Hydrochloric Acid Supply Chain - Executive Summary Hydrochloric Acid Direct Use Chemical Precursor Chemical HCI (liquid) Inputs to Manufacturing Process: Chlorine Hydrogen Organic Chemicals ^ Derivative Water Treatment Chemicals: Ferrous Chloride Polyaluminum Chloride Ferric Chloride Zinc Orthophosphate ^ % of Total Domestic Consumption Attributed to Water Sector: Less than 1% /5\ Understanding Chemical Supply Chains Map of Suppliers & Manufacturers A. Product Family: Chlor-alkali CAS No.: 7647-01-0 2 Shelf Life: 12-24 Months — RISK OF SUPPLY DISRUPTION (Assessed in 2022) RISK RATING: Moderate-Low RISK DRIVERS Hydrochloric acid production is directly dependent on chlorine. It is primarily produced as a co- or byproduct in the manufacturing of chlorinated derivative chemi- cals. Demand for chlorine and chlorine derivative products, as well as demand for end uses has resulted in supply disruptions. RISK PARAMETERS Criticality: High. Essential for pH adjustment and production of water treatment chemicals. Likelihood: High. Previous regional disruptions in supply that impacted the water sector. Vulnerability: Low. Distributed domestic manufacturing and supply. MANUFACTURING PROCESS Water Treatment Applications Organic Chemicals Chlorine Hydrogen Hydrochloric Acid Input End Use pH Adjustment Ion-exchange resin regeneration Water treatment chemical production Other Applications Oil and gas well acidizing Steel pickling Chemical production Ore processing DOMESTIC PRODUCTION AND CONSUMPTION, AND INTERNATIONAL TRADE Domestic Manufacturing Locations (2015): 94, distributed throughout the U.S. (^) International Trade (2019) PrimaryTrading Partner (Imports): Canada PrimaryTrading Partner (Exports): Canada Domestic Consumption (2019): 1,458 M kg I Domestic Production (1,212 M kg) ¦ Imports for Consumption (308 M kg) I Export of Domestic Production (61 M kg) &EPA ------- Hydrochloric Acid Supply Chain - Full Profile Product Description Hydrochloric acid (HCI) is an inorganic, strong acid that is widely used for pH adjustment. It is a key input in the commercial manufacture of several other water treatment chemicals. Hydrochloric acid is primarily manufactured as a byproduct of manufacturing chlorinated organic chemicals or through combination of the chlor-alkali co-products chlorine and hydrogen. The majority of hydrochloric acid manufactured in the U.S. is used in oil and gas well acidification, steel pickling, and food manufacturing. Use in Water Treatment Hydrochloric acid is used in water treatment for pH adjustment and the regeneration of ion-exchange resins. Use as a Precursor to Other Water Treatment Chemicals Hydrochloric acid is used to manufacture ferrous chloride, ferric chloride, polyaluminum chloride, and zinc orthophosphate. Other Applications Hydrochloric acid has a wide range of applications. The leading uses of hydrochloric acid are steel pickling, oil well acidification, food manufacturing, ore processing, and organic and inorganic chemical production (OxyChem, 2018). Primary Industrial Consumers In 2011, the use of hydrochloric acid in oil and gas well acidification accounted for 30% of domestic consumption, followed by steel pickling and food processing, which each accounted for 19% of domestic consumption. A variety of other applications including organic chemical production, ore processing, and water treatment applications accounted for the remaining 32%. While the percentage of consumption accounted for by water treatment is unknown, it is believed to be less than 1% based on estimates of other uses (McCoy, 2012; NCBI, 2021). Manufacturing, Transport, & Storage Manufacturing Process Over 90% of hydrochloric acid is produced as a byproduct from the production of chlorinated solvents, fluorocarbons, isocyanates, organics, magnesium, and vinyl chloride monomer. Hydrochloric acid is produced as a gas, generally referred to as hydrogen chloride, while the solution is more commonly referred to as hydrochloric acid, however the terms are often used interchangeably. Hydrogen chloride gas is readily absorbed by water. As chlorination of an organic compound takes