Sodium Hydroxide Supply Chain - Executive Summary Sodium Hydroxide Direct Use Chemical Precursor Chemical NaOH (liquid) Inputs to Manufacturing Process: Sodium Chloride Derivative Water Treatment Chemicals: Aluminum Hydroxide Monosodium Phosphate Calcium Hypochlorite Disodium Phosphate Sodium Hypochlorite Sodium Silicate Sodium Chlorite % of Total Domestic Consumption Attributed to Water Sector: Approximately 3% (^Understanding Chemical Supply Chains Map of Suppliers & Manufacturers w Product Family: Chlor-alkali CAS No.: 1310-73-2 2 Shelf Life: 24 Months — RISK OF SUPPLY DISRUPTION (Assessed in 2022) RISK RATING: Moderate-High Low Moderat RISK DRIVERS Sodium hydroxide is co-produced with chlorine through the chlor- alkali process, and demand for chlorine generally drives chlor- alkali production output. This can create an uneven supply of sodi- um hydroxide. Furthermore, un- planned and planned chlor-alkali production outages have result- ed in supply disruptions. RISK PARAMETERS Criticality: High. Essential for pH adjustment and production of water treat- ment chemicals. Likelihood: High. Previous local disrup- tions in supply that impacted the water sector. Vulnerability: Low. Distributed domestic manufacturing and supply. Loss of produc- tion capacity could increase vulnerability. MANUFACTURING PROCESS Sodium Chloride Sodium Hydroxide Input End Use Water Treatment Uses • pH adjustment • Precipitation of metals Water treatment chemical production Competing Uses • Inorganic and organic chemicals • Pulp and paper • Alumina production • Neutralizing agent DOMESTIC PRODUCTION AND CONSUMPTION, AND INTERNATIONAL TRADE Domestic Manufacturing Locations (2019): 41, distributed throughout the U.S. (^) International Trade (2019) PrimaryTrading Partner (Imports): Taiwan PrimaryTrading Partner (Exports): Brazil Domestic Consumption (2019): 6,046 Million kg ¦ Domestic Production (11,627 M kg) ¦ Imports for Consumption (792 M kg) ¦ Export of Domestic Production (6,373 M kg) &EPA ------- Sodium Hydroxide Supply Chain - Full Profile Product Description Sodium hydroxide (NaOH) is an inorganic, strong base that is widely used for pH adjustment. It is a foundational product of the chlor-alkali industry, primarily manufactured through electrolysis of a sodium chloride brine. The majority of sodium hydroxide manufactured in the U.S. is used in organic and inorganic chemical production. Use in Water Treatment Sodium hydroxide is used in water treatment for pH adjustment and precipitation of metals (AWWA, 2019; NCBI, 2020). Use as a Precursor to Other Water Treatment Chemicals Sodium hydroxide is used to manufacture aluminum hydroxide, calcium hypochlorite, sodium hypochlorite, sodium chlorite, mono- and disodium phosphate, and sodium silicate. Other Applications Sodium hydroxide has a wide range of applications. The leading uses of sodium hydroxide in North America are inorganic and organic chemical manufacturing, and pulp and paper manufacturing. Other applications include manufacturing of soap, bleach, plastics, pharmaceuticals, and alumina production. Sodium hydroxide is also used as a neutralizing agent in many industrial applications, including the manufacturing of synthetic materials (NCBI, 2020; IHS Markit, 2017; Westlake Corporation, 2018). Primary Industrial Consumers In 2015, the use of sodium hydroxide for organic chemical synthesis accounted for 23% of North American consumption, followed by pulp and paper manufacturing and inorganic chemical production, which each accounted for 22% of North American consumption. A variety of specialty applications including alumina production accounted for the remaining 33%. All water treatment applications, including wastewater treatment and drinking water treatment, account for 3% of North American consumption (IHS Markit, 2017). Manufacturing, Transport, & Storage Manufacturing Process Sodium chloride is the primary raw material used to produce sodium hydroxide. The majority of sodium hydroxide is produced using the chlor-alkali process, which involves passing a direct electric current through a sodium chloride brine (i.e., electrolysis), converting chloride ions to elemental chlorine at the anode while sodium ions and hydrogen gas collect at the cathode to react and form sodium hydroxide (The Chlorine Institute, 2014). The general equation for this process is shown in Figure 1. Sodium hydroxide is