Phosphoric Acid Supply Chain - Executive Summary Phosphoric Acid Direct Use Chemical Precursor Chemical H3PO4 (liquid) Inputs to Manufacturing Process: Phosphate Rock Sulfuric Acid ^ Derivative Water Treatment Chemicals: * Orthophosphates Polyphosphates % of Total Domestic Consumption Attributed to Water Sector: Less than 1% (Sb Understanding Chemical Supply Chains Map of Suppliers & Manufacturers ^ Product Family: Phosphate CAS No.: 7664-38-2 2 Shelf Life: 60 Months — RISK OF SUPPLY DISRUPTION (Assessed in 2022) RISK RATING: Moderate-High I nil/ Mnrln.. RISK DRIVERS Competing use in fertilizers accounts for the majority of con-sumption of domestic production. Other uses of phosphoric acid may rely on import. Access to a key input (phosphate rock) on the inter-national market may be challenging. RISK SCORE PARAMETERS Criticality: High. Essential for pH ad- justment, corrosion control, and production of water treatment chemicals. Likelihood: High. Previous disruptions in supply that impacted the water sector. Concerns over access to manufac-turing inputs. Vulnerability: Low. Distributed domestic manufacturing and supply. Consumption of domestic production dominated by use in fertilizer. MANUFACTURING PROCESS Phosphate Rock Sulfuric Acid ] Phosphoric Acid Input End Use Water Treatment Applications • pH adjustment • Corrosion control • Water treatment chemical production Other Applications • Fertilizer • Food and beverage production • Livestock food • Cleaning agents • Sugar refining DOMESTIC PRODUCTION AND CONSUMPTION, AND INTERNATIONAL TRADE Domestic Manufacturing Locations (2019): 19, distributed throughout the U.S. (^) International Trade (2019) Primary Trading Partner (Imports): Canada Primary Trading Partner (Exports): Mexico Domestic Consumption (2019): 7,522 M kg I Domestic Production (8,117 M kg) ¦ Imports for Consumption (288 M kg) ¦ Export of Domestic Production (883 M kg) &EPA ------- Phosphoric Acid Supply Chain - Full Profile ProductDescription Phosphoric acid (H3P04) is an inorganic, strong acid that is widely used for pH adjustment and is a key input in the production of all phosphate derivative chemicals. Phosphoric acid is domestically manufactured primarily through the wet acid process. The majority of phosphoric acid manufactured in the U.S. is used in fertilizer formulations. UseinWaterTreatment Phosphoric acid is used in water treatment for pH adjustment and corrosion control (AWWA, 2016). UseasaPrecursortoOtherWaterTreatmentChemicals Phosphoric acid is used to manufacture phosphate-derived products including all orthophosphates and polyphosphates. OtherApplications Phosphoric acid has a wide range of applications, but is predominantly used in fertilizer formulations. Other uses include pH adjustment for food and beverage processing, livestock food, cleaning agent formulation, sugar refining, and synthetic phosphate manufacturing (NCBI, 2021; Shriver and Atkins, 2010; USDA, 2021). Primarylndustrial Consumers The use of phosphoric acid for fertilizer manufacturing accounts for consumption of approximately 85% of the phosphoric acid produced (Shriver and Atkins, 2010). Other significant uses are in food and beverage processing, sugar refining, and as a source of phosphate detergent in cleaning applications (USDA, 2021). Direct use in water treatment and use as a starting material in producing phosphate derivative products for water treatment are a small percent (< 1%) of the domestic market. Manufacturing;Transport,&Storage ManufacturingProcess Phosphoric acid can be produced from minerals (such as fluorapatite) through the wet acid process, or from elemental phosphorous using the thermal process. Historically, the wet method was only used to manufacture phosphoric acid for fertilizer production and other non-technical applications. Applications requiring a higher purity phosphoric acid, including food- and technical-grade phosphoric acid, require additional purification steps or a different production method. In recent years, further development of the wet acid method, including a solvent-based extraction, have allowed this method to become the dominant North American technology to manufacture purified phosphoric acid, however the electric furnace (thermal) method may also be used to produce food- or technical-grade phosphoric acid (Innophos, 2011; Mosaic, 2021; Potash, 2015). Using the wet acid method, phosphoric acid is produced by reacting sulfuric acid with finely ground phosphate rock. Gypsum formed in this reaction is filtered out of the solution and the hydrogen fluoride vapors may be recovered. The chemical reaction of the wet acid method is shown in Figure 1. The production of phosphoric acid via the wet acid method relies heavily on significant quantities of sulfuric acid. Commercially, it is economical to produce sulfuric acid on-site from sulfur. Many phosphoric acid producers therefore also produce sulfuric acid. The wet process produces a dilute phosphoric acid which is subsequently concentrated and sold as an industrial grade product