* O \
KWJ
*1 PRO^^
Regulatory Impact Analysis for the Final
National Emission Standards for Hazardous Air
Pollutants: Integrated Iron and Steel Manufacturing
Facilities Fechnology Review
-------
ii
-------
EPA-452/R-24-012
March 2024
Regulatory Impact Analysis for the Final National Emission Standards for Hazardous Air
Pollutants: Integrated Iron and Steel Manufacturing Facilities Technology Review
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Health and Environmental Impacts Division
Research Triangle Park, NC
iii
-------
CONTACT INFORMATION
This document has been prepared by staff from the Office of Air and Radiation, U.S.
Environmental Protection Agency. Questions related to this document should be addressed to the
Air Economics Group in the Office of Air Quality Planning and Standards, U.S. Environmental
Protection Agency, Office of Air and Radiation, Research Triangle Park, North Carolina 27711
(email: OAQPSeconomics@epa.gov).
ACKNOWLEDGEMENTS
In addition to U.S. Environmental Protection Agency staff, personnel from RTI International
contributed research, data, and analysis to this document.
iv
-------
TABLE OF CONTENTS
Table of Contents v
List of Tables vii
List of Figures ix
1 Executive Summary 1-1
1.1 Introduction 1-1
1.1.1 Legal Basis for this Rulemaking 1-2
1.1.2 Regulatory Background 1-4
1.1.3 Final Requirements 1-5
1.1.3.1 Currently Unregulated Fugitive or Intermittent Particulate Sources 1-5
1.1.3.2 Currently Regulated Fugitive Sources 1-5
1.1.3.3 Dioxins/Furans (D/F) and Poly cyclic Aromatic Hydrocarbons (PAH) from Sinter Plants 1-6
1.1.3.4 Fenceline Monitoring 1-6
1.1.3.5 Other Regulatory Gaps 1-6
1.1.4 Economic Basis for this Rulemaking 1-7
1.2 Results for the Final Rulemaking 1-7
1.2.1 Baseline and Regulatory Options 1-7
1.2.2 Methodology 1-8
1.2.3 Summary of Cost and Emissions Impacts 1-8
1.3 Organization of this Report 1-11
2 Industry Profile 2-1
2.1 Introduction 2-1
2.2 Iron Making 2-2
2.3 Steel Making 2-4
2.4 Steel Mill Products 2-8
2.5 Uses and Consumers of Steel Mill Products 2-9
2.6 Industry Organization 2-9
2.6.1 Horizontal and Vertical Integration 2-12
2.6.2 Firm Characteristics 2-14
2.7 Market Conditions 2-14
2.7.1 Domestic Production and Consumption 2-14
2.7.2 Prices 2-16
2.7.3 Foreign Trade 2-17
2.7.4 Trends and Projections 2-18
3 Emissions and Engineering Costs Analysis 3-1
3.1 Introduction 3-1
3.2 Facilities and Emissions Points 3-1
3.2.1 II&S Manufacturing Facilities 3-1
3.2.2 Emission Points at Regulated Facilities 3-2
3.2.2.1 Blast Furnaces 3-2
3.2.2.2 Basic Oxygen Process Furnace Shops 3-5
3.2.2.3 Sinter Plants 3-7
3.2.3 Facility Projections and the Baseline 3-8
3.3 Description of Regulatory Options 3-10
3.3.1 Blast Furnaces and Basic Oxygen Process Furnaces 3-10
3.3.1.1 Fugitive Emissions 3-10
3.3.1.2 Other Regulatory Gaps 3-12
v
-------
3.3.2 Sinter Plants 3-12
3.3.2.1 Dioxins/Furans and Poly cyclic Aromatic Hydrocarbons 3-12
3.3.2.2 Other Regulatory Gaps 3-13
3.3.3 Fenceline Monitoring 3-13
3.3.4 Summary of Regulatory Alternatives 3-13
3.4 Emissions Reduction Analysis 3-14
3.4.1 Baseline Emissions Estimates 3-14
3.4.2 Projected Emissions Reduction 3-15
3.5 Engineering Cost Analysis 3-17
3.5.1 Detailed Impacts Tables 3-17
3.5.1.1 Fugitive or Intermittent Particulate Sources 3-18
3.5.1.2 Sinter Plants 3-19
3.5.1.3 Fenceline Monitoring 3-21
3.5.1.4 Summary of Facility-Level Costs 3-22
3.5.2 Summary Cost Tables for the Final Regulatory Options 3-23
4 Human Health Benefits of Emissions Reductions 4-1
4.1 Introduction 4-1
4.2 Health Effects from Exposure to Hazardous Air Pollutants (HAP) 4-1
4.2.1 Manganese (Mn) 4-2
4.2.2 Lead (Pb) 4-2
4.2.3 Arsenic (As) 4-3
4.2.4 Chromium (Cr) 4-3
4.2.5 Dioxins/Furans (D/F) 4-4
4.2.6 Polycyclic Aromatic Hydrocarbons (PAH) 4-4
4.2.7 Other Air Toxics 4-5
4.3 Approach to Estimating PM2.5-related Human Health Benefits 4-5
4.3.1 Selecting Air Pollution Health Endpoints to Quantify 4-6
4.3.2 Quantifying Cases of PM2 s-Attributable Premature Death 4-7
4.3.3 Economic Valuation 4-9
4.4 Monetized PM2.5 Benefits 4-11
4.4.1 Benefit-per-Ton Estimates 4-11
4.4.2 PM2 5 Benefits Results 4-12
4.4.3 Characterization of Uncertainty in the Monetized PM2 5 Benefits 4-14
5 Economic Impact Analysis and Distributional Assessments 5-1
5.1 Introduction 5-1
5.2 Economic Impact Analysis 5-1
5.3 Employment Impacts Analysis 5-4
5.4 Small Business Impact Analysis 5-5
6 Comparison of Benefits and Costs 6-1
6.1 Results 6-1
6.2 Uncertainties and Limitations 6-4
7 References 7-7
vi
-------
LIST OF TABLES
Table 1-1: Current and Final Standards for II&S Facility Emissions 1-9
Table 1-2: Monetized Benefits, Compliance Costs, Net Benefits, Emissions Reductions, and Non-Monetized
Benefits for the Final NESHAP Amendments, 2026-2035, Discounted to 2024 (million 2022$3)a 1-10
Table 2-1: Steel Type by Metallurgical Content, 2021 2-8
Table 2-2: Global Steel Consumption by Category, 2019 2-9
Table 2-3: II&S Facilities 2-10
Table 2-4: EAF Facilities 2-11
Table 2-5: U.S. Taconite Iron Ore Facility Ownership, Production, and Capacity 2-13
Table 2-6: U.S. Coking Facility Ownership and Capacity 2-13
Table 2-7: Taconite Iron Ore Facility Owner Sales and Employment, 2021 2-14
Table 2-8: U.S. Steel Production, Consumption, and Prices, 2010-2021 (volumes in thousand metric tons) 2-15
Table 2-9: Shipments of Steel Mill Products by Type, 2019 and 2020 2-16
Table 2-10: U.S. Steel Mill Products Imports and Exports, 2010-2021 (thousand metric tons) 2-17
Table 2-11: U.S. Steel Mill Product Imports and Exports by Country, 2019 and 2020 (thousand metric tons) 2-18
Table 3-1: II&S Facilities 3-2
Table 3-2: Baseline Emissions Estimates for II&S Blast Furnace and Basic Oxygen Process Furnace Fugitive
Emissions3 3-14
Table 3-3: Baseline Emissions Estimates for II&S Sinter Plant Windboxes3 3-15
Table 3-4: II&S Blast Furnace and Basic Oxygen Process Furnace Fugitive Emission Reductions3 3-15
Table 3-5: II&S Sinter Plant Windbox Emission Reductions from Final Limit for D/F and PAH3 3-16
Table 3-6: Estimated Control from Fugitive Work Practice Standards and Windbox ACI 3-16
Table 3-7: II&S Blast Furnace and Basic Oxygen Process Furnace Fugitive Emission Reductions by Source, Final
Option (Tons per Year)3 3-17
Table 3-8: Summary of Total Capital Investment and Annual Costs per Year for Fugitive or Intermittent Particulate
Sources (2022S) 3-18
Table 3-9: Summary of Total Capital Investment and Annual Costs per Year of the Final Option by Facility for
Fugitive or Intermittent Particulate Sources (2022$)3 3-19
Table 3-10: Summary of Total Capital Investment and Annual Costs per Year of the Less Stringent Alternative by
Facility for Fugitive or Intermittent Particulate Sources (2022$)3 3-19
Table 3-11: Summary of Total Capital Investment and Annual Costs per Year of the Final Option for Sinter Plants
D/F and PAH (2022S) 3-20
Table 3-12: Summary of Total Capital Investment and Annual Costs per Year of the Less Stringent Option for Sinter
Plants D/F and PAH (2022S) 3-20
Table 3-13: Costs by Year for the Final Fenceline Monitoring Requirements (2022$)3 3-21
Table 3-14: Summary of Total Capital Investment and Annual Costs per Year of the Final Fenceline Monitoring
Requirements (2022$)3 3-22
Table 3-15: Summary of Total Capital Investment and Annual Costs per Year of the Final Amendments (2022$)3. 3-
22
Table 3-16: Summary of Total Capital Investment and Annual Costs per Year of the Less Stringent Alternative
Options (2022S) 3-23
Table 3-17: Costs by Year for the Final Options (2022$) 3-24
Table 3-18: Present-Value, Equivalent Annualized Value, and Discounted Costs for Final Options, 2026-2035
(million 2022$) 3-24
Table 4-1: Human Health Effects of PM2 5 and whether they were Quantified and/or Monetized in this RIA 4-7
Table 4-2: II&S Benefit per Ton Estimates of PM2 5-Attributable Premature Mortality and Illness for the Final
Option, 2025-2035 ($2022) 4-13
Table 4-3: II&S Benefit Estimates of PM2 5-Attributable Premature Mortality and Illness for the Proposal (million
2022S) ' 4-13
Table 4-4: Undiscounted Monetized Benefits Estimates of PM2 5-Attributable Premature Mortality and Illness for the
Final Option (million 2022$), 2026 2035: 4-14
Table 4-5: Undiscounted Monetized Benefits Estimates of PM2 5-Attributable Premature Mortality and Illness for the
Less Stringent Alternative Option (million 2022$), 2026-20353b 4-14
Table 5-1: II&S Facility Owner Sales and Employment, 2021 5-2
vii
-------
Table 5-2: Total Annualized Cost-to-Sales Ratios for II&S Facility Owners by Regulatory Alternative 5-3
Table 5-3: Total Capital Investment-to-Sales Ratios for II&S Facility Owners by Regulatory Alternative 5-3
Table 6-1: Summary of Monetized Benefits, Compliance Costs, Net Benefits, and Non-Monetized Benefits
PV/EAV, 2026-2035 (million 2022$, discounted to 2024): 6-2
Table 6-2: Undiscounted Net Benefits Estimates for the Final Option (million 2022$), 2026-2035"h 6-3
Table 6-3: Undiscounted Net Benefits Estimates for the Less Stringent Alternative Option (million 2022$), 2026-
2035: 6-3
viii
-------
LIST OF FIGURES
Figure 2-1: The Integrated Steel Making Process 2-2
Figure 2-2: Iron Making Process: Blast Furnace 2-4
Figure 2-3: Steel Making Process: Basic Oxygen Process Furnace and Electric Arc Furnace 2-6
Figure 2-4: Ingot Casting and Continuous Casting 2-7
Figure 2-5: Steel Production and Capacity, 2000-2019 2-19
Figure 2-6: Share of BF/BOPF andEAF Steel in the U.S., 2001-2021 2-19
Figure 3 -1: Diagram of a Blast Furnace 3 -3
Figure 3 -2: Diagram of Blast Furnace Fugitive Emissions 3 -5
Figure 3-3: Diagram of a Basic Oxygen Furnace Vessel 3-6
Figure 3-4: Diagram of the Sintering Process 3-8
ix
-------
1 EXECUTIVE SUMMARY
1.1 Introduction
The U.S. Environmental Protection Agency (EPA) is finalizing amendments to the
National Emission Standards for Hazardous Air Pollutants (NESHAP) for Integrated Iron and
Steel (ll&S) Manufacturing Facilities (40 CFR Part 63, Subpart FFFFF), as required by the
Clean Air Act (CAA). The Il&S source category produces steel from iron ore pellets, coke, metal
scrap and other raw materials using furnaces and other processes. The EPA is finalizing this rule
to complete the technology review that was originally promulgated on July 13, 2020, and to
address regulatory gaps in the NESHAP for II&S. This document presents the regulatory impact
analysis (RIA) for this final rule.