separated from the solution using one of the following three methods: (1) the diaphragm method; (2) the membrane method; or (3) the mercury cell method. The diaphragm method is the most common separation process used in North America (The Chlorine Institute, 2014; Westlake Corporation, 2018). Sodium Chloride Brine -> Chlorine Gas + Hydrogen Gas + Sodium Hydroxide 2NaCI + 2H20 -> Cl2 + H2 + 2NaOH ; 4, Anode Cathode Cathode Figure 1. Chemical Equation for the Reaction to Manufacture Sodium Hydroxide EPA 817-F-22-046 | December 2022 svEPA ------- Sodium Hydroxide Supply Chain - Full Profile Sodium hydroxide can also be produced from trona; the primary, natural source of sodium carbonate in North America. Sodium hydroxide manufactured from trona is formed when sodium carbonate is combined with a lime (calcium hydroxide) solution in a precipitation reaction forming a sodium hydroxide solution and calcium carbonate precipitate (Eldoma et al., 2013; Genesis Alkali, 2017). Product Transport Sodium hydroxide can be transported in bulk or smaller containers by truck, rail, barge, and ship (Westlake Corporation, 2018). Storage and Shelf Life Sodium hydroxide is highly reactive and corrosive, and thus should be stored in non-reactive storage vessels at room temperature in a dry, cool place to avoid solidification. When stored properly, sodium hydroxide in solution can have a shelf life of 24 months, depending on concentration and size of storage container (CORECHEM, 2017; Puritan Products, 2017). Domestic Production & Consumption Domestic Production Production data was collected from the Chlorine Institute, while trade data was collected from the U.S. International Trade Commission (USITC) Dataweb, as characterized in Table 1. Both production data and trade data are specific to sodium hydroxide in an aqueous solution. Table 1. Sodium Hydroxide Production and Trade Data Sources Production and Trade Data Category Data Source Identifier Description Domestic Production The Chlorine Institute CAS No.: 1310-73-2 Sodium Hydroxide (Aqueous) Imports and Exports U.S. International Trade Commission HS Code: 2815.12 Sodium Hydroxide (Aqueous) Total U.S. domestic manufacturing of sodium hydroxide was approximately 11,627 million kg (M kg) in 2019 (The Chlorine Institute, 2020). The majority of domestic commercial manufacture of sodium hydroxide takes place at chlor-alkali facilities located throughout the contiguous U.S. Many of these facilities are owned by a relatively small number of companies including Olin Corporation, Formosa Plastics Group, Westlake Corporation, and Oxy Chemical Corporation (The Chlorine Institute, 2020). Westlake Corporation and Formosa Plastics Group are leading global and domestic manufacturers of sodium hydroxide. While Westlake Corporation and Formosa Plastics Group manufacture and distribute millions of tons of sodium hydroxide each year, a significant percentage of the sodium hydroxide manufactured serves as feedstock for the derivative products these companies produce (Formosa Plastics Group, 2021; Westlake Corporation, 2018). The number of domestic manufacturing locations shown in Figure 2 represents operating facilities as of 2019. Supply of NSF/ANSI Standard 60 certified sodium hydroxide 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 ------- Sodium Hydroxide Supply Chain - hull Profile o o X o Q> P O o B o 4 O o - 0 Oq (P -o j X. -„n a> o o Ooo 0 o O w & o°f* >&p £ So o o """ ©' 3 0 ° o O- Qi <&> o, r o o o or % o o 3 . °°S © o NO o o Domestic Supply and Manufacturing of Sodium Hydroxide O 224 NSF/ANSI Standard 60 Certified Suppliers (NSF International, 2021) ^ 41 Domestic Manufacturing Locations (The Chlorine Institute, 2020) Figure 2. Domestic Supply and Manufacturing of Sodium Hydroxide Domestic Consumption U.S. consumption of sodium hydroxide in 2019 is estimated at 6,046 M kg. This includes production of 11,627 M kg, import of 792 M kg, minus export of 6,373 M kg (The Chlorine Institute, 2020; IJSITC, 2021), as shown in Figure 3. Domestic Consumption (2019): 6,046 Million kg ¦ Domestic Production (11,627 M kg) ¦ Imports for Consumption (792 M kg) ¦ Export of Domestic Production (6,373 M kg) Figure 3. Domestic Production and Consumption of Aqueous Sodium Hydroxide in 2019 Trade & Tariffs Worldwide Trade Worldwide import and export data for sodium hydroxide are reported through the World Bank's World Integrated