.
The effects of the regulatory options on national fuel consumption are
estimated in Table 7-4, based on the projected construction of seven new
lines per year and the projected modification or reconstruction of nine
existing lines per year, as discussed in Section 7.1. The assumption is
made that the distribution of new and modified or reconstructed lines by
location will be the same as that of existing lines. The increase in
national fuel demands is highly dependent on the types of control systems
installed. The values given in these tables are order-of-magnitude esti-
mates and are subject to inaccuracy for the same reasons discussed in
Section 7.1.
The national increase in electrical energy demand due to growth in the
industry is extremely difficult to predict. There are little data on
existing lines because many coil coating lines are located in facilities
that use electricity for other operations and because the focus in the
literature has been on fuel conservation. However, an order-of-magnitude
estimate can be made using figures of 0.26 kWh/m2 (0.024 kWh/ft2) of produc-
tion (lines meeting NSPS or numerical limits) and 0.18 kWh/m2 (0.017 kWh/ft2)
of production (lines meeting CTG limits). The annual increase in national
electrical energy usage under Regulatory Alternative I, No NSPS, is esti-
mated at 40 million kWh. The annual increase under either NSPS alternative
is estimated at 44 million kWh.
Several methods are available to reclaim heat energy and thus reduce
overall energy consumption, including the use of recuperative heat exchang-
ers as in the model plants. Various systems are described in detail in
Chapter 4. These include recuperative and regenerative heat recovery, in
7-12
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TABLE 7-4. ESTIMATED ANNUAL INCREASE IN NATIONAL FUEL
CONSUMPTION DUE TO INDUSTRY GROWTH3
Increase in fuel consumption
First year Fifth year
Regulatory alternative TJD (billion Btu) TJ (billion Btu)
I. No NSPS 700 (660) 3,500 (3,300)
II. Limiting emissions to the 770 (730) 3,850 (3,650)
equivalent of that obtained
by an overall reduction of
85 percent in the emissions
from the average industry
coating formulation of
40 percent solids and
60 percent solvent by volume
III. Limiting emissions 740 (700) 3,700 (3,500)
to the equivalent of
that obtained by an
overall reduction of
95 percent in the emissions
from the average industry
coating formulation of
40 percent solids and
60 percent solvent by volume
Assumptions:
1. Wherever 85 or 95 percent reduction is required, new and jodified/
reconstructed lines using solvent-borne coatings install thermal
incineration systems. These systems include primary and secondary
heat recovery or equivalent heat recovery.
2. Systems with 95 percent control include coating rooms.
3. CTG levels of control are achieved by coating rooms and ovens
using solvent combustion.
4. Incineration temperature for 85 and 95 percent control is 760° C
(1,400° F).
5 Lines usina waterborne coatings meet NSPS limits by choice of coating
formulation rather than by installation of emission control equipment.
bTJ = terajoule, 1012 joules.
7-13
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which incinerator exhaust gases are used to preheat oven make-up air and/or
incinerator inlet air. Process steam is also produced in some plants from
the heat of exhaust gases. Other systems use direct recycle to return
afterburner exhaust gases directly to the ovens; since the exhaust streams
have been cleaned of solvent, safe solvent levels are maintained in the
ovens with a mini .urn ambient make-up air requirement.
7.5 OTHER ENVIRONMENTAL CONCERNS
7'5>1 ^reversible and irretrievable Commitment of Resources
Each of the control alternatives considered requires the commitment of
a quantity of steel and various other materials to construct emission
control systems. This commitment is estimated to be quite small relative
to the total annual usage of these materials. Some of the emission control
systems require a small commitment of land area for installation. Although
there may be individual coaters with limited available space for whom this
land requirement is a problem, it is estimated to be a minor consideration
on a national basis. The energy impact of the control alternatives is
described in the preceding section and shows that there is a net increase
in energy consumption for each of the NSPS regulatory alternatives but that
the impact is minimized when incineration with heat recovery is used.
7'5'2 Environmental Impact of Delayed Standards
If promulgation of an NSPS is delayed for some period of time, VOC
emissions from coil coating operations would increase at an annual rate
equal to the No NSPS alternative discussed above in Section 7.1. Relative
to the second regulatory alternative (i.e., requiring plants to reduce
ennssions by 85 percent), the net annual increase in emissions during the
delay would be 603 Mg (664 tons). Relative to the third regulatory alter-
native (i.e. requiring all plants to decrease emissions by 95 percent) the
net annual increase in emissions during the delay would amount to 1,059 Mg
(1,167 tons).
7.6 REFERENCES
p 41-61 riangle Park, North Carolina. February 12, 1979.
7-14
-------
2. Control of Volatile Organic Emissions form Existing Stationary Sources.
Volume II. Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles,
and Light-Duty Trucks. U.S. Environmental Protection Agency. Research
Triangle Park, North Carolina. Publication No. EPA-450/2-77-008. May
1977. p. v.
3. Trip Report: Precoat Metals—St. Louis, Missouri. Research Triangle
Institute. Research Triangle Park, North Carolina. March 6, 1979.
p. 5.
4. Trip Report: Bendix Modern Materials—Detroit, Michigan. Research
Triangle Institute. Research Triangle Park, North Carolina. March
12, 1979. p. 3.
5. Telecon. McCarthy, J. M., Research Triangle Institute, with Dombeck,
Jerry, Precoat Metals. October 26, 1979. Operating costs of coating
lines.
6- Telecon. McCarthy, J. M., Research Triangle Institute, with Dwyer,
Larry, Supracote. January 8, 1980. Operating costs of coating lines.
7-15
-------
8. ECONOMIC IMPACT
8.1 INDUSTRY CHARACTERIZATION
Coil coating is a process by which metal is coated prior to its forma-
tion into end products. The process originated in the 1930s as a method of
coating metal to be used in making Venetian blinds, but, because of the
efficiency and cost-effectiveness of the process, its use has expanded to
many other products. The process begins with a roll (or coil) of bare
sheet metal and ends with a roll of metal that has one or two coats of
finish on one or both sides. Coatings are applied with rollers, which are
virtually 100 percent efficient in transferring the coating to the metal
surface. The process is also more energy efficient than most postassembly
coating operations because of the continuous nature of the process. It has
been estimated that coil coating uses only about one-fifth of the energy
that would be required by a postassembly coating operation.1 This section
presents a description of the coil coating industry and identifies the
companies and plants that are engaged in the process.
8.1.1 General Profile
A total of 83 companies have been identified that engage in the produc-
tion of coil coated metal. These companies own approximately 109 plants
containing an estimated 147 coil coating lines that produce precoated steel
and aluminum for domestic consumption. Coil coating facilities are typically
located in or near industrial areas to minimize the shipping costs of both
raw materials and the final product. Although plants are dispersed through-
out 27 States, over one-half of the existing facilities are located in
Illinois, Ohio, Pennsylvania, and California. However, facilities are not
heavily concentrated in any one locality within these States. On an EPA
Regional basis, Region V represents about 34 percent of existing coil
coating plants, and Region IV, about 12 percent. A listing of all identified
8-1
-------
companies and plants is contained in Table 8-1, along with the number of
lines per plant, plant location, and company ownership, where applicable.
The majority of coil coating establishments are privately owned or
operated. Analysis of available data indicates that, of the 83 companies
identified, a total of 42 are subsidiaries of conglomerates or of major
iron, steel, or :luminum manufacturing concerns. Existing plants are, on
the average, about 23 years old and have had a renovation or upgrading of a
coil coating line within the last 6 years.2
"Toll" and "captive11 coaters represent the two basic structural divi-
sions of this highly competitive industry. The toll coater is a service
coater that accepts an order to coat steel or aluminum according to a
customer's needs and specifications. The coated metal is then delivered to
the customer, who forms the end product. Some large toll coaters use up to
1,000 different formulations of coatings. In contrast, the captive coater
both coats the metal and fabricates the final product, often within the
same plant, and normally uses a smaller number of coating formulations.
Some coil coaters perform both toll and captive coating services.
Coated metal coil is not generally considered an end product because
it is usually cut and formed into other metal products by the purchaser.
Coated metal coil has historically been associated with building products
such as Venetian blinds, curtain and drapery hardware, and exterior wall
and roof panels but has recently been formed into many new end products.
During 1977, the transportation industry was the largest single user of
coil coated metal, and the large appliance industry is expected to be an
expanding market in coming years. A list of current and suggested end uses
of coil coated metal, supplied by the National Coil Coaters Association
(NCCA), is contained in Table 8-2.
Estimated North American shipments of coated metal coil reached over
3.4 million Mg (3.7 million tons) in 1977, a 19 percent increase over 1976
shipments. Coated steel coil accounted for over three-fourths of 1977
production, with estimated shipments of 2.6 million Mg (2.9 million tons).
Much of the 22 percent increase over 1976 shipments is accredited to the
larger shipments of coated steel purchased by the transportation industry.
Precoated aluminum shipments reached an estimated 709,415 Mg (782,000 tons)
in 1977, an increase of 8.6 percent over the previous year. The nearly 3.6
8-2
-------
TABLE 8-1. DOMESTIC COIL COATING ESTABLISHMENTS
CURRENTLY IN OPERATION: 19792 3
Company/Subsidiary3
Alan Wood
Alcan Aluminum Ltd. (Canada)
A! can Aluminum Corp.
Almax Aluminum Mills
Alsar Manufacturing
Aluminum Company of America
Stolle Corp.
AMAX Inc. (50%)
Mitsui and Co. (45%)
Nippon Steel Co. (5%)
Alumax Mill Products
American Nickel oid
Amsted Industries Incorporated
Litho Strip Co.
Anta Corporation
^Nichols-Homeshield Inc.
Apollo Metals, Inc.
Armco Steel
Arvin Industries, Inc.
Roll Coater, Inc.
Plant location(s)
Pennsylvania
Ohio
Pennsylvania
California
California
Michigan
Pennsylvania
Iowa
Indiana
Tennessee
Ohio
California
Illinois
Illinois
Pennsylvania
Illinois
Illinois
Texas
Pennsylvania
Iowa
Illinois
New Jersey
Pennsylvania
Ohio
Indiana
Indiana
Estimated
number of line
per plant
1
1
1
1
1
1
I
I
1
1
1
2
1
1
1
1
1
1
1
i
J.
1
1
1
2
1
a
Subsidiaries are indented.
(continued)
8-3
-------
TABLE 8-1. (continued)
Company/Subsidiary
a
Plant location(s)
Estimated
number of lines
per plant
Atlantic Richfield
Anaconda
Banyon Corporation
Hydrographies Corporation
Belmont Industries, Inc.
Supra Cote, Inc.
Bendix Corporation
Modern Materials Corporation
Chamberlain Manufacturing Corp.
Chicago Metallic Corp.
California Finished Metals, Inc.
Chesapeake Finished Metals, Inc.
Chicago Finishing
Chroma!loy American
Precoat Metals
Arrow Group
Clark Brothers
Consolidated Foods
Graber Co.
Consolidated Systems
Southeastern Coated Products
Cortland Container Corporation
Custom Metals
Cyclops Corp.
E.G. Smith
Oonn Corporation
American Metals
Edco Products, Inc.
a
Ohio
Ohio
Texas
California
Michigan
Pennsylvania
California
Maryland
Illinois
Missouri
New Jersey
Michigan
Wisconsin
South Carolina
Texas
Illinois
Pennsylvania
Ohio
Ohio
Minnesota
I
2
1
1
3
1
I
1
2
I
I
1
1
1
1
1
1
1
Subsidiaries are indented.
(continued)
8-4
-------
TABLE 8-1. (continued)
Company/Subsidiary3
Enameled Steel and Sign Company
Epic Metals Corp.
Finished Metals Inc.
Fruehauf
Globe Products Corp.
Groff Industries, Inc.
Hexcel Corporation
Hillman Coal and Coke Co., Inc.
Prior Coated Metals, Inc.
Hoechst A. G. (Germany)
Azoplate
Hunter-Douglas N. V.
Hunter-Douglas
Imperial Metals
Inland Steel
INRYCO
Kaiser Aluminum
Kirsch Company
Landsdale Finishing
Lawler Steel Components, Inc.
Levolor-Lorentzen, Inc.
Lifeguard Industries, Inc.
LTV Corp.
Jones and Laughlin Steel Corp.
Marathon Manufacturing
Marathon-Carey-McFal 1
Plant location(s)
Illinois
Ohio
Pennsylvania
Illinois
Alabama
Maryland
Texas
Arizona
Texas
Pennsylvania
Pennsylvania
Georgia
New Jersey
North Carolina
California
Wisconsin
Washington
Ohio
Michigan
Pennsylvania
Texas
West Virginia
California
New Jersey
Ohio
Texas
Pennsylvania
Estimated
number of line
per plant
1
1
1
1
1
1
1
1
2
1
1
3
1
1
1
3
1
1
1
2
1
5
1
1
1
Subsidiaries are indented.
8-5
(continued)
-------
TABLE 8-1. (continued)
Company/Subs1di ary*
Plant location(s)
Estimated
number of lines
per plant
Martin Marietta
Marwais Steel
Minnesota Mining & Manufacturing
Mirro Aluminum
Material Sciences Corporation
Prefinish Metals Inc.
National Steel Corporation
Enamel Products & Plating
National Aluminum
Hastings Aluminum
National Roll ex
N. E. Co. Limited Int.
Aluminum Mills, Inc.
Noranda Mines Ltd. (Canada)
Norandex
Omega Industries
Phelps Dodge Corp.
Consolidated Aluminum
Pechiney Ugine Kuhlmann (France)
Howmet Corp.
Republic Steel Corp.
Revere Copper and Brass, Inc.
Revere Aluminum Building Products
Reynolds Metals Company
Alloys Sheet & Plate
McCook Sheet & Plate
Asheville Arch
Kentucky
California
West Virginia
Washington
Illinois
Illinois
Pennsylvania
Indiana
Kentucky
Michigan
Wisconsin
California
Ohio
Texas
Tennessee
Missouri
Pennsylvania
Texas
Ohio
Illinois
Alabama
Alabama
Alabama
Illinois
Ohio
I
1
1
1
I
2
2
I
I
2
I
I
1
1
2
1
1
1
2
1
1
Subsidiaries are indented.
(continued)
8-6
-------
TABLE 8-1. (continued)
Company/Subsidiary*
Plant location(s)
Estimated
number of lines
per plant
Rosewall Industries, Inc.
PI astee! Products Corporation
Sears Roebuck
Roper Eastern
Stanley Works
Teledyne, Inc.
Teledyne-Rodney
Thomas Steel Strip Corporation
U.S. Steel Corporation
Alside, Inc.
Wheeling-Pittsburgh Steel Corporation
Pittsburgh-Canfield
Wheeling Corrigated
Wolverine Aluminum Corporation
Zeeger, Inc.
Pennsylvania
Maryland
Connecticut
Massachusetts
Ohio
Alabama
Ohio
Ohio
West Virginia
Michigan
Illinois
5
6
2
1
1
2
1
1
3
1
Subsidiaries are indented.
8-7
-------
TABLE 8-2. CURRENT AND SUGGESTED END USES OF
____ PRECOATED METAL STRIP1*
Appliances— Large
1. Air conditioners
2. Clothes dryers
3. Otsh washers
4. Furnaces
5. Gas or electric ranges
6. Radio and phonograph cabinets
7. Refrigerator and freezer liners
8. Refrigerator and freezer—doors and shells'
9. Space Heaters
10. Vending machines
11. Washing machines
12. Water coolers
13. Water heater jackets
Appliances—Small
1. Beauty shop equipment co1n-op equipment
2. Business machine housings
3. Can openers
4. Clock faces and housings
5. Coin-op equipment
6. Dehunidifiers
7. Electric fan blades
8. Floor waxers
9. Hair dryers
10. Honogenizers
11. Household cooking appliances
12. Humidifiers
13. Knife sharpeners
is4: SmS'lT for appl1ances (braces- bMckets- •*•>
16. Sewing machines
17. Sound recording equipment
18. Vacuum cleaners
19. Watches and clocks
Construction
1: SSSTIS 2LSS* ""•• «•• — ..... *.
3. Baseboard heating covers
4. Bathroom cabinets
|. Building soffit systems
6. Bus stop shelters
7. Carports, boat shelters
8. Car wash booths
9. Ceiling tile
10. Commercial building marquees
11. Construction machinery
. e)"3 S6et Su"e™^. aircraft hangers, fac-
13. Decorative chinmies
14. Decorative shutters
15. Doors
16. Door and window frames
17. Ductwork
18. Electrical switch and outlet plates
I3- Elevator and escalator paneling
ted SeCt1°nS f°r bHd9eS a"d
2
22. Fireplaces
(continued)
8-8
-------
TABLE 8-2. (continued)
23. Garage doors
24. Gutters and downspouts
25. Interior partitions and trim
26. Kitchen cabinets
27. Lighting reflectors and housings
28. Louvered vents
29. Partitions and fixtures
30. Patio covers and supports
31. Radiator fin stock
32. Refreshment booths (to house vending machines)
33. Residential siding
34. Roof decking
35. Roof flashing
36. Roof shingles and sheet
37. Sanitary ware (metal)
38. Screen frames
39. Shower stalls
40. Signs and advertising displays
41. Si To roofs
42. Stadium seats
43. Staircases, railings, scaffolds
44. Storage sheds, tool sheds
45. "T" Bar hangers for tile
46. Telephone booth—paneling
47. Walkway covers and supports
48. Wall tile
Machinery, Farm and Garden Equipment
1. Animal shelters
2. Farm storage bins
3. Feed troughs
4. Garden Equipment
5. Grain dryers
6. Large farm machinery
7. Blowers and fans
8. Food products machinery
9. Industrial controls
10. Machine tool accessories
11. Paper industry machinery
12. Printing industry machinery
13. Stampers, roll formers
14. Switchgear
IS. Textile machinery
16. Mowers
17. Snowblowers
18. Spreaders
19. Tools
Furniture
(Residential and Commercial)
1. Cabinets (storage, beverage, functional)
2. Card tables
3. Chairs
4.' Clothes hampers
5. Coat racks
6. Desks
7. Display cases
8. Filing cabinets
9. Fireplace accessories
10. Institutional furniture
11. Ironing boards
12. Juvenile furniture
13. Ladders and ironing boards
"~(continued)
8-9
-------
TABLE 8-2. (continued)
14. lamps and shades
15. Lawn furniture
16. Library shelving
17. Lockers
18. Metal drawers dividers
19. Radiator covers
20. Shelving
21. Store *
-------
TABLE 8-2. (continued)
Miscellaneous
1. Athletic and sporting goods
2. Blackboards (metal}
3. Bread boxes
4. Camera shells and parts
5. Casket handles
6. Communications equipment
7. Dental equipment
8. Dispensing machines, towels, etc.
9. Drapery fixtures and curtain rods
10. Electrical measuring equipment
11. Games, toys
12. House numbers
13. Instrument gauge faces, clocks, thermometers, etc.
14. Instrument panels
15. Luggage
16. Mail boxes
17. Metal signs (interior and exterior)
18. Morticians goods
19. Musical instruments
20. Ordnance and accessories
21. Photographic equipment
22. Picture frames
23. Pins and mechanical pencils
24. Tool and tackle boxes
25. Utensils
26. Window blinds, Venetian blinds, pivot shades, and accessories^
8-11
-------
million Mg (4 million tons) of coil coated metal currently produced per
year represents an estimated product value of over $3.5 billion.1
Industry sources indicate that the industry currently operates at
about 65 percent of its maximum practical capacity,1 compared to 67 percent
for the metal coating industry as a whole.5 Practical capacity is defined
as the greatest level of output the plant can achieve within a realistic
work pattern.5 If all lines run at full capacity, implied production is
estimated at more than 1.86 billion m2 (20 billion ft2) of coated metal
annually. Total actual production in 1977 reached 1.21 billion m2 (13 bil-
lion ft2) and had an average product value of $2.47/m2 (23
-------
comprehensive printed price list. However, a list of average prices of
coating per square foot of coated metal was constructed during an industry
analysis conducted by the EPA Effluent Guidelines Division.6 This list is
given in Table 8-3 and shows that the average price ranges between IB.Kt/m2
and $2.15/m2 (1.5
-------
TABLE 8-3. COATINGS,
Coating
Weldable primer
Zincrometal
Epoxy
Epoxy-ester
Acrylic
Sili com' zed acrylic
Al kyd
Fluorocarbon (pvf and pvf2)
Fluorocarbon (ptfe)
Phenolic
Polyester (oil free)
Sili cone polyester
Solution vinyl
Urethane
Organosol
Plastisol
Acrylic film
Polyvinyl chloride film
Poly vinyl fluoride
Polyester film
Polyolefin film
Prints of two or more colors
Plastisols and organosols
Polyphenylene sulfide
Water and alkali soluble
=================^^
PRICES, AND METALS
Price/m2 (ft2)
$0.16 (1.5
-------
TABLE 8-4. SHIPMENTS OF PRECOATED ALUMINUM AND STEEL: 1976 and 1977
Industry users
Aluminum
Steel
1976
1977
1976
1977
Megagrams (tons)
Megagrams (tons)
Megagrams (tons)
Megagrams (tons)
CO
M
Cjn
Building products
Transportation
Appliances
Containers &
packaging
Furniture, fix-
tures, &
equipment
Other users
316,419 (348,794)
29,707 (32,747)
5,054 (5,571)
308,753 (340,344)
60,747 (66,962)
17,040 (18,783)
144,059 (158,799) 163,271 (179,976)
1,057 (1,165)
24,931 (26,931)
3,126 (3,446)
107,159 (118,123)
715,320 (788,509)
646,680 (712,846)
65,595 (72,306)
66,313 (73,098)
78,764 (86,823)
103,598 (114,198)
795,054 (876,402)
837,712 (923,424)
84,246 (92,866)
58,403 (64,379)
69,395 (76,495)
97,054 (106,985)
-------
TABLE 8-5. MAJOR MARKETS FOR PRECOATED METAL: 1976 AND 19778
Markets
Megagrams (tons) of metal shipped
1976
1977
Aluminum markets
Residential siding
Cans, ends & tabs
Service centers &
distributors
Mobile homes
Travel trailers & campers
Trucks, trailers & shipping
containers
Awnings & canopies
Rain carrying equipment
Steel markets
Passenger automobiles
Industrial, rural buildings
Lighting fixtures
Trucks, trailers & shipping
containers
Shelving & fixtures
Heating, water heating &
water softening equipment
Container strapping & seals
Portable buildings & parts
144,127 (158,874)
132,608 (146,176)
14,118 (15,563)
61,999 (68,343)
19,196 (21,160)
7,315 (8,063)
17,352 (19,127)
21,787 (24,016)
494,804 (545,431)
422,193 (465,390)
37,006 (40,792)
18,333 (20,209)
40,764 (44,935)
17,157 (18,912)
32,939 (36,309)
32,231 (35,529)
157,776 (173,919)
151,568 (167,076)
61,718 (68,033)
53,380 (61,046)
26,086 (28,755)
24,171 (26,644)
21,303 (23,483)
21,033 (23,185)
780,570 (860,436)
546,216 (602,103)
55,210 (60,859)
52,424 (57,788)
39,609 (43,662)
36,773 (40,536)
35,894 (39,567)
34,400 (37,920)
8-16
-------
import or export of coil coated metal was identified from government or
industry sources because data on precoated metal are included in overall
figures for production, imports, and exports of steel and aluminum.