To complete the required technology review, EPA is finalizing standards to address
fugitive emissions from five unmeasured fugitive or intermittent particulate (UFIP) sources,
referred to as "fugitive" sources: Bell Leaks, Unplanned Bleeder Valve Openings, Planned
Bleeder Valve Openings, Slag Pits, and Beaching. Also, we are finalizing standards for carbonyl
sulfide (COS), carbon disulfide (CS2), mercury (Hg), hydrochloric acid (HC1), and hydrogen
fluoride (HF) from sinter plants. In addition, we are finalizing standards for total hydrocarbons
(THC), HC1, and dioxins/furans (D/F) from blast furnaces (BFs) and basic oxygen process
furnaces (BOPFs). As part of an update to the technology review under 112(d)(6), we are
finalizing to: add specific work practices for BOPF shop fugitives; and add D/F standards for
sinter plants. Also under 112(d)(6), we are finalizing fenceline monitoring for chromium (Cr)
including a work practice action level for Cr; if a monitor exceeds that level, the facility must
conduct a root cause analysis and take corrective action to lower emissions.
In accordance with E.O. 12866 (as amended by E.O. 14094) and 13563, the guidelines of
OMB Circular A-4 and EPA's Guidelines for Preparing Economic Analyses (U.S. EPA, 2016),
the RIA analyzes the benefits and costs associated with the projected emissions reductions under
the final requirements, a less stringent set of alternative requirements, and a more stringent set of
alternative requirements to inform the EPA and the public about these projected impacts. The
benefits and costs of the final rule and regulatory alternatives are presented for the 2026 to 2035
time period.
1-1
-------
1.1.1 Legal Basis for this Rulemaking
Section 112 of the CAA provides the legal authority for this final rule. Section 112 of the
CAA establishes a two-stage process to develop standards for emissions of HAP from new and
existing stationary sources in various industries or sectors of the economy (i.e., source
categories). Generally, the first stage involves establishing technology-based standards and the
second stage involves assessing whether additional standards are needed to address any
remaining risk associated with HAP emissions from the source category. This second stage is
referred to as the "residual risk review." In addition to the residual risk review, the CAA requires
the EPA to review standards set under CAA section 112 every eight years and revise them as
necessary, taking into account any "developments in practices, processes, or control
technologies." This review is commonly referred to as the "technology review".
In the first stage of the CAA section 112 standard setting process, the EPA promulgates
technology-based standards under CAA section 112(d) for categories of sources identified as
emitting HAP listed in CAA section 112(b). Sources of HAP emissions are either major sources
or area sources depending on the amount of HAP the source has the potential to emit.l
Major sources are required to meet the levels of reduction achieved in practice by the
best-performing similar sources. CAA section 112(d)(2) states that the technology-based
NESHAP must reflect the maximum degree of HAP emissions reduction achievable after
considering cost, energy requirements, and non-air quality health and environmental impacts.
These standards are commonly referred to as maximum achievable control technology (MACT)
standards. MACT standards are based on emissions levels that are already being achieved by the
best-controlled and lowest-emitting existing sources in a source category or subcategory. CAA
section 112(d)(3) establishes a minimum stringency level for MACT standards, known as the
MACT "floor." For area sources, CAA section 112(d)(5) gives the EPA discretion to set
standards based on generally available control technologies or management practices (GACT) in
lieu of MACT standards. In certain instances, CAA section 112(h) states that the EPA may set
work practice standards in lieu of numerical emission standards.
1 "Major sources" are those that emit or have the potential to emit 10 tons per year (tpy) or more of a single HAP or
25 tpy or more of any combination of HAP. All other sources are "area sources."
1-2
-------
The EPA must also consider control options that are more stringent than the MACT floor.
Standards more stringent than the floor are commonly referred to as beyond-the-floor (BTF)
standards. CAA section 112(d)(2) requires the EPA to determine whether the more stringent
standards are achievable after considering the cost of achieving such standards, any non-air-
quality health and environmental impacts, and the energy requirements of additional control.
For major sources and any area source categories subject to MACT standards, the second
stage in the standard-setting process focuses on identifying and addressing any remaining {i.e.,
"residual") risk pursuant to CAA section 112(f) and concurrently conducting a technology
review pursuant to CAA section 112(d)(6). The EPA is required under CAA section 112(f)(2) to
evaluate residual risk within eight years after promulgating a NESHAP to determine whether
risks are acceptable and whether additional standards beyond the MACT standards are needed to
provide an ample margin of safety to protect public health or prevent adverse environmental
effects.2 For area sources subject to GACT standards, there is no requirement to address residual
risk, but technology reviews are required. Technology reviews assess developments in practices,
processes, or control technologies and revise the standards as necessary without regard to risk,
considering factors like cost and cost-effectiveness. The EPA is required to conduct a technology
review every eight years after a NESHAP is promulgated. Thus, the first review after a NESHAP
is promulgated is a residual risk and technology review (RTR) and the subsequent reviews are
just technology reviews.
The EPA is also required to address regulatory gaps {i.e., "gap-filling") when conducting
NESHAP reviews, meaning it must establish missing standards for listed HAP that are known to
be emitted from the source category. {Louisiana Environmental Action Network v. EPA, 955
F.3d 1088 (D.C. Cir. 2020) {LEAN)). Any new MACT standards related to gap-filling must be
established under CAA sections 112(d)(2) and (d)(3) or, in specific circumstances, under CAA
sections 112(d)(4) or (h).
2 If risks are unacceptable, the EPA must determine the emissions standards necessary to reduce risk to an
acceptable level without considering costs. In the second step of the approach, the EPA considers whether the
emissions standards provide an ample margin of safety to protect public health in consideration of all health
information as well as other relevant factors, including costs and economic impacts, technological feasibility, and
other factors relevant to each particular decision.
1-3
-------
1.1.2 Regulatory Background
II&S manufacturing facilities produce finished steel from iron ore using a process
consisting mainly of a blast furnace (BF), a basic oxygen process furnace (BOPF), and in some
cases sinter production. The blast furnace combines sinter, taconite iron ore pellets, coke, and
limestone and creates a chemical reaction that produces molten iron and slag (a by-product
consisting of lime, silicates, and aluminates). The iron is combined with scrap steel in the basic
oxygen furnace to produce molten steel and slag. The slag is separated from the steel, which is
then poured into a ladle for casting. Sinter plants recover the iron-bearing materials from BF and
BOPF waste products for use in the blast furnace, and also produce limestone and dolomite for
use in the blast furnace.
II&S facilities also include several ancillary processes, such as hot metal transfer,
desulfurization, slag-skimming, and ladle metallurgy, but blast furnaces, basic oxygen furnaces,
and sinter plants are the primary sources of HAP and particulate matter (PM) emissions from the
source category. There are eight active II&S facilities in the United States, and three include
sinter plants.
The EPA final the NESHAP for II&S facilities in 2003 under CAA section 1 12(d). The
standards address emissions of HAP from new and existing sinter plants, blast furnaces, and
basic oxygen process furnace (BOPF) shops using PM and opacity limits as surrogates for
particulate HAP. Sinter plants also need to meet volatile organic compound (VOC) emission
limits or limit oil content in sinter feed. The EPA amended the NESH AP in 2006 to add a new
compliance option, revise emission limitations, reduce the frequency of repeat performance tests
for certain emission units, add corrective action requirements, and clarify monitoring,
recordkeeping, and reporting requirements.
In 2020, the EPA final the RTR for the source category. The 2020 RTR determined that
risks from the source category were acceptable and provide an ample margin of safety to protect
public health. The RTR did not identify cost-effective technology-based developments that
would further reduce HAP emissions beyond the original NESHAP. The EPA, however, took
final action to establish a new requirement to limit mercury (Hg) emissions from scrap metal
used in steel operations. The EPA also final amendments to clarify that the standards are
applicable during periods of startup, shutdown, and malfunction and require electronic reporting
1-4
-------
of performance test results, notifications of compliance status, and semi-annual reports. The final
2020 amendments also revised several monitoring requirements to increase flexibility.
1.1.3 Final Requirements
The final requirements are discussed briefly below. These include standards for currently
regulated and unregulated fugitive sources, dioxins/furans and polycyclic aromatic hydrocarbons
(PAH) from sinter plants, fenceline monitoring, and other standards to address current regulatory
gaps. Each regulated emissions source is discussed in more detail in Section 3.2.