Trade Solutions (WITS) software, as a category specific to sodium hydroxide (aqueous solution). In 2021, U.S. ranked first worldwide in total exports and second in total imports of sodium hydroxide. In 2021, 3 &EPA ------- Sodium Hydroxide Supply Chain - Full Profile Netherlands ranked first worldwide in total imports (WITS, 2022), as shown in Table 2. The quantity of sodium hydroxide imported by Brazil, a country which imports significant quantities of sodium hydroxide from the U.S., was not reported through WITS in 2021. Table 2. WITS Worldwide Export and Import of Sodium Hydroxide in 2019 2021 Worldwide Trade Sodium Hydroxide (Aqueous Solution) (HS Code 2815.12) Top 5 Worldwide Exporters Top 5 Worldwide Importers United States 5,749 M kg Netherlands 1,881 M kg Netherlands 1,980 M kg United States 1,146 M kg Japan 1,951 M kg Finland 871 M kg France 1,140 M kg Sweden 712 M kg China 1,094 M kg Spain 626 M kg Domestic Imports and Exports Domestic import and export data are reported by USITC in categories specific to sodium hydroxide in aqueous solution. Figure 4 summarizes imports for consumption1 and domestic exports2 of sodium hydroxide between 2015 and 2020. During this period, the overall quantity of exports and imports remained relatively steady, with domestic exports exceeding imports for consumption. Over this five-year period, Brazil was the primary recipient of domestic exports while Taiwan was the primary source of imports (USITC, 2021). Unlike chlorine, sodium hydroxide is easily stored and transported, which allows for greater utilization of international trade. Domestic Trade of Sodium Flydroxide (Aqueous Solution) HS Code 2815.12 ¦ ¦ ¦ ¦ ¦ ¦ ¦ o Q. E 2016 ¦ ¦ o Q. E 2018 ¦ ¦ ¦ O Q. E 2015 o Q. X LU o Q. X LU o Q. E 2017 o Q. X LU o Q. X LU o Q. E 2019 o Q. X LU o Q. E 2020 o Q. X LU ¦ Imports from Taiwan ¦ Exports to Brazil ¦ Imports from Japan ¦ Exports to Australia Imports from Other Countries Exports to Other Countries Figure 4. USITC Domestic Import and Export of Sodium Hydroxide 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 ------- Sodium Hydroxide Supply Chain - Full Profile Tariffs There is no general duty for import of sodium hydroxide, however, there is an additional 25% duty on imports from China (USITC, 2022), as summarized in Table 3. China, one of the largest chlor-alkali producing nations, is expected to drive future growth in chlor-alkali production (Kreuz et al., 2022). Table 3. Domestic Tariff Schedule for Sodium Hydroxide in 2020 HS Code General Duty Additional Duty - China (Section 301 Tariff List) Special Duty 2815.12 None 25% None Market History & Risk Assessment History of Shortages Chlor-alkali producers generally set chlor-alkali production around demand for chlorine. In the past this has created uneven supply and demand patterns for the sodium hydroxide market. When demand for chlorine decreased during and after the Great Recession (2007-2009), a reduction in chlor-alkali production followed. The resulting sodium hydroxide supply disruption resulted in local shortages impacting the water sector (Henderson et al., 2009). Another shortage occurred in 2021 when Winter Storm Uri directly hit the Gulf Coast region resulting in a temporary loss of approximately 28% of domestic chlor-alkali production capacity (The Chlorine Institute, 2021). Furthermore, in spring and summer of 2021, a number of chlor-alkali production facilities experienced significant equipment failures resulting in additional, temporary losses in production capacity. While some of these impacted facilities were located in the Gulf Coast region, others were located in West Virginia, Utah, and Washington. Later in the summer of 2021, there was a permanent reduction in chlor-alkali production capacity at facilities located in New York, Alabama, Louisiana, and Texas. The reductions in chlor- alkali production capacity that occurred in 2021 were compounded by the impacts of COVID-19 (Powder and Bulk Solids, 2021; Prohaska, 2021). 