The standard government publications that contain industry statistics
on shipments, employment, and production did not yield any information that
is specifically related to the coil coating industry. The reason for this
lack of data is that coil coating is identified by a seven-digit Standard
Industrial Classification (SIC) code, and none of the statistics is reported
to that level of detail. Most of the data are reported at the four-digit
level. Coil coating as an independent process is included in SIC code
3479, Metal Coating and Allied Services, which also includes numerous other
metal coating processes. The captive coil coaters may be included in the
SIC code for their parent companies, which may be producers of aluminum or
steel, or may be classified by their major product. Because of this lack
of published data, most of the information contained in the above discus-
sion was provided by sources within the coil coating industry.
8.1.2 Trends
8.1.2.1 Historical Trends. Since its inception in the 1930s, the
coil coating industry has demonstrated a steady rate of growth. During the
10-year period from 1968 through 1977, the industry grew, on the average,
about 14 percent each year.8 This may be compared to an annual growth rate
of 8.8 percent for the metal coating industry as a whole during the same
period." Although shipments of both precoated steel and aluminum declined
sharply during the 1974-1975 recession, production quickly recovered by
1976. Total shipments of precoated metal from 1968 through 1977 are indi-
cated in Table 8-6 along with the percent change per year in the production
of steel and aluminum.
Shipments of precoated aluminum coil increased an average of 9.6
percent each year from 1968 through 1977, and shipments of precoated steel
grew by nearly 16 percent each year during the same period. The rapid
growth of precoated steel has corresponded to an increase in demand in both
new and existing markets, such as the transportation and large appliance
industries, respectively. Because both aluminum and steel production have
shown significant growth in recent years, it does not appear that one
segment is growing at the expense of the other. Imports and substitute
8-17
-------
TABLE 8-6. ESTIMATE OF TOTAL SHIPMENTS OF PREPAINTED OR PRECOATED METAL COIL
BY COATERS LOCATED IN THE UNITED STATES, CANADA, AND MEXICO8
[thousands of megagrams (tons)]
00
i-»
00
Year
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
Average
growth per
year
Aluminum
411 (453)
526 (580)
499 (550)
600 (661)
662 (730)
752 (829)
641 (707)
526 (580)
653 (720)
709 (782)
+ 9.6%
Percent
change
+ 24.6%
+ 27.9%
- 0.4%
+ 20.1%
+ 10.3%
+ 13.6%
- 14.7%
- 18.0%
+ 24.1%
+ 8.6%
Steel
919 (1,013)
1,072 (1,182)
1,031 (1,137)
1,146 (1,263)
1,305 (1,439)
1,690 (1,863)
1,893 (2,087)
1,301 (1,434)
2,184 (2,407)
2,671 (2,944)
+ 15.9%
Percent
change
+ 17.7%
+ 16.8%
+ 0.4%
+ 11.1%
+ 13.8%
+ 29.4%
+ 12.0%
- 31.3%
+ 67.9%
+ 22.3%
Total
1,330 (1,466)
1,598 (1,762)
1,530 (I,o87)
1,746 (1,924)
1,967 (2,169)
2,442 (2,692)
2,534 (2,794)
1,827 (2,014)
2,837 (3,127)
3,380 (3,376)
+ 14.0%
Percent
change
+ 19.7%
+ 20.2%
- 0.4%
+ 14.0%
+ 12.7%
+ 24.1%
+ 3.8%
- 27.9%
+ 54.9%
+ 19.2%
-------
products have had little or no effect on growth trends during the past 10
years.9
During the past 10 years, expansion of industry capacity has been
achieved through the construction of new coil coating lines and through
modifications of existing facilities. Based on data obtained from the EPA
Effluent Guidelines Division,2 it is estimated that a total of 18 new lines
have been constructed since 1970 and that 55 lines have undergone modifica-
tion since that time. The ratio of modifications to new lines has been
about 3 to 1 during the past decade. Although some of the newer lines have
dramatically higher production rates than most existing lines, smaller
lines also continue to be built. New plant construction has not substan-
tially modified the geographic distribution of the industry in recent
years.
8.1.2.2 Future Trends. The coil coating industry is highly capital
intensive and fast growing. Led by the increased use of precoated metal in
the transportation and appliances industry, the demand for coil coated
steel and aluminum is expected to grow significantly in the future. Con-
trary to the lower annual growth rate of 4 to 5 percent forecast for most
industries that purchase precoated metal, it is estimated that the coil
coating industry will grow at an average annual rate of 12 percent through
1985.12 13 projections of total shipments of precoated metal for the
5-year period from 1981 through 1985 are indicated in Figure 8-1. By 1985,
total shipments of coil coated metal are expected to reach approximately
6.9 million Mg (7.6 million tons), as compared to approximately 3.4 million
Mg (3.7 million tons) during 1977. Projections are based on an annual
growth rate of 12 percent of the base year (1977) production through 1985.
This amounts to an annual increase of approximately 0.45 million Mg (0.50
million tons) per year during this period.
Although existing facilities will absorb a portion of this anticipated
growth during the next few years, new and modified lines will be necessary
to maintain the growth rate. At least three major manufacturers are known
to be planning the construction of new lines to be in operation by the
early 1980s. As discussed in Chapter 5, the most prevalent modification to
coil coating lines will be for the purpose of increasing line speed.
8-19
-------
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
5,600
1981
7,100
6,100
1982
1983
1984
7,600
1985
Figure 8-1. Total projected shipments of precoated metal: 1981-1985.
(in thousands of tons)
8-20
-------
The projected growth in the production of coil coated metal is equiva-
lent to an annual increase in production of 139 million m2 (1.5 billion
ft2). This projected growth is equivalent to three large, two medium, and
two small new model plants per year and the modification of nine existing
plants per year. As mentioned previously, some of the newer lines have a
much higher production capacity than previous ones. For example, Roll
Coater, Inc., and Prefinish Metals each have lines operating or under
construction that are capable of processing metal up to 1.83 m (72 in.)
wide at speeds in the range of 3.5 to 4.0 m/s (700 to 800 ft/rain). One
line of this capacity is equal to several lines in the size ranges of the
model plants. The estimate of the number of new lines is made only to
represent the expected increase in production capacity. The actual number
of lines built may be more or less than the estimates depending on the
capacity of each new line. Major replacement of equipment for existing
lines is not typical of the coil coating industry. Routine replacement of
line components, such as the wet section, which may occur every 2 to 5
years, does not constitute a modification because it does not impact produc-
tion or emissions.
Areas of growth will include the deeper penetration of existing markets
In addition to the entrance into new markets not yet explored by the indus-
try. Increased sales to the transportation industry for such products as
trucks, trailers, and recreational vehicles are expected. Industry spokes-
persons also believe the large appliance industry to be on the verge of a
major switch to precoated stock.5 Advances in coating formulations, energy
conservation measures, and the desire to avoid postassembly painting and
its resultant pollution control problems are expected to be additional
factors that will lead to increased sales of precoated metal coil. Competi-
tion with imports or substitute products is not expected to dampen industry
growth.
The actual coating process, the size of lines, and the geographical
concentration of new lines are not expected to change to any significant
degree over the next 5 years. However, improved operating characteristics
on new and existing lines, such as increased line speed and the addition of
dual coating heads, which allow color changes to be made without interrupt-
ing the coating process, will contribute to industry growth. New lines
8-21
-------
will incorporate an even higher degree of automation, resulting in lower
labor cost and greater economy of scale in production. Examples of recent
innovations include automatic film (coating) thickness monitoring and strip
temperature measurement using infrared techniques. In addition, advances
in coating formulations will enable new industries to use precoated steel
or aluminum in t.,eir manufacturing processes. For coil coated metal to be
used in a product, the coatings not only must be capable of withstanding
the normal conditions of the products' use, but must also withstand manufac-
turing operations such as cutting, bending, and joining. Two recent innova-
tions that have led to new markets for coil coated steel are (1) a polyester
coating that is induction heated during roll forming operations to radii as
small as twice the metal thickness and (2) a weldable primer.14 The first
of these developments is used by General Electric to manufacture refrigerator
doors and wrappers, and the latter is used by the automobile industry.
8.2 COST ANALYSIS OF CONTROL OPTIONS
8.2.1 Introduction
In this section the costs of various control options are presented and
analyzed. The control options, discussed in Chapter 4, are summarized in
Table 8-7, along with the regulatory alternatives to which each applies.
(See Appendix E for a description of a set of revised control options and
regulatory alternatives.) The model coil coating lines presented in Chapter 6
form the basis for all cost analyses in this section. Figure 8-2 lists key
parameters for each model line size. The metal sizes and production rates
of the model lines are based on responses to an industry survey of all
known facilities.
The first regulatory alternative, No New Source Performance Standard
(NSPS), corresponds to the level of control expected under the State Imple-
mentation Plans (SIPs). The S!P limits applicable to particular coating
lines vary geographically, depending on whether Control Technique Guideline
(CTG) limits or numerical limits apply. AS described in Chapter 7, the
average level of volatile organic compound (VOC) control required in those
areas that use CTG limits is 64 percent overal!, while the average level of
control required in States that use numerical limits is 85 percent overall
(approximately equivalent to 90 percent capture and 95 percent destruction
8-22
-------
TABLE 8-7. REGULATORY ALTERNATIVES AND CONTROL OPTIONS
CONSIDERED IN THE ECONOMIC ANALYSIS
Regulatory alternative
Control option
I. No NSPS
(SIP regulations apply)
SIP = CTG limits
SIP = Numerical limits
II. Limiting emissions to the
equivalent of an 85 percent
reduction in the emissions
from the average industry
coating formulation of
40 percent solids and 60
percent VOC
III. Limiting emissions to the
equivalent of a 95 percent
reduction in the emissions
from the average industry
coating formulation
1.
2.
2.
Multiple zone incinerators
and coating rooms
Thermal incineration with
heat recovery
Thermal incineration with
heat recovery
3.
Thermal incineration with
heat recovery and coating
rooms.
8-23
-------
Small Line
Annual operating time
Annual coating time
Total metal processed
Metal
Dry film thickness
Line speed
Ovens
Oven exhaust temperature
4,000 h
2,780 h
4.6 X 106 m2/yr (50 X 106 ft2/yr)
Aluminum, 0.46 m (18 in.) wide, 0.30 mm (0.012 in.) thick
prime coat, 0.0114 mm (0.00045 in.) each side
top coat, 0.0114 mm (0.00045 in.) each side
1.02m/s{200ft/min)
1 each for prime coat and top coat
316° C (600° F)
Medium Line
Annual operating time
Annual coating time
Total metal processed
Metal
Dry film thickness
Line speed
Ovens
Oven exhaust temperature
4,000 h
2,780 h
14 X 106m2/yr(150X 10^ ft2/yr)
Steel, 0.91 m (36 in.) wide, 0.43 mm {0.017 in.) thick
prime coat, 0.0114 mm (0.00045 in.) each side
top coat, 0.0114 mm (0.00045 in.) each side
1.5m/s(300ft/min)
1 each for prime coat and top coat
316° C (600° F)
Large Line
Annual operating time
Annual coating time
Total metal processed
Metal
Dry film thickness
Line speed
Ovens
Oven exhaust temperature
4,000 h
2,500 h
28 X 1Q6 m2/yr (300 X 106 ft2/yr)
Steel, 1.22 m (48 in.) wide, 0.48 mm (0.019 in.) thick
prime coat, 0.0114 mm (0.00045 in.) each side
top coat, 0.0114 mm (0.00045 in.) each side
2.5 m/s (500 ft/min)
1 each for prime coat and top coat
316° C (600° F)
Figure 8-2. List of parameters for model coil coating lines.
8-24
-------
TABLE 8-8. KEY PARAMETERS FOR CONTROL OPTION 1: MULTIPLE ZONE INCINERATORS
AND COATING ROOMS
Line size
Parameter
Small
Medium
Large
Oven exhaust temperature 316° C (600° F)
Exhaust volume, each oven 2.4 m3/s (5,000 scfm)
Effectiveness of solvent
capture
Effectiveness of solvent
destruction
Average solvent input
reaching oven
100 percent
64 percent
316° C (600° F)
4.7 mVs (10,000 scfm)
100 percent
64 percent
0.016 £/s (15.1 gal/h) 0.048 S./s (45.4 gal/h)
316° C (600° F)
9.4 mVs (20,000 scfm)
100 percent
64 percent
0.11 £/s (101 gal/h)
ro
01
Average heat released by 720 kW (2.5 MM Btu/h) 2,200 kW (7.4 MM Btu/h) 4,700 kW (16 MM Btu/h)
solvent combustion
Electric power required
above that of standard
ovens
Approx. 0
Approx. 0
Approx. 0
MM Btu = million Btu/h.
-------
TABLE 8-9. KEY PARAMETERS FOR CONTROL OPTION 2: THERMAL INCINERATION WITH HEAT RECOVERY
Line size
Parameter
Small
Medium
Large
00
r
ro
en
Oven exhaust temperature
Incineration temperature
Exhaust volume, each oven
Primary heat exchanger duty
Secondary heat exchanger
duty
Effectiveness of solvent
capture
Effectiveness of solvent
destruction in incinerator
Average solvent input reaching
oven
Average heat released by
solvent combustion
Electric power required
above that of standard
ovens
Volume of preheated air to
ovens
Temperature of preheated air
to ovens
316° C (600° F)
760° C (1,400° F)
2.4 mVs (5,000 scfm)
1,000 kW (3.5 MM Btu/h)
1,800 kW (6.3 MM Btu/h)
90 percent
95 percent
.014 £/s (13.6 gal/h)
970 kW (3.3 MM Btu/h)
106 kW
4.1 mVs (8,600 scfm)
382° C (720° F)
316° C (600° F)
760° C (1,400° F)
7.1 m3/s (15,000 scfm)
2,900 kW (10 MM Btu/h)
5,600 kW (19 MM Btu/h)
90 percent
95 percent
.043 £/s (40.9 gal/h)
316° C (600° F)
760° C (1,400° F)
15. F mVs (33,000 scfm)
6,700 kW (23.MM Btu/h)
12,000 kW (42 MM Btu/h)
90 percent
95 percent
.096 A/s (90.0 gal/h)
2,900 kW (9.9 MM Btu/h) 6,400 kW (22 MM Btu/h)
225 kW
12 mVs (26,000 scfm)
382° C (720° F)
510 kW
27 mVs (58,000 scfm)
382° C (720° F)
MM Btu/h = million Btu/h.
-------
TABLE 8-10. KEY PARAMETERS FOR CONTROL OPTION 3: THERMAL INCINERATION WITH HEAT RECOVERY
AND COATING ROOMS
Line size
Parameter
Small
Medium
Large
Oven exhaust temperature
Incineration temperature
Exhaust volume, each oven
Primary heat exchanger duty
Secondary heat exchanger
duty
Effectiveness of solvent
capture
oo Effectiveness of solvent
[^ destruction in incinerator
Average solvent input reaching
oven
Average heat released by
solvent combustion
Electric power required
above that of standard
ovens
Volume of preheated air
to ovens
Temperature of preheated
air to ovens
316° C (600° F)
760° C (1,400° F)
2.4 m3/s (5,000 scfm)
1,000 kW (3.5 MM Btu/h)
1,800 kW (6.3 MM Btu/h)
100 percent
95 percent
0.16 SL/s (15.1 gal/h)
316° C (600° F)
760° C (1,400° F)
7.1 m3/s (15,000 scfm)
2,900 kW (10 MM Btu/h)
5,600 kW (19 MM Btu/h)
100 percent
95 percent
.048 £/s (45.4 gal/h)
1,100 kW (3.7 MM Btu/h) 3,200 (11 MM Btu/h)
106 kW
4.1 m3/s (8,600 scfm)
382° C (720° F)
225 kW
12 m3/s (26,000 scfm)
382° C (720° F)
316° C (600° F)
760° C (1,400° F)
15.6 mVs (33,000 scfm)
6,700 kw (23 MM Btu/h)
12,000 kW (42 MM Btu/h)
100 percent
95 percent
0.11 £/s (101 gal/h)
7,000 kW (24 MM Btu/h)
510 kW
27 m3/s (58,000 scfm)
382° C (720° F)
MM Btu/h = million Btu/h.
-------
in the control device). Tables 8-8, 8-9, and 8-10 list important parameters
for the three control options.
By virtue of its having the lowest capital and operating costs, Control
Option 1 is the control option applied to CTG limits in this analysis.
Option 1 involves the use of multiple incinerators as integral parts of the
curing ovens. Fumes from the various oven zones are recycled through these
incinerators in such a manner that solvent destruction is achieved before
the exhaust leaves the ovens. These systems, in effect, incinerate a
portion of the total gas flow in the ovens. With this control technique, a
solvent destruction level of 64 percent is near the maximum that can consis-
tently be obtained. Therefore, coating rooms are required in order to
achieve maximum percent capture of solvents. The costs of coating rooms
are included in the capital costs of this control option.
Control Option 2 is thermal incineration with primary and secondary
heat recovery, resulting in 90 percent solvent capture and 95 percent
solvent destruction. Figure 8-3 is a schematic diagram of a model coil
coating line with such a control system. The effectiveness of the primary
heat exchanger is limited to an average of 36 percent in order that the
temperature of the gas stream entering the incinerator be no greater than
482° C (900° F) for safety reasons. The secondary exchanger is 60 percent
effective, which is a relatively high level of effectiveness for an air-to-
air exchanger, and is offered by a number of vendors as standard equipment.
The use of these heat exchangers reflects the rapidly growing trend in the
industry toward heat recovery systems.
Control Option 3 is thermal incineration with heat recovery, as in
Option 2, with the addition of coating rooms. Solvent destruction is 95
percent complete, and solvent capture is assumed to be 100 percent effec-
tive. With reference to the model coil coating line diagrammed in Figure
8-3, the addition of enclosures around the two coating areas would make the
"solvent loss" streams equal to zero and would increase the solvent avail-
able for combustion in the incinerator over that of Option 2.
Several variations on the above incineration schemes with heat recov-
ery are available to the industry. These include the use of multiple zone
incinerators followed by an afterburner and the use of thermal incineration
with regenerative heat recovery.
8-28
-------
TO STACK
CD
I
ro
SOLVENT LOSS
FROM PRIME
COATING AREA
ACCUMULATOR
SPLICER
^
UNCOILING
METAL
SOLVENT LOSS
FROM TOPCOAT
COATING AREA
AIR
NATURAL GAS
PRIMARY
HEAT
EXCHANGER
INCINERATOR
TO CONTROL
EQUIPMENT
-*••
AIR
u
1
WET SECTION
PRIME PRIME PRIME TOPCOAT TOPCOAT TOPCOAT
COATING OVEN QUENCH COATING OVEN QUENCH
AREA AREA
RECOILING
METAL
Figure 8-3. Schematic diagram of a model coil coating line with thermal incineration and primary
and secondary heat recovery (Control Option 2).
-------
Another category of control technology for this industry is catalytic
incineration. Recuperative heat exchangers may be used in conjunction with
these incinerators to achieve maximum fuel economy. However, catalytic
incineration is not widely used in the industry due to a history of problems
with catalyst fouling and poisoning. These problems can be overcome through
control of the t>pes of coatings used, regular maintenance of the units,
and the use of special filters. Catalytic incineration is best suited to
captive coaters, who use only a few coatings and know the composition of
each. In such cases, this system is more economical than thermal incinera-
tors due to fuel savings. Catalytic incineration is not considered as a
control option in this section, however, because it is not universally
applicable to the industry.
The cost estimates presented in this section are study estimates,
accurate to ±30 percent. Equipment costs of lines and control systems were
obtained from vendors of the equipment.15 16 *7 is is 20 21 Descriptions
of the model lines were sent to a number of vendors with the request that
they provide cost data on the control systems they would recommend. Operat-
ing costs of lines and control equipment were estimated based on vendor
data and on calculations made with the parameters shown in Figure 8-2 and
Tables 8-8, 8-9, and 8-10. The costs of coating lines and control equip-
ment presented here have been found to be consistent with the experience of
various coil coating firms.
8.2.2 New Facilities
In this section, costs that are applicable to new coating lines are
summarized. All costs are based on the model plant parameters. In this
industry, new coating lines are likely to fall within the size range of
existing facilities. Model plant sizes are discussed in Chapter 6.
8.2.2.1 Capital Costs. Table 8-11 shows the total installed costs of
air pollution control equipment for the various control options. The
control system in Option 1 consists of multiple zone incinerators in combi-
nation with the use of coating rooms. The installed cost given for Option
2 is for thermal incineration with recuperative (air-to-air) heat exchangers,
a common form of heat recovery used in the industry. This control system
is described in detail in Section 8.2.1, above.
Different vendors offer equivalent heat recovery using their own
designs and types of equipment. Based on vendor responses, the ranges of
8-30
-------
TABLE 8-11. CAPITAL COSTS OF CONTROL OPTIONS
Control option
1. Multiple zone
incinerators and
coating rooms
2. Thermal incineration
with heat recovery
3. Thermal incineration
with heat recovery
and mat inn rooms
Percent overall
solvent
destruction
64
85
95
Size
model
line
Small
Medium
Large
Small
Medi um
Large
Small
Medium
Large
Installed cost,
$l,OOOs
214
289
A f\ r*
405
278
548
1,178
388
680
1,322
8-31
-------
installed capital costs for systems using thermal incineration with
primary heat recovery (36 percent effectiveness) and secondary heat recov-
ery (60 percent effectiveness), or at least equivalent heat recovery, are
approximately as follows: small model line, $260,000 to $420,000; medium
model line, $490,000 to $740,000; and large model line, $680,000 to
$1,400,000. Because of the high air flow rates in the large model line,
most vendors recommend the use of two incinerators, one for each oven. The
costs of control for the large line thus include two incinerators plus heat
recovery systems. The total installed costs shown in Table 8-11 were
determined from equipment prices with component capital cost factors.22
Table 8-12 shows the component capital cost factors used in this analysis.
Most vendors provide cost information for a 90 percent control level.
Capital costs for the systems designed to deliver 95 percent solvent
destruction are estimated to be 10 percent greater than the costs for
systems designed to deliver 90 percent solvent destruction. Equipment
vendors indicate that, for some lines, no modification to their standard
control systems would be required to achieve 95 percent control. However,
in order to guarantee 95 percent in every situation, a larger incineration
chamber and/or special seals on the heat exchangers may be required.
Based on discussions with vendors and on the use of standard cost/capacity
correlations, the equipment cost of the incinerator alone would increase 20
to 30 percent for the required increase in residence time from approxi-
mately 0.3 second to 0.4 or 0.5 second." ™ This WQuld result -n an
increase in the cost of the entire system of approximately 10 percent.
This factor was applied to the capital costs of systems for 90 percent
destruction to arrive at the cost of systems for 95 percent destruction.
8.2.2.2 Annual 1 zed Costs. In this section, the annualized costs of
the control options are discussed. These costs include annualized capital
costs and operating costs for electricity, fuel, labor, and maintenance.
Table 8-13 shows some basic assumptions made in the cost calculations.
Additional assumptions are that the control devices operate at preset
temperatures and air flow rates throughout the 4,000 hours annual operating
time and that the devices use no fuel during nonoperating hours. The
latter assumption is made for ease in calculation, with the realization
that a firm operating two shifts per day might choose to use a low-fire
mode at night to protect the incinerator and heat exchangers and prevent
8-32
-------
TABLE 8-12.