place, the hydrogen chloride-containing gas stream goes to an absorption tower where concentrated hydrochloric acid is produced by absorption of hydrogen chloride gas into a weak solution of hydrochloric acid. Less than 10% of U.S. hydrochloric acid production is made by the direct reaction of hydrogen and chlorine, generally referred to as the thermal method (EPA, 2019; NCBI, 2021; OxyChem, 2018). Both manufacturing methods, depicted in Figure 1, depend on the chlor-alkali industry for inputs. EPA 817-F-22-029 | December 2022 SEPA ------- Hydrochloric Acid Supply Chain - Full Profile Hydrochloric Acid Produced as a Byproduct of Chlorination of Aliphatic Hydrocarbons Chloromethane + Chlorine —> Chloroform + Hydrochloric Acid CH3CI + 2CI2 -> CHCI3 + 2HCI Hydrochloric Acid Produced from the Reaction of Hydrogen and Chlorine Hydrogen + Chlorine —> Hydrochloric Acid H2 + Cl2 -> 2HCI Figure 1. Chemical Equation for the Reaction to Manufacture Hydrochloric Acid Product Transport Hydrochloric acid can be transported in bulk or smaller containers by truck, rail, barge, and ship (OxyChem, 2018). Storage and Shelf Life Hydrochloric acid is a highly corrosive and hazardous chemical, and should be stored in non-reactive storage vessels at room temperature in a dry, cool place. When stored properly, hydrochloric acid can have a shelf life of 12 to 24 months, depending on concentration and size of storage container (NCBI, 2021). Domestic Production & Consumption Domestic Production Production data was collected from 2020 EPA Chemical Data Reporting (CDR), while trade data was collected from the U.S. International Trade Commission (USITC) Dataweb, as shown in Table 1. Both production and trade data are specific to hydrochloric acid. Table 1. Hydrochloric Acid Production and Trade Data Sources Production and Trade Data Category Data Source Identifier Description Domestic Production 2020 TSCA Chemical Data Reporting CAS No.: 7647-01-0 Hydrochloric acid Imports and Exports U.S. International Trade Commission HS Code: 2806.10 Hydrochloric Acid Total U.S. domestic production of hydrochloric acid was approximately 1,212 million kilograms (M kg) in 2019 (EPA, 2020). A substantial portion of domestic commercial manufacture of hydrochloric acid is integrated into production of other chemicals such as dichloroethane and vinyl chloride for polyvinyl chloride production (USITC, 1992). Many chemical manufacturers produce hydrochloric acid and subsequently use it as an intermediary in chemical production (EPA, 2003; McCoy, 2012). Some of the primary manufacturing locations in the U.S. are owned by Shintech, Formosa Plastics Corporation, and Superior Plus US Holdings Inc. The number of domestic manufacturing locations shown in Figure 2 represents operating facilities as of 2015 (EPA, 2016). Supply of NSF/ANSI Standard 60 certified hydrochloric acid for use in drinking water treatment is widely distributed throughout the U.S. (NSF International, 2021). For a more current listing of manufacturing locations and supplier locations, visit the U.S. Environmental Protection Agency's (EPA's) Chemical Locator Tool (EPA, 2022a). 2 f/EPA ------- Hydrochloric Acid Supply Chain - Full Profile CP Qt o ?o Ir" O m* * V"*" Q> m V Be1 0 o o o 0 O ° di o (b # _c* <9 __ * e> • o a • 6-» O: O . ) CD° Domestic Supply and Manufacturing of Hydrochloric Acid O 75 NSF/ANSI Standard 60 Certified Suppliers (NSF International, 2021) © 94 Domestic Manufacturing Locations (EPA Chemical Data Reporting, 2016) Figure 2. Domestic Supply and Manufacturing of Hydrochloric Acid Domestic Consumption U.S. consumption of hydrochloric acid in 2019 is estimated at 1,458 M kg. This estimate includes production of 1,212 M kg, import of 308 M kg, minus export of 61 M kg (EPA, 2020; USITC, 2021), as shown in Figure 3. Domestic Consumption (2019): 1,458 M kg ¦ Domestic Production (1,212 M kg) ¦ Imports for Consumption (308 M kg) ¦ Export of Domestic Production (61 M kg) Figure 3. Domestic Production and Consumption of Hydrochloric Acid in 2019 Trade & Tariffs Worldwide Trade Worldwide import and export data for hydrochloric acid are