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 ------- Sodium Hydroxide Supply Chain - Full Profile Table 4. Supply Chain Risk Evaluation for Sodium Hydroxide Risk Parameter Ratings and Drivers 1 1 Criticality High 1 Likelihood High 1 1 Vulnerability Low 1 Sodium hydroxide is essential to the water sector and 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 sodium hydroxide supply disruptions in the past. Uneven supply and demand due to the demand for chlorine driving chlor-alkali production, combined with unplanned and planned chlor-alkali production outages, have led to sodium hydroxide supply disruptions. Strong domestic manufacturing capabilities and a distributed manufacturing base provide some resilience to supply disruptions. However, chlor-alkali facility closures in 2021 and the potential for future losses in production capacity could increase vulnerability. Risk Rating: Moderate-High t*e-L0W V*e / Vloderafg % t OQ (D 1 References American Water Works Association (AWWA), 2019. B501 Sodium Hydroxide (Caustic Soda). Denver, CO: American Water Works Association. CORECHEM, 2017. Sodium Hydroxide Safety Data Sheet, retrieved from https://corecheminc.com/wp- content/uploads/2019/03/Sodium-Hydroxide-25-Solution-CORECHEM-lnc.-Safetv-Data-Sheet- 2015.07.31.pdf Eldoma, M.A., Almaghrabi, M.N., and S.E. Hegazi, 2013. Recovery of Sodium Hydroxide from Trona Ore and Calcium Carbonate as Raw Materials. International Journal of Science and Research, 4(5): 2019-2924. 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/waterutilitvresponse/water-sector-supplv-chain-resilience Formosa Plastics Group, 2021. Annual Report 2020, retrieved from https://staticl.squarespace.eom/static/5acbfcd40dbda3fb2fce9560/t/61555f8e0738f0539e4154ba/163 2984999587/FPG+Annual+Report+2020.pdf Genesis Alkali, 2017. Natural Alkali Products from the World's Largest Trona Mine, retrieved from https://alkali.genesisenergy.com/wp-content/uploads/sites/24/2018/07/Genesis-Alkali-Folder.pdf Henderson, J.L., Raucher, R.S., Weicksel, S., Oxenford, J. and Mangravite, F., 2009. Supply of critical drinking water and wastewater treatment chemicals—A white paper for understanding recent chemical price increases and shortages. Water Research Foundation, Denver, USA. IHS Markit, 2017. The Economic Benefits of Sodium Hydroxide Chemistry in Specialty Applications in the 6 &EPA ------- Sodium Hydroxide Supply Chain - Full Profile United States and Canada, retrieved from https://www.chlorine.org/wp- content/uploads/2017/ll/FINAL-ACC-Pulp-paper-Qct-2017.pdf Kreuz, H., Kovics, N., Suarez, L., Lopez, A., and Herzog, N., 2022. Impact of EPA's Proposed Asbestos- Diaphragm Chlor-Alkali Rulemaking. Chemical Market Analytics. Retrieved from https://www.americanchemistrv.com/content/download/11507/file/lmpact-of-EPAs-Proposed- Asbestos-Diaphragm-Chlor-Alkali-Rulemaking.pdf National Center for Biotechnology Information (NCBI), 2020. PubChem Compound Summary for CID 14798, Sodium Hydroxide, retrieved from https://pubchem.ncbi.nlm.nih.gov/compound/Sodium-hvdroxide NSF International, 2021. Search for NSF Certified Drinking Water Treatment Chemicals, retrieved from https://info.nsf.org/Certified/PwsChemicals/ Powder and Bulk Solids, 2021. "Olin to Cut Chlor Alkali Capacity at Alabama Plant." Powder & Bulk Solids, March 16, 2021, retrieved from https://www.powderbulksolids.com/chemical/olin-cut-chlor-alkali- capacitv-alabama-plant Prohaska, T., 2021. "Occidental Chemical to close Niagara Falls plant; 130 jobs lost." The Buffalo News, August 19, 2021, retrieved from https://buffalonews.com/business/local/occidental-chemical-to-close- niagara-falls-plant-130-iobs-lost/article ddb5463c-010a-llec-a536-9b2a8e99ba71.html Puritan Products, 2017. Product Shelf Life/Expiration Date Policy, retrieved from https://www.puritanproducts.com/wp-content/uploads/2016/02/Shelf-Life-Policv.pdf The Chlorine Institute, 2014. Pamphlet 1: Chlorine Basics. The Chlorine Institute. Retrieved from https://www.chlorineinstitute.org/stewardship/chlorine/chlorine-manufacture/ The Chlorine Institute, 2020. Pamphlet 10: North American Chlor-Alkali Industry Plants and Production Data Report, Edition 2019. The Chlorine Institute, 2021. U.S. Chlorine/Sodium Hydroxide Production and Shipment Report, September 2021. 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 Westlake Corporation, 2018. Product Stewardship Summary: Sodium Hydroxide. Westlake Chemical Corporation. Retrieved from https://www.westlake.com/sites/default/files/Liquid%20Caustic%20Soda- DiaphragmMembrane-PS%20Summarv%20-%20Edl%20-%20Final Julv2018 O.pdf World Integrated Trade Solutions (WITS), 2020. Trade Statistics by Product (HS 6-digit), retrieved from https://wits.worldbank.org/trade/countrv-bvhs6product.aspx?lang=en#void 7 &EPA ------- |