COMPONENT CAPITAL COST FACTORS USED IN CALCULATING
TOTAL INSTALLED COSTS
Type of cost
Component capital cost factor
Basic equipment cost
Installation direct costs
Foundations and supports
Erection and handling
Electrical
Piping
Insulation
Painting
Freight
Installation indirect costs
Engineering and supervision
Construction and field expense
Construction fee
Startup
Performance test
Contingencies
1.00
0.08
0.14
0.04
0.02
0.01
0.01
0.05
Total
8-33
-------
TABLE 8-13. CALCULATION OF ANNUALIZED COSTS OF AIR
POLLUTION CONTROL SYSTEMS
Cost component
Basis of calculation
Operating factor
Operation and maintenance
Utilities
Electricity
Natural gas
Capital recovery factor3
16 n/d
250 d/yr
4,000 h/yr
5 percent Of installed cost
$.04/kWh
$2.84/GJ ($3.00/MM Btu)
0.174
and overhead and 0.02 for taxes and i
MM Btu/h = million Btu/h.
8-34
-------
lengthy warm-up times. The operating temperature to achieve 95 percent
solvent destruction is taken as 760° C (1,400° F) in the thermal incinera-
tors.23 25
Table 8-14 summarizes annual operating costs for the control options.
The estimates of operating costs for Options 2 and 3 in this analysis
tend to be somewhat higher than the costs that the most energy-conscious
firm could achieve with the same equipment. This is primarily due to fuel
costs. The control equipment at many existing plants is operated at preset
temperatures and gas flows as assumed in this analysis. However, as energy
conservation becomes more of a necessity, the use of low-fire modes during
extended noncoating periods and during oven turndown modes, when possible,
may increase. Such practices would tend to keep operating costs below
those shown here.
Tables 8-15 through 8-17 present annualized capital and operating
costs for air pollution control systems. Three levels of overall solvent
destruction are evaluated for facilities that use solvent-borne coatings:
64 percent, 85 percent, and 95 percent.
The operating costs of the control systems in Tables 8-15 through 8-17
demonstrate the economic value of heat recovery equipment. The fuel require-
ment of each control system is less than the requirement of a line without
controls. In the medium and large plants, the fuel savings cause the
direct cost (operating cost) of each system to be negative, i.e., a savings.
For any given new coating line, a particular design of the heat recovery
scheme may offer the most cost-effective emission control. Firms building
new lines generally consider several designs before deciding on the best
one for their applications. Several plants are using regenerative heat
recovery systems that are reported by the vendor to yield a net cost savings
for almost any size line. Other firms are using direct recycle of incine-
rator exhaust or recycle of oven exhaust through oven burners. There are
many variations on thermal incineration with heat recovery in the industry.
8.2.2.3 Cost Effectiveness. The overall cost effectiveness of con-
trol options is presented in Tables 8-15 through 8-17. These figures give
the annual cost or savings associated with a control system per unit VOCs
removed.
8-35
-------
TABLE 8-14. ANNUAL OPERATING COSTS OF CONTROL OPTIONS
Annual operating costs. $l,OOOs
Control
option
Model line
size
Electricity
Fuel
Labor,
maintenance,
materials
Total
1.
2.
3.
Small
Medium
Large
Small
Medium
Large
Smal 1
Medi um
Large
0
0
0
17
36
82
17
36
82
(25)
(143)
(304)
(25)
(83)
(178)
(28)
(93)
(198)
10
14
20
14
28
60
20
35
C7
(15)
(129)
(284)
6
(19)
(36)
9
(22)
(49)
8-36
-------
TABLE 8-15. ANNUALIZED COST OF VOC CONTROL OPTIONS FOR SMALL MODEL LINE
CO
CO
Percent Overall
Control option for overall effectiveness of Annual i zed Direct
facilities that use solvent VOC reduction capital costs, cost (savings),
solvent-borne coatings destruction Mg/yf ton/yr $l,OOOs Jl.OOOs
1. Multiple zone 64 176 194 37 (15)
incinerators and
coating rooms
2. Thermal incineration 85 235 259 48 6
with heat recovery
3. Thermal incineration 95 261 288 68 9
with heat recovery
and coating rooms
facilities that use waterborne coatings were not considered for add-on controls.
Overall cost
Total annualized (savings)/unit
cost (savings), VOC removal
$l,OOOs $/Mg $Aon
22 120 110
54 230 208
77 295 267
-------
CO
I
u>
00
TABLE 8-16. ANNUALIZED COSTS OF VOC CONTROL OPTIONS FOR MEDIUM MODEL LINE
Percent Overall
Control option for overall effectiveness of Annual i zed Direct
facilities that use solvent VOC reduction capital costs, cost (savings),
solvent-borne coatings destruction Mg/yr ton/yr $l,OOOs 51,000s
1.
2.
3.
Multiple zone 64 530 584 50 (129)
incinerators and
coating rooms
Thermal incineration 85 708 780 95 (19)
with heat recovery
Thermal incineration 95 787 866 118 (22)
with heat recovery
and coating rooms
Overall cost
Total annual i zed (savings)/unit
cost (savings), VOC removal
$l,OOOs $/Mg $/ton
(79) (149) (135)
76 107 97
96 122 111
^Facilities that use waterborne coatings were not considered for add-on controls.
-------
00
TABLE 8-17. ANNUALIZED COSTS OF VOC CONTROL OPTIONS FOR LARGE MODEL LINE
Percent Overall Overall cost
Central option for overall effectiveness of Annualized Direct Total annualized {savings)/unit
facilities that use solvent VOC reduction capital costs, cost (savings), cost (savings), VOC removal
solvent-borne coatings destruction Mg/yr ton/yr $l,OOOs $l,OOOs $l,OOOs $/Mg t/ton
1.
2.
3.
Multiple zone 64 1,060 1,168 70 (284) (214) (202) (183)
incinerators and
coating rooms
Thermal incineration 85 1,411 1,556 205 (36) 169 120 109
with heat recovery
Thermal incineration 95 1,568 1,729 230 (49) 181 115 105
with heat recovery
and coating rooms
'facilities using waterborne coatings were not considered for add-on controls.
-------
Control Option 1, applicable only to lines needing 64 percent control,
offers a net savings over the cost of standard coating lines for the medium
and large model lines. This is because the use of multiple zone incine-
rators and coating rooms has a relatively low capital cost above that of
the basic lines (without emission controls) for larger plants yet allows
recovery of substantial heat from the solvent.
Tables 8-18 through 8-20 show the marginal cost per unit VOCs removed
for various control alternatives in achieving NSPS levels of control. The
marginal cost in achieving NSPS limits over CTG limits is the difference in
total annualized cost between the CTG control option and the NSPS option
being considered. For the medium and large size plants, the annualized
cost of the CTG option is negative; that is, it is a savings over the
standard line without controls, as seen in Tables 8-15 through 8-17. Thus
the marginal cost per unit VOCs removed is higher for the medium and large
model lines than for the small line.
The marginal costs per unit VOCs removed given in Tables 8-18 through
8-20 (e.g., the case of going from Control Option 2 to Control Option 3 for
small and medium plants) are generally higher than the corresponding overall
cost effectiveness values given in Tables 8-15 through 8-17 This is
primarily due to the increase in capital requirements to achieve a modest
reduction in emissions. The large plant shows a relatively low marginal
cost in this case because of proportionally lower capital costs per unit
VOCs removed. In going from the CTG control system ^ ^ ^ ^
control system (Options 2 or 3), the high marginal costs are due to a
com ination of major increases in capital costs and substantially higher
fuel requirements.
8.2.2.4 Base Cost of faculty. This section presents the base cost
and operaung costs of new col, coating faculties. These costs can be
compared to t e cost of control allocable to MSPS to determine the economic
f...ibimy of new regulations. The analys1s contains costs for each size
model plant.
The najor capita, expenses for a new col, coating p,ant are for me-
chan,cal equlpraent and ovens for the ,1ne Itself, Installation of equip-
ment, and natenals and construction of a Urge factory building. These
costs are summarized In Table 8-21. All Information In Table 8-21 was
8-40
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TABLE 8-18. MARGINAL COST EFFECTIVENESS OF NSPS ABOVE SIP REGULATIONS FOR SMALL MODEL LINE
Control option for
facilities that use
solvent-borne coatings3
2.
3.
Thermal incineration
with heat recovery
Thermal incineration
with heat recovery
and coating rooms
Percent
overall
solvent
destruction
85
95
Incremental effectiveness
of VOC removal compared
with SIP regulations
Mg/yr(ton/yr)°
States using
CTG limit
59 (65)
85 (94)
States using
numerical limits
~0 (~0)
26 (29)
Incremental annual i zed cost
attributable to NSPS,
Sl.OOOs
States using States using
CTG limits numerical limits
32 0
55 23
Marginal cost per unit
of VOC removal
$/Mg ($/ton)
States using
CTG limits
540 (490)
650 (590)
States using
numerical limits
880 (790)
CO
Facilities that use waterborne coatings were not considered for add-on controls.
The difference between SIP emissions and NSPS emissions expressed on an annual basis.
-------
oo
i
-P»
ro
TABLE 8-19. MARGINAL COST EFFECTIVENESS OF NSPS ABOVE SIP REGULATIONS FOR MEDIUM MODEL LINE
Control option for
facilities that use
solvent-borne coatings
2. Thermal incineration
with heat recovery
3. Thermal incineration
with heat recovery
and coating rooms
Percent
overall
solvent
destruction
85
95
Incremental effectiveness
of VOC removal compared
with SIP regulations
Mfl/yr(ton/yr)ft
States using States using
CTG limit numerical limits
178 (196) ~0 (~0)
257 (282) 79 (86)
Incremental annual i zed cost
attributable to NSPS,
$1.000s
States using States using
CTG limits numerical limits
155 ~0
175 20
Marginal cost per unit
of VOC removal
$/.> ($/ton)
States using States using
CTG limits numerical limits
870 (790)
680 (620) 250 (230)
Facilities that use waterborne coatings were not considered for add-on controls.
nThe difference between SIP emissions and NSPS emissions expressed on an annual basis.
-------
03
i
-p»
OJ
TABLE 8-20. MARGINAL COST EFFECTIVENESS OF NSPS ABOVE SIP REGULATIONS FOR LARGE MODEL LINE
Control option for
facilities that use
solvent-borne coatings
Percent
overall
solvent
destruction
Incremental effectiveness
of VOC removal compared
with SIP regulations
Mq/yr(ton/yr)D
States using States using
CTG limit numerical limits
Incremental annual i zed cost
attributable to NSPS,
$ 1,000s
States using States using
CTG limits numerical limits
Marginal cost per unit
of VOC removal
$/Mg ($/ton}
States using States using
CTG limits numerical limits
2. Thermal incineration 85
with heat recovery
3. Thermal incineration 95
with heat recovery
and coating rooms
351 (388) ~0 (~0)
508 (561) 157 (173)
383
395
~0
12
1,110 (1,000)
780 (710) 80 (70)
facilities that use waterborne coatings were not considered for add-on controls.
bThe difference between SIP emissions and NSPS emissions expressed on an annual basis.
-------
TABLE 8-21. CAPITAL COSTS OF NEW COIL COATING FACILTIES
Cost item
Mechanical equipment-- line
Ovens
Installation of mechanical
equipment and ovens
Total basic line cost
Building cost
Total facility cost less
control equipment
Total facility cost,
including control
equipment, to meet
Control Options 1, 2,
and 3
Control Option 1—64
percent overall
destruction
Control Option 2--85
percent overall
destruction
Control Option 3—95
percent overall
destruction
Costs
Small
2,700
630
1,110
4,440
2.870
7,310
7,520
7,590
7,700
for each size
$1 ,000s
Medium
4,000
800
1,600
6,400
3,870
10,270
10,560
10,820
10,950
model line,
Large
53150
1,090
2,080
8,320
5,200
13,520
13,920
14,700
14,840
pplicable only to lines that use solvent-borne
coatings.
8-44
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obtained from vendors and other persons responsible for estimating costs of
new Tines.15 1S 2l 26 27 In Table 8-21, four significant figures are used
only to demonstrate differences between costs with and without emission
controls.
Installation costs are the most variable of the costs shown. These
are affected by geographic location of the new facility and the local cost
of labor. A factor of 33 percent of equipment cost is assumed for the
installation cost of mechanical equipment.15 26
Since few lines have been built exclusively for the use of waterborne
coatings, there are few cost data available on these lines at the present
time. However, most of the mechanical equipment and the structure for a
Plant that uses such lines would be similar to those of a plant with lines
built exclusively for the use of solvent-borne coatings. As previously
discussed, the average oven size and air flow on lines that use waterborne
coatings are assumed to be the same as those on lines that use solvent-
borne coatings. Therefore, the costs of model lines that use waterborne
coatings may also be taken from Table 8-21.
New model coating facilities would require approximately the following
shop areas: small line, 6,690 m2 (72,000 ft2); medium line, 9,290 m2
(100,000 ft2); and large line, 12,800 m2 (138,000 ft2). The building costs
in Table 8-21 reflect a cost of $377/m2 ($35/ft2) plus an allowance for a
ceiling-mounted crane.15 26 27 Building costs are high in this industry
because of the amount of structural steel required.
In estimations of annual operating costs of model coating facilities,
it was assumed that each facility provides coating services for customers
and does not actually purchase the metal. Table 8-22 gives .annual operat-
ing costs for the model plants. Costs of coatings are by far the greatest
operating expenses for coil coaters. Annual coating costs for the model
facilities are estimated with a figure of $2.37/m2 ($.022/ft*) coated.
This figure reflects the use of a relatively inexpensive, commonly used
coating (a polyester, for example) at the film thickness used in the model
Plants. Most coating facilities use a variety of coatings and adjust their
charge to the customer to reflect the cost of the coatings.
Electrical costs in Table 8-22 were calculated with a figure of
0.26 kWh/m2 (0.024 kWh/ft2) of metal coated. The electrical costs of
8-45
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TABLE 8-22. ANNUAL OPERATING COSTS OF MODEL COIL COATING
LINES WITHOUT EMISSION CONTROL EQUIPMENT
Annual operating costsT $l,OODs
Model line Maintenance
size Electricity Fuel Labor repairs Materials Total
8-46
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operating coil coating lines vary from less than 0.19 kWh/m2 (0.018 kWh/ft2)
coated to greater than 0.31 kWh/m2 (0.029 kWh/ft2) coated, depending on
line size, line speed, and type of equipment.26 28 Fuel costs are based on
the use of ovens with no solvent destruction or heat recovery. The costs
of electrical energy and fuel energy are given in Table 8-14. Labor costs
in Table 8-22 reflect the following: small plant, 19 employees; medium
plant, 28 employees; and large plant, 36 employees. These numbers exclude
maintenance personnel, whose salaries are included in the maintenance and
repair costs. These costs are estimated at 5 percent of the total installed
costs of the facilities without air pollution control equipment. All labor
is assumed to cost $9 per hour. The number of employees in each plant
reflects a shop worker to administrative worker ratio of approximately 3 to 1.
8-2.3 Modified/Reconstructed Facilities
As discussed in Chapter 5, most modifications to coil coating lines
are made either to increase the production rate or to conserve fuel energy.
In the past, a number of plants have achieved an increase in line speed of
approximately 20 percent by replacing drive motors and gears and by chang-
ing the electrical controls on the line.29 Frequently, no modification to
the ovens was required in such cases. Today, the cost of modifying a line
in this manner would be on the order of $100,000 to $200,000.
Since an increase in line speed would result in increased emissions,
such a modification would bring a facility under NSPS regulations. For
purposes of estimating the economic impact of the regulations on a facility
undergoing modifications, the installed capital costs of emission control
equipment given in this chapter, multiplied by a factor of 1.3, may be
used. The 30 percent increase in capital costs is intended to allow for
additional direct costs of ducting, structural work, and electrical work
and for additional indirect costs of engineering and construction. These
costs are very much site specific. The capital costs of retrofitting
emission control systems vary from less than 20 percent greater to several
hundred percent greater than the costs of such equipment on new lines. A
figure of 30 percent represents the typical case where no major design or
installation problems are encountered in the retrofitting process.
8-47
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Capital and operating expenses were analyzed for coil coating lines
(in the size range of the model lines) that undergo modifications to
increase their production rate by 20 percent. While this is by no means the
only kind of modification expected in the industry, it is believed to be a
reasonable example of modifications that may occur. An existing line
meeting CTG limits by Control Option 1 would be required to install addi-
tional emission control equipment in order to meet NSPS requirements.
Thermal incinerators are generally used in combination with Control Option
1 systems to achieve better emission control. The operating temperatures
of the afterburner can be significantly less than 760° C (1,400° F) for
most solvents.15
For the purpose of estimating the costs of additional emission control
needed to meet NSPS, the following system is used. On each model line, an
afterburner with a primary heat exchanger is added to treat the exhaust
flow from both ovens. The primary heat exchanger, with an effectiveness of
50 percent, is used to preheat oven exhaust gas with heat from the incine-
rator exhaust gas. Primary heat exchangers are used here because package
units containing both incinerator and heat exchanger are available, and
because their use here is in keeping with the level of heat recovery used
in the analysis of new lines meeting NSPS requirements in Section 8.2.2.
Secondary heat exchangers or air preheaters are not considered here (1)
because significant heat recovery has already been achieved by the use of
zone incinerators and a primary heat exchanger and (2) because afterburner
temperatures are somewhat lower than those considered in Section 8.2.2.
" Tn'1^^6^"65 °f the add'°n-incinerators assumed here are
538 C (1,000 F) for 85 percent overall control and 649° C (1,200° F) for
95 percent overall control.
The capital costs of the incinerator systems with primary heat recovery
or the model lines already having Control Option 1 are as follows: small
line $258,000; medium line, $426,000; large line, $671,000. The units are
sized for actual flow rates at 649° C (1|200. F). The costs are corrected
to current prices using Marshal! and Swift equipment cost indices and a
factor of 1.30 to account for the extra costs of retrofit equipment.
Operating costs of modified lines originally having CTG levels of
1°nrntHH* are deSCn'bed " Tabl6 8'23' The tabl* -eludes informa-
on the addUional operating costs of the model lines modified for a 20
8-48
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TABLE 8-23. INCREASE IN ANNUAL OPERATING COSTS OF EXISTING LINES
HAVING CTG CONTROL SYSTEMS DUE TO INCREASED PRODUCTION
AND ADDITIONAL EMISSION CONTROL
($l,OOOs)
Size model
line Fuel
Electricity
Maintenance
and
repairs
Materials Labor Total
A- Production
Cost increase (savings) in existing portion of line due to 20 percent
increase in productionb
Small
Medium
Large
(4)
(12)
(23)
7
20
41
0
0
0
220
660
1,320
0
0
0
223
668
1,338
B. Control
Cost increase due to additonal control equipment needed to provide
«5 percent overall
Small
Medium
Large
23
37
72
control
5
10
20
13
21
33
0
0
0
0
0
0
41
68
125
C. Control
gost increase due to additonal control equipment needed to provide
'•"'.percent overall control
Small
Medium
Large
35
58
114
5
10
20
13
21
33
0
0
0
0
0
0
53
89
167
Includes the materials and labor associated with maintenance and repairs.
bTo obtain total additional operating costs of a line due to increase in
production and NSPS requirements, add the total production cost increase
(A) to the total control cost increase for the appropriate NSPS level of
control (B or C).
8-49
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percent increase in line speed, without the additional afterburners. Costs
are also presented that can be directly attributed to the additional control
systems.
The above discussion of capital and operating costs refers to the
situation in which an existing line with CTG levels of emission control is
retrofitted with -quipment to meet NSPS requirements for the regulatory
alternatives requiring 85 and 95 percent overall control. In the case of a
line currently having a system to provide 85 percent overall control (in
States using numerical limits), the only regulatory alternative to consider
is the alternative requiring 95 percent overall control. Since the system
in Control Option 2 provides 85 percent overall control, it is assumed here
that an existing facility in a State using numerical limits would need to
add coating rooms to achieve 95 percent control. The installed costs of
coating rooms, with a factor of 1.3 built in to allow for the difficulty of
retrofitting the equipment, are as follows: small line, $143,000; medium
line, $172,000; large line, $187,000. Additional operating costs due to
the increased production and the additional emission control are summarized
in Table 8-24. The fuel savings shown are due to the heat of combustion
provided by the additional solvent oxidized to 95 percent destruction.
In actual practice, some existing facilities may be achieving 85
percent overall removal by other means, such as less efficient incinerators
in combination with coating rooms. In such cases, the capital and operat-
ing expenses would be different (perhaps higher) than those presented here.
For example, facilities may have to modify existing incinerators to increase
the residence time of combustion chambers or to reduce leakage in heat
exchangers. However, the costs presented in Table 8-24 represent those
expected in typical cases.
8.3 OTHER COST CONSIDERATIONS
The purpose of this section is to summarize, to the extent possible,
the cost impact of requirements imposed on the coil coating industry by
other environmental regulations. Areas of other major regulations perti-
nent to the coil coating process include water pollution, occupational
exposure to toxic substances by employees, and toxic substances control.
8-50
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TABLE 8-24. INCREASE IN ANNUAL OPERATING COSTS OF EXISTING LINES
HAVING 85 PERCENT CONTROL DUE TO INCREASED PRODUCTION
AND ADDITIONAL (95 PERCENT OVERALL) EMISSION CONTROL
TO MEET NSPS
($l,OOOs)
Size model
line Fuel
Electricity
Maintenance
and
repairs
Materials Labor Total
A. Production
Cost increase (savings) in exfstfng portion of Une due to 20 percent
increase in production
Small (5) 7 0 220 0 222
Medium (15) 20 0 660 0 665
Large (31) 41 0 1,320 0 1,330
8. Control
Additional cost increase (savings) due to additional control equipment
needed to provide 95 percent overall control
Small (4) 0 7 ° • S A
Medium (11) 0 9 0 0 (2
Large (21) 0 9 00 (12)
Includes the materials and labor associated with maintenance and repairs.
bTo obtain total additional operating costs of a line due to increase in
production and NSPS requirements, add the total production cost increase
(A) to the total control cost increase (B).
8-51
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8.3.1 The Clean Water Act
Coil coating facilities are generally subject to effluent discharge
regulations imposed by the Federal Water Pollution Control Act Amendments
of 1972,30 as amended by the Clean Water Act of 1977, Public Law 95-217
(the Act). Basically, the Act requires that EPA develop effluent limita-
tions for both new and existing facilities that discharge liquid effluent
directly into navigable waters. New and existing facilities that discharge
to publicly owned treatment works (POTWs) would be subject to new pretreat-
ment standards. In addition, Section 307 (a) of the Act requires that the
Administrator promulgate specific effluent guideline limitations for the
toxic pollutants listed under Section 307 (a) (1) of the Act. Included in
this listing are several of the solvents commonly used in the surface
coating process.
Effluent discharges from coil coating facilities generally originate
from the pretreatment ("wet") section of the plant. In the actual coating
process, common industry practice entails the capture and reclamation of
cleanup solvent in lieu of effluent discharge. When a color change is
made in a plant that uses solvent-borne coatings, the coating tray and
coating rolls are cleaned with solvent. Excess solvent is drained from the
coating pan, stored in drums, and shipped to a commercial recovery plant.
Reclaimed solvent from the recovery plant is sold back to the coater for
use in cleanup operations.