reported through the World Bank's World Integrated Trade Solutions (WITS) software, as a category specific to hydrochloric acid. In 2021, the U.S. ranked tenth worldwide in total exports and first in total imports of hydrochloric acid. In 2021, Germany ranked first 3 svEPA ------- Hydrochloric Acid Supply Chain - Full Profile worldwide in total exports (WITS, 2022), as shown in Table 2. Table 2. WITS Worldwide Export and Import of Hydrochloric Acid in 2021 2021 Worldwide Trade Hydrochloric Acid (HS Code 2806.10) Top 5 Worldwide Exporters Top 5 Worldwide Importers Germany 615 M kg United States 328 M kg Canada 317 M kg Germany 250 M kg Belgium 257 M kg France 242 M kg Netherlands 171 M kg Netherlands 237 M kg Flungary 138 M kg Belgium 145 M kg Domestic Imports and Exports Domestic imports and export data are reported by USITC in categories specific to hydrochloric acid. Figure 4 summarizes imports for consumption1 and domestic exports2 of hydrochloric acid between 2015 and 2020. During this period, the overall quantity of exports and imports remained steady, with imports for consumption exceeding domestic exports. Over this five-year period, Canada was the primary recipient of domestic exports and the primary source of imports (USITC, 2021). 400 350 300 250 200 150 100 50 0 Domestic Trade of Flydrochloric Acid HS Code 2806.10 2015 2016 2017 2018 2019 2020 I Imports from Canada I Imports from Germany Imports from Other Countries I Exports to Canada Exports to Mexico Exports to Other Countries Figure 4. USITC Domestic Import and Export of Hydrochloric Acid between 2015 and 2020 1 Imports for consumption are a subset of general imports, representing the total amount cleared through customs and entering consumption channels, not anticipated to be reshipped to foreign points, but may include some reexports. 2 Domestic exports are a subset of total exports, representing export of domestic merchandise which are produced or manufactured in the U.S. and commodities of foreign origin which have been changed in the U.S. 4 f/EPA ------- Hydrochloric Acid Supply Chain Tariffs There is no general duty for import of hydrochloric acid, however there is an additional 25% duty on from China (USITC, 2022), as summarized in Table 3. Table 3. 2020 Domestic Tariff Schedule for Hydrochloric Acid HS Code General Duty Additional Duty - China (Section 301 Tariff List) Special Duty 2806.10 None 25% None Market History & Risk Evaluation History of Shortages Production of hydrochloric acid is highly dependent on demand for chemicals which produce hydrochloric acid as a co- or byproduct. Demand slowed considerably during the Great Recession of 2007-2009, which resulted in reduced production and a shortage of hydrochloric acid in 2011 (McCoy, 2012). Historically the purchase price of hydrochloric acid has been impacted by fluctuations in the price of oil and growth or contraction of steel manufacturing activities, while availability has been tightly tied to availability of chlorine and demand for the other chemical products for which hydrochloric acid is an integrated co- or byproduct. The COVID-19 pandemic also impacted the price and availability of hydrochloric acid. In 2020-2021, there was a sharp falloff in demand for hydrochloric acid in oilfields and steel manufacturing. As crude oil prices dropped in 2020, drilling activity decreases, which in turn reduced the demand for hydrochloric acid. Additionally, temporary shutdowns of factories for cleaning or reorganization to maintain social distancing led to a drop in demand for steel (Bowen, 2020). The tight market for chlorine during this period also played a role in the shortage of hydrochloric acid. Risk Evaluation The complete risk evaluation methodology is described in Understanding Water Treatment Chemical Supply Chains and the Risk of Disruptions (EPA, 2022b). The risk rating is calculated as the product of the following three risk parameters: Risk = Criticality x Likelihood x Vulnerability Criticality Measure of the importance of a chemical to the water sector Likelihood Measure of the probability that the chemical will experience a