typically used in fertilizer or further concentrated and processed to produce a high purity product. This process may limit the quantity of high purity product that can be produced. EPA 817-F-22-036 | December 2022 SEPA ------- Phosphoric Acid Supply Chain - Full Profile Phosphate Rock + Sulfuric Acid — > Phosphoric Acid + Gypsum + Hydrogen Fluoride CasfPCU^F + 5H2S04 - >• 3H3P04 + 5CaS04 + HF Figure 1. Chemical Equation for the Reaction to Manufacture Phosphoric Acid Product Transport Phosphoric acid is typically sold as a liquid in a range of concentrations, and primarily delivered by specialized rail cars to suppliers who repackage and sell the product directly to customers. Transport of phosphoric acid must adhere to the appropriate methods and regulations related to its status as a highly corrosive substance (AWWA, 2016; CORECHEM, 2017). Storage and Shelf Life Phosphoric acid should be stored in corrosion-resistant vessels in a cool place away from direct sunlight. When stored properly, phosphoric acid can have a shelf life of 60 months, depending on concentration and size of storage container (CORECHEM, 2017). Domestic Production & Consumption Domestic Production Production data was collected from the EPA Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR), for the year 2019, while trade data was collected from the U.S. International Trade Commission (USITC) Dataweb, as characterized in Table 1. While production data is specific to phosphoric acid, trade data includes phosphoric acid and polyphosphoric acid, a polymerized form of phosphoric acid more common in solution at very high concentrations (USDA, 2021). Table 1. Phosphoric Acid Production and Trade Data Sources Production and Trade Data Category Data Source Identifier Description Domestic Production 2020 TSCA Chemical Data Reporting CAS No.: 7664-38-2 Phosphoric Acid Imports and Exports U.S. International Trade Commission HS Code: 2809.20 Phosphoric Acid and Polyphosphoric Acid otal U.S. domestic manufacturing of phosphoric acid was approximately 8,117 million kilograms (M kg) in 2019 (EPA, 2020a). The majority of domestic commercial manufacture of phosphoric acid takes place at phosphate rock processing facilities located throughout the contiguous U.S. Many of these facilities are owned by a relatively small number of companies including the Mosaic Company (Mosaic), PCS Phosphate, and J.R. Simplot (EPA, 2020a). Mosaic reported production of approximately 3,900 M kg of phosphoric acid in 2019, with a capacity of 4,500 M kg, which they estimate as approximately 58% of North American annual capacity. Mosaic ships phosphate rock concentrate from Peru to their Louisiana processing facility for production of phosphoric acid and fertilizers (Mosaic, 2021). The number of domestic manufacturing locations shown in Figure 2 represents operating facilities as of 2015. Supply of NSF/ANSI Standard 60 certified phosphoric 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 &EPA ------- Phosphoric Acid Supply Chain - Full Profile <5 o o o, o #o % o o r Q>o w o o - ¦ i o . : °o v- V OO ^ Q Domestic Supply and Manufacturing of Phosphoric Acid O 93 NSF/ANSI Standard 60 Certified Suppliers (NSF International, 2021) 0 19 Domestic Manufacturing Locations (EPA Chemical Data Reporting, 2016) Figure 2. Domestic Supply and Manufacturing of Phosphoric Acid Domestic Consumption U.S. consumption of phosphoric acid in 2019 is estimated at 7,522 M kg. This includes production of 8,117 M kg, import of 288 M kg, minus export of 883 M kg (EPA, 2020a; USITC, 2021), as shown in Figure 3. • Domestic Consumption (2019): 7,522 M kg ¦ Domestic Production (8,117 M kg) M Imports for Consumption (288 M kg) ¦ Export of Domestic Production (883 M kg) Figure 3. Domestic Production and Consumption of Phosphoric Acid in 2019 Trade & Tariffs Worldwide Trade Worldwide import and export data for phosphoric acid are reported through the World Bank's World Integrated 3 &EPA ------- Phosphoric Acid Supply Chain - Full Profile Trade Solutions (WITS) software, as a category specific to phosphoric acid and polyphosphoric acid. In 2021, U.S. ranked first worldwide in total exports and seventh in total imports of phosphoric acid. In 2021, India ranked first worldwide in total imports (WITS, 2022), as shown in Table 2. Table 2. WITS Worldwide Export and Import of Phosphoric Acid in 2021 2021 Worldwide Trade Phosphoric Acid and Polyphosphoric Acid (HS Code 2809.20) Top 5 Worldwide Exporters Top 5 Worldwide Importers United States 500 M kg India 6,592 M kg Senegal 478 M kg Pakistan 711 M kg Belgium 302 M kg Turkey 476 M kg Netherlands 210 M kg Belgium 376 M kg European Union 182 M kg Spain 336 M kg Domestic Imports and Exports Domestic import and export data are reported by USITC in categories specific to phosphoric acid and polyphosphoric acid. Figure 4 summarizes imports for consumption1 and domestic exports2 of phosphoric acid and polyphosphoric acid between 2015 and 2020. During this period, the volume of exports and imports fluctuated, with domestic