Estimates of compliance costs for Water Act regulations are not avail-
able for inclusion in this study. However, preliminary estimates indicate
no expectation of plant closures due to the regulations, which are scheduled
for proposal in September 1980.« New or existing sources that meet, or
™lo ^ 6XiSt1n9 Nati°nal P°11Utant D1scha^ Elimination System
(NPDES) standards would incur only minimal economic impact. However,
sources that do not practice solvent recovery in the coating process may be
subject to a more severe impact for water treatment systems.«
8.3.2 Occupational Exposure
The responsibility of regulating levels of enrissions within the plant
working area is that of the National Institute for Occupational Safety and
Health (HIOSH) and the Occupational Safety and Health Administration (OSHA).
OSHA „ a part of the U.S. Department of Labor, and its responsibilities
8-52
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include final adoption of occupational exposure standards and enforcement
of the standards through inspection of work places. NIOSH is an agency of
the U.S. Department of Health, Education, and Welfare, and part of its
charter is to provide regulation support information to OSHA.
OSHA has worker area standards for nearly 500 chemicals. These stand-
ards are very similar to the Threshold Limit Values (TLVs) designated by
the American Conference of Governmental Industrial Hygienists (ACGIH). The
ACGIH defines TLV as "concentrations of air-borne substances which repre-
sent conditions under which it is believed that nearly all workers may be
repeatedly exposed day after day without adverse effect .... TLVs refer
to time-weighted concentrations for a seven or eight hour workday and a
forty hour work week." This same definition may be used for OSHA exposure
standards. The TLVs for typical solvents used in the coil coating process
are shown in Table 8-25.
Control of worker-area solvent concentrations is accomplished through
containment, isolation, substitution, general ventilation, 7oca7 exhaust
ventilation, change of operating procedures, and administrative control.
Many hooding techniques can be used and are discussed in the ACGIH Indus-
trial Ventilation Manual.32 Around a coating area, a hooding system com-
bined with a containment system can be very effective in limiting employee
solvent exposure levels. The cost of hood, ducting, and fan 'is expected to
be a small percent of the total capital cost of a new coating line.
Another emission level constraint affecting the coil coater is the
lower explosive limit (LED of solvents. Solvent explosions are not only a
health and safety concern to the worker, they also are a great concern to
insurers of coating equipment. Insurance companies require strict monitor-
ing of solvent 7eve7s in equipment areas where such levels might approach
the LEL.
The highest solvent levels are found in the drying ovens. Most coat-
ing systems are designed to maintain a concentration below 25 percent of
the LEL in the ovens. Table 8-25 lists LEL values for typical solvents
used in the coil coating industry. However, meeting the required levels of
solvent concentration in this instance is a design concern rather than an
added cost due to Federal regulation.
8-53
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TABLE 8-25. THRESHOLD LIMIT VALUES (TLV) AND LOWER
EXPLOSIVE LIMITS (LEL) OF TYPICAL SOLVENTS
TLV
Solvent
Toluene
Xylene
n-Hexane
n-Heptane
Cyclohexane
Naphtha
Methyl acetate
Ethyl acetate
N-Butyl acetate
Acetone
Methyl ethyl ketone (MEK)
Methyl isopropyl ketone
Carbon tetrachloride
Methanol
Ethanol
•— .,_,... . _ _ _ _
Mg/m3
375
435
(l,800)b
(2,000)b
1,100
NA
610
1,400
710
2,400
590
700
65C
260C
1,900
ppm
100
100
(500)b
(500)b
300
NA
200
410
150
1,000
200
200
10C
200C
1,000
Vol %
1.27
1.0
1.3
1.0
1.31
0.81
4.1
2.2
1.7
2.15
1.81
1.4
NA
6.0
3.3
LEL
lb/103ftsa
2.37
2.32
2.75
2.40.
2.8
2.16
7.45
4.74
4.83
3.04
3.20
3.54
NA
4,70
3.72
Calculated at 100° F.
b.
In the process of being changed.
through skin>
mucous
NA--not available.
8-54
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8-3.3 Toxic Substances Control
The EPA Office of Toxic Substances has authority to regulate the manu-
facture, importation, processing, use, and disposal of chemical substances
that pose unreasonable risk to health or the environment. This includes
industries such as the paint and coating industries, which for the most part
are processors of chemicals; i.e., they mix chemicals such as solvents to
form paint.33
Several of the solvents currently in wide use throughout the industry
are contained on the EPA Priority List of Toxic Substances. These sub-
stances, including toluene, are under active study by the Agency. Accord-
ingly, future regulations may ban their use in manufacturing processes or
may limit them to specific nonessential uses. However, the impact of such
a regulation appears minimal.34
8.4 ECONOMIC IMPACT ANALYSIS
This section analyzes the economic impacts of the regulatory alterna-
tives for new and modified facilities in the coil coating industry. Model
plants of three capacities are used to represent typical new sources and
typical existing sources that might undergo modification in the industry.
The analysis in this section is based on the parameters and costs presented
In Sections 8.2 and 8.3. Two baselines are used in estimating the economic
impacts; these correspond to facilities in States that require a reduction
in VOC emissions of 64 percent (designated as CTG areas) and to those in
States that specify an 85 percent reduction in VOC emissions (designated as
numerical limit areas).
The impacts of two regulatory alternatives are estimated in this
section, only one of which applies to new and modified sources in numerical
limit areas. Regulatory Alternative I is the no regulation, or No NSPS,
case and would therefore have no impact on the industry. Regulatory Alter-
native II would require an 85 percent reduction in emissions and applies
only to sources in CTG areas. Regulatory Alternative III would require a
95 percent reduction in emissions and applies to sources in CTG and numerical
limit areas.
Three types of impacts are estimated. Price impacts are calculated
with the assumption that all additional costs of the alternatives are
passed forward to consumers of the coil coaters1 services. Return on
8-55
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investment (ROI) impacts assume that these additional costs are absorbed by
the coil coater-that is, that the product price does not change in the
face of a cost increase. Finally, incremental capital requirements attribut-
able to the regulatory alternatives are estimated. Section 8.4.1 contains
a summary of these impacts for new and modified facilities. Section 8.4.2
discusses the structure and performance of the industry and provides a
backdrop against which the estimated impacts can be interpreted. Section
8.4.3 describes the methodology used to estimate the impacts. Sections 8.4.4
and 8.4.5 present the estimated impacts for new and modified facilities,
respectively.
8.4.1 Summary
The regulatory alternatives would have a smaller Impact on new sources
than on existing facilities that undergo modification. These impacts are
more severe for new and modified sources in CTG areas than for those in
numencal limit areas. In addition, the regulatory alternatives are likely
to affect the toll coater more than the captive, or subsidiary, coater, who
is a part of an integrated company.
Estimated price impacts for new facilities range from 0.2 to 4.1 percent.
The larger price impacts fall on firms in the CTG areas and range from 1.0
to 41 percent compared with those for sources in numerical limit areas.
wh,ch range from 0.2 to 0.8 percent. The decline in the baseline ROJ of
12 percent is estimated to range from 0.4 to 2.4 percentage points for
f.c,l,ti.. constructed in CTG areas as opposed to a decline ranging from
0.1 to 0.3 percentage points for new sources in numerical limit areas. The
largest .ncremental capital outlay for firms in CTG areas represents 6.6 per-
cent of the baseline (Alternative I) outlay compared with a maximum increase
of l^percent for firms in numerical limit areas. Even though the regula-
ory alternates affect facilities in CTG areas more than those in numerical
l«it areas, no competitive advantage is gained or lost because coil coat-
ing f,rms serve local markets rather than a national one. In effect, this
means that firms in CTG areas are not in competition with firms in numerical
limit areas.
The impacts for existing sources that undergo modification are more
severe than those reported above for new sources; again, lines in CTG areas
are affected more than those in numerical limit areas. The price impacts
8-56
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for the former range from 20.2 to 45.5 percent; those for the latter range
from 2.0 to 15.0 percent. An ROI does not exist that would allow a modi-
fied facility in a CTG area to maintain the baseline (No NSPS) price of its
coating services. The baseline ROI of a facility in a numerical limit area
would decline by 6.1 to 11.9 percentage points. The incremental capital
required if a modification is undertaken explains the size of these impacts.
It ranges from 258 to 336 percent of the baseline investment for facilities
in CTG areas, or 94 to 143 percent for modified sources in numerical limit
areas.
A distinction must be drawn in the interpretation of these results as
they are applied to toll versus captive coaters. For the toll coater,
whose product is a service (namely, the coating of a steel or aluminum coil
for a price), the results stand. A captive coater, however, is usually part
of a vertically integrated firm—a steel or aluminum producer, for example.
In this case, the regulatory alternatives would increase the cost of an
input (the coated coil) used in the manufacture of some final product—for
example, aluminum siding or rain-carrying equipment. Because the cost of
this input represents only a fraction of the cost of all inputs used to
manufacture the final product, the actual increase in the product price
would be less than the "price" increases reported above. Thus, the toll
coater might suffer greater impacts than the captive coater, whose parent
company might be more interested in an assured supply of coated coils than
in the price per se of the coater1s services.
8.4.2 Economic Conditions in the Industry
The purpose of this section is to provide a perspective from which to
interpret the economic impacts presented in Sections 8.4.4 and 8.4.5.
These impacts are based on representative model plants, which are engineer-
ing constructs, rather than on actual plants and firms in the industry.
The information in this section, then, supplements the model plant analysis
by relating it to actual conditions facing the industry. Section 8.4.2.1
describes the structure of the coil coating industry. Section 8.4.2.2
analyzes the financial performance of the industry and presents an estimate
of the weighted average cost of capital, which is used in the calculation
of the economic impacts.
8-57
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8-4-2'1 Industry Structure. Production in the coil coating industry,
as noted in Section 8.1.1, is not heavily concentrated. Historical data on
concentration ratios for the metal coating and allied services industry (of
which coil coating is a part) are presented in Table 8-26. In each case
the concentration ratio has been derived by calculating the ratio of the
value of shipment of the 4, 8, 20, and 50 largest firms to the value of
shipments for all firms in the industry. It should be emphasized that coil
coating is only a part of this industry, and the concentration ratios may
not reflect the degree of concentration existing among coil coaters. The
total value of shipments by coil coating firms accounted for 17,2 percent
of the total value of shipments for the metal coating and allied services
industry in 1972 and for 18.9 percent in 1977.35 Data for a more complete
analysis of concentration ratios for the coil coating industry are not
currently available.
The evidence suggests that firms exhibit economies of scale in produc-
tion. As stated in Section 8.1.1, as well as in other industry studies,
production is capital intensive and continuous; high-volume production is a
significant operating characteristic. ** There is no evidence, however,
that these economies of scale restrict the entry of new firms into the
industry. Expansion within the industry, as discussed in Section 8.1.2.1,
consists primarily of the modification of existing lines (to increase the
line speed) and the construction of new lines by existing firms.
Vertical and horizontal integration may be more important as barriers
to entry into the industry. As Table 8-1 indicates, the majority of coil
coating firms are subsidiaries of larger organizations. As a result, the
cost of capital may be lower than that for independent (nonsubsidiary)
coaters. (A large, publicly traded firm has access to more sources of
capital than does a privately owned, or independent, coater. Such sources
include issuing more shares of common stock, financing out of retained
earnings, issuing notes or bonds, and borrowing from a bank. The privately
owned coater can tap only two of these sources: earnings and bank borrow-
ing The publicly traded firm, then, has more flexibility in determining
the fmancing mix, and thus the cost of financing, than does the independent
coater.) Many nonsubsidiary firms are large meta! processing and manufac-
turing enterprises, who may therefore be !ess concerned with the market
8-58
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TABLE 8-26. CONCENTRATION RATIOS IN THE METAL COATING
AND ALLIED SERVICES INDUSTRY37
Value of shipments (%) accounted for
by largest firms
Year 4 firms 8 firms 20 firms 50 firms
1963 17 26 39 54
1967 18 26 37 50
1972 15 23 36 49
8-59
-------
demand for coil coating services. Both characteristics imply, at least
qualitatively, that a new market entrant would potentially face higher
capital costs as well as less certain demand and would thus be less likely
to enter the market in response to otherwise favorable profit conditions.
As indicated in Table 8-6, the coil coating industry has experienced
historically high growth rates. This trend is expected to continue through
1985 and will take place through increased sales to the transportation
industry as wel? as expansion of newer markets sjch as the large appliance
industry. However, growth is expected to be achieved by using existing
capacity more fully, by modifying existing lines, and by the construction
of new lines by existing manufacturers.
In light of the industry's economic structure, there are several
qualitative implications regarding the impacts of the regulatory alternatives.
If compliance requires significant increases in capital costs, the higher
interest rates paid by the nonsubsidiary firms will increase their costs of
production, making them less competitive than the subsidiary firms.
8'4-2'2 Industry Performance. Data on a variety of financial statis-
tics for the coil coating industry for the period 1976-1978 are presented
in Table 8-27. These statistics were compiled from data on 29 firms (see
Section 8.6). The industry's financial position appears to have been rela-
tively satisfactory over the 3-year period.
The ratio of current assets to current liabilities fell slightly
between 1976 and 1978 but remained above 2.0, indicating an ability to meet
all short-term obligations. Long term debt to total capitalization in the
industry declined from 34 percent in 1976 to 31 percent in 1978; the indus-
try is not burdened with excessive debt, and the average coil coating firm
should be able to finance at least a part of new investment through the
bond market, usually a less costly option than financing out of equity.
The ratios of sales to inventory and sales to receivables fluctuated sharply
between 1977 and 1978. The sales-to-inventory ratio more than doubled,
suggesting that the industry reduced the value of its assets held in the
form of inventories relative to sales, a, indicator that tne industry is
not carrying *x«ss^ inventory. The ratio of sales to receivables fell,
however, indicating that the industry's customers *er* not as prompt in
paying off their accounts.
8-60
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TABLE 8-27. SELECTED FINANCIAL STATISTICS FOR THE COIL COATING INDUSTRY,
1976-1978*
Ratio
Sales to inventories
Sales to receivables
Current assets to current liabilities
Debt to total capitalization (%)
1976
NA
NA
2.3
33.5
Year
1977
5.9
11.6
3.2
32.4
1978
12.0
7.4
2.1
30.7
— — — —• -
— .^^^^ " _ —' I I ... -^Ml^
Calculated from financial data on 29 firms (see Section 8.6).
NA = not available.
8-61
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An important financial parameter for the industry is the weighted
average cost of capital (WACC), which was estimated to be 12 percent. The
WACC is the return on investment needed to guarantee a supply of investment
funds for the industry. The cost of capital is a weighted average of the
after-tax costs of the three major sources of capital: common stock,
long-term debt, a<,d preferred stock. The methods used to determine the
WACC are described in detail in Section B.6.
8.4.3 Methodology
The methodology used to estimate the impacts of the regulatory alter-
natives is described in this section. A discounted cash flow (DCF) approach
is used to evaluate the profitability of investing in new production facil-
ities and, more specifically, to determine which one of several alternative
facilities is the most profitable for the firm. For each size of produc-
tion facility, the firm can choose one of several possible configurations.
These configurations correspond to the "base case" and the control options
for which cost data were provided in Section 8.2. Using the OCF approach,
the most profitable configuration for each type of production facility can
be selected. The resulting choices show which facilities would be con-
structed by the industry in the absence of the regulatory alternatives and
thus constitute a baseline from which the impacts of those alternatives can
be measured.
A general description of the DCF approach is provided in Section 8.4.3.1.
This background is needed to understand the particular application of the
DCF approach, which, as presented in Section 8.4.3.2, is used to estimate
the economic impacts. Finally, how the impacts are calculated with this
method is discussed in Section 8.4.3.3.
8.4.3.1 Discounted Cash Flow Approach. An investment project gene-
rates cash outflows and inflows. Cash outflows include the initial invest-
ment and operating expenses. Cash inflows are the revenues from the sales
of the output produced by the project, depreciation of the capital equip-
ment, and recovery of the working capital at the end of the project's life.
Cash outflows and inflows can occur at any time during the project's life-
time. For this analysis, all flows are assumed to take place instantaneously
at the end of each year. Furthermore, all investments are assumed to be
8-62
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conventional investments; that is, they are represented by one cash outflow
followed by one or more cash inflows.38 This assumption insures the exist-
ence of a unique internal rate of return for each project.39 For a project
with a lifetime of N years, there are N + 1 points in time at which cash
flows occur: at the end of year 0, the end of year 1, and so on through
the end of the Nth year.
The initial (and only) investment is assumed to be made at the end of
year zero. This cash outflow comprises the sum of the fixed capital cost
and the working capital. It is offset by an investment tax credit, which
is calculated as a percentage of the fixed capital cost and represents a
direct tax saving. The cash flow in year zero can be given by the follow-
ing equation:
Y = (FCC + WC) + (TCRED x FCC). (8-1)
The variables for this and subsequent equations are defined in Table 8-28.
The project generates its first revenues (and incurs further costs) at
the end of year 1. The net cash flows in this and succeeding years can be
represented by the following equation:
Yt = (Rt - Et) (1 - T) + QtT t = 1, . . ., N. (8-2)
The first term of Equation 8-2 represents the after-tax inflows of the
project generated by sales of the output after netting out all deductible
expenses. Revenues are given by
R. = P • Q • U. (8-3)
U
Deductible operating expenses, Et, are the sum of the fixed and variable
operating costs and can be represented by
E = V * U + F. (8-4)
U-
Variable costs include expenditures on raw materials, labor (operating,
supervisory, and maintenance), and utilities. Fixed costs include expendi-
tures for facility use, insurance, administrative overhead, etc. For
8-63
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TABLE 8-28. DEFINITIONS
Explanation
Dt Depreciation in year t
DFt Discount factor = (1 + r)-t
DF Sum of the discount factors over the life of the project
N -t
I (1 + r) t
t = 0
DSL Present value of the tax savings due to straight line
depreciation = N
2 D.T(1 + r)"1
t = 0 l
Et Operating expenses in year t
F Annual fixed costs
FCC Fixed capital costs
N Project lifetime in years
NPV Net present value
P Price per unit of output
Q Annual plant capacity
Rt Revenues in year t
r Discount rate, or weighted average cost of capital
T Corporate tax rate
TCC Total capital cost
TCRED Investment tax credit
U Capacity utilization rate
V Annual variable operating costs
WC Working capital
X Minimum [$2,000, 0.2 x FCC]
Yt Net cash flow in year t
8-64
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income tax purposes, E. is deductible from gross revenues, Rt. Hence, the
after-tax cash inflow to the firm can be determined by netting out these
expenses and multiplying the result by (1 - T).
Federal income tax laws also allow a deduction for depreciation of the
capital equipment (not including working capital). Although depreciation
'is not an actual cash flow, it does reduce income tax payments (which are
cash outflows) since taxes are based on net income after the depreciation
allowance is deducted.40 In Equation 8-2, the expression DtT represents a
firm's annual tax savings resulting from depreciation; it is treated as a
cash inflow. In the analysis in this section, the straight-line method of
depreciation is used. The salvage value of the facility is assumed to be
zero, so the annual depreciation expense is simply given by (FCC - X)/N,
where N is the lifetime of the project and X is $2,000 or 20 percent of the
fixed capital costs, whichever is smaller.
The net cash flows represented by Equation 8-2 occur at the end of the
first through the Nth years. Additional cash inflows occur at the end of
the first and Nth year. The additional cash inflow at the end of the first
year is the tax savings attributable to the additional first year deprecia-
tion deduction of 20 percent of the fixed capital cost or $2,000, whichever
is smaller. By law, the basis for calculating normal depreciation allow-
ances must be reduced by the amount of the additional first year deprecia-
tion.4! The additional cash inflow at the end of the Nth year occurs when
the working capital, initially treated as a cash outflow, is recovered.
Because these cash flows occur over a future period of time, they must
be discounted by an appropriate interest rate to reflect the fact that a
sum of money received at some future date is worth less than if that sum
were received at the present time. This discount factor, DFt, can be given
by
DF = (1 + r)-t t = o, 1, . . ., N. (8-5)
U
The sum of the discounted cash flows from a project is called the net
present value of that project. That is,
3-65
-------
N
NPV = I Y. - OF. , or
t = 0 l t
(8-6)
N _t
NPV =1 Y. (1 + r) r .
t = 0 *
The decision criterion is to invest in the project if it has a positive NPV
at a discount rate equal to the weighted average cost of capital.
8.4.3.2 Project Ranking Criterion. The specific application of DCF
used in the economic analysis is discussed in this section. What is needed
is a criterion for ranking alternative investment projects in terms of
profitability. It is assumed that, in the absence of the regulatory alter-
natives, any firm building a new production facility would invest in the
most profitable configuration of that facility. This configuration can be
compared with the one to be built to comply with the regulatory alternative;
this comparison forms the basis for calculating price and rate of return
impacts.
Equation 8-6 can be rearranged and used as the ranking criterion. The
procedure begins by substituting the expressions for R and E (given by
Equations 8-3 and 8-4, respectively) in Equation 8-2. Next, the expres-
sions for YQ in Equation 8-1 and Yt in Equation 8-2 are substituted for Yfc
in Equation 8-6. NPV in equation 8-6 is then set equal to zero, and the
unit price, P, is solved for by rearranging the terms in Y. so that the
price is on the left-hand side of the equal sign, and all other terms are
on the right hand side:
p =
DP • (l-T) • Q -U Q . u ' •
where Z = -YQ - DSL - WC(1 + r)"N - X(l + r)"1 - T and all other variables
are as defined in Table 8-28. The resulting expression for P has two terms.
The first, or "capital cost," term is that part of the unit price accounted
for by the initial capital outlay (adjusted for the tax savings attribut-
able to depreciation, recovery of working capital, etc.) and includes the
return on the invested capital. The second, or "operating cost," term is a
8-66
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function of the fixed and variable operating costs. Hence, for any con-
figuration, the price given by Equation 8-7 can be interpreted as the one
that just covers the unit operating costs and yields a rate of return, r,
over the project's lifetime on the unrecovered balances of the initial
investment.
For each type of facility, Equation 8-7 is used to calculate the unit
cost of the coating from each configuration. The results are then ranked
in order of cost, from lowest to highest. The most profitable configura-
tion is the one that can coat a square meter of metal coil for the lowest
cost.
8.4.3.3 Determining the Impacts of the Regulatory Alternatives. This
section describes how the impacts of the regulatory alternatives are esti-
mated with the price ranking method discussed in Section 8.4.3.2. The
estimated impacts are presented in Sections 8.4.4 and 8.4.5. Three cate-
gories of impacts are estimated: price, ROI, and incremental capital
requirements.
Price impacts are calculated directly from Equation 8-7. Given the
imputed cost of the coating for each control option, cost increases from
the base unit cost of the most profitable line can be calculated.
Whereas price impacts are calculated by assuming that all of the
incremental costs associated with a given control option are passed forward
to the consumer, ROI impacts are estimated by assuming that the producer
absorbs all of the incremental costs, thus lowering the ROI. In this case,
the price facing the consumer would not change. For any control option,
there may exist a discount rate that would enable the producer to maintain
the imputed price of the coating at its baseline level. The baseline price
is the price associated with the most profitable line configuration and is
determined from the procedure described in Section 8.4.2.2
The baseline price was calculated from Equation 8-7 using a specific
value of the discount rate, r (equal to the weighted average cost of capital).
The calculation of the rate of return impact would begin by setting P = P
In Equation 8-7, where P is the baseline (lowest) price, and by then itera-
tively solving for the value of r that equates the right-hand side of
Equation 8-7 with P. This value, say r*, will always be less than r, the
baseline rate of return. The difference between r* for each control option
and r constitutes the rate of return impact.