1.1.3.1 Currently Unregulated Fugitive or Intermittent Particulate Sources
EPA is finalizing standards to regulate five currently unregulated fugitive or intermittent
particulate (UFIP) emissions sources: BF unplanned bleeder valve openings, BF planned bleeder
valve openings, BF and BOPF slag processing, handling, and storage, BF bell leaks, and
beaching of iron from BFs. For BF unplanned bleeder valve openings, EPA is finalizing specific
work practice standards to limit the likelihood of slips that can cause these openings. For BF
planned bleeder valve openings, EPA is finalizing an 8 percent opacity limit. EPA is finalizing
an opacity limit for BF and BOPF slag processing, handling, and storage of 10 percent. For BF
bell leaks, EPA is finalizing work practices and a 10 percent opacity action level. Finally, EPA is
finalizing a MACT floor limit for fugitive emissions from the beaching of iron from BFs along
with work practices to meet the limit.
1.1.3.2 Currently Regulated Fugitive Sources
EPA is finalizing updated requirements for one currently regulated source: basic oxygen
process furnace (BOPF) shop fugitive emissions. Currently, fugitive emissions from both BOPF
shop and BF casthouses are covered by a 20 percent opacity limit.
For BOPF shop fugitive emissions, EPA is finalizing specific work practices (such as
optimizing the positioning of collection hoods and using higher draft velocities to capture more
fugitives) but is not finalizing changes to the opacity limit. BOPF shop fugitives are likely the
largest contributor of hexavalent chromium (Cr+6) emissions at II&S facility fencelines, so
facilities may need to install better fugitive capture systems to meet the fenceline action level for
Cr+6 (discussed below in Section Error! Reference source not found.). For BF casthouse
1-5
-------
fugitive emissions, EPA is not finalizing changes to the opacity limit or specific work practices
to meet the current opacity limit.
1.1.3.3 Dioxins/Furans (D/F) and Polycyclic Aromatic Hydrocarbons (PAH) from Sinter
Plants
EPA is finalizing a limit based on technology review for D/F and PAH from sinter plant
windboxes. There are currently no specific requirements for these pollutants, but the current
VOC and oil content limits act as a surrogate standard for these HAP. Three II&S facilities have
on-site sinter plants. These plants currently control windbox emissions using a baghouse, Venturi
scrubber, or a baghouse in combination with a dry scrubber. EPA anticipates that all three
affected facilities could meet this limit by installing an activated carbon injection system to
complement existing windbox controls.
1.1.3.4 Fenceline Monitoring
EPA is finalizing a fenceline monitoring requirement pursuant to CAA section 112(d)(6).
The fenceline monitoring requirement incudes a work practice action level for Cr. If a monitor at
a facility exceeds the action level for Cr, the facility must do a root-cause analysis and take
corrective action to lower Cr emissions. Based on current analyses, BOPF shop fugitive
emissions are likely the largest contributor of Cr at II&S facility fencelines. EPA is also
finalizing a sunset provision in the fenceline monitoring requirements: if facilities remain below
half the action level (0.05 ug/m3) for two full years, they can terminate the fenceline monitoring
as long as they continue to comply with all other rule requirements.
1.1.3.5 Other Regulatory Gaps
EPA has also identified five unregulated HAP from sinter plants (CS2, COS, HC1, HF,
and Hg) and two unregulated HAP from blast furnaces (HC1 and total hydrocarbons (THC)), and
three unregulated HAP from basic oxygen furnaces and blast furnace stoves (HC1, THC, and
D/F). EPA is finalizing MACT floor limits for COS and HC1 from sinter plants, HC1 and THC
from blast furnaces and blast furnace stoves, and HC1, THC, and D/F from basic oxygen
furnaces. EPA anticipates II&S facilities can meet the limits without installing additional
controls. The only expected costs from these final standards, excluding Hg, are from additional
compliance testing and monitoring, recordkeeping, and reporting requirements. For Hg, EPA is
1-6
-------
finalizing BTF limits that reflect the addition of ACI controls to the sinter plants. CS2 emissions
are being addressed through setting a limit for COS, HF emissions are being addressed through
setting a limit for HC1, and D/F emissions from blast furnace stoves are being addressed through
setting a limit for THC from blast furnace stoves.
1,1.4 Economic Basis for this Rulemaking
Many regulations are promulgated to correct market failures, which otherwise lead to a
suboptimal allocation of resources within a market. Air quality and pollution control regulations
address "negative externalities" whereby the market does not internalize the full opportunity cost
of production borne by society as public goods such as air quality are unpriced.
While recognizing that the optimal social level of pollution may not be zero, HAP
emissions impose costs on society, such as negative health and welfare impacts, that are not
reflected in the market price of the goods produced through the polluting process. For this
regulatory action the good produced is steel. If the process of using a blast furnace and basic
oxygen furnace to smelt iron and then manufacture steel pollutes the atmosphere, the social costs
imposed by the pollution will not be borne by the polluting firm but rather by society as a whole.
Thus, the producer is imposing a negative externality, or a social cost from these emissions, on
society. The equilibrium market price of steel mill products may fail to incorporate the full
opportunity cost to society of consuming them. Consequently, absent a regulation or some other
action to limit emissions, producers will not internalize the negative externality of pollution due
to emissions and social costs will be higher as a result. This regulation will work towards
addressing this market failure by causing affected producers to begin internalizing the negative
externality associated with HAP emissions.
1.2 Results for the Final Rulemaking
1.2,1 Baseline and Regulatory Options
The impacts of regulatory actions are evaluated relative to a baseline that represents the
world without the regulatory action. In this RIA, we present results for the final amendments to
the NESHAP for II&S manufacturing facilities relative to a world without the final amendments.
The final amendments set standards for five currently unregulated fugitive emissions sources,
revise standards for one currently regulated source of fugitive emissions, and set numerical limits
1-7
-------
for D/F and PAH from sinter plants. EPA is also finalizing fenceline monitoring requirements
and setting MACT floor limits for four currently unregulated HAP (two from sinter plants, two
from BF/BF stoves, and three from BOPF) and a BTF limit for Hg from sinter plants.
Throughout this document, the EPA focuses the analysis on the final requirements that
result in quantifiable compliance cost or emissions changes compared to the baseline. We
assume each facility achieves emissions control meeting current standards and estimate
emissions reductions and cost relative to this baseline. We also analyze a less stringent
alternative regulatory option as compared to our final option in adherence to OMB Circular A-4.
The results of this analysis are presented alongside analysis of the final option in Chapter 3.
1.2.2 Methodology
The impacts analysis summarized in this RIA reflects a nationwide engineering analysis
of compliance cost and emissions reductions. The EPA estimated costs and expected emissions
reductions of the final and alternative regulatory options for each II&S facility individually and
aggregated them to calculate industry-wide impacts for the rule. We calculate cost and emissions
impacts of the final and alternative regulatory requirements over a 10-year analytical timeframe
from 2026 to 2035. This timeframe spans the projected first year of full implementation of the
final NESHAP amendments for BF/BOPF fugitive emission sources (under the assumption that
the final action is final in 2024), and presents 10 years of potential regulatory impacts. We
assume the number of active facilities in the source category is constant over the analysis period.
1.2.3 Summary of Cost and Emissions Impacts
The final requirements discussed in Section Error! Reference source not found, are
presented in Error! Reference source not found, below. The final amendments to the NESHAP
for II&S Manufacturing Facilities (Subpart FFFFF) constitute significant regulatory action under
E.O. 12866 Section 3(f)(1), as amended by E.O. 14094. This rulemaking is a significant
regulatory action because it is likely to have an annual effect on the economy of $200 million or
more in any one year or adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or safety, or state, local, territorial
or tribal governments or communities. Specifically, the final amendments to HAP fugitive
standards under Subpart FFFFF are projected to reduce HAP emissions by about 64 short tons
1-8
-------
per year and PM2.5 emissions by about 470 short tons per year. The EPA monetized the projected
benefits of reducing PM2.5 emissions in terms of the value of avoided premature deaths and
illnesses attributable to PM2.5. The equivalent annualized value of monetized benefits related to
PM2.5 emissions reductions is greater than $200 million per year, as seen in Table 1-2.
Table 1-1: Current and Final Standards for II&S Facility Emissions
Emissions Segment
Current Standard
Final Standard
Fenceline Monitoring
No Requirement
Requirement with Work
Practice Action Level for Cr
BF Unplanned Bleeder Valve
Openings
Work Practices
BF Planned Bleeder Valve
Openings
8% Opacity Limit
BF/BOPF Slag Processing,
Handling, and Storage
No Standard
10% Opacity Limit
BF Bell Leaks
Work Practices; 10%
Opacity Action Level
BF Iron Beaching
MACT Floor and Work
Practices
BOPF Shop Fugitives
20% Opacity Limit
20% Opacity Limit and
Work Practices
Sinter Plant: D/F and PAH
VOC and Oil Content
Limit based on addition of
Surrogate Standard
ACI
Sinter Plant: Hg
No Standard
BTF
Sinter Plant: COS, HC1
BOPF: HC1, THC, D/F
No Standard
MACT Floor
BF/BF stoves: HC1, THC
Error! Reference source not found, presents projected emissions reductions, health
benefits, compliance costs, and net benefits from the final amendments to the NESHAP for II&S
facilities. Health benefits, compliance costs and net benefits are presented in terms of present-
value (PV) and equivalent annualized value (EAV) over the period 2026-2035, discounted back
to 2024. The EAV represents a flow of constant annual values that would yield a sum equivalent
to the PV. PM reductions, some fraction of which are expected to be PM2.5, are expected to occur
as result of implementing the final standards for BF/BOPF fugitive emissions sources. The EPA
1-9
-------
monetized the projected benefits of reducing PM2.5 emissions in terms of the value of avoided
premature mortality and morbidity to particulate matter; the estimated PM-attributable benefits
are quantified using two alternative estimates of the risk of mortality from long-term exposure to
fine particles. Net benefits are calculated as monetized health benefits minus compliance costs.
EPA did not monetize benefits of HAP reductions or non-health benefits of PM/PM2.5 reductions,
both of which are expected to be positive.
Table 1-2: Monetized Benefits, Compliance Costs, Net Benefits, Emissions Reductions, and
Non-Monetized Benefits for the Final NESHAP Amendments, 2026-2035, Discounted to
2024 (million 2022$3)a
3 Percent Discount Rate
7 Percent Discount Rate
PV
EAV
PV
EAV
$1,800
$200
$1,300
$170
Monetized Health Benefits'3
and
and
and
and
$3,700
$420
$2,600
$340
Compliance Costs
$45
$5.3
$36
$5.1
$1,800
$190
$1,200
$160
Net Benefits
and
and
and
and
$3,700
$410
$2,600
$330
Emissions Reductions
2026-2035
HAP
640 short tons
PM
18,000 short tons
PM2.5
4,700 short tons
D/F
72 grams
PAH
54 short tons
Hg
530 pounds
Non-Monetized Benefits
HAP benefits from reducing 1,100 short tons of HAP from
2026-2035
Benefits from reducing 72g of D/F, 54 tons of PAH, 5301bs of
Hg from 2026-2035
Non-health benefits from reducing 18,000 tons of PM, of which
4,700 tons is PM2.5, from 2026-2035
Visibility Effects
Reduced Ecosystem/Vegetation Effects
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise noted.
b Monetized benefits include health benefits associated with reducing PM2.5 emissions. The monetized health benefits are
quantified using two alternative concentration-response relationships from the Di et al. (2017) and Turner et al. (2016) studies
and presented at real discount rates of 3 and 7 percent. The two benefits estimates are separated by the word "and" to signify that
they are two separate estimates. Benefits from HAP reductions remain unmonetized and are thus not reflected in the table.
1-10
-------
1.3 Organization of this Report
The remainder of this report details the methodology and the results of the RIA. Chapter
2 presents a profile of the steel manufacturing industry. Chapter 3 describes emissions, emissions
control options, and engineering costs. Chapter 4 presents the benefits analysis, including a
qualitative discussion of the unmonetized benefits associated with HAP emissions reductions.
Chapter 5 presents an analysis and discussion of economic impacts. Chapter 6 presents a
comparison of benefits and costs. Chapter 7 contains the references for this RIA.
l-ll
-------
2 INDUSTRY PROFILE3
2.1 Introduction
This industry profile supports the regulatory impact analysis (RIA) of the final
amendments to the NESHAP for II&S mills. Iron is produced from iron ore, and steel is
produced by progressively removing impurities from iron ore and scrap metal. The North
American Industry Classification System code (NAICS) for Iron and Steel Mills and Ferroalloy
Manufacturing is 331110, and all integrated iron and steel manufacturing operations fall within
this classification.
There are two primary methods for manufacturing steel. The first uses a blast furnace to
convert iron ore and other raw materials into molten iron, and then produces steel in a basic
oxygen process furnace (BOPF) using primarily molten iron and scrap metal. This is the
BF/BOPF process, and is the method used by II&S manufacturing facilities. The other method is
the electric arc furnace (EAF), which primarily recycles scrap steel into new steel products. The
United States produced 87 million metric tons of raw steel in 2021, about 29 percent of which
was produced by the BF/BOPF process in II&S facilities. The remainder was produced at EAF
facilities (USGS, 2022a). Steel is a primary input to automobiles, home appliances, and
residential construction, so demand for steel is a derived demand that depends on an array of
final products.
Figure 2-1 illustrates the four-step production process for manufacturing steel products at
II&S facilities. The first step is iron making. Primary inputs to the iron making process are iron
ore or other sources of iron, coke or coal, and flux. Pig iron is the primary output of iron making
and the primary input to the next step in the process, steel making. Metal scrap and flux are also
used in steel making. The steel making process produces molten steel that is shaped into solid
forms at forming mills. Finishing mills then shape, harden, and treat the semi-finished steel to
yield its final marketable condition.
3 This section is derived in part from the Economic Impact Analysis of Final II&S NESHAP (U.S. EPA, 2002).
2-1
-------
Figure 2-1: The Integrated Steel Making Process
Iron Ore Coke Flux
Finished Steel Products
Source: U.S. EPA. 2002. Economic Impact Analysis of Final II&S NESHAP. Available here:
https://www.epa.gOv/sites/default/files/2020-07/documents/iron-steel_eia_neshap_final_09-
2002.pdf
2.2 Iron Making
Blast furnaces are the primary site of iron making at integrated facilities where iron ore is
converted into more pure and uniform iron. Blast furnaces are tall steel vessels lined with
refractory brick. They range in diameter from 20 to 50 feet and in height from 70 to 360 feet.4
Conveyor systems of carts and ladles carry inputs and outputs to and from the blast furnace.
4 https://www.britannica.com/technology/blast-furnace. Accessed 1/26/2023.
2-2
-------
Iron ore, coke, and flux are the primary inputs to the iron making process. Iron ore, which
is typically 50 to 70 percent iron, is the primary source of iron for II&S mills. Pellets are the
primary source of iron ore used in iron making at integrated steel mills. Iron can also be captured
by sintering from fine grains, pollution control dust, and sludge. Sintering ignites these materials
and fuses them into cakes that are 52 to 60 percent iron.
Coke is made in ovens that heat metallurgical coal to drive off gases, oil, and tar, which
can be collected by a coke by-product plant to use for other purposes or to sell. Coke may be
generated by an II&S facility or purchased from a merchant coke producer. Flux is a general
name for any material used in the iron or steel making process that is used to collect impurities
from molten metal. Limestone is commonly used as flux in blast furnaces, in addition to silica,
dolomite, and lime.5
Figure 2-2 shows the iron making process at blast furnaces. Once the blast furnace is
fired up, it runs continuously until the lining is worn away. Coke, iron materials, and flux are
charged into the top of the furnace. Hot air is forced into the furnace from the bottom . The hot
air ignites the coke, which provides the fuel to melt the iron. As the iron ore melts, chemical
reactions occur. Coke releases carbon as it burns, which combines with the iron. Carbon bonds
with oxygen in the iron ore to reduce the iron oxide to pure iron. The bonded carbon and oxygen
leave the molten iron in the form of carbon monoxide, which is the blast furnace gas. Some of
the carbon remains in the iron. Carbon is an important component of iron and steel because it
allows iron and steel to harden when they are cooled rapidly.
Flux combines with the impurities in molten iron to form slag. Slag separates from the
molten iron and rises to the surface. A tap removes the slag from the iron while molten iron,
called hot metal, is removed from a different tap at 2,800 to 3,000°F. Producing a metric ton of
iron from a blast furnace requires about 1.6 metric tons of iron ore, 450 kg of coke (740 kg of
coal), and 120 kg of limestone. 6
Hot metal may be transferred directly to steel making furnaces. Hot metal that has cooled
and solidified is called pig iron. Pig iron is typically used in steel making furnaces, but it also
may be cast for sale as merchant pig iron. Merchant pig iron may be used by foundries or electric
5 https://www.britannica.com/technology/flux-metallurgy. Accessed 1/26/2023.
6 https://worldsteel.org/steel-topics/raw-materials/. Accessed 1/26/2023.
2-3
-------
arc furnace (EAF) facilities that do not have iron making capabilities. In 2021, blast furnaces in
the United States produced 22 million short tons of pig iron (USGS, 2022a).
Figure 2-2: Iron Making Process: Blast Furnace
Source: U.S. EPA, Office of Compliance. 1995. EPA Office of Compliance Sector Notebook Project: Profile of the
Iron and Steel Industry. Washington, DC: Environmental Protection Agency.
2.3 Steel Making
Steel making is carried out in basic oxygen process furnaces or in EAFs, while iron
making is only carried out in blast furnaces. Basic oxygen furnaces are the standard steel making
furnace used at integrated mills; EAFs are the standard furnace at mini-mills since they use scrap
metal efficiently on a small scale. Open hearth furnaces were used to produce steel prior to 1991
but have not been used in the United States since that time.
2-4
-------
Hot metal or pig iron is the primary input to the steel making process at integrated mills.
Hot metal accounts for up to 70-712 percent of the iron charged into a steel making furnace. 7
Scrap metal is also used, which either comes as waste from other mill activities or is purchased
on the scrap metal market. Scrap metal must be carefully sorted to control the alloy content of
the steel. Direct-reduced iron (DRI) may also be used to increase iron content, particularly in
EAFs that use mainly scrap metal for the iron source. DRI is iron that has been formed from iron
ore by a chemical process, directly removing oxygen atoms from the iron oxide molecules.
Figure 2-3 shows the steel making process at basic oxygen furnaces and EAFs. At basic
oxygen furnaces, hot metal and other iron sources are charged into the furnace. An oxygen lance
is lowered into the furnace to inject high purity oxygen—99.5 to 99.8 percent pure—to minimize
the introduction of contaminants. Some basic oxygen furnaces insert the oxygen from below.
Energy for the melting of scrap and cooled pig iron comes from the oxidation of silicon, carbon,
manganese, and phosphorous. Flux is added to collect the oxides produced in the form of slag
and to reduce the levels of sulfur and phosphorous in the metal. Approximately 30-50 kilograms
of lime are needed to produce a metric ton of steel.8 The basic oxygen process can produce
approximately 220 tons in 45 minutes.9 When the process is complete, the furnace is tipped and
the molten steel flows out of a tap into a ladle.
7 https://www.wermac.org/steel/steelmaking.html. Accessed 3/15/2023.
8 https://britishlime.org/technical/iron_and_steel.php. Accessed 1/26/2023.
9 https://www.wermac.org/steel/steelmaking.html. Accessed 1/26/2023.
2-5
-------
Figure 2-3: Steel Making Process: Basic Oxygen Process Furnace and Electric Arc Furnace
IlasJc Oxygen Furnace
Air *
Scrap *-
Flux
Iron >
Air
Scrap
Electricity
Mo lien
Steel
Dnst/
Sludge
Source: U.S. EPA, Office of Compliance. 1995. EPA Office of Compliance Sector Notebook Project: Profile of the
Iron and Steel Industry. Washington, DC: Environmental Protection Agency.
Steel often undergoes additional, referred to as secondary, metallurgical processes after it
is removed from the steel making furnace. Secondary steel making takes place in vessels, smaller
furnaces, or the ladle. These sites do not have to be as strong as the primary refining furnaces
because they are not required to contain the powerful primary processes. Secondary steel making
can have many purposes, such as removal of oxygen, sulfur, hydrogen, and other gases by
exposing the steel to a low-pressure environment; removal of carbon monoxide through the use
2-6
-------
of deoxidizers such as aluminum, titanium, and silicon; and changing of the composition of
unremovable substances such as oxides to further improve mechanical properties.
Molten steel transferred directly from the steel making furnace is the primary input to the
forming process. Forming must be done quickly before the molten steel begins to cool and
solidify. Two generalized methods are used to shape the molten steel into a solid form for use at
finishing mills: ingot casting and continuous casting machines (see Figure 2-4). Ingot casting is
the traditional method of forming molten steel in which the metal is poured into ingot molds and
allowed to cool and solidify. However, continuous casting currently accounts for greater than 99
percent of steel production (USGS, 2022a). Continuous casting, in which the steel is cast directly
into a moving mold on a machine, reduces loss of steel in processing.
Figure 2-4: Ingot Casting and Continuous Casting
Molk'U MU'I
>• Process Water
Scale
C O Q|
c o o|
'ontinuous Casting
V
Villi-! iiiWutl Mia-I
Source: U.S. EPA, Office of Compliance. 1995. EPA Office of Compliance Sector Notebook Project: Profile of the
Iron and Steel Industry. Washington, DC: Environmental Protection Agency.
2-7
-------
2.4 Steel Mill Products
Carbon steel is the most common type of steel by metallurgical content (see Table 2-1).
By definition, for a metal to be steel it must contain carbon in addition to iron. Increases in
carbon content increase the hardness, tensile strength, and yield strength of steel but can also
make steel susceptible to cracking. Alloy steel is the general name for the wide variety of steels
that manipulate alloy content for a specific group of attributes. Alloy steel does not have strict
alloy limits but does have desirable ranges. Some of the common alloy materials are manganese,
phosphorous, and copper. Stainless steel must have a specific mix of at least 10.12 percent
chromium, less than 1.2 percent carbon and other alloying elements, and at least 50 percent
iron. 10
Table 2-1: Steel Type by Metallurgical Content, 2021
Thousand Metric Tons
Percent
Carbon Steel
81,700
95%
Stainless Steel
2,250
3%
All Other Alloy Steel
1,970
2%
Total
85,900
100%
Source: United States Geological Survey (USGS). 2021. Iron and Steel [table-only release]. Metals and Minerals:
USGS Minerals Yearbook 2021, volume 1. Available at: https://www.usgs.gov/centers/national-minerals-
information-center/iron-and-steel-statistics-and-information.
Semi-finished steel formed from the casting process are passed through processing lines
at finishing mills to give the steel its final shape. At rolling mills, steel slabs are flattened or
rolled into pipes. At hot strip mills, slabs pass between rollers until they have reached the desired
thickness. The slabs may then be cold rolled in cold reduction mills. Cold reduction, which
applies greater pressure than the hot rolling process, improves mechanical properties,
machinability, and size accuracy, and produces thinner gauges than possible with hot rolling
alone. Cold reduction is often used to produce wires, tubes, sheet and strip steel products.
After the shape and surface quality of steel have been refined at finishing mills, the metal
often undergoes further processes for cleansing. Pressurized air or water and cleaning agents are
the first step in cleansing. Acid baths during the pickling process remove rust, scales from
processing, and other materials. The cleaning and pickling processes help coatings to adhere to
10 https://www.aperam.com/stainless/what-is-stainless-steel/. Accessed 1/16/2023.
2-8
-------
the steel. Metallic coatings are frequently applied to sheet and strip to inhibit corrosion and
oxidation, and to improve visual appearance. The most common coating is galvanizing, which is
a zinc coating. Other coatings include aluminum, tin, chromium, and lead. Semi-finished
products are also finished into pipes and tubes. Pipes are produced by piercing a rod of steel to
create a pipe with no seam or by rolling and welding sheet metal.
Slag is generated by iron and steel making. Slag contains the impurities of the molten
metal, but it can be sintered to capture the iron content. Slag can also be sold for use by the
cement industry, for railroad ballast, and by the construction industry.
2.5 Uses and Consumers of Steel Mill Products
Table 2-2 shows world steel consumption over a variety of categories. Building and
infrastructure construction accounts for more than half of global steel consumption. U.S.
Securities and Exchange Commission filings provide insight into the end-users of steel produced
by the two firms that own all II&S facilities in the U.S., U.S. Steel and Cleveland-Cliffs Inc. The
automotive industry is the largest end-user of domestic steel produced by II&S facilities,
accounting for about 43 percent of U.S. Steel steel shipments and 40 percent of Cleveland-Cliffs
Inc.'s total revenue . 11 Since steel demand is derivative of demand for automobiles and
construction, sales of U.S. steel manufactures sales are particularly responsive to underlying
changes in underlying macroeconomic conditions that affect demand for those end products
(e.g., changes in interest rates).
Table 2-2: Global Steel Consumption by Category, 2019
Category Share
Buildings and Infrastructure 52%
Automotive 12%
Metal Products 10%
Mechanical Equipment 16%
Other Transport 5%
Domestic Appliances 2%
Electrical Equipment 3%
Source: https://worldsteel.org/about-steel/steel-facts/. Accessed 1/26/2024.
2.6 Industry Organization
11 Source: U.S. Steel Corporation Form 10-K 2022 and Cleveland-Cliffs Inc. Form 10-K 2022
2-9
-------
There are currently eight II&S manufacturing facilities in the United States; Table 2-3
lists these facilities. These facilities are all in the midwestern United States, across five states:
three in Indiana, two in Ohio, and one each in Illinois, Michigan, and Pennsylvania. A ninth
facility, the Great Lakes Works in Ecorse, Michigan (owned by U.S. Steel) closed in 2019. The
facilities range in steel capacity from 2.5 to 7.5 million metric tons per year. Three II&S facilities
use on-site sinter plants: Burns Harbor Works, Indiana Harbor Works, and Gary Works. The
Dearborn Works permanently idled their hot strip mill, anneal, and temper operations in 2020.12
The number of II&S has decreased from 20 (owned by 14 firms) in 2001 to 8 (owned by two
firms). As previously mentioned, two parent companies account for all the raw steel from the
BF/BOPF process. Cleveland-Cliffs Inc. facilities account for 59 percent of II&S capacity and
U.S. Steel facilities account for the remaining 41 percent. There are also 88 EAF facilities owned
by 36 firms. Since Cleveland-Cliffs Inc. and U.S. Steel own both II&S facilities and EAF
facilities, there are 96 steel manufacturing facilities owned by 36 firms.
Table 2-3: II&S Facilities
Steel
Ultimate Parent
Company
Facility
Location
Capacity
(million
metric
tons/year)
Sinter
Plant
Burns Harbor Works
Burns Harbor,
IN
5
Yes
Cleveland Works
Cleveland, OH
3
No
Cleveland-Cliffs Inc.
Dearborn Works
Dearborn, MI
2.5
No
Indiana Harbor
Works
East Chicago, IN
5.5
Yes
Middletown Works
Middletown, OH
3
No
Gary Works
Gary, IN
7.5
Yes
U.S. Steel
Granite City Works
Granite City, IL
2.8
No
Mon Valley Works
Braddock, PA
2.9
No
Sources: US Steel and Cleveland-Cliffs websites https://www.clevelandcliffs.com/operations/steelmaking
https://www.ussteel.com/about-us/locations.
12 https://www.clevelandcliffs.com/operations/steelmaking/dearborn-
works#:~:text=During%202020%2C%20the%20Dearborn%20Works,temper%20operations%20were%20perma
nently%20idled. Accessed 1/23/2023.
2-10
-------
Table 2-4: EAF Facilities
Firm Name
Firm-Owned EAFs
Acciaierie Valbruna S.p.a.
Acerinox S.A.
Allegheny Technologies Inc.
Berkshire Hathaway Inc.
Bluescope Steel Limited
Carpenter Technology Corp.
Charter Manufacturing Company, Inc.
Cleveland-Cliffs Inc.
Commercial Metals Company
Ellwood Group, Inc.
Evraz PLC
G. O. Carlson, Inc.
Gerdau S.A.
Grupo Simec, S.A.B. De C.V.
Haynes International, Inc.
Hoganas Holding AB
JSW Steel Limited
KCI Holdings, Inc.
Kyoei Steel Ltd.
Leggett & Piatt, Inc.
Melrose Industries PLC
Nippon Steel Corporation
NLMK, PAO
Nucor Corporation
Outokumpu
Schnitzer Steel Industries, Inc.
SSAB U.S. Holding, Inc.
Steel Dynamics, Inc.
Sumitomo Corporation
Swiss Steel Holding AG
Tenaris Global Services (USA) Corporation
Timkensteel Corporation
U.S. Steel
Universal Stainless & Alloy Products, Inc.
Vallourec Deutschland Gmbh
Whemco Inc.
2
2
4
9
2
1
1
10
2
1
1
1
1
1
1
1
1
1
21
1
1
2
6
1
1
1
2
2
1
1
1
Grand Total
88
Source: Information on existing EAFs from AIST publication "2021 AIST Electric Arc Furnace Roundup"
2-11
-------
Estimated employment in iron and steel mills is 86,000 (USGS, 2022a), down from about
160.000 in 2000 and 110,000 in 2010.13 As detailed in Section 2.7.4, United States steel
production has been trending strongly towards EAF and will likely continue to do so for the
foreseeable future. The fall in employment is closely related to the shift in production to EAF, as
EAF steel requires fewer labor-hours to produce. 14
2.6.1 Horizontal and Vertical Integration
Whether a firm is vertically or horizontally integrated depends on the business activity
that the parent company does and the businesses that the facilities or subsidiaries owned by that
company engage in. Vertically integrated companies may own the production process of inputs
that are used in other production processes within the company. In the steel industry, a company
that operates an II&S facility might also own the taconite iron ore mining and processing
facilities, coal mines, and coking facilities, all of which contribute primary inputs to II&S
facilities. Horizontal integration occurs if a firm increases production of a good at the same point
in the supply chain, through growth or acquisitions and mergers. Cleveland-Cliffs Inc. and U.S.
Steel own all taconite iron ore mining and processing facilities in the United States (see Table
2-5). Both companies hold full or partial ownership in facilities that produce coke, with U.S.
Steel owning the largest facility in the country (Clairton, located at the Mon Valley Works) (see
Table 2-6). Finally, Cleveland-Cliffs Inc. owns a facility that produces hot-briquetted iron, a
lower-carbon iron feedstock used primarily as a substitute for scrap metal in EAFs.15 U.S. Steel
and Cleveland-Cliffs Inc. could also be considered horizontally integrated at the steel
manufacturing stage of production because they represent large portions of the industry (and the
entirety of the II&S portion of the industry).
13 USGS Mineral Commodity Summaries, available here: https://www.usgs.gov/centers/national-minerals-
information-center/iron-and-steel-statistics-and-information. Accessed 1/27/2023.
14 https://www.aei.org/carpe-diem/the-main-reason-for-the-loss-of-us-steel-jobs-is-productivity-and-technology-
not-imports-and-theyre-not-coming-back/. Accessed 1/27/2023.
15 https://www.clevelandcliffs.com/operations/steelmaking/toledo-dr-plant. Accessed 1/27/2023.
2-12
-------
Table 2-5: U.S. Taconite Iron Ore Facility Ownership, Production, and Capacity
State Facility Name
„ x „ Annual
Parent Company „
r Capacity
Production
2020
Production
2019
Minorca Mine
Cleveland-Cliffs Inc. 2.9
2.8
2.8
Hibbing Taconite Mine
Cleveland-Cliffs Inc. 8.1
2.5
7.6
Northshore Mining
United Taconite Mine
Cleveland-Cliffs Inc. 6.1
3.9
5.3
Cleveland-Cliffs Inc. 5.5
5.3
5.4
Keetac Mine
U.S. Steel 5.5
2
5.3
Minntac Mine
U.S. Steel 14.8
12.8
13.1
MI Tilden Mine
Cleveland-Cliffs Inc. 8.1
6.4
7.8
Total
51
35.7
47.3
Source: Minnesota Department of Revenue, (2022). Mining Tax Guide.
https://www.revenue.state.mn.us/sites/default/files/2022-10/2022_mining_guide_0.pdf
Source: Tuck. (2022b). Iron Ore 1 tables onlv releasel. U.S. Geological Survey Minerals Yearbook - 2020. Available
at https://www.usgs.gov/centers/national-minerals-information-center/iron-ore-statistics-and-information.
Table 2-6: U.S. Coking Facility Ownership and Capacity
Parent Company
Facility
Capacity
(million short
tons)
Status
Burns Harbor, IN
1.4
Active
Follansbee, WV
N/A
Closing
Cleveland-Cliffs Inc.
Monessen, PA
0.35
Active
Middletown, OH
0.35
Idle
Warren, OH
0.55
Active
DTE Energy Company
EES-River Rouge, MI
0.8
Active
Drummond Company
ABC-Tarrant, AL
0.73
Active
James C. Justice Companies Inc. Bluestone-Birmingham, AL
0.35
Idle
East Chicago, IN
1.22
Active
Franklin Furnace, OH
1.1
Active
Suncoke Energy, Inc.
Granite City, IL
0.65
Active
Middletown, OH
0.55
Active
Vansant, VA
0.72
Active
U.S. Steel
Clairton, PA
4.3
Active
Source: Firm websites.
Note: Firms owning II&S facilities displayed in bold.
2-13
-------
2.6.2 Firm Characteristics
Table 2-7 reports 2021 sales and employment data for U.S. Steel and Cleveland-Cliffs
Inc. The data provided in the table were collected from the corporations' Forms 10-K submitted
to the U.S. Securities and Exchange Commission. Both companies reported similar sales revenue
in 2021 (just over $20 billion) and employed approximately 25,000 workers worldwide.
Table 2-7: Taconite Iron Ore Facility Owner Sales and Employment, 2021
Parent Company
HQ Location
Legal Form
Sales (million USD)
Employment
U.S. Steel
Pittsburgh, PA
Public
$20,275
24,500
Cleveland-Cliffs Inc.
Cleveland, OH
Public
$20,444
26,000
Total
$40,719
50,500
Sources: U.S. Steel Corporation Form 10-K 2022 and Cleveland-Cliffs Inc. Form 10-K 2022
2.7 Market Conditions
2.7.1 Domestic Production and Consumption
Table 2-8 shows steel production, consumption, and prices in the United States from
2010 to 2021. Steel production, shipments, and consumption were broadly stable over the period.
Steel production and consumption dipped sharply due to the economic slowdown caused by the
COVID-19 pandemic, but rebounded in 2021. Table 2-9 shows steel mill product shipments by
product type. Hot-rolled coil sheets are the most produced steel mill product, accounting for
about 228 percent of all shipments in 2019, and therefore are a useful surrogate for all product
prices.
2-14
-------
Table 2-8: U.S. Steel Production, Consumption, and Prices, 2010-2021 (volumes in
thousand metric tons)
Year
Raw Steel
Production
Shipments
Consumption
Hot Rolled
Coil Steel
($/metric
ton)a
HRC Price
Adjusted to
2021 USD
All Steel Mill
Products PPI
2010
80,500
75,700
82
620
1,182
191.7
2011
86,400
83,300
90
735
1,307
216.2
2012
88,700
87,000
98
652
1,249
208
2013
86,900
86,600
100
634
1,338
195
2014
88,200
89,100
107
647
1,326
200.2
2015
78,800
78,500
99
454
1,124
177.1
2016
78,500
78,500
93
533
1,430
167.8
2017
81,600
82,500
99.4
621
1,407
187.4
2018
86,600
86,400
101
835
1,604
211.1
2019
87,800
87,300
99.6
600
1,269
204
2020
72,700
73,500
82.9
607
1,533
184.4
2021
87,000
88,000
98
1,610
1,610
348.5
a Steel prices reflect HRC steel USD/metric ton average monthly prices. Hot rolled sheets are the most produced
steel in the United States; see Table 15. HRC prices were adjusted to 2021 values using the PPI for hot rolled
sheet steel. The PPI for steel mill products index year: 1982 = 100.
Sources:
USGS. Iron and steel. Mineral Commodity Summaries 2011-2022. Available at:
https://www.usgs.gov/centers/national-minerals-information-center/iron-and-steel-statistics-and-information.
U.S. Bureau of Labor Statistics. (2022). Producer Price Index by commodity: metals and metal products: Hot
rolled steel sheet and strip, including tin mill products [WPU101703],
U.S. Bureau of Labor Statistics. (2022). Producer Price Index by commodity: metals and metal products: Steel
mill products. [WPU1017],
Investing.com (2024) US Midwest Domestic Hot-Rolled Coil Steel Futures Historical Data.
httpsZ/www.investing.com/commodities/us-steel-coil-futures-historical-data^
2-15
-------
Table 2-9: Shipments of Steel Mill Products by Type, 2019 and 2020
Quantity
(thousand metric tons)
Steel mill products:
2019
2020
2019
2020
Ingots, blooms, billets, and slabs
525
424
0.6
0.58
Wire rods
2,860
1,940
3.28
2.65
Structural shapes, heavy
6,240
5,310
7.15
7.22
Plates, cut lengths
5,840
5,120
6.7
6.96
Plates, in coils
2,280
1,680
2.62
2.28
Rails
814
721
0.93
0.98
Railroad accessories
359
295
0.41
0.4
Bars, hot-rolled
4,560
3,210
5.23
4.37
Bars, light-shaped
2,060
1,410
2.36
1.92
Bars, reinforcing
7,740
6,330
8.87
8.61
Bars, cold finished
1,070
721
1.22
0.98
Pipe and tubing, standard pipe
843
532
0.97
0.72
Pipe and tubing, oil country goods
1,700
868
1.95
1.18
Pipe and tubing, line pipe
589
292
0.68
0.4
Pipe and tubing, mechanical tubing
510
376
0.58
0.51
Pipe and tubing, pipe piling
210
151
0.24
0.21
Pipe and tubing, pressure tubing
16
16
0.02
0.02
Pipe and tubing, structural
425
383
0.49
0.52
Wire
445
366
0.51
0.5
Tin mill products, blackplate
43
9
0.05
0.01
Tin mill products, tinplate
875
1,130
1
1.54
Tin mill products, tin free steel
190
36
0.22
0.05
Tin mill products, tin coated sheets
69
58
0.08
0.08
Sheets, hot-rolled
19,900
17,800
22.82
24.27
Sheets, cold-rolled
9,700
8,490
11.11
11.56
Sheets and strip, hot dip galvanized
14,100
12,600
16.11
17.09
Sheets and strip, electrogalvanized
570
415
0.65
0.56
Sheets and strip, other metallic coated
2,100
2,240
2.4
3.04
Strip, hot-rolled
82
83
0.09
0.11
Strip, cold-rolled
582
493
0.67
0.67
Total
87,300
73,500
100
100
Source: USGS. (2020). Iron and steel [tables only release]. U.S. Geological Survey Minerals Yearbook - 2020.
https://www.usgs.gov/centers/national-minerals-information-center/iron-and-steel-statistics-and-information
2,7,2 Prices
Table 2-8 shows the price of hot-rolled coil steel in both nominal and 2021 dollars. Steel
prices spiked in 2021, doubling year-over-year from 2020 to 2021. This was a temporary spike,
as steel production struggled to keep with demand from the construction, automotive, and home
2-16
-------
appliance sectors and higher energy and raw material costs. 16 Prices have since returned to
historical norms, with hot-rolled coil steel futures trading at 775 $/metric ton in January 2024.17
2,7.3 Foreign Trade
Table 2-10 shows steel mill product imports and exports from 2010-2021. The United
States was a net importer over the time period, with the volume of the trade deficit peaking in
2014. Mexico and Canada account for the vast majority of steel mill product exports, while the
U.S. imports significant quantities from Canada, Mexico, Brazil, South Korea, and Japan. Table
2-11 shows the breakdown of imports and exports by country.
Table 2-10: U.S. Steel Mill Products Imports and Exports, 2010-2021 (thousand metric
tons)
Year
Imports
Finished
Semi-finished1
Exports
Finished
Semi-finished
2010
21,700
17,100
4,600
11,000
10,400
609
2011
25,900
19,800
6,000
12,200
11,300
904
2012
30,400
23,500
6,900
12,500
11,700
817
2013
29,200
22,600
6,600
11,500
11,100
443
2014
40,200
30,600
9,600
10,900
10,600
289
2015
35,200
28,600
6,600
9,050
8,900
138
2016
30,000
23,900
6,000
8,450
8,400
111
2017
34,600
26,800
7,800
9,550
9,400
143
2018
30,600
23,300
7,300
7,980
7,900
94
2019
25,300
19,100
6,200
6,700
6,600
72
2020
20,000
14,600
5,300
6,810
6,700
110
2021
25,000
18,000
6,700
8,300
8,100
100
a Exports and imports rounded to 100,000 metric tons, besides semi-finished exports due to small values.
Source: USGS. (2022). Iron and steel [tables only release]. U.S. Geological Survey Minerals Yearbook - 2020.
Available at: https://www.usgs.gov/centers/national-minerals-information-center/iron-and-steel-statistics-and-
information.
16 https://www.yahoo.com/video/steel-prices-set-upturn-war-
131101512.html?guccounter=l&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=
AQAAAG6jjiF8suwUlzCn-zK8PA5PVGx2b0VE2O-
Md5LDPv7k8NcrOBoT2T6KN2RQOcXjhZdbOJvjE5Mh8LlvPnxMWxI_BxAPijlISSlyDyXJ4onKuQhEj-
PW_Ox3ykCsISBugeXHCOApgncxsJU2Z8winlH_P9SXnFyOnwtmD72vLZbD. Accessed 1/27/2023.
17 https://www.investing.com/commodities/us-steel-coil-futures-historical-data. Accessed 1/27/2023.
2-17
-------
Table 2-11: U.S. Steel Mill Product Imports and Exports by Country, 2019 and 2020
(thousand metric tons)
Country 2019 2020
Imports
Exports
Imports
Exports
Argentina
178
8
27
6
Belgium
114
28
54
14
Brazil
3,830
38
3,670
24
Canada
5,030
2,940
4,730
2,850
China
498
55
342
65
France
168
8
90
5
Germany
966
21
809
14
Italy
535
18
167
15
Japan
1,140
15
732
14
Republic of Korea
2,340
34
1,830
25
Mexico
3,370
3,050
3,010
2,630
Netherlands
499
6
420
3
Russia
977
—
390
—
Spain
404
24
262
12
Sweden
203
9
138
10
Taiwan
753
13
520
8
Turkey
297
—
510
—
United Kingdom
231
27
190
16
Vietnam
602
—
285
—
Other
3,220
404
1,810
1,090
Total
25,300
6,700
20,000
6,810
Source: USGS. (2022). Iron and steel [tables only release]. U.S. Geological Survey Minerals Yearbook - 2020.
Available at: https://www.usgs.gov/centers/national-minerals-information-center/iron-and-steel-statistics-and-
information.
2.7,4 Trends and Projections
Figure 2-5 shows U.S. steel production and capacity from 2000 to 2019. Total steel
production dropped markedly from 2008 to 2009, but has been around 80-90 million metric tons
per year since 2011. Total capacity has been steady since 2015. Figure 2-6 shows the evolution
of the U.S. steel industry from BF/BOPF to EAF production from 2001 to 2021. The share of
steel produced by II&S facilities has dropped from 53 percent in 2001 to 29 percent in 2021. The
U.S. is a global outlier in this regard: in 2020, only 28 percent of all global steel was produced
from EAFs.18
18 https://www.globalefficiencyintel.eom/new-blog/2020/9/2/part-2-cleanest-and-dirtiest-countries-for-secondary-
eaf-steel-production. Accessed 1/26/2023.
2-18
-------
Figure 2-5: Steel Production and Capacity, 2000-2019
140
120
100
80
60
40
20
0
CV> _C\b _C?> .0s _vV _vb
5 ^ A A
ry rf of op rf of
V V 'V
i Steel Production (Million Metric Tons)
•Capacity (Million Metric Tons)
Source: USGS Mineral Yearbooks, 2000-2020. Available here: https://www.usgs.gov/centers/national-minerals-
information-center/iron-and-steel-statistics-and-information.
Figure 2-6: Share of BF/BOPF and EAF Steel in the U.S., 2001-2021
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
o — vor-ooo,\0 —
-------
The EAF process has been gaining prevalence, especially domestically. EAFs produce
fewer emissions, have lower initial costs, use generally smaller operations, and are more efficient
than the traditional process. Compared to the integrated steelmaking process, EAFs are quite
energy efficient, using 2 gigajoules (GJ) of final energy per metric ton, compared to 15 GJ used
by the integrated process (IEA, 2020). The EAF process relies primarily on electricity as an
energy source, while the integrated process relies primarily on coal, resulting in vastly different
emission intensities. Scrap-based EAFs, like those used in the United States, emit about 0.3 t
C02/t of steel produced, while integrated operations emit 2.21 C02/t of steel (IEA, 2020).
However, EAFs typically face higher material costs than integrated steel mills because steel
scrap is more expensive than iron ore. Considering raw material costs along with fuel, fixed
costs, and capital costs, though, EAFs and integrated mills have similar levelized costs,
according to the IEA (2020). The United States has a long history of steelmaking and steel
consumption and, thus, a mature stock of steel and steel scrap that has supported the transition to
EAF production. Developing regions tend to have newer infrastructure and less steel recycling,
often along with a greater supply of iron ore or cheap coal (China and India, for instance), which
favors the continued investment in integrated steelmaking. The integrated process is still the
dominant steelmaking process globally, accounting for 70 percent of global production (World
Steel Association, 2022). Although EAFs will continue to gain market share of steel production
under a business-as-usual scenario, considering announced and existing steelmaking policies, the
IEA projects that by 2050 EAFs will make up just under 50 percent of global steel production.
As the industry has shifted toward EAF steelmaking, the domestic demand for iron ore has
decreased over the past several decades.
As detailed in the Organisation for Economic Co-operation and Development's recent
report Latest Developments in Steelmaking Capacity 2021 (2021), companies invested in 11 new
steelmaking facilities in the United States to start production in 2020 or later, all of which are
EAFs. Although BF/BOPF facilities are still being constructed in India, China, and parts of
Africa and Asia, it appears unlikely that BF/BOPF capacity will increase in the United States in
the near future. As shown in Table 2-3, two II&S facilities have idled over the past 3 years, and
another one closed in 2015 that now houses an EAF. As the United States, as well as other
countries, attempts to reduce carbon emissions to meet climate policy targets, EAFs may become
more cost competitive because they produce 0.3 t CO2 per metric ton of steel compared with 2.2
2-20
-------
t CO2 per metric ton of steel emitted by a BOPF (IEA, 2020). A 2021 IEA report claims that, by
2050, EAFs in the United States will make up about 90 percent of steel production (IEA, 2020).
2-21
-------
3 EMISSIONS AND ENGINEERING COSTS ANALYSIS
3.1 Introduction
In this chapter, we present estimates of the projected emissions reductions and
engineering compliance costs associated with the final NESHAP amendments for the 2026 to
2035 period. The projected costs and emissions impacts are based on facility-level estimates of
the costs of meeting the final emission limits and the expected emissions reduction of installing
the necessary controls and performing the required work practices. The baseline emissions and
emission reduction estimates are based on the number of blast furnaces, basic oxygen furnaces,
and sinter plants each facility, iron and steel production capacity at each facility, stack testing
data, information and assumptions about current installed controls, and the best available
information about emissions factors and activities for each source of fugitive emissions.
3.2 Facilities and Emissions Points
3,2,1 II&S Manufacturing Facilities
The NESHAP for II&S facilities covers eight facilities owned by two ultimate parent
companies: Cleveland-Cliffs Inc. (five facilities) and U.S. Steel (three facilities). These facilities
are all in the midwestern United States, across five states: three in Indiana, two in Ohio, and one
each in Illinois, Michigan, and Pennsylvania. A ninth facility, the Great Lakes Works in Ecorse,
Michigan (owned by U.S. Steel) closed in 2019. The three sinter plants in the source category are
located at Burns Harbor Works, Indiana Harbor Works, and Gary Works. Table 3-1 lists these
facilities.
3-1
-------
Table 3-1: II&S Facilities
Ultimate Parent Company
Facility
Sinter Plant
Burns Harbor Works
Yes
Cleveland Works
No
Cleveland-Cliffs Inc.
Dearborn Works
No
Indiana Harbor Works
Yes
Middletown Works
No
Gary Works
Yes
U.S. Steel
Granite City Works
No
Mon Valley Works
No
Sources: US Steel and Cleveland-Cliffs Inc. websites: https://www.clevelandcliffs.com/operations/steelmaking
https://www.ussteel.com/about-us/locations
II&S facilities manufacture steel by reducing iron ore to iron in a blast furnace and then
feeding the molten iron and scrap steel (along with other additives) to a basic oxygen furnace to
produce steel. Three facilities include sinter plants. Blast furnaces, basic oxygen furnaces, and
sinter plants are the primary sources of HAP and PM emissions from the source category. These
three emissions points are discussed in detail in the next section.
3,2,2 Emission Points at Regulated Facilities 19
3.2.2.1 Blast Furnaces
The blast furnace converts feedstock (mainly iron ore and taconite iron ore pellets, coke,
limestone, and sinter) into molten iron. The feedstock enters at the top of the furnace and
descends through the furnace. Coke provides heat and fuel for the chemical reaction in the
furnace and provides carbon to reduce the iron oxide by removing oxygen in the form of carbon
monoxide (CO). As the feedstock burden descends, it is heated by a countercurrent flow of gas.
Hot air is blasted into the bottom of the furnace above the hearth. As the hot air and gas flows
upward counter to the feedstock burden, it consumes the coke, reducing the oxygen content of
the iron and producing CO. The limestone decomposes into slag, which sits on the top of the
molten iron. The iron and slag exit through separate tapholes at the bottom of the furnace, and
19 This section draws heavily from the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for
II&S Plants - Background Information for Proposed Standards (U.S. EPA, 2001) (EPA 453/R-01-005) and the
Development of Emissions Estimates for Fugitive or Intermittent HAP Emissions Sources for an Example II&S
Facility for input to the RTR Risk Assessment (U.S. EPA, 2019c) (Available at:
https://www.regulations.gov/document/EPA-HQ-OAR-2002-0083-0956)
3-2
-------
are directed to ladles in the casthouse before transportation to the basic oxygen furnace. Figure
3-1 provides a diagram of the blast furnace and the chemical reactions produced. For more
detailed information on iron production, see Section 2.2.
Figure 3-1: Diagram of a Blast Furnace
The Blast Furnace
Charge: iron ore, coke, limestone
I
Hot waste gases
Carbon dioxide reacts
with coke:
C02(g) + C(s)-2CO(g)
Hot air reacts with coke:
C(s) + 02(g)-C02(g)
Hot air blast
Hot waste gases
Reduction of iron ore:
3CO(g) + Fe203(s)—2Fe(l) + 3C02(g)
Limestone decomposes and
slag forms:
CaO(s) + C02(g)
CaCO,(s)
CaO(s) + Si02(s) -
sand
Hot air blast
• CaSiOjO)
slag
Source: https://www.metallics.org/pig-iron-bf.htmL
There are several fugitive emissions points in the blast furnace. Figure 3-2 below contains
a diagram. Flood systems in the blast furnace casthouse capture emissions and use a scrubber or
baghouse to remove PM. Fugitive emissions in the casthouse result from incomplete capture by
the emissions systems in place. Fugitive emissions leave the casthouse though roof vents, open
doors, and other building openings. Fugitive emissions also occur through bleeder valve
openings (both planned and unplanned), bell leaks, slag processing, and iron beaching. The gas
leaving the blast furnace is primarily CO and nitrogen and is laden with PM.
There is a pressure/bleeder valve 100-150 feet above the casthouse. Raw material build-
up can occasionally create a pressure surge referred to as a "slip" that leads to an unexpected
3-3
-------
releases of the bleeder valve, lasting from seconds up to about ten minutes. These unexpected
bleeder valve openings are referred to as "slips" and occur up to about seven times per month.
Bleeder valves are also opened periodically for repair about twice per week. The blast furnace is
idled prior to planned bleeder valve openings, leading to lower emissions than during unplanned
bleeder valve openings.
Blast furnace bells are part of the hopper system on the blast furnace that allow raw
materials to be charged into the furnace without allowing solids or gases to escape into the
atmosphere. The typical bell system consists of a large and small bell arranged in a lock system,
with the small bell on top of the large bell. Feedstock is placed into the small bell with the large
bell closed. Once full, the small bell closes to the atmosphere and its bottom opens into the top of
the large bell, which directs the raw materials into the blast furnace. Exhaust air exits the bell
through uptakes ducts which directs it to a scrubber or baghouse for PM removal. However,
there is a narrow gap in the seal between the bell system and the furnace which allows fugitive
emissions to escape. The gap becomes wider over time as the seal wears down, and typically
needs to be replaced every five years.
The last two sources of fugitives in the blast furnace are slag handling and iron beaching.
Slag is skimmed off the molten iron and exits the casthouse through a system of troughs to large
open pits where the slag cools. The slag emissions occur when the slag is dumped into the open
pits, stored in the open pits, and removed from the pits. Iron beach occurs when the basic oxygen
furnace stops suddenly and cannot receive the molten iron produced by the blast furnace. When
this occurs, molten iron from the blast furnace is dumped onto the ground where it emits fumes.
3-4
-------
Figure 3-2: Diagram of Blast Furnace Fugitive Emissions
1. Blast Furnace Casthouse (All openings, i.e., roof
vents/doors; regulated)
2. Bell Leaks (Fugitive)
3. Unplanned Openings/Slips (Bleeder valve; intermittent)
4. Planned Openings (Bleeder valve; intermittent)
5. Slag Handling/Storage (Fugitive)
6. Beaching (Fugitive)
3. and 4. Bleeder Valve
2. Bell Leaks
Taconite ore.
Coke
Limestone.
Sinter
en
1. Blast Furnace
Casthouse
3.2.2.2 Basic Oxygen Process Furnace Shops
The basic oxygen process furnace shop (BOPF shop) receives a charge of molten iron
and scrap steel and converts it into molten steel. Molten iron produced by the blast furnace is
transported from the BF casthouse by a system of torpedo cars and transferred to a ladle. Each
BOPF shop contains at least two vessels that may be operated alternately or used at different
stages of the process. The BOPF process consists of the following distinct steps:
1. Charging: the addition of molten iron and metal scrap to the furnace
2. Oxygen blow: introducing oxygen into the furnace to refine the iron
3. Turndown: tilting the vessel to obtain a sample and check temperature
4. Reblow: introducing additional oxygen, if needed
5. Tapping: pouring the molten steel into a ladle
6. Deslagging: pouring residual slag into a slag pot
3-5
-------
The furnace is a large, open-mouthed, basic refractory-lined vessel. High-purity oxygen
is blown into the vessel to oxidize the carbon and silicon in the molten iron to remove them and
to provide heat to melt the scrap. After the oxygen jet starts, lime is added to the furnace to
provide a slag of the basicity, and fluorspar and mill scale are added to manipulate slag fluidity.
Computations are made to determine the necessary percentage of molten iron, scrap, flux
materials, and alloy additions to create steel of the desired specifications. Steelmaking fluxes are
added to reduce the sulfur and phosphorus content of the metal, and the oxidation of silicon,
carbon, manganese, phosphorus, and iron, provide the energy required to melt the scrap, form the
slag, and attain the desired temperature inside the vessel. For more information on steel
production, see Section 2.3.
Figure 3-3: Diagram of a Basic Oxygen Furnace Vessel
Molten iron (70-75%) +
steel scraps (25-30%) +
lime/dolomite
1
BOF converter
Source: Yildirim and Prezzi (2011)
Emissions occur in the BOPF shop from hot metal transfer, desulfurization, charging,
oxygen blow, and tapping. Emissions are captured by a hood system and routed to a wet scrubber
or electrostatic precipitator (ESP) to remove PM. Incomplete capture of emissions from
metallurgical processes inside the BOPF shop result in fugitive emissions, which exit through
roof vents and other building openings. The major H AP emitted from the BOPF shop are
3-6
-------
manganese (Mn) and lead (Pb), in addition to smaller amounts of chromium (Cr), copper (Cu),
mercury (Hg), nickel (Ni), selenium (Se), and other metal HAP.
3.2.2.3 Sinter Plants
Three II&S facilities include sinter plants: Gary Works, Burns Harbor Works, and
Indiana Harbor Works. Sintering recovers the raw material value of many waste products
generated at II&S facilities that would otherwise be landfilled or stockpiled. The sinter plant
returns waste iron-bearing materials to the blast furnace and also provides part of the flux used in
the iron-making process. Feed material includes iron ore fines, blast furnace dust, mill scale, and
recycled fines from the sintering process.
The sintering machine accepts feed and conveys it down a moving strand. Near the feed
end of the grate, the bed is ignited on the surface by gas burners and, as the mixture moves along
on the traveling grate, air is pulled down through the mixture to burn the fuel by downdraft
combustion; either coke oven gas or natural gas may be used for fuel to ignite the undersize coke
or coal in the feed. As the grates move continuously over a series of windboxes toward the
discharge end of the strand, the combustion front in the bed moves progressively downward.
This creates sufficient heat and temperature to agglomerates the fine particles, forming a cake of
porous clinker. The clinker is discharged to a breaker which reduces the clinker to smaller
pieces. The sinter is then screened, cooled, and transferred to the blast furnace for use as
feedstock. The sintering process is diagrammed in Figure 3-4.
3-7
-------
Figure 3-4: Diagram of the Sintering Process
Raw material bunkers
Roll mixer
II M
Roll feeder 0o° 'gH'tion hood
fooling and screening
of sinter
mnh f\nnnnf
Jll III 111 . li!
¦ i innmnnnnnrlnr
F
m J
Main e\linuster
Malciiiil How
Gas flow
Source: Huang et al. (2018)
Emi ssions from the sintering process occur during raw material handling and mixing,
through windbox exhaust, sinter machine discharge, and crushing, screening, cooling and storage
of sinter. The most significant source of emissions is through the windbox exhaust, which is
collected by an air capture system and directed to a baghouse or scrubber. Sinter plant windboxes
are a potential source of organic HAP in addition to metal HAP and PM. HAP emissions from
sinter plants primarily consist of Mn and Pb, but also include PAH, D/F, and volatile organic
HAP along with smaller quantities of other metal HAP.
3.2.3 Facility Projections and the Baseline
The impacts of regulatory actions are evaluated relative to a baseline that represents the
world without the regulatory action. In this RIA, we present results for the final amendments to
NESHAP Subpart FFFFF for II&S manufacturing facilities. Throughout this document, we focus
the analysis on the final requirements that result in quantifiable compliance cost or emissions
changes compared to the baseline.
EPA used a variety of sources and assumptions to develop emissions factors for blast
furnace and BOPF shop fugitive emissions and emissions activity estimates for each facility.
3-8
-------
This information includes stack testing data collected in 2011 and emission factors and activity
estimates from a variety of sources. For a detailed description of the development of emissions
estimates from these sources, see Development of Emissions Estimates for Fugitive or
Intermittent HAP Emissions Sources for an Example II&S Facility for input to the RTR Risk
Assessment (U.S. EPA, 2019c), available in the docket for the final rule (hereafter referred to as
the Emissions Memo).20 For a discussion of the cost and emissions reduction estimates from
fugitive sources and sinter plants, see the memorandums Unmeasured Fugitive and Intermittent
Particulate Emissions and Cost Impacts for Integrated Iron and Steel Facilities under 40 CFR
Part 63, Subpart FFFFF and Maximum Achievable Control Technology Standard Calculations,
Cost Impacts, and Beyond-the-Floor Cost Impacts for Integrated Iron and Steel Facilities under
40 CFR Part 63, Subpart FFFFF, also available in the docket (hereafter referred to as the
Technical Memos).
For the analysis, we calculate the cost and emissions impacts of the final NESHAP
amendments from 2026 to 2035. The initial analysis year is 2026 as we assume the final action
will be final and thus become effective during 2024, and the final rule allows 12 months for
compliance with the fugitive emission requirements for BF/BOPF. Facilities must comply with
fenceline monitoring requirements within two years after promulgation of the final rule, so costs
for fenceline monitoring are assumed to begin in 2026. The final analysis year is 2035, which
allows us to provide 10 years of potential regulatory impacts after the final amendments are
assumed to fully take effect. We assume the number of facilities active in the source category
remains constant during the analysis period. There is a lot of uncertainty in this assumption, as
the II&S source category has significantly shrunk since EPA final the original NESHAP in 2001.
Since 2001, the number of II&S facilities has fallen from 20 to 8, and the number of sinter plants
has fallen from 9 to 3 (U.S. EPA, 2001). The most recent closure of a facility in the source
category occurred in 2019. If the number of facilities in the source category continues to fall
during the analysis period, it is likely the impacts projected in this RIA are overestimated.
20 Available at: https://www.regulations.gov/document/EPA-HQ-OAR-2002-0083-0956
3-9
-------
3.3 Description of Regulatory Options
This RIA analyzes a less stringent alternative package of regulatory options in addition to
the analyzing the final amendments to Subpart FFFFF. This section details the regulatory options
examined for each emissions source covered by the rule. In addition to the emission limits
discussed in each section, EPA is also finalizing additional compliance testing and monitoring,
recordkeeping, and reporting requirements.
3,3,1 Blast Furnaces and Basic Oxygen Process Furnaces
3.3.1.1 Fugitive Emissions
EPA is finalizing standards to regulate five currently fugitive or intermittent particulate
emissions sources: BF unplanned bleeder valve openings ("slips"), BF planned bleeder valve
openings, BF and BOPF slag processing, handling, and storage, BF bell leaks, and beaching of
iron from BFs. EPA is also finalizing updated requirements for fugitive emissions from two
currently one regulated source: BOPF shops and BF casthouses.
For unplanned BF bleeder valve openings, EPA is finalizing specific