exports consistently exceeding imports for consumption. Over this five-year period, Mexico and Canada were the primary recipients of domestic exports while Canada was the primary source of imports (USITC, 2021). Domestic Trade of Phosphoric Acid and Polyphosphoric Acid 1000 HS Code 2809.20 900 800 700 600 i? 500 2015 2016 2017 2018 2019 2020 ¦ Imports from Canada ¦ Exports to Mexico ¦ Imports from Japan ¦ Exports to Canada ¦ Imports from Other Countries Exports to Other Countries Figure 4. USITC Domestic Import and Export of Phosphoric Acid and Polyphosphoric 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 &EPA ------- Phosphoric Acid Supply Chain - Full Profile Tariffs There is no general duty for import of phosphoric acid, however there is an additional 25% duty on imports from China (USITC, 2022), as summarized in Table 3. Table 3. Domestic Tariff Schedule for Phosphoric Acid in 2020 HS Code General Duty Additional Duty-China (Section 301 Tariff List) Special Duty 2809.20 None 25% None Market History & Risk Evaluation History of Shortages The majority (approximately 85%) of domestically produced phosphoric acid is used to produce fertilizers. This may lead domestic suppliers of phosphoric acid and domestic manufacturers of phosphate-based chemicals other than fertilizer to rely on import of phosphoric acid from other countries which produce high purity phosphoric acid required for their formulations. High purity phosphoric acid produced from phosphate rock found in Morocco, Saudi Arabia, Peru, and other locations, is thought to be domestically competitive with domestically produced phosphoric acid (EPA, 2020b). Phosphoric acid suppliers and manufacturers, and suppliers of phosphoric acid derivative chemicals such as orthophosphates and polyphosphates may encounter persistent challenges in acquiring phosphoric acid on the international market, which may be impacted by trade barriers, international events, and natural disasters. Between 2020 and 2022, the disruptions in international trade caused by the COVID-19 pandemic severely challenged domestic phosphoric acid supply. Risk Evaluation The complete risk assessment 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. 5 &EPA ------- Phosphoric Acid Supply Chain - Full Profile Table 4. Supply Chain Risk Evaluation for Phosphoric Acid Risk Parameter Ratings and Drivers l 1 1 Criticality High 1 Likelihood High 1 1 Vulnerability Low 1 Phosphoric acid is essential to the water sector for pH adjustment and corrosion control. It is a precursor in the production of numerous critical water treatment chemicals. The water sector has experienced regional phosphoric acid supply disruptions in the past. Concerns are primarily due to increased competition and reliance on imports for raw material (phosphate rock). Strong domestic manufacturing provides some resilience to supply disruptions. Flowever, the majority of domestic manufacturing is intended for fertilizer. Phosphoric acid for other uses may rely on imports. Risk Rating: Moderate-High £ ° i te-L°W t Ranee 'e/> r\ % t o 00 1 References American Water Works Association (AWWA), 2016. B507 Phosphoric Acid. Denver, CO: American Water Works Association. CORECHEM, 2017. Phosphoric Acid Safety Data Sheet, retrieved from https://corecheminc.com/product/phosphoric-acid-85-solution/ EPA, 2016. 2016 TSCA Chemical Data Reporting, retrieved from https://www.epa.gov/chemical-data- reporting/access-cdr-data#2016 EPA, 2020a. 2020 TSCA Chemical Data Reporting, retrieved from https://www.epa.gov/chemical-data- reporting/access-cdr-data#2020 EPA, 2020b. 2015 Comment on the U.S. Environmental Protection Agency's Proposed Rule Entitled "Phosphoric Acid Manufacturing and Phosphate Fertilizer Production RTR and Standards of Performance for Phosphate Processing," submitted by PCS Phosphate Company, Inc., retrieved from https://www.regulations.gov/document/EPA-FIQ-OAR-2020-0016-0019 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-supply-water-treatment-chemicals Innophos, Inc., 2011. Form 10-K2010, retrieved from https://www.sec.gov/Archives/edgar/data/1364099/000136409916000Q53/iphsl0kl23115.htm 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 1004, 6 &EPA ------- Phosphoric Acid Supply Chain - Full Profile phosphoric acid, retrieved from https://pubchem.ncbi.nlm.nih.gov/compound/1004 Potash Corporation of Saskatchewan, Inc. (Potash), 2015. Form 10-K2014, retrieved from https://www.sec.gov/Archives/edgar/data/855931/000119312515062Q91/d863198dl0k.htm Shriver DF, Atkins PW. 2010. Inorganic Chemistry. 5th ed. New York (NY): W.FI. Freeman and Company. The Mosaic Company (Mosaic), 2021. 2020 Annual Report, retrieved from https://investors.mosaicco.com/financials/annual-reports/default.aspx U.S. Department of Agriculture (USDA), 2021. Phosphoric Acid: Handling/Processing, retrieved from https://www.ams.usda.gov/sites/default/files/media/USDAHandlingPhosphoricAcid.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/ 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 &EPA ------- |