8-67
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The incremental capital requirements are calculated from the cost data
presented in Section 8.2. The additional capital required to meet the
standards is used as a partial measure of the financial difficulty firms
might face in attempting to conform to the standard. Incremental capital
requirements also constitute a barrier for firms entering the coil coating
industry. The magnitude of the additional capital relative to the baseline
capital requirements is a measure of the size of this barrier.
8.4.4 Economic Impacts on New Facilities
This section presents the estimated impacts of the regulatory alter-
natives on new production facilities. The firm is confronted with a set of
coating line configurations from which it selects the most profitable by
applying the ranking method described in Section 8.4.3.2. Each line configu"
ration corresponds to a level of emission control (64 percent reduction,
85 percent reduction, or 95 percent reduction). The profit-maximizing
choice is compared with the configuration needed to comply with the regula-
tory alternatives; the resulting impacts are then estimated with the
methods described in Section 8.4.3.3.
Table 8-29 presents the capital and operating costs for the different
configurations of the small> medium, and large coating lines. The costs
are based on those given in Section 8.2 and are reproduced here to illus-
trate the form in which they were used in the analysis. The "annual operat-
ing costs" reported in Section 8.2 are here classified as "fixed" and
"variable." Note that these are not annualized costs; that is, they do not
include a capital recovery component. This aspect of cost accounting is
implicitly handled in the DCF approach.
The costs for each configuration were inserted into Equation 8-7 to
determine the cost of coating one square meter of metal. All calculations
assumed straight-line depreciation of the capital equipment over 10 years;
a 100 percent capacity utilization rate; an investment tax credit of 10 per-
cent; a corporate tax rate of 46 percent; and a discount rate of 12 percent
(equal to the weighted average cost of capital reported in Section 8.4.2.2).
Working capital was estimated at 10 percent of the fixed capital cost.
Table 8-30 presents the unit price for each line configuration. These
are ranked from lowest (rank = 1) to highest. These prices and rankings
8-68
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TABLE 8-29. SUMMARY COST DATA FOR NEW FACILITIES ($1,000)
Line size
Small9 Medium Largec
Capital Operating cost Capital Operating cost Capital Operating cost
Line configuration costd Fixed6 Variablef costd Fixed6 Variable1" costd Fixed6 Variablef
Zone incineration
(64% reduction) 8,272.0 300.8 1,885.0 11,616.0 422.4 4,571.0 15,312.0 556.8 8,516.0
Thermal incineration
(85% reduction) 8,349.0 303.6 1,906.0 11,902.0 432.8 4,681.0 16,170.0 588.0 8,764.0
Thermal incineration
(95% reduction) 8.470.0 308.0 1,909.0 12.045.0 438.0 4,678.0 16,324.0 593.6 8,751.0
aOne coating line with annual capacity = 4,600 x 103 m2.
One line with annual capacity = 14,000 x 103 m2.
C0ne line with annual capacity = 28,000 x 103 m2.
Installed equipment costs from Tables 8-11 and 8-21 plus working capital at 10 percent of installed cost.
e
4 percent of installed equipment cost.
fFrom Tables 8-14 and 8-22.
-------
TABLE 8-30. UNIT PRICES AND RANKINGS FOR NEW FACILITIES'
Line size
Small b
Line configuration
Zone incineration
(64% reduction)
Thermal incineration
(85% reduction)
Thermal incineration
(95% reduction)
^ aAll calculations assumed
^ 10 percent, a corporate
o weighted average cost of
Price,
$/m2
0.854
0.863
0.870
straight- li
tax rate of
capital) of
Rank
CTG Numerical
I
2
3
ne
46
12
NA
1
2
depreciation of
Price,
$/m2
0.532
0.545
0.547
capital
percent, a project life
percent.
Medium0
Rank
CTG
1
2
3
Numerical
NA
1
2
Price,
$/m2
0.439
0.456
0.457
equipment, an investment of
of 10
years, and
a discount
Large
CTG
1
2
3
tax
rate
Rank
Numerical
NA
1
2
credit
(the
of
One coating line with annual capacity = 4,600 x io3 m2.
C0ne line with annual capacity = 14,000 x io3 m2.
One line with annual capacity = 28,000 x IO3 m2.
NA = not applicable.
-------
are used to estimate the price impacts (Section 8.4.4.1), the ROI impacts
(Section 8.4.4.2), and the incremental capital requirements (Section 8.4.4.3)
of the regulatory alternatives.
8.4.4.1 Price Impacts. Table 8-31 shows the price impacts of the
regulatory alternatives on new facilities in CTG and numerical limit areas.
Note that two alternatives apply to facilities in CTG areas, and one alter-
native to facilities in numerical limit areas. This reflects the difference
in the baseline level of control required by States using the CTG (64 per-
cent reduction in emissions) and that required by States specifying a
numerical limit on emissions (85 percent reduction). The less stringent
standard for the CTG areas also explains why the impacts are greater for
new facilities located in those areas than for those in the numerical limit
areas. Facilities in CTG areas would have to increase prices by 1.1 to
3.9 percent to maintain the baseline ROI under Alternative II; under Alter-
native III, the price impact would range between 1.9 and 4.1 percent. The
impacts on facilities in numerical limit areas are insignificant; the
estimated price increases would range from 0.2 to 0.8 percent.
8.4.4.2 Return on Investment Impacts. Table 8-32 shows the ROI
impacts of the regulatory alternatives for new facilities in CTG and numeri-
cal limit areas. Again, the impacts are more severe for facilities in CTG
areas. The decline in ROI would range from 0.4 to 2.3 percentage points
under Alternative II and from 0.7 to 2.4 percentage points under Alterna-
tive in. Alternative III would have insignificant ROI impacts for facili-
ties in numerical limit areas, with the ROI declining from 0.1 to 0.3 per-
centage points from its baseline level of 12 percent.
8.4.4.3 Incremental Capital Requirements. The additional capital
outlays required under the regulatory alternatives for facilities in CTG
and numerical limit areas are shown in Table 8-33. The incremental capital
requirements, as a percentage of the baseline amount, are larger for new
facilities in CTG areas than for facilities in numerical limit areas.
Under Alternative III, from 2.4 to 6.6 percent more capital is required for
new lines in CTG areas, compared with a 1.0 to 1.4 percent increase for new
lines in numerical limit areas. In absolute amounts, the incremental
capital requirements are also greater for new facilities in CTG areas,
ranging from $180,000 to $920,000 under Alternative III. The comparable
range for lines in numerical limit areas is $110,000 to $140,000.
8-71
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TABLE 8-31. PRICE IMPACTS OF REGULATORY ALTERNATIVES ON NEW FACILITIES (%)
Regulatory alternative
CTG areas
II. 85%
III. 95%
reduction
reduction
Small3
1.05
1.87
Line size
Medi urn
2,44
2.82
Large
3.87
4.10
Numerical limit areas
III. 95% reduction 0.81 0.37 0.22
aOne coating line with annual capacity = 4,600 x 103 m2.
One line with annual capacity = 14,000 x io3 m2.
C0ne line with annual capacity = 26,000 x
8-72
-------
TABLE 8-32. RETURN ON INVESTMENT IMPACTS OF REGULATORY ALTERNATIVES
ON NEW FACILITIES (%)a
Regulatory alternative
CTG areas
II. 85% reduction
III. 95% reduction
Numerical limit areas
III. 95% reduction
Small5
-0,38
-0.69
-0.31
Line size
Medium0
-1.21
-1.41
-0.21
Large
-2.28
-2.39
-0.1-2
aTable entries are decreases from the baseline ROI of 12 percent.
One coating line with annual capacity = 4,600 x 103 m2.
C0ne line with annual capacity = 14,000 x 103 m2.
dOne line with annual capacity = 28,000 x 10s m2.
8-73
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TABLE 8-33. INCREMENTAL CAPITAL REQUIREMENTS OF REGULATORY
ALTERNATIVES FOR NEW FACILITIES ($l,OOOs)3
Regulatory alternative
CTG areas
II. 85% reduction
III. 95% reduction
Numerical limit areas
III. 95% reduction
Small b
77.0
(0.9)
198.0
(2.4)
121.0
(1.4)
Line size
Medium0
286.0
(2.5)
429.0
(3.7)
143.0
(1.2)
a
Large
858.0
(5.6)
1,012.0
(6.6)
154.0
(1.0)
*s ' ' " ''"•' * ~~ ' ' """ ' - • ^ ' •'_ _-.___ - - ~-- - -L '_- j—^asas^ssiSS^^^^^™
Calculated from data in Table 8-29. Numbers in parentheses are the incre-
mental capital requirement as a percentage of the baseline capital invest-
ment. r
One coating line with annual capacity = 4,600 x 103 m2.
One line with annual capacity = 14,000 x io3 m2.
One line with annual capacity = 28,000 x io3 m2.
6-74
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8.4,4.4 Summary. Regulatory Alternative III, which calls for a
95 percent reduction in emissions, will have the largest overall impact on
the industry. Price increases ranging from 0.2 to 4.1 percent would result
if all additional costs were passed through; ROI decreases of 0.1 to 2.4
percentage points would occur if the additional costs were absorbed by the
producer. Alternative II, on the other hand, would have the least impact
on the industry, primarily because facilities in numerical limit areas
would not be affected. New lines in CTG areas would have to raise prices
from 1.1 to 3.9 percent if all additional costs were passed forward; the
ROI would decline from 0.4 to 2.3 percentage points if producers absorbed
the incremental costs.
These impacts are subject to two important qualifications. First, the
costs for the model plants implicitly assume that only one type of coating
would be applied. While this may be true for captive coaters, it is not
true for toll coaters, who use many types of coatings. Calculating the
unit price for each configuration based on these costs, then, creates a
false impression that each coater sets and maintains one price for all of
his output. In actuality, as discussed in Section 8.1 and illustrated in
Table 8-3, prices for coil coating services vary widely, primarily depend-
ing on the type of coating applied. Using a point estimate (the unit
prices reported in Table 8-30) to represent an array of prices carries with
H the risk that estimates of price and ROI impacts may be greatly over- or
underestimated. Second, the unit prices reported in Table 8-30 can be
viewed as prices only for toll coaters; a vertically integrated company
that owns a coating firm would view the reported "prices" as costs, and the
estimated "price" increases as cost increases. The actual price impact
would appear in the price of the final product in which the coated coil was
an input; the magnitude of this impact would depend, among other things, on
the share of the cost of the coated coil relative to the total cost of
production of the final product.
The size of the impacts for facilities in CTG areas relative to those
for facilities in numerical limit areas also deserves comment. No competi-
tive advantage currently exists for facilities in CTG areas, nor would a
facility in a numerical limit area acquire a competitive advantage under
Alternative II or III merely because the impacts are smaller. A coil
8-75
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coater does not serve a national market, so there is little if any competi-
tion between facilities in CTG and numerical limit areas. That facilities
in CTG areas have no competitive advantage is demonstrated by observing
that only 30 percent of the coil coating facilities are located in these
areas where production costs are presumably lower. It seems clear that
another factor, the location of the coil coater close to the customers he
serves, is much more important than the air pollution standards of the area
in determining the location of new facilities. The implementation of
Alternative II or III, then, will tend to equalize the costs of production
between CTG and numerical limit facilities, although site-specific factors
will still result in considerable price variation.
8.4.5 Economic Impacts on Modified Facilities
This section presents the estimated impacts of Regulatory Alterna-
tives II and III on existing coil coating lines that undergo modification.
The modification is an equipment change that increases the line speed (and
output) by 20 percent. Table 8-34 gives the capital and operating costs
for small, medium, and large lines that undergo modification in CTG and
numerical limit areas. These costs are based on those given in Section 8.2.
The operating costs represent the variable cost of production for the
additional output of the line and include the emissions control costs.
The costs for each line configuration were inserted into Equation 8-7
to determine the unit price of coating a square meter of metal. All calcu-
lations assumed straight-line depreciation of the additional capital equip-
ment over 10 years; a 100 percent capacity utilization rate; an investment
tax credit of 10 percent; a corporate tax rate of 45 percent; and a discount
rate of 12 percent (equal to the weighted average cost of capital from
Section 8.4.2.2). Working capital was estimated at 10 percent of the fixed
capital cost.
Table 8-35 presents the unit price in dollars per square meter for
each configuration and line size in both CTG and numerical limit areas.
These are ranked from lowest to highest, i.e., from most to least profit-
able. These prices and rankings were used to estimate price impacts (Sec-
tion 8.4.5.1), ROI impacts (Section 8.4.5.2), and incremental capital
requirements (Section 8.4.5.3) that would occur under Alternatives II and III.
8-76
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TABLE 8-34. SUMMARY COST DATA FOR MODIFIED FACILITIES ($1,0005)'
oo
Line configuration
Zone incineration
(64% reduction)
Thermal incineration
(85% reduction)
Thermal incineration
(95% reduction)
Snail
Capital
cost6
110.0
393.8
393.8
line"
Operat-
ing f
costr
223.0
264.0
276.0
CTG
Medium
• Capital
cost6
165.0
633.6
633.6
areas
linec
Operat-
ing f
cost1
668.0
736.0
757.0
Numerical limit areas
Large
Capital
cost6
220.0
958.1
958.1
lined
Operat-
ing f
! costT
1,338.0
1,463.0
1,505.0
Small
Capital
cost6
NA
110.0
267.3
lineb
Operat-
1n9,g
costa
NA
222.0
225.0
Medium
Capital
cost6
NA
165.0
354.2
linec
Operat-
1na>g
costy
NA
665.0
663.0
Large
Capital
cost
NA
220.0
425.7
lined
Operat-
il19*q
cost"
NA
1,330.0
1,318.0
The modification is a 20 percent increase in line speed accomplished by replacing the drive motor, gears, and electrical controls. The
resulting increase in annual capacity is 920 x io3 m2 for the small line, 2,800 x 103 m2 for the medium line, and 5,600 x io3 m2 for the
large line.
One coating line with annual capacity = 4,600 x io3 m2.
C0ne line with annual capacity = 14,000 x io3 m2.
One line with annual capacity = 28,000 x io3 m2.
eCapital costs taken from Section 8.2.3, including working capital at 10 percent of the installed capital cost.
Operating costs taken from Table 8-23, including the variable costs of production and emission control attributable to the additional out-
put only.
Operating costs taken from Table 8-24, including the variable costs of production and emission control attributable to the additional out-
put only.
NA = not applicable.
-------
TABLE 8-35. UNIT PRICES AND RANKINGS FOR MODIFIED FACILITIES*
CTG areas Numerical limit areas
Small line Medium line0 Large line Small line13 Medium 1inec Large lined
Price, Price, Price, Price, Price, Price,
Line configuration $/m2 Rank $/m2 Rank $/m2 Rank $/m2 Rank $/m2 Rank $/m2 Rank
Zone incineration
(64% reduction) 0.268 1 0.251 1 0.247 1 NA NA NA NA NA NA
Thermal incineration
(85% reduction) 0.377 2 0.311 2 0.297 2 0.266 1 0.250 1 0.246 1
Thermal incineration
(95% reduction) 0.390 3 0.318 3 0.305 3 0.306 2 0.263 2 0.251 2
^ All calculations assume straight-line depreciation of capital equipment, an investment tax credit of
oo 10 percent, a corporate tax rate of 46 percent, a project life of 10 years, and a discount rate (the
weighted average cost of capital) of 12 percent.
One coating line with annual capacity = 4,600 x io3 m2.
C0ne line with annual capacity = 14,000 x io3 m2.
One line with annual capacity = 28,000 x IO3 m2.
NA = not applicable.
-------
8.4.5.1 Price Impacts. Table 8-36 presents the price impacts for
modified facilities in CTG and numerical limit areas. Alternative II is
not applicable to facilities in numerical limit areas. Alternative II is
not applicable to facilities in numerical limit areas, since the SIPs
require an 85 percent reduction in emissions. However, firms that modify
facilities in CTG areas would have to raise the price of the additional
output by 20.2 to 40.7 percent to maintain the baseline ROI. Alterna-
tive III would affect all modified facilities, although the price increases
for modified lines in numerical limit areas, which range from 2.0 to 15.0 per-
cent, are significantly smaller than those for lines in CTG areas, which
range from 23.5 to 45.5 percent.
8.4.5.2 ROI Impacts. Table 8-37 shows the ROI impacts of the regula-
tory alternatives on modified facilities. In calculating these impacts, it
is assumed that producers attempt to maintain the baseline price when faced
with cost increases. For firms in CTG areas, this is the price for the
zone incineration configuration reported in Table 8-35; for firms in the
numerical limit areas, it is the unit price for the thermal incineration
(85 percent reduction) configuration.
As the table shows, the impacts are large. For modified lines in CTG
areas, an ROI does not exist under either Regulatory Alternative II or III
that would allow the firm to maintain the baseline price. Another way of
stating this is that a firm would never have a net cash inflow (see Equa-
tion 8-2) over the life of the project by charging the baseline price; it
would thus be impossible for the firm to recover its initial capital invest-
ment. The impacts for facilities that undergo modification in numerical
limit areas are almost as great. The ROI would decrease by 11.9, 9.1, and
6.1 percentage points for the small, medium, and large lines, respectively,
from the baseline ROI of 12 percent.
8.4.5.3 Incremental Capital Requirements, Table 8-38 gives the
additional capital outlays that would be required under Alternatives II and
HI if an existing line were modified. The results help explain the severity
of the ROI impacts. Modifications of facilities in CTG areas would require
increased outlays ranging from 258 to 336 percent under Alternatives II or
III over the baseline capital requirement. These increases range from 94
to 143 percent for modifications in numerical limit areas.
8-79
-------
TABLE 8-36. PRICE IMPACTS OF REGULATORY ALTERNATIVES ON
MODIFIED FACILITIES (%)
II.
III.
Regulatory
alternative
85% reduction
95% reduction
Small
linea
40.67
45.52
CTG areas
Medium
lineb
23.90
26.69
Numerical limit
Large
line
20.24
23.48
Small
linea
NA
15.04
Medium
lineb
NA
5.20
areas
Largec
line
NA
2.03
One coating line with annual capacity = 4,600 x io3
One line with annual capacity = 14,000 x io3 m2.
One line with annual capacity = 28,000 x io3 m2.
NA = not applicable.
8-80
-------
TABLE 8-37.
RETURN ON INVESTMENT IMPACTS OF REGULATORY ALTERNATIVES
ON MODIFIED FACILITIES (%)
Regulatory alternative
II.
III.
85% reduction
95% reduction
Small
line
b
b
CTG areas
Medium
lined
— -b
— -b
Numerical limit
Large
line
... _b
— -b
Small
linec
NA
-11.90
Medium
lined
NA
-9.14
areas
Large
1* C
me
NA
-6.09
3Table entries are decreases from the baseline ROI of 12 percent.
bThe ROI is undefined. That is, an ROI does not exist that would allow the
facility to maintain the baseline price.
C0ne coating line with annual capacity = 4,600 x 103 m2.
dOne line with annual capacity = 14,000 x 10s m2.
30ne line with annual capacity = 28,000 x 103 m2.
NA = not applicable.
8-81
-------
TABLE 8-38. INCREMENTAL CAPITAL REQUIREMENTS OF REGULATORY ALTERNATIVES
FOR MnniFipn PAPTI TTTPC rti nnn^>a
FOR MODIFIED FACILITIES ($l,OOOs)
_CJG areas Numerical limit areas
Smal] Medium Large Small Medium Large
Regulatory alternative lineu linec line0 line lineC line0
II. 85% reduction 283.8 468.6 738.1 NA NA NA
(258.0) (284.0) (335.5)
III. 95% reduction 283.8 468.6 738.1 157.3 189.2 205.7
(258.0) (284.0) (335.5) (143.0) (114.7) (93.5)
Calculated from data in Table 8-34. Numbers in parentheses are the incre-
mental capital requirement as a percentage of the baseline capital invest-
ment.
One coating line with annual capacity = 4,600 x io3 m2.
C0ne line with annual capacity = 14,000 x io3 m2.
One line with annual capacity - 28,000 x io3 m2.
NA = not applicable.
8-82
-------
8.4.5.4 Summary. The estimated impacts of the regulatory alternatives
on modified facilities were much larger than the estimated impacts for new
facilities. The main reason for this is the relatively small investment
outlay (between $100,000 and $200,000) required to make the original modifi-
cation when compared with the additional capital outlays needed to meet the
regulatory alternatives (see Table 8-38). However, it cannot be concluded
that the modification of an existing plant would not be undertaken. The
unit prices reported in Table 8-35 represent point estimates; in actuality,
the price charged by a coil coater could be expected to vary widely, depend-
ing mainly on the type of coating being applied. A coil coater receiving
an average price for the additional output that is greater than the highest
price reported in Table 8-35 would make the modification because it would
be profitable for him to do so. Hence, the prices in Table 8-35 must be
interpreted as the minimum needed to cover the variable production costs
and to return 12 percent on the unrecovered balances of the initial invest-
ment over the life of the project. Since the estimated prices are tied so
closely to the one type of coating implicit in the cost data, and since
there are many types of coatings used in the industry, it cannot be con-
cluded that all modifications of existing lines would cease.
8-5 POTENTIAL SOCIOECONOMIC AND INFLATIONARY IMPACTS
Executive Order 12044 requires that the inflationary impacts of major
legislative proposals, regulations, and rules be evaluated. The regulatory
options would be considered a major action (thus requiring the preparation
of an Inflationary Impact Statement) if either of the following criteria
apply:
• Additional annualized costs of compliance, including capital
charges (interest and depreciation), will total $100 million within
any Slender year by the attainment date, if applicable, or within
5 years of implementation.
Total additional cost of production is more than 5 percent of the
selling price of the product.
Section 8.5.1 estimates the maximum additional annualized costs of com-
pliance. Section 8.5.2 addresses the expected increase in the product
price.
8-83
-------
8.5.1 Annualized Cost Criterion
To calculate the additional compliance costs, the number of new sources
that would be constructed and the number of existing sources that would be
modified each year were taken from Section 8.1.2.2. For new sources, it
was estimated that three large lines, two medium lines, and two small lines
would be built each year; it was assumed that three lines of each size
would be modified each year. To calculate the worst impacts, two assump-
tions were made: (1) all new and modified sources would come onstream in
1985 and (2) all new and modified facilities would be located in CTG areas.
The incremental annualized costs were determined from the cost data
for Alternative III (95 percent reduction) in Tables 8-29 and 8-34. The
incremental capital investment for each Mne size was multiplied by a
capital recovery factor of 0.176 (based on an interest rat? of 12 percent
and straight-line depreciation over 10 years); this result was added to the
incremental operating cost to calculate the incremental annualized cost for
each line size. The total number of lines and the incremental cost per
line are shown in Table 8-39. The last column of Table 8-39 gives the
product of the number of lines and the incremental cost per line. The sum
of the figures in this column, $18 million, is well under the $100 million
threshold. Thus, none of the regulatory alternatives qualifies as a major
action by this criterion.
8.5.2 Product Price Criterion
To determine if the implementation of Alternative III would increase
product prices by more than 5 percent, it was necessary to construct a
weighted average price increase for the overall industry price level from
the price impacts presented in Tables 8-31 and 8-36. This was done by
multiplying each price impact under Alternative III by a weighting factor
and summing the results. The weighting factor has three components:
(1) the proportions of the increase in annual output accounted for by new
and by modified facilities, (2) the proportions of the increase in annual
output accounted for by facilities in CTG and in numerical limit areas, and
(3) the proportions of the increase in annual output accounted for by
small, medium, and large facilities.
The increases in annual output accounted for by new and modified
facilities were calculated from information in Section 8.1.2.2. It was
8-84
-------
TABLE 8-39. INCREMENTAL ANNUALIZED COST OF COMPLIANCE WITH
REGULATORY ALTERNATIVE III, 1985a
lines
Incremental cost per
line, l,000sc
Cost per line
size, l,000sa
New facilities
Large
Medium
Small
Modified facilities
Large
Medium
Small
Total incremental cost
15
10
10
15
15
15
450.9
198.5
66.2
297.6
171.9
103.2
6,763.5
1,985.0
662.0
4,464.0
2,578.5
1,548.0
18,001.0
Calculations assumed that all facilities were located in CTG areas.
Taken from Section 8.1. It is assumed that the number of new and
modified facilities projected annually all take place in the fifth year
after implementation.
Calculated from costs presented in Tables 8-29 and 8-34. A capital recovery
factor of 0.176 was calculated using a depreciation of 10 years and an
interest rate of 12 percent. This factor was used to annualize the incre-
mental capital investment required under Alternative III.
dThe product of the number of lines and the incremental annualized cost
per line.
8-85
-------
assumed that three large facilities, two medium facilities, and two small
facilities would be constructed each year; in addition, three large, three
medium, and three small facilities would be modified each year. The total
additional output from new facilities and from modified facilities was
divided by the total annual increase in output to calculate two weights:
(1) new facilitrs would account for 81.3 percent of total additional
output and (2) modified facilities would account for 18.7 percent.
To estimate the proportions of the increase in annual output from
facilities in CTG and in numerical limit areas, it was assumed that the
present proportions of facilities in these areas would be maintained in
future new source construction and existing source modification. Thus,
30 percent of the increase in annual output would occur in CTG facilities
and 70 percent would occur in numerical limit facilities. Finally, the
proportions of the increase in annual output accounted for by small, medium,
and large new sources and by small, medium, and large modified sources were
determined by reapplying the assumptions used to determine the first part
of the weighting factor described above. For example, small new facilities
were estimated to account for 13.8 million m2 (4.6 million m2 per line
times 3 new lines per year) of the 121.2 million m2 additional annual
output from new facilities, which is 7.6 percent of the additional output.
The three components were multiplied together to determine a unique
weight for each facility size that was dependent on whether it was a new or
modified facility and on whether it was located in a CTG or numerical limit
area. The weighting factors and the unweighted price impacts are shown in
Table 8-40. The weighted price impacts in this table are the products of
the weight and the unweighted price impact. The sum of these products,
3.1 percent, is the estimated percentage increase in the overall industry
price level.
Because these price impacts are not insignificant, even if they do not
exceed the 5 percent threshold, it is of some interest to see what impact
on the Consumer Price Index (CPI) an increase in the price of coil coating
services would have. The input-output tables of the U.S. economy were used
to simulate this impact. A price increase of 3.1 percent was assumed to
take place in the metal coating and allied services industry (SIC 3479).
(Recall that the coil coating industry accounts only for roughly 20 percent
8-86
-------
TABLE 8-40. OVERALL PRICE IMPACT OF REGULATORY ALTERNATIVE III
Unweighted
price
impacts, %
Weights'
Weighted
price
impacts, %
New facilities
CTG areas
Small
Medium
Large
Numerical limit areas
Smal 1
Medium
Large
Modified facilities
CTG areas
Small
Medium
Large
Numerical limit areas
Small
Medium
Large
Total
1.87
2.82
4.10
0.81
0.37
0.22
45.52
26.69
23.48
15,04
5.20
2.03
0.019
0.056
0.169
0.043
0.131
0.394
0.006
0.017
0.034
0.013
0.039
0.079
LOOO
0.03
0.16
0.69
0.03
0.05
0.09
0.25
0.45
0.79
3.10
Price
'Unweighted price impacts for new facilities taken from Table 8-31.
impacts for modified facilities taken from Table 8-36.
bThe product of three factors: (1) proportions of additional annual output
accoSnled for by new anS modified facilities, (2) the .Proportions of; the
additional annual output accounted for by facilities in CTG and in numerical
limit arias? and (3) the proportions of the additional gnual output
accounted for fay small, medium, and large facilities. See text for a
description of how these components were estimated.
Product of the unweighted price impact and the weighting factor.
8-87
-------
of the value of shipments of this industry group; the actual price increase
that would occur in SIC 3479 is thus much lower than the 3.1 percent used
in this exercise.) After the increase has worked its way through the
economy, the results show that the CPI would increase by one-hundredth of
one percent, a nominal amount. For these reasons, it is concluded that the
regulatory alternatives do not qualify as a major action by this criterion.
8.6 FINANCIAL DATA FOR COIL COATING FIRMS
This section provides the statistics for individual firms that were
used to compile the averages for the coil coating industry given in Sec-
tion 8.4.2.2. This information is given in Table 8-41.
The weighted average cost of capital (WACC) is the return on a firm's
investment necessary to guarantee a continued inflow of investment funds.
The cost of capital for any new project is the cost of equity, debt, and
preferred stock, weighted by the percentage of funds generated by each type
of financing. That is,
kc = ke T + k1 I +*p I • (8-8)
where
kc = cost of capital
kg = cost of equity capital
k^ = cost of debt capital
k = cost of preferred stock capital
E = the amount of equity used to finance a given investment
D = the amount of debt used to finance a given investment
P = the amount of preferred stock used to finance a given investment
I = the total funds needed for the investment.
The first step in estimating Equation 8-8 is to determine the relevant
weights for the three types of financing. It is assumed that the proportion
of debt, equity, and preferred stock to be used on any new project will be
the same as currently exists in the firm's capital structure. This implies
that the firm is currently using the optimal mix of financing. Figures for
the three types of funds came from the Value Line Investment Survey for
each firm's fiscal years ending in 1978. Common equity included the par
value of common stock, retained earnings, capital surplus, self-insurance
-------
TABLE 8-41. FINANCIAL STATISTICS FOR COIL COATING FIRMS
00
CO
10
Sales/
inventories
1977 1978
Alcan
Alcoa
Amax
Armco
Arvin Industries
Bendix
Bethlehem Steel
Chamberlain
Chroma! loy
Consolidated
Foods
Cyclops
Freuhauf
Groff
Hexel
Inland Steel
Kaiser
Ki rsch
LTV
Marathon
Martin Marietta
National Steel
Phelps Dodge
Republic Steel
Revere Copper
Reynolds Metals
Sears
Stanley
Teledyne
Wolverine
Average
3.0
5.3
3.9
6.1
6.5
5.0
7.9
NA
5.6
7.7
NA
7.4
9.6
10.2
8.1
4.8
3.9
NA
3.9
6.9
6.2
4.2
6.1
4.1
3.6
6.8
NA
NA
NA
5.9
3.6
6.1
4.6
8.9
6.1
5.3
9.7
NA
5.8
7.0
NA
7.3
7.2
100.1
9.3
5.1
40.0
NA
4.2
8.8
6.6
7.0
7.4
4.7
4.2
6.6
NA
NA
NA
12.0
Sales/
receivables
1977
5.5
6.9
8.3
8.1
8.7
8.5
9.9
NA
7.8
12.1
8.1
8.5
2.3
7.8
7.8
10.0
6.2
113.5
6.8
6.3
9.9
8.2
11.4
9.7
7.9
2.6
9.4
8.8
3.6
11.6
1978
4.9
6.8
7.1
8.5
7.5
7.7
9.2
5.6
7.7
9.2
7.9
6.9
3.1
8.9
9.5
8.6
6.1
7.6
7.1
6.2
8.4
7.2
10.3
7.4
7.1
2.6
9.8
8.6
7.8
7.4
Current assets/
current
liabilities
1976
2.3
2.2
2.2
2.0
3.5
1.9
2.0
NA
1.8
2.3
1.9
2.0
2.8
NA
1.9
NA
4.0
NA
2.3
2.2
1.7
1.4
1.8
2.7
2.6
1.6
NA
NA
2.8
2.3
1977
2.3
2.2
2.4
1.8
5.4
1.8
1.5
32.0
2.0
2.4
1.8
1.8
2.8
2.2
1.9
0.2
4.1
1.4
1.9
1.9
1.8
1.5
2.2
1.8
2.6
1.6
2.8
2.0
2.0
3.2
1978
2.2
2.1
1.5
1.7
4.0
1.7
1.6
3.0
1.9
1.9
1.8
1.8
2.3
2.4
1.7
1.6
3.3
1.6
1.6
1.6
1.7
2.1
2.9
2.7
2.4
1.6
3.0
2.0
2.1
2.1
Debt/total l
capitalization, %
1976
39.7
40.7
28.7
27.4
44.0
26.4
27.5
NA
48.8
21.8
30.0
46.2
NA
NA
30.3
NA
29.2
NA
29.7
27.0
37.1
38.5
22.0
57.0
46.3
24.0
NA
30.0
18.0
33.5
1977
34.4
38.6
29.2
25.9
42.0
23.0
34.6
NA
48.1
19.5
30.0
44.5
NA
33.7
34.9
NA
27.1
NA
21.9
23.0
36.1
36.7
25.3
46.2
42.6
22.4
NA
30.0
28.0
32.4
1978
29.2
34.3
25.3
23.6
37.9
26.9
29.8
30.3
46.5
26.5
30.0
45.7
10.0
33.7
34.2
NA
27.8
NA
16.4
14.9
34.2
40.8
24.1
56.6
41.9
23.4
NA
30.0
24.0
30.7
978 weighted
average
cost of
capital , %
13.1
11.5
10.9
12.5
NA
13.4
12.6
NA
11.5
12.1
12.8
10.9
NA
NA
11.2
NA
12.9
NA
NA
13.8
11.1
10.7
12.8
10.2
11.5
13.1
NA
13.3
NA
12.1
NA = not available.
-------
reserves, and capital premium, while debt included all obligations due more
than a year from the company's balance sheet date. Preferred stock repre-
sented the net number of preferred shares outstanding at year end multiplied
by the involuntary liquidating value per share.
The next step in calculating Equation 8-8 is to estimate the cost of
equity financing. The capital-asset pricing model (CAPM) was used to
estimate this cost. The CAPM examines the necessary returns on a firm's
stock in relation to a portfolio comprised of all existing stocks. The
required return on equity is
ke = i + P (km - i) , (8-9)
where
i = the expected risk free interest rate
km ~ i = the expected excess return on the market
p = the firm's beta coefficient.
Figures for Equation 8-9 were developed in the following manner. The
expected risk-free rate was assumed equal to the yield on a 3-month Treasury
Bill, as reported in the October 1, 1979, Wall Street Journal. The current
yield was 10.46 percent. This corresponds to the yield from a bond with no
possibility of default and offering no chance of a capital loss and is
therefore riskless. The firm's beta coefficients came from the September 24,
1979• Value Line Investment Survey. The expected excess return equalled
2.9646 percent, the 5-year average (July 1974 through June 1979) of the
monthly excess returns on the Standard & Poor's 500 Stock Index multiplied
by 12.
The third step in estimating Equation 8-8 is calculating the cost of
debt financing. This would be a relatively easy estimation if interest
rates did not change over time. Past yields on old issues of bonds would
suffice. Since interest rates have been increasing, it was felt that a
more forward-looking rate was required. The method selected was to take
the average yield as given in the October 1 through September 3, 1979,
Moody's Bond Survey for the firm's bond ratings class as the necessary
yield the firm must offer on long-term debt. The firm's ratings class came
from the September 1979 Moody's Bond Record or the 1979 Moody's Industrial
8-90
-------
Manual. This was used as the necessary yield on long-term debt. Table 8-42
presents the yields by ratings class and the prime rate used for the cost
of debt funds.
The yield on long-term debt does not represent the aftertax cost of
debt financing since interest charges are tax deductable. To arrive at the
after-tax cost, the yield must be multiplied by one minus the marginal tax
rate,
k. = k(l - t) ,
where
k = the yield on bonds
t = the marginal tax rate.
It is assumed that the firms in the sample are profitable, so that taxes
must be paid, and that their marginal tax rate is 48 percent.
The last step in estimating Equation 8-8 is to arrive at the cost of
preferred stock financing. Unlike debt, preferred stock does not have a
maturity date, so that the current yield should approximate the yield on
new issues. The yield is
where
D = stated annual dividend
P = the price of a share of preferred stock.
The figures for dividends and share price came from the October 1, 1979,
Wall Street Journal or, if not included in this source, from the January 1,
1979, listing in the Daily Stock Price Record.
8.7 REFERENCES
1. Coil Coating: The Better Way. National Coil Coaters Association.
Philadelphia, Pennsylvania. December 1978.
2. Unpublished Survey of the Coil Coating Industry. Effluent Guidelines
Division, U.S. Environmental Protection Agency. Washington, D.C.
1978.
8-91
-------
TABLE 8-42. YIELDS BY RATING CLASS FOR COST OF DEBT FUNDS, 1979
(prime rate = 15.00 %)
Ratings class Yield, %
AAA
AA
A
BAA
BA
B
9.25
9.59
9.72
10.38
11.97
12.395
8-92
-------
3. Moody's Industrial Manual 1979. 2 volumes. Dun and Bradstreet, Inc.
New York, New York. 1979.
4. Current and Suggested End Uses of Pre-coated Metal Strip. National
Coil Coaters Association. Philadelphia, Pennsylvania. Technical
Bulletin No. IV. 1975.
5. 1977 Survey of Plant Capacity. Current Industrial Reports. Bureau of
the Census, U.S. Department of Commerce. Washington, D.C. Publica-
tion No. MQ-C1(77)-1. 1978.
6. Letter and attachments from Fege, David, Water Economics Branch, U.S.
Environmental Protection Agency, to Lawrence, Jere, National Coil
Coaters Association. March 14, 1979. Attachment B. Fact sheet on
the coil coating industry.
7. Preliminary Quantitative Economic Assessment for the Coil Coating
Industry. JRB Associates. McLean, Virginia. EPA Contract No.
68-01-3892. November 16, 1978.
8. Estimate of Total Shipments of Prepainted or Precoated Metal Coil by
Coaters Located in the United States, Canada, and Mexico. News Release.
National Coil Coaters Association. Philadelphia, Pennsylvania.
May 15, 1978.
9. Telecon. Wright, Milton, Research Triangle Institute, with Benson,
John, Chairman, National Coil Coaters Association Marketing Committee,
Roll Coater, Inc. September 12, 1979. Discussion of market competi-
tion with coil coated metal.
10. Telecon. Wright, Milton, Research Triangle Institute, with Graziano,
Frank, Chairman, National Coil Coaters Association Technical Section,
Prefinish Metals, Inc. August 30, 1979. Discussion of market compe-
tition with coil coated metal.
11. Predicast Basebook. Predicast, Inc. Cleveland, Ohio. 1976.
12. Why Coil Coating's Growth Continues. Special PF Report. Products
Finishing. November 1974. p. 60-63.
13. Wright Milton Trip Report: Chesapeake Finished Metals-Baltimore
Maryland Research Triangle Institute, Research Triangle Park, North
Carolina. December 12, 1978.
14. Bernard, Paul. What's Happening in Finishes for Steel Appliances?
Products Finishing, p. 66-73. November 1979.
15. Letter from Whike, Alan S., B & K Machinery International Limited, to
McCarthy, J. M., Research Triangle Institute. October 10, 1979.
Response to letter requesting cost information.
8-93
-------
16. Letter from Mil ley, Herbert J., Hunter Engineering, to McCarthy,
J. M., Research Triangle Institute. October 15, 1979. Response to
letter requesting cost information.
17. Letter from Blazejewski, Ed, C-E Air Preheater, to McCarthy, J. M.,
Research Triangle Institute. October 18, 1979. Response to letter
requesting cost information.
18. Letter from Archibald, J. M., Smith Environmental, to McCarthy, J. M.,
Research Triangle Institute. October 26, 1979. Response to letter
requesting cost information.
19. Telecon. McCarthy, J. M., Research Triangle Institute, with Vu, Thai,
Smith Environmental. November 2, 1979. Discussion of cost data
submitted through letter by Smith Environmental.
20. Letter from Grenfell, Thomas N., REECO, to McCarthy, J. M., Research
Triangle Institute. October 9, 1979. Response to letter requesting
cost information.
21. Telecon. McCarthy, J. M., Research Triangle Institute, with Orr
L. W., Schweitzer Industrial. December 7, 1979. Cost of coatinq
rooms.
22. Neveril R B., J U. Price and K. L. Engdahl. Capital and Operating
Costs of Selected Air Pollution Control Systems-V. Journal of the Air
Pollution Control Association. 28:1254. December 1978.
23. Telecon. McCarthy, J. M., Research Triangle Institute, with Brewer,
Gerald, Air Correction Division, UOP, Inc. December 11, 1979. Dis-
cussion of design and operating parameters for 95 percent solvent
destruction.
24. Vilbrandt, C. and C. E. Dryden. Chemical Engineering Plant Design.
New York, McGraw-Hill Book Company, 1959. p. 205-207.
25. Telecon. McCarthy, J. M., Research Triangle Institute, with
Blazejewski, Ed, C-E-Air Preheater. December 7, 1979. Discussion of
design and operating parameters for 95 percent destruction.
26. Telecon. McCarthy, J. M., Research Triangle Institute, with Dombeck,
Jerry, Precoat Metals. October 26, 1979. Discussion of costs of new
line.
27. Telecon. McCarthy, J. M., Research Triangle Institute, with Wilson,
Russ, Harnischfeger Corporation. October 29, 1979. Cost of overhead
cranes.
28. Telecon. McCarthy, J. M., Research Triangle Institute, with Dwyer,
Larry, Supracote, Inc. January 8, 1980. Operating costs of coating
lines.
8-94
-------
29. Telecon. McCarthy, J. M., Research Triangle Institute, with Orr,
L. W.t Schweitzer Industrial. December 28, 1979. Modifications to
coil coating lines.
30. United States Congress. Federal Water Pollution Control Act, as
amended November 1978. 33 U.S.C. 1251 et seq. Washington, D.C. U.S.
Government Printing Office. December 1978.
31. Telecon. Scott, Marsha, Research Triangle Institute, with Kukulka, J.,
Effluent Guidelines Division, U.S. Environmental Protection Agency.
December 10, 1979. Cost of water pollution control regulations in the
coil coating industry.
32. Industrial Ventilation Manual. American Conference of Governmental
Industrial Hygienists. Washington, D.C. n.d.
33. United States Congress. Toxic Substances Control Act. 15 U.S.C. 2601
et seq. Washington, D.C. U.S. Government Printing Office. October
1976.
34. Telecon. Scott, Marsha, Research Triangle Institute, with Beronja, G.,
Office of Toxic Substances, U.S. Environmental Protection Agency.
December 10, 1979. Impact of toxic substances control on the coil
coating industry.
35. 1977 Census of Manufacturers Preliminary Report. Bureau of the Census,
U.S. Department of Commerce. Washington, D.C. Table 3. n.d.
36. Source Category Survey Report: Phase I, Metal Coil Surface Coating.
Research Triangle Institute, Research Triangle Park, North Carolina.
1979. pp. 18-20.
37. 1972 Census of Manufacturers. Bureau of the Census, U.S. Department
of Commerce. Washington, D.C. Table 5. n.d.
38. Bussey, L. E. The Economic Analysis of Industrial Projects. Englewood
Cliffs, New Jersey, Prentice-Hall, Inc., 1978. p. 220.
39. Reference 38, p. 222, n. 13.
40. Reference 38, p. 73.
41. Reference 38, p. 78.
8-95
-------
APPENDIX A
EVOLUTION OF THE BACKGROUND INFORMATION DOCUMENT
-------
APPENDIX A
EVOLUTION OF THE BACKGROUND INFORMATION DOCUMENT
The contractor for the Metal Coil Surface Coating source category,
Research Triangle Institute (RTI), began work on the project on October 12,
1978. Table A-l lists major events and accomplishments in the evolution of
the Background Information Document (BID). The initial activities consisted
of formulating a Phase I Work Plan and making contacts with industry offi-
cials. The National Coil Coaters Association (NCCA) agreed to provide tech-
nical and economic information and provided such at various stages throughout
the project. The Air Pollution Technical Information Center conducted a
literature search on the coil coating industry in November 1978. Project
personnel reviewed this information during the next month.
A series of seven visits to coil coating plants was begun with two
visits in December 1978. In January and February of 1979 priority was
given to completing Phase I, with the submission of the Source Category
Survey Report and the Phase II and III Work Plan. Four more facilities
were visited in March 1979, and one in October 1979. The plants were
selected to provide information on a wide range of emission control systems
and types of coatings. In March 1979, the project staff met with industry
representatives at NCCA Headquarters in Philadelphia to'discuss the types
of information needed from the Association.
An emission test plan was outlined in April 1979; however, the first
test was delayed until August 1979, at which time it was carried out success-
fully by Midwest Research Institute (MRI) in cooperation with RTI. In
May 1979 a meeting was held with officials of Midland-Ross Corporation, a
vendor of coating equipment, ovens, and emission control systems. Much of
the information regarding control systems was obtained from vendors by
letters and telephone conversions during the remainder of 1979.
A-3
-------
TABLE A-l. MAJOR EVENTS AND ACCOMPLISHMENTS IN THE EVOLUTION OF THE BACKGROUND INFORMATION DOCUMENT
Month
Event
-P.
October 1978
November 1978
December 1978
January 1979
February 1979
March 1979
ApriT 1979
Hay 1979
June 1979
July 1979
August 1979
September 1979
October 1979
December 1979
January 1980
Aprfl 1980
June 1980
June 1980
Work begun by Research Triangle Institute (RTI). National Coil Coaters Association (NCCA) contacted.
Phase I Work Plan submitted. Literature search carried out.
Plant visits conducted to Roper Eastern Corporation and Chesapeake Finished Metals, Baltimore. Formal request
for information sent to NCCA.
Phase II and III Work Plan completed.
Source Category Survey Report completed. Phase I completed.
Plant visits made to Precoat Metals, St. Louis; Modern Materials, Detroit; and Rollcoater, Greenfield and
Kfngsbury, Indiana. Meeting held at NCCA headquarters.
Emission Test Plan completed. Preliminary model plants and regulatory alternatives defined.
Meeting with Midland-Ross Corporation officials.
Survey and economic data obtained from EPA Effluent Guidelines Division and Water Economics Branch.
Requests for samples sent to coating manufacturers.
Model plants and regulatory alternatives defined. Emission test at Precoat Metals begun.
Emission test at Precoat Metals completed. Requests for cost information sent to equipment vendors.
NCCA Technical Meeting, Chicago, attended. Technical background chapters of Background Information Document
(BID) completed. Plant visit made to Kaiser Aluminum, Toledo.
Chapters 3-6 of BID sent to industry officials for comment. Cost study completed.
REECO representative gave presentation at EPA on REECO emission control system.
Economic analysis completed. NAPCTAC package completed.
NAPCTAC meeting held.
Steering Committee package mailed on consent agenda. No meeting held.
-------
APPENDIX B
INDEX TO ENVIRONMENTAL IMPACT CONSIDERATIONS
-------
APPENDIX B
INDEX TO ENVIRONMENTAL IMPACT CONSIDERATIONS
Table B-l lists the locations in this document of certain information
pertaining to environment impact, as outlined in Agency Guidelines (39 FR
37419, October 21, 1974).
B-3
-------
TABLE B-l. LOCATIONS OF INFORMATION CONCERNING
ENVIRONMENTAL IMPACT WITHIN THE BACKGROUND INFORMATION DOCUMENT
Agency guidelines for preparing
regulatory action environmental
impact statements (39 FR 37419,
October 21, 1974)
Location within the Background
Information Document
Background and summary
of regulatory alternatives
Statutory basis for proposing
standards
Relationships to other regulatory
agency actions
Industry affected by the regula-
tory alternatives
Specific processes affected
by the regulatory alternatives
Chapter 1, Section 1.1
Chapter 2, Section 2.1
Chapters 3, 7, and 8
Chapter 3, Section 3.1, and Chapter 8,
Section 8.1
Chapter 1, Section 1.1, and Chapter 3,
Section 3.2.
B-4
-------
APPENDIX C
EMISSION SOURCE TEST DATA
-------
APPENDIX C
EMISSION SOURCE TEST DATA
C.I INTRODUCTION
Six emission tests of coil coating lines with thermal incinerators
have been identified, and a test sponsored by the U.S. Environmental Pro-
tection Agency (EPA) was completed during the course of this study. Each
test is discussed below.
C.I.I Emission Test 1
In 1971, Scott Research Laboratories performed a series of emission
tests on two coil coating lines with thermal incinerators. Control unit
031 was designed to heat 4.2 mVs (9,000 scfro) of gases to 760° C (1,400° F),
with a design residence time of 0.8 s. Control unit 033 had a residence
time of 0.8 s at a design flow of 1.2 mVs (2,600 scfm) and at a temperature
of 760° C (1,400° F). The coatings in each case were white acrylic coatings
containing 40 percent solids by weight. The methods of analysis are sum-
marized in Table C-l.
During the testing, Unit 031 was operating at less than design flow
rate while Unit 033 was operating at greater than design flow rate. For
reasons not explained in the report, the operating temperatures were esti-
mated at approximately 38° C (100° F) greater than the measured outlet
temperatures. The results of the testing are summarized in Tables C-2 and
C-3. Unit 031 achieved an average 99.5 percent reduction in hydrocarbons;
Unit 033 achieved only 89 percent, probably because of the lower actual
operating temperature and residence time due to overloading. Unit 033
produced a higher level of products of partial combustion than Unit 031,
although compounds present in the inlet streams predominated in the outlet
streams in each case. Higher concentrations of nitrogen oxides were pro-
duced in Unit 031, probably as a result of the higher actual operating
temperatures.
C-3
-------
TABLE C-l. PROCEDURES USED IN EMISSION TEST 1
Parameter
Method of measurement
Nitric oxide & nitrogen dioxide
Carbon monoxide
Carbon dioxide
Total aldehydes
Total hydrocarbons
Individual hydrocarbons
Odor
Gas velocity
Gas temperature
Modified Saltzmun Procedure
Continuous infrared analyzer
Continuous infrared analyzer
MBTH method
Continuous total hydrocarbon
analyzer, flame ionization
Gas chromatography
Modified ASTM Standard
Method D 1391-57
Pi tot tube traverse of duct
Thermocouple traverse of duct
C-4
-------
TABLE 02. CONDITIONS AND COMPOSITION OF GASES AT THE INLET AND OUTLET OF CONTROL UNIT 031. EMISSION TEST 1
Inlet flow
o
i
Ul
Run
no.
1
2
3
4
5
Avg.
rate Temperature, °C
nrVs
3.40
3.20
3.36
3.13
3.27
(scfm)
-
(7,200)
(6,790)
(7,120)
(6,640)
6,940
Inlet
-
316
321
321
307
316
Outlet
688
721
682
699
699
698
Nitric oxide,
ppm
Inlet Outlet
31
44
2.2 22
2.0 13
2.4 17
2.2 27
Nitrogen
dioxide, ppm
Inlet
-
8.3
4.8
3.8
8.2
6.3
Outlet
17
3.5
5.1
4.9
12
8.5
Aldehydes,
ppm H2CO
Inlet Outlet
30
20
31 11
32 5.1
34 10
32 15
Carbon
monoxide, ppm
Inlet
180
40
100
100
120
110
Outl et
690
30
250
250
480
340
Carbon
dioxide t %
Inlet Outlet
-
2.70
2.25 4.05
2.70 4.35
2.55 4.00
2.55 4.13
Total nonme thane
hydrocarbons ,
ppm CaH8
Inlet Outlet
2,120 15
2,470 12
17
2
2,720
2,440 11
Odor
reduction.
dilutions
300
300
200
300
300
280
-------
TABLE 03. CONDITIONS AND COMPOSITION OF GASES AT THE INLET AND OUTLET OF CONTROL UNIT 033, EMISSION TEST 1
Run
no.
1
2
3
Avg.
Inlet flow
rate
ni-Vs
1.40
1.49
1.34
1.41
(scfm)
(2,960)
(3,070)
(2,840)
(2,960)
Temperature. °C
Inlet
304
293
293
297
Outlet
582
566
582
577
Nitric oxide,
PP*i
Inlet
-
2.3
2.8
2.6
Outlet
10
11
11
Nitrogen Aldehydes, Carbon
dioxide, ppm ppm H2CO monoxide, ppm
Inlet
2.1
4.2
3.2
Outlet Inlet
3.6 38
8.7 51
6.2 45
Outlet Inlet
285
1. 9 270
23 569
13 375
Outlet
2,450
5,360
5,930
4,580
Carton
dioxide, %
Inlet
2.59
2.35
(2.20)
2.38
Outlet
3.33
3.06
-
3.20
Total normtettiane
hydrocarbons ,
ppm C3Ha
Inlet
-
'2,200)
2,570
2,385
Outlet
-
230
304
267
Odor
reduction,
dilutions
-
8
100
54
NOTE: Parenthesis indicates values estimated on the basis of incomplete data.
o
i
en
-------
C.I.2 Emission Test 2
Environmental Technology and Engineering Corporation conducted an
emission test of a REECO Re-therm system in April 1976. The Re-therm unit
incorporates thermal incineration and regenerative heat recovery. Gas
samples were collected upstream and downstream of the unit in heated (121° C,
250° F), stopcocked, 500 m£ gas sampling bottles. Approximately 40 £ of
sample were drawn through the sampling train before the stopcock was closed.
A gas chromatograph equipped with a flame ionization detector was used in
the analysis of samples. Flow rate determinations were made with a stand-
ard pitot tube to do velocity traverses of 12 points each. The results for
each sample are given in Table C-4. The air flow rates and retention times
in the incinerator are not reported. The types of coatings used during the
testing are listed in Figure C-l. The incinerator system achieved an
average solvent reduction of 94 percent of the hydrocarbons entering the
device.
C.I.3 Emission Test 3
An emission test was done by Midland-Ross Corporation on a thermal
incinerator controlling emissions from a coil coating line in November 1976.
The line was running a steel strip 1.2 m (48 in.) wide at 1.0 m/s (200
ft/s). The wet coating thickness was 0.089 mm (.0035 in.), and the coating
contained 50 percent solids (basis unknown). Details of the testing proce-
dure are not known. Based on three samples, the average inlet concentra-
tion to the incinerator was 2,700 ppmv; the average outlet concentration
was 36 ppmv (both concentrations probably as methane). The average solvent
reduction across the incinerator was 98 percent.
C.I.4. Emission Test 4
An emission test of a 1.2 m (48 in.) aluminum coating line was carried
out in January 1977 by Clayton Environmental Consultants of Southfield,
Michigan. The incinerator temperature was 700° C (1,300° F). A single
pair of samples were taken, one upstream and one downstream of the Incimra-
tor; the corresponding concentrations of nonmethane hydrocarbon were
4,530 ppm as methane (upstream) and 560 PP» as methane (downstream) The
solvent reduction across the incinerator was thus 88 percent. Total hydro-
carbons were determined by an on-line hydrocarbon analyzer based on a flame
C-7
-------
Sample time
TABLE C-4. RESULTS OF EMISSION TEST 2
Incinerator
exhaust temperature
C
F)
Concentrations
hydrocarbons, ppim'
Inlet Outlet
Efficiency
0910
1020
1105
1150
1235
1255
1415
1435
Avg
700
700
700
700
700
700
700
700
700
=====
(1,300)
(1,300)
(1,300)
(1,300)
(1,300)
(1,300)
(1,300)
(1.300)
(1,300)
._
400
420
673
653
540
560
450
477
52?
=======
61
54
23
10
47
7
10
23
29
=f.
85
87
97
98
91
99
98
95
94
C-8
-------
Time of test
Prime coat
Finish coat
Front side
Back side
Front side
Back side
0910 though
1200
1200 through
1600
Epoxy 141
Epoxy 153
Epoxy 141
Epoxy 141
Polyester 189
Fluorocarbon618
Polyester 189
Polyester 189
Chemical Composition of Coatings
Epoxy Primer 141
Epoxy Primer 153
31.9% Nonvolatile;
4.5% Butanol
17.0% Xylol
13.4% Solvesso 100
28.8% Diacetone
4.4% Butyl cellosolve
33.7% Nonvolatiles
44.8% Cellosolve acetate
16.3% Solvesso 150
2.7% Toluol
2.5% Isopropyl alcohol
Polyester 189 53.0% Nonvolatiles
2.9% Butanol
3.4% Xylol
2.6% Solvesso 100
31.5% Solvesso 150
4.2% Butyl carbitol
2.4% Butyl cellosolve
Fluorocarbon618 37.0% Nonvolatiles
51.0% Isophorene
6.8% Xylol
5.1% Butyl cellosolve
Figure C-1. Description of coatings used during emission test 2.
C-9
-------
iom'zation detector. Methane was measured with the same analyzer preceded
by an activated carbon column; nonmethane hydrocarbons were calculated as
the difference. The gas flow rate to the incinerator was measured at
5.29 mVs (11,200 scfm). Measurements of the flow rate and hydrocarbon
concentration of the air being exhausted from the coating room indicated
that approximately 20 percent of the total nonmethane hydrocarbons that
could potentially have reached the incinerator actually were exhausted to
atmosphere through exhaust ducts.
C.I.5 Emission Test 5
H & M Engineering and Research Company performed an emission test of a
coil coating line in October 1978. The line had been retrofitted with
multiple, oven-mounted incinerators (zone incinerators). Although coating
usage was recorded, the only gas streams actually tested were the exhaust
streams from the final afterburners. The results of the testing are given
in Table C-5. Flow rates were measured by velocity traverses. Each hydro-
carbon data point in Table C-5 represents a sample that was collected in a
glass chromatography collector and analyzed with flame ionization calibrated
for methane. Based on the solvent usage rates measured at the coating
rooms, the solvent reduction across the entire topcoat system was greater
than 99 percent at afterburner temperatures of 482° C (900° F) or greater.
C.I.6 Emission Test 6
An emission test was performed on a total of nine incinerators that
were being used to burn recycled hydrocarbons to two ovens. The incinera-
tors were mounted external to the ovens. The average of the inlet concen-
trations to the five incinerators on the prime coat oven was 733 ppmv; the
average of the outlet concentrations from the five incinerators was 55 ppmv,
for an efficiency of 92 percent. The average temperature was 716° C
(1,320° F). The average of the inlet concentrations to the four incinera-
tors on the topcoat oven was 3,718 ppmv; the average of the outlet concen-
trations was 32 ppmv, for an effectiveness of 99 percent. The exhaust
temperature was 760° C (1,400° F).
C.1.7 EPA Sponsored Emission Test
An emission test was done by Midwest Research (MRI) Institute of Kansas
City, Missouri, in August and September 1979. The work was done under con-
tract with the Emission Measurement Branch of EPA. The coating line being
C-10
-------
TABLE C-5. RESULTS OF EMISSION TEST 5
Gas stream tested
Final exhaust from
prime coat system
Final exhaust from
topcoat system
Gas flow rate
m3/s
3.07
3.80
3.83
2.97
(scfm)
(6,510)
(8,060)
(8,110)
(6,300)
Total
hydrocarbons
ppmv as CH4
1.0
150
20
0.45
Total hydrocar-
bon emissions
kg/h
.002
0.50
.059
.001
(Ib/h)
(.005)
(1.1)
(-13)
(.002)
Solvent
i nput
kg/h
95
223
223
223
(Ib/h)
(210)
(492)
(492)
(492)
Afterburner Percent
temperature reduc-
0 C (° F) tion
649
482
593
649
(1,200)
(900)
(1,100)
(1,200)
99.9
99.8
99.9
99.9
-------
tested was equipped with ovens having zone incinerators and individual
final afterburners with waste heat boilers.
Emission measurements were made before and after each final after-
burner. Temperatures in the afterburners were changed for separate test
runs to measure the efficiency of these units at several temperatures. A
material balance of coatings was done for each run to estimate the overall
efficiency of the control systems. Sampling was done to measure quantity
and solvent concentrations of the coatings used; nitrogen oxides at the
afterburner outlets; volumetric flow rates at the afterburner inlets and
outlets; and volatile organic compound (VOC) concentrations at the after-
burner inlets and outlets. VOC sampling and analyses were done according
to Method 25 for total gaseous nonmethanc organic emissions.
The results of the testing indicate that the final afterburners, when
operated at 760° C (1,400° F), achieved destruction efficiencies of 93 to
96 percent. The resulting overall destruction efficiencies of the system
were estimated at greater than 99 percent. There are inconsistencies in
the data between the Method 25 results and the THC (FID only) results at
lower concentrations for all afterburner temperature settings. These
inconsistencies are being investigated by EPA. Further interpretation of
the data is awaiting release of the final report.
As best as can be determined from the reports, the MRI emission test
is the only test performed according to Proposed Method 25, "Determination
of Total Gaseous Nonmethane Organic Emissions as Carbon: Manual Sampling
and Analysis Procedure."
C.2 REFERENCES
1. A Study of the Gaseous Emissions of the Coil Coatinq Process and Their
Control Scott Research Laboratories, Inc. Plum ?eadvilie! Pennsyl-
vania. Report Number SRL 1233 07 1071. October 1971 DD 3-13
through 3-18, AIII-2 through AIII-15, and AIII-46 through AIII-55.
2.
Report of Hydrocarbon Emission Test. Environmental Technology and
Engineering Corporation. Elm Grove, Wisconsin. May 1976
3. Letter from Zuffante, V. M., Midland-Ross Corporation to Fletcher
George, Metal Koting. May 31, 1977. Emission test Fletcher>
4. Hydrocarbon Emission Study, Rolled Aluminum Strip-Coatinq Process
Clayton Environmental Consultants, Inc. Southfield, Michigan.
C-12
-------
5. Stack Sampling Report. H & M Engineering and Research Company.
Address Unknown. October 1978.
6. Emission Test of a Coil Coating Plant in St. Louis, Missouri. Midwest
Research Institute. Kansas City, Missouri. November 1979.
C-13
-------
APPENDIX D
EMISSION MEASUREMENT AND CONTINUOUS MONITORING
-------
APPENDIX D
EMISSION MEASUREMENT AND CONTINUOUS MONITORING
D. 1 EMISSION MEASUREMENT METHODS
During the standard support study for the coil coating industry, the
U.S. Environmental Protection Agency (EPA) conducted a test for volatile
organic compounds (VOCs) at one coil coating plant. The primary purpose of
this test program was to determine the VOC control efficiency of the two
incinerators employed to control prime coat and finish coat curing oven
emissions.
VOC emission tests were conducted at three different incinerator
temperatures for both the prime coat and the finish coat incinerator to
establish an estimate of the relationship between incinerator temperature
and VOC control efficiency. Each incinerator was tested separately.
A second objective of the test program was to determine the amount of
coating used during the individual test runs. No attempt, however, was
made to assure that the coatings tested represented the "average" coating
at this plant or in the industry.
Three test runs were conducted at each of three different incinerator
temperatures on each of the two incinerators for a total of 18 test runs.
Each run spanned approximately 30 minutes. During each run, tests were
conducted at the main exhaust of the prime coat (or finish coat) curing
oven (the inlet to the incinerator) and at the exhaust of the applicable
incinerator. These tests included determining the average VOC concentration
with Reference Method 25, determining percent oxygen and carbon dioxide
with Fyrite equipment, and determining moisture content with Reference
Method 4. In addition, the nitrogen oxide and continuous VOC concentrations
were measured at the incinerator exhaust with a chemiluminescent and flame
ionization analyzer (FIA), respectively. The volumetric flow rate at the
inlet of the incinerator being tested was determined daily with Reference
Method 2. Additional testing was conducted during the last day of the test
D-3
-------
program to estimate VOC emissions from the finish oven quench exhaust by
(1) measuring the VOC concentration according to proposed Reference Method 25
and FIA and (2) measuring flow measurements according to Reference Method 2.
The coating used was determined by measuring the volume of coating
used during the run. Samples of the coating were collected at the start
and end of each un. Some of these samples were analyzed for VOC content
to determine the applicability of Reference Method 24.
D.2 PERFORMANCE TEST METHODS
Performance test methods are needed to determine the VOC content of
the coating and to determine the overall control efficiency of an add-on
VOC control system.
D.2.1 Coating VOC Content
The volatile organic content of the coating may be determined by the
manufacturer's formulation or from Reference Method 24, "Determination of
Volatile Organic Content (as Mass) of Paint, Varnish, Lacquer, or Related
Products."
Reference Method 24 combines several American Society for Testing and
Materials (ASTM) standard methods that determine the volatile matter content,
density, volume of solids, and water content of the paint, varnish, lacquer,
or related coating. From this information, the mass of VOCs per unit
volume of coating solids is calculated. The estimated cost of analysis per
coating sample is $150. For aqueous coatings, there is an additional $100
cost per sample for water content determination. Because the testing
equipment is standard laboratory apparatus, no additional purchasing costs
are expected.
D-2-2 Control Efficiency of Add-on VOC Control System
If the VOC content of the coatings used exceeds the level of the
recommended standard, the efficiency of the add-on control system must be
determined. This information would be used in conjunction with the VOC
content of the coating used to determine compliance with the recommended
standard.
For those types of control systems that do not destroy or change the
nature of VOC emissions, the recommended procedure is a material balance
system where the mass of the VOCs recovered by the control system is
D-4
-------
determined and used in conjunction with the mass of VOCs in the coating used
over the same period of time. The length of time during which this material
balance is conducted will be dependent upon the Agency decision on whether
to require continual compliance or to demonstrate compliance during an
initial performance test. Examples of control systems where this procedure
would be applicable are refrigeration and carbon adsorption systems.
A different approach is recommended for those control systems (such as
incinerators) that alter the VOC emissions. Ideally, the procedure would
directly measure all VOCs emitted to the atmosphere. However, this procedure
would require measurement of the VOC emissions that escape capture prior to
the incinerator (control system) by construction of a complex ducting
system and measurement of the VOC emissions exhausting to the atmosphere
from the control system.
The recommended procedure requires simultaneous measurement of the
mass of VOCs (as carbon) entering the control system and exiting the control
system to the atmosphere. Methods 1, 2, 3, and 4 are recommended to deter-
mine the volumetric flow measurements. Reference Method 25 is recommended
to determine the VOC (as carbon) concentration. These results are then
combined to give the mass of VOCs (as carbon) entering the control system
and exiting the control system to the atmosphere. The control efficiency
of the control system is determined from these data.
The average of three runs should be adequate to characterize the
control efficiency of the control system. The length of each run would be
dependent upon the operational cycle of the control system employed.
Minimum sampling time would be in the range of 30 minutes and would be
dependent upon the size of the evacuated tanks and the sampling rate employed
to obtain a sample. The control agency should also consider the represen-
tativeness of the solvents and coatings used during the test program. It
is assumed that the manufacturers of the oven and incinerator will design
the system based on a miximum organic loading that would occur at the
maximum line speed with use of the highest percent solvent content coating
and the lowest molecular weight solvent (which are typically the most
difficult to combust). The designer would also assume 100 percent capture
(i e no fugitive losses). Although the actual testing time using Reference
D-5
-------
Method 25 is only a minimum of 90 minutes, the total time required for one
complete performance test is estimated at 8 hours, with an estimated overall
cost of $4,000.
D.3 MONITORING SYSTEMS AND DEVICES
The purpose of monitoring is to ensure that the emission control
system is being properly operated and maintained after the performance
test. One can either directly monitor the regulated pollutant or, instead,
monitor an operational parameter of the emission control system. The aim
is to select a relatively inexpensive and simple method that will indicate
that the facility is in continual compliance with the standard.
For carbon adsorption systems, the recommended monitoring test is
identical to the performance test. A solvent inventory record is maintained,
and the control efficiency is caluclated every month. Excluding reporting
costs, this monitoring procedure should not incur any additional costs for
the affected facility since these process data are normally recorded
anyway and since the liquid volume meters were already installed for the
earlier performance test.
For incinerators, two monitoring approaches were considered: (1)
directly monitoring the VOC content of the inlet, outlet, and fugitive
vents so that the monitoring test would be similar to the performance
tests; and (2) monitoring the operating temperature of the incinerator as
an indicator of compliance. The first alternative would require at least
two continuous hydrocarbon monitors with recorders (about $4,000 each) and
frequent calibration and maintenance. Instead, it is recommended that a
record be kept of the incinerator temperature. The temperature level for
indication of compliance should be related to the average temperature
measured during the performance test. The averaging time for the tempera-
ture for monitoring purposes should be related to the time period for the
performance test-90 minutes, in this case. Since a temperature monitor is
usually included as a standard feature for incinerators, it is expected
that this monitoring requirement will not incur additional costs for the
plant. The cost of purchasing and installing an accurate temperature
measurement device and recorder is estimated at $1,000.
D-6
-------
D.4 REFERENCES
1. (Proposed) Method 25—Determination of Total Gaseous Nonmethane Organic
Emissions as Carbon: Manual Sampling and Analysis Procedure. Federal
Register. 40 CFR Part 60, Vol. 44, No. 195. October 5, 1979. p. 57808.
2 (Proposed) Method 24 (Candidate 2)--Determination of Volatile Organic
Compound Content (as mass) of Paint, Varnish, Lacquer, or Related
Products. Federal Register, 40 CFR Part 60, Vol. 44, No. 195. October 5,
1979. p. 57807.
D-7
-------
APPENDIX E
REVISED REGULATORY ALTERNATIVES
-------
APPENDIX E
REVISED REGULATORY ALTERNATIVES
E.1 INTRODUCTION
During the background study conducted for the metal coil surface
coating industry, the best system of continuous emission reduction was
determined to be incineration with heat recovery and the use of coating
rooms that are ventilated into the oven or incinerator. Consequently, the
regulatory alternatives that were considered during the background study
were based on the use of such control systems. The original regulatory
alternatives considered were as follows:
I. No NSPS.
II. An emission limit equivalent to an 85 percent overall reduction
in the emissions from the average industry coating formulation.
III. An emission limit equivalent to a 95 percent reduction in the
emissions from the average industry coating formulation.
Regulatory Alternative II is based on the use of an incinerator with a
95 percent VOC removal efficiency, which emission test data indicate can
consistently be achieved. This alternative relies upon the normal industry
practice for capturing VOC emissions. Information in the literature indicates
that under these conditions a capture efficiency of about 90 percent could
be expected.
During site visits to two coil coating plants, three coil coating
lines were identified that have their coating application stations enclosed
in rooms and have all of the ventilating air from the rooms passing into
the ovens. This configuration should result in almost complete capture of
the VOC emissions. Regulatory Alternative III was therefore based on the
use of coating rooms that are ventilated into the oven or incinerator and
the use of a 95 percent efficient incinerator.
E-3
-------
When the Background Information Document (BID) and recommended standards
for the coil coating industry were presented to the National Air Pollution
Control Techniques Advisory Committee (NAPCTAC) for review, representatives
of the National Coil Coaters Association (NCCA) presented new data indicating
that the basis of the regulatory alternatives may not be consistently
applicable throughout the industry. Specifically, the industry data indicate
that the coil coating lines that have all of the coating room ventilation
passing through the oven are not representative of the industry in that, in
most installations, the coating room ventilation requirement is much greater
than the requirement for oven makeup air. This statement was verified
through contacts with several vendors of coil coating equipment. Because
all the air that passes through the oven and incinerator must be heated, a
severe energy penalty would be imposed if coil coaters were required to
pass all of the coating room ventilation air through the oven or incinerator.
The NCCA submittal suggested that, with the use of coating rooms and proper
hooding of the coating application stations, a capture efficiency of 95 per-
cent could consistently be achieved.1
Other information submitted by the NCCA indicated that if the emission
limits for a standard are based on the use of incinerators with a 95 percent
eff1Ciency, very few if any of the waterborne coatings available to the
coil coating industry could achieve compliance.* It was earlier learned
that approximately 15 percent of the annual production of coil coated metal
is coated with waterborne coatings. The NCCA and several vendors of coat-
ings for the coil industry stated that the recommended limits were so far
beyond the existing state of the art in low-VOC content coatings that
research and development efforts on these coatings would be stopped. Data
solicited from coating vendors indicate that the VOC content of available
waterborne coatings ranges from 0.07 kilogram/liter (kg/£) of coating
solids to 0.54 kg/* of coating solids and that 90 percent of them are in
the range of 0.11 to 0.28 kg/Jl of coating solids.3 * s e 7 These figures
are in fact well above the recommended limit of 0.07 kg/* of coating solids.
In view of the new data obtained during and subsequent to the NAPCTAC
meeting, it became necessary to consider several additional regulatory
alternatives. A total of five alternatives were considered. These are as
follows:
E-4
-------
I. No NSPS.
II. An emission limit equivalent to an 85 percent overall reduction
in the emissions from the average industry coating formulation.
III. An emission limit the same as Regulatory Alternative II for
plants that use higher VOC content coatings and incineration and
a separate emission limit for plants that use low-VOC content
coatings.
IV. An emission limit equivalent to a 90 percent overall reduction in
the emissions from the average industry coating formulation.
V. An emission limit the same as Regulatory Alternative IV for
plants that use higher VOC content coatings and incineration and
a separate emission limit for plants that use low-VOC content
coatings.
As can be seen, Regulatory Alternatives I and II are the same as those
originally considered. Regulatory Alternative III is the same as Alterna-
tive II for plants that use higher VOC content coatings but also contains a
separate emission limit for plants that use low-VOC content coatings. This
separate limit would be based on the VOC content of existing coatings of
that type.
Regulatory Alternative IV is similar to the original Regulatory Alter-
native III and is based on the use of a 95 percent efficient incinerator
and coating rooms. The capture efficiency of the system is estimated to be
95 percent because all of the coating room ventilation would not be required
to pass through the oven or control device.
Regulatory Alternative V is the same as Alternative IV for plants that
use higher VOC content coatings but also contains a separate emission
limit, based on the VOC content of existing coatings, for plants that use
low-VOC content coatings.
The environmental, energy, and economic impacts of each of the above
regulatory alternatives were evaluated. The results of these evaluations
are presented in the following subsections.
E.2 ENVIRONMENTAL, ENERGY, AND ECONOMIC IMPACTS
The estimated impacts of each of the regulatory alternatives on atmos-
pheric emissions of VOCs are given in Table E-l. The procedures used to
estimate these impacts are the same as those described in Chapter 7. No
other environmental impacts would be expected from any of the regulatory
alternatives.
E-5
-------
TABLE E-l. ESTIMATED ENVIRONMENTAL IMPACTS IN THE FIFTH YEAR (Mg/yr [ton/yr)]
m
i
01
Regulatory
alternative
I.
II.
III.
IV.
V.
No NSPS
(baseline)
85% control
85% control,
separate limit
for waterbornes
90% control
90% control,
separate limit
for waterbornes
Emissions from Reduction in
new plant emissions from
capacity modified plants
+4,570(+5,035)
+3,315(+3,655) -660(-730)
+3,3800-3,725) -625(-690)
+2,210 (+2,435) -1,245(-1,375)
+2,440(+2,690) -1,125(-1,240)
Overall impact
on emissions
+4,570(+5,035)
+2, 655 (+2, 925)
+2,755(+3,035)
+960(+1,060)
+1,315(+1,450)
Emission reduction
relative to baseline
0
-1,915(-2,110)
-1,815(-2,000)
-3,605(-3,975)
-3,250(-3,585)
-------
Tables E-2 and E-3 present the rates of fuel and electrical energy
consumption for uncontrolled coil coating lines and the rates for each
level of control considered in the regulatory alternatives. The data are
presented for each of the model plant sizes. Table E-4 gives the overall
impact on national energy consumption that would result from each of the
regulatory alternatives. The energy impact on individual plants is the
same for Regulatory Alternatives II and III and for Regulatory Alterna-
tives IV and V. The differences in the national energy impact result from
the fact that fewer plants are impacted under Regulatory Alternatives II
and IV than under Regulatory Alternatives III and V, It was assumed that
under Regulatory Alternatives II and IV, no plants would be able to comply
with the standards by using low-VOC content coatings. This assumption
probably results in an overestimate of the energy impacts because it is
likely that some plants could comply with low-VOC content coatings, although
it is not possible to estimate the number of such plants. Under Regulatory
Alternatives III and V it was assumed that 15 percent of the plants could
comply with the standards by using low-VOC content coatings.
The cost and economic analyses of the regulatory alternatives were
made by selecting a specific control methodology by which plants could
achieve compliance with each alternative. The control options selected are
presented in Table E-5. Tables E-6, E-7, and E-8 show, for each model
plant size, the operating parameters for each of the control options that
use control devices.
The installed costs for each of the control systems are given in
Table E-9 for each model plant size. The annual operating costs are given
in Table E-10. The total annualized costs of each control option are given
in Tables E-ll, E-12, and E-13 for small, medium, and large model plants,
respectively. It was assumed that no costs are associated with the use of
low-VOC content coatings as a control technique.
Table E-14 presents the capital costs for a new coil coating line for
each model plant size and gives the capital costs of the emission control
equipment to achieve each level of control considered for plants that use
solvent-borne coatings.
A comparison of the cost data contained in Tables E-9 through E-14
with the corresponding costs for the original regulatory alternatives
E-7
-------
TABLE E-2. RATE OF FUEL ENERGY USAGE OF MODEL COIL COATING LINES1
Level of Control
Model line size
Small
Medium
Large
No emission
control
kW (106Btu/h)
2,100 (7.2)
6,700 (23)
14,000 (48)
64 percent reduction
by incineration at
ovens
kW (106Btu/h)
1,000 (3.4)
3,200 (11)
7,000 (24)
85 percent overall
reduction by incin-
eration at after-
burner
kW (106Btu/h)
1,600 (5.5)
4,700 (16)
10,000 (34)
90 percent overall
reduction by incin
eration at after-
burner with coatini
rooms
kW (106Btu/h)
1,550 (5.3)
4,550 (16)
9,700 (33)
m
i
00
Energy rates during plant operating time.
-------
TABLE E-3. RATE OF ELECTRICAL ENERGY USAGE OF MODEL COATING LINES6
Level of Control
Mode] line size
Small
Medi urn
Large
No emission
control
kW
190
680
1,300
64 percent reduction
by incineration at
ovens
kW
190
680
1,300
85 percent overall
reduction by incin-
eration at after-
burner
kW
300
900
1,800
90 percent overall
reduction by incin
eration at after-
burner with coatini
rooms
kW
300
900
1,800
m
Energy rates during plant operating time.
-------
TABLE E-4. ESTIMATED ANNUAL INCREASE IN NATIONAL FUEL
CONSUMPTION DUE TO INDUSTRY GROWTH5
Regulatory alternative
I. No NSPS
II. 85% control
III. 85% control,
separate waterborne limit
IV. 90% control
V. 90% control ,
separate waterborne limit
Increase in
First year
TJ (billion Btu)
700 (660)
886 (840)
770 (730)
870 (820)
755 (715)
fuel consumption
Fifth year
TJ (billion Btu)
3,500 (3,300)
4,430 (4,200)
3,850 (3,650)
4,340 (4,110)
3,775 (3,575)
Assumptions:
L recon^u?L2ri^eS ^l'"!!.'^'"*'. -"•"•< -dlflyi/
reconstruc
incineration
- ,
US1?S solvent-bo™e coatings install thermal
Pr1mary and secondary
2. Systems with 90 percent control include coating rooms
3' ""^ * C0atin^ r°°ras and
TJ =
(MuO°aF)°n temperature for 85 ^d 90 percent control is 760° C
formulS rath^tT T^"95 meet NSPS limits bV choice of coating
formulation rather than by installation of emission control equipment.
terajoule, 1012 joules.
E-10
-------
TABLE E-5. REGULATORY ALTERNATIVES AND CONTROL OPTIONS
CONSIDERED IN THE ECONOMIC ANALYSIS
Regulatory alternative
Control option
I. No NSPS
(SIP regulations apply)
SIP = CTG limits
SIP = Numerical limits
II. Limiting emissions to the
equivalent of an 85 percent
reduction in the emissions
from the average industry
coating formulation of
40 percent solids and 60
percent VOC
III. Same as II with a separate
limit for waterborne coatings
IV. Limiting emissions to the
equivalent of a 95 percent
reduction in the emissions
from the average industry
coating formulation
V. Same as IV with a separate
limit for waterborne coatings
1.
2.
2.
3.
4.
Multiple zone incinerators
and coating rooms
Thermal incineration with
heat recovery
Thermal incineration with
heat recovery
5.
Thermal incineration with
heat recovery of waterborne
coatings
Thermal incineration with
heat recovery and coating
rooms
Thermal incineration with
heat recovery and coating
rooms or waterborne coat-
ings
E-ll
-------
TABLE E-6. KEY PARAMETERS FOR CONTROL BY MULTIPLE ZONE INCINERATORS
AND COATING ROOMS
Line size
Parameter
Small
Medium
Large
I\J
Oven exhaust temperature
Exhaust volume, each oven
Effectiveness of solvent
capture
Effectiveness of solvent
destruction
Average solvent input
reaching oven
Average heat released by
solvent combustion
Electric power required
above that of standard
ovens
316° C (600° F)
2.4 mVs (5,000 scfm)
95 percent
64 percent
316° C (600° F)
4.7 mVs (10,000 scfm)
95 percent
64 percent
0.016 H/s (15.1 gal/h) 0.048 2,/s (45.4 gal/h)
316° C (600° F)
9.4 m /s (20,000 scfm)
95 percent
64 percent
0.11 £/s (101 gal/h)
720 kW (2.5 MM Btu/h)
Approx. 0
2,200 kW (7.4 MM Btu/h) 4,700 kW (16 MM Btu/h)
Approx. 0
Approx. 0
MM Btu = million Btu/h.
-------
TABLE E-7. KEY PARAMETERS FOR CONTROL BY THERMAL INCINERATION WITH HEAT RECOVERY
Line size
Parameter
Small
Medium
Large
m
t-1
oo
Oven exhaust temperature
Incineration temperature
Exhaust volume, each oven
Primary heat exchanger duty
Secondary heat exchanger
duty
Effectiveness of solvent
capture
Effectiveness of solvent
destruction in incinerator
Average solvent input reaching
oven
Average heat released by
solvent combustion
Electric power required
above that of standard
ovens
Volume of preheated air to
ovens
Temperature of preheated air
to ovens
316° C (600° F)
760° C (1,400° F)
2.4 mVs (5,000 scfm)
1,000 kW (3.5 MM Btu/h)
1,800 kW (6.3 MM Btu/h)
90 percent
95 percent
.014 £/s (13.6 gal/h)
970 kW (3.3 MM Btu/h)
106 kW
4.1 mVs (8,600 scfm)
382° C (720° F)
316° C (600° F)
760° C (1,400° F)
7.1 m3/s (15,000 scfm)
2,900 kW (10 MM Btu/h)
5,600 kW (19 MM Btu/h)
90 percent
95 percent
.043H/s (40.9 gal/h)
316° C (600° F)
760° C (1,400° F)
15.6 ms/s (33,000 scfm)
6,700 kW (23.MM Btu/h)
12,000 kW (42 MM Btu/h)
90 percent
95 percent
.096 Jd/s (90.0 gal/h)
2,900 kW (9.9 MM Btu/h) 6,400 kW (22 MM Btu/h)
225 kW
12 mVs (26,000 scfm)
382° C (720° F)
510 kW
27 m3/s (58,000 scfm)
382° C (720° F)
MM Btu/h = million Btu/h.
-------
TABLE E-8. KEY
PARAMETERS FOR CONTROL BY THERMAL INCINERATION WITH HEAT RECOVERY
AND COATING ROOMS
Line size
Parameter
Small
Medi urn
Large
m
Oven exhaust temperature
Incineration temperature
Exhaust volume, each oven
Primary heat exchanger duty
Secondary heat exchanger
duty
Effectiveness of solvent
capture
Effectiveness of solvent
destruction in incinerator
Average solvent input reaching
oven
Average heat released by
solvent combustion
Electric power required
above that of standard
ovens
Volume of preheated air
to ovens
Temperature of preheated
air to ovens
316° C (600° F)
760° C (1,400° F)
2.4 mVs (5,000 scfm)
1,000 kW (3.5 MM Btu/h)
1,800 kW (6.3 MM Btu/h)
95 percent
95 percent
0.15 £/s (14.4 gal/h)
316° C (600° F)
760° C (1,400° F)
7.1 mVs (15,000 scfm)
2,900 kW (10 MM Btu/h)
5,600 kW (19 MM Btu/h)
95 percent
95 percent
0.46 £/s (43.2 gal/h)
316° C (600° F)
760° C (1,400° F)
15.6 mVs (33,000 scfm)
6,700 kw (23 MM Btu/h)
12,000 kW (42 MM Btu/h)
95 percent
95 percent
0.10 &/s (95.5 gal/h)
1,035 kW (3.5 MM Btu/h) 3,050 KW (10.4 MM Btu/h) 6,700 kW (23 MM Btu/h)
106 kW
4.1 nrVs (8,600 scfm)
382° C (720° F)
22C kW
12 mVs (26,000 scfm)
382° C (720° F)
510 kW
27 mVs (58,000 scfm)
382° C (720° F)
MM Btu/h = million Btu/h.
-------
TABLE E-9. CAPITAL COSTS OF CONTROL OPTIONS
Control option
Multiple zone
incinerators and
coating rooms
Thermal incineration
with heat recovery
Thermal incineration
with heat recovery
and coating rooms
Percent overall
solvent
destruction
64
85
90
Size
model
line
Small
Medium
Large
Small
Medium
Large
Small
Medium
Large
Installed cost,
$l,OOOs
214
289
405
278
548
1,178
388
680
1,322
E-15
-------
TABLE E-10. ANNUAL OPERATING COSTS OF CONTROL OPTIONS
Annual operating costs. $1.000s
Labor,
Control Model line maintenance,
level si/- Electricity Fuel materials Total
64%
Small
Medi urn
Large
0
0
0
(25)
(143)
(304)
10
14
20
(15)
(129)
(284)
85% Small 17 (25) 14 6
Medium 36 (83) 28 (19)
Large 82 (178) 60 (36)
90% Small 17 (26.5) 20 10
Medium 36 (88) 35 (17)
Large 82 (188) 67 (39)
E-16
-------
TABLE E-ll. ANNUALIZED COST OF VOC CONTROL OPTIONS FOR SMALL MODEL LINE
Percent Overall
Control option for overall effectiveness of Annual ized
facilities that use solvent VOC reduction capital costs.
solvent-borne coatings destruction Mg/yr ton/yr $l,OOOs
Multiple zone 64 176 194 37
incinerators and
coating rooms
Thermal incineration 85 235 259 48
with heat recovery
Thermal incineration 90 261 288 68
with heat recovery
and coating rooms
Overall cost
Direct Total annual ized (savings )/unit
cost (savings), cost (savings), VOC removal
$l,OOUs 51,000s $/Mg $/ton
(15) 22 120 110
6 54 230 208
10 78 295 270
Facilities that use waterborne coatings were not considered for add-on controls.
-------
TABLE E-12. ANNUALIZED COSTS OF VOC CONTROL OPTIONS FOR MEDIUM MODEL LINE
m
i
t—i
oo
Percent Overall
Control option for overall effectiveness of Annual ized
facilities that use solvent VOC reduction capital costs,
solvent-borne coatings destruction Mg/yr ton/yr $l,OOOs
Multiple zone 64 530 584 50
incinerators and
coating rooms
Thermal incineration 85 708 780 95
with heat recovery
Thermal incineration 90 787 866 118
with heat recovery
and coating rooms
Direct
cost (savings),
$1.000s
(129)
(19)
(17)
Overall cost
Total annual ized (savings)Ainit
cost (savings), VOC removal
$l,OOOs $/Hg
(79) (149)
76 107
101 122
$/ton
(135)
97
117
Facilities that use waterborne coatings were not considered for add-on controls.
-------
TABLE E-13. ANNUALIZED COSTS OF VOC CONTROL OPTIONS FOR LARGE MODEL LINE
Percent Overall
Control option for overall effectiveness of Annualized
facilities that use solvent VOC reduction capital costs,
solvent-borne coatings destruction Mg/yr ton/yr $l,OOOs
Multiple zone 64 1,060 1,168 70
incinerators and
coating rooms
Thermal incineration 85 1,411 1,556 205
with heat recovery
Thermal incineration 90 1,568 1,729 230
with heat recovery
and coating rooms
Direct
cost (savings),
$l,OOOs
(284)
(36)
(39)
Overall cost
Total annualized (savings)/unit
cost (savings), VOC removal
51,000s $/Mg $/ton
(214) (202) (183)
169 120 109
191 115 110
m
facilities using waterborne coatings were not considered for add-on controls.
-------
TABLE E-14. CAPITAL COSTS OF NEW COIL COATING FACILTIES
Cost item
Mechanical equipment-- line
Ovens
Installation of mechanical
equipment and ovens *
Total basic line cost
Building cost
Total facility cost less
control equipment
Total facility cost,
including control
equipment, to meet
Control Options 1, 2,
and 3a
Control Option 1—64
percent overall
destruction
Control Option 2—85
percent overall
destruction
Control Option 3—90
percent overall
destruction
Costs
Small
2,700
630
1,110
4,440
2.870
7,310
7,520
7,590
7,700
for each size
$l,OOOs
Medium
4,000
800
1,600
6,400
3,870
10,270
10,560
10,820
10,950
model line,
Large
5,150
1,090
2,080
8,320
5,200
13,520
13,920
14,700
14,840
Applicable only to lines that use solvent-borne coatings.
E-20
-------
contained in Tables 8-11 through 8-21 shows that, for plants that use
solvent-borne coatings, the costs associated with Regulatory Alternatives II
and III are the same as the costs associated with the original Regulatory
Alternative II. Such a comparison further shows that, for plants that use
solvent-borne coatings, the costs associated with Regulatory Alternatives IV
and V are the same as the costs associated with the original Regulatory
Alternative III except for a very small difference in fuel consumption.
This difference in fuel consumption is, at most, about 5 percent, and the
difference in total annualized costs is much smaller than 5 percent.
Because these cost differences are well within the estimated accuracy of
the overall data collection and analysis procedures, the economic analyses
described in Chapter 8 are applicable to the regulatory alternatives dis-
cussed in this appendix. The price impacts and the return on investment
(ROI) impacts that were estimated for the original Regulatory Alternative II
are applicable to Regulatory Alternatives II and III for plants that use
solvent-borne coatings, and the impacts estimated for the original Regula-
tory Alternative III are applicable to Regulatory Alternatives IV and V for
plants that use solvent-borne coatings. The difference between the economic
impacts of Regulatory Alternatives II and III is that fewer plants would
have an economic impact under Alternative III than under Alternative II.
This difference occurs because, under Alternative III, some plants could
achieve compliance with the standard by using low-VOC content coatings
rather than switching to solvent-borne coatings and incineration. The
difference between the economic impacts of Regulatory Alternatives IV and V
occurs for the same reason.
The result of these differences is that the national impact on product
price could be up to 15 percent smaller for Regulatory Alternatives III and
V than the values for II and IV, respectively. In Table 8-40, the price
increase estimated to result from the original Regulatory Alternative III
is 3.1 percent. This same price increase is estimated to occur as a result
of Regulatory Alternative IV. Under Regulatory Alternative V, the national
price increase could be reduced to 2.6 percent.
E-21
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E.3 REFERENCES
1. Graziano, Frank D. Statement by the National Coil Coaters Association.
In: National Air Pollution Control Techniques Advisory Committee—Minutes
of Meeting June 4 and 5, 1980. Research Triangle Park, North Carolina,
U.S. Environmental Protection Agency. June 25, 1980. p. 111-14.
2. Reference 1, p. 111-13.
3. Telecon. Wright, Milton, Research Triangle Institute, with Bates,
Jack, Desoto, Incorporated, June 25, 1980. Waterborne coatings for
coil.
4. Telecon. Wright, Milton, Research Triangle Institute, with Miller,
M. W., DuPont, June 26, 1980. Waterborne coatings for coil.
5. Telecon. Wright, Milton, Research Triangle Institute, with Uphoff,
John, Enterprise Chemical Coatings, Inc., June 26, 1980. Waterborne
coatings for coil.
6. Telecon. Wright, Milton, Research Triangle Institute, with Chernich,
Jim, Valspar Corporation, June 26, 1980. Waterborne coatings for
coil.
7. Telecon. Wright, Milton, Research Triangle Institute, with Kinzly,
H. B., Cook Pain and Varnish Company, June 27, 1980. Waterborne
coatings for coil.
E-22
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TECHNICAL REPORT DATA .
(Please read Instructions on the reverse before completing}
1. REPORT NO.
EPA-450/3-8Q-035a
2.
4. TITLE AND SUBTITLE
Metal Coil Surface Coating Industry - Background
Information for Proposed Standards
5. REPORT DATE
October 1980
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
3. PERFORMING ORGANIZATION NAME AND ADDRESS
Office of Air Quality Planning and Standards
U.S. Environmental Protection Agency
Research Triangle Park, NC 27711
10.
11. CONTRACT/GRANT NO.
68-02-3056
12. SPONSORING AGENCY NAME AND ADDRESS
13. TYPE OF REPORT AND PERIOD COVERED
DAA for Air Quality Planning and Standards
Office of Air, Noise, and Radiation
U.S. Environmental Protection Agency
Research Triangle Park.NC 27711
Final
14. SPONSORING AGENCY CODE
EPA/200/04
15. SUPPLEMENTARY NOTES
16. ABSTRACT
This document contains information used as the basis for
developing proposed New Source Performance Standards for the
metal coil surface coating industry. The document includes
an industry description, descriptions of model plants and
regulatory alternatives considered, and environmental, energy,
and economic impact analyses of the regulatory alternatives.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b.lDENTIFIERS/OPEN ENDED TERMS
e. cos AT I Field/Group
Air pollution
Pollution control
Standards of performance
Metal coil
Volatile organic compound
Surface coating
Air Pollution Control
13B
18. DISTRIBUTION STATEMENT
Unlimited
19. SECURITY CLASS (This Report)
Unclassified
21. NO. OF PAGES
234
20. SECURITY CLASS (Thispage)
Unclassified
22. PRICfc
EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION is OBSOLETE
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