supply disruption in the future, which is estimated based on past occurrence of supply disruptions Vulnerability Measure of the market dynamics that make a chemical market more or less resilient to supply disruptions The individual parameter rating is based on evaluation of one or more attributes of the chemical or its supply chain. The ratings and drivers for these three risk parameters are shown below in Table 4. - Full Profile imports 5 f/EPA ------- Hydrochloric Acid Supply Chain - Full Profile Table 4. Supply Chain Risk Evaluation for Hydrochloric Acid Risk Parameter Ratings and Drivers 1 Criticality High 1 1 Likelihood High 1 1 Vulnerability Low 1 Hydrochloric acid has widespread application for pH adjustment. It is a precursor in the production of several other critical water treatment chemicals. The water sector has experienced regional hydrochloric acid supply disruptions in the past. In 2020 disruptions in the supply of hydrochloric acid occurred due to a decrease in demand for chemicals in industries that produce hydrochloric acid as a byproduct and disruptions in the supply of chlor-alkali chemicals needed to produce hydrochloric acid. Strong domestic manufacturing capabilities and a distributed manufacturing base provide some resilience to supply disruptions. Risk Rating: Moderate-Low J O 1 a ,aXe-Low Moderaf ^<«e "a"£e 'e/> r\ t i oo References Bowen, Bill, 2020. Independent Commodity Intelligence Services. US HCI dealt second major demand blow as steel production plummets. Independent Commodity Intelligence Services, April 16, 2020, retrieved from https://www.icis.com/explore/resources/news/2020/04/16/10497Q88/us-hcl-dealt-second-maior- demand-blow-as-steel-production-plummets/ EPA, 2003. Economic Impact Analysis of the Hydrochloric Acid (HCI) Production NESHAP: Final Report, retrieved from https://www3.epa.gov/ttnecasl/docs/eia ip/hcl-acid eia neshap final 02-2003.pdf EPA, 2016. 2016 TSCA Chemical Data Reporting, retrieved from https://www.epa.gov/chemical-data- reporting/access-cdr-data#2016 EPA, 2019. Toxics Release Inventory Guidance for Reporting Hydrochloric Acid (acid, aerosols including mists, vapors, gas, fog, and other airborne forms of any particle size), retrieved from https://ordspub.epa.gov/ords/guideme ext/f?p=guideme:gd:::::gd:hcl EPA, 2020. 2020 TSCA Chemical Data Reporting, retrieved from https://www.epa.gov/chemical-data- reporting/access-cdr-data#2020 EPA, 2022a. Chemical Suppliers and Manufacturers Locator Tool, retrieved from https://www.epa.gov/waterutilitvresponse/chemical-suppliers-and-manufacturers-locator-tool EPA, 2022b. Understanding Water Treatment Chemical Supply Chains and the Risk of Disruptions, retrieved from https://www.epa.gov/waterutilityresponse/risk-disruptions-supplv-water-treatment-chemicals McCoy, Michael, 2012. The Hunt is on for Hydrochloric Acid. Chemical & Engineering News, 90(6), retrieved 6 f/EPA ------- Hydrochloric Acid Supply Chain - Full Profile from https://cen.acs.org/articles/90/i6/Hunt-Hydrochloric-Acid.html NSF International, 2021. Search for NSF Certified Drinking Water Treatment Chemicals, retrieved from https://info.nsf.org/Certified/PwsChemicals/ National Center for Biotechnology Information (NCBI), 2021. PubChem Compound Summary for CID 313, Hydrochloric acid, retrieved from https://pubchem.ncbi.nlm.nih.gov/compound/Hvdrochloric-acid OxyChem, 2018. Hydrochloric Acid Handbook, retrieved from https://www.oxy.com/globalassets/documents/chemicals/products/chlor- alkali/hydrochloric acid handbook.pdf U.S. International Trade Commission (USITC), 1992. Industry & Trade Summary: Inorganic Acids, retrieved from https://www.usitc.gov/publications/other/pub2509.pdf U.S. International Trade Commission (USITC), 2021. USITC DataWeb, retrieved from https://dataweb.usitc.gov/ U.S. International Trade Commission (USITC), 2022. Harmonized Tariff Schedule (HTS) Search, retrieved from https://hts.usitc.gov/current World Integrated Trade Solutions (WITS), 2022. Trade Statistics by Product (HS 6-digit), retrieved from https://wits.worldbank.org/trade/countrv-bvhs6product.aspx?lang=en#void 7 f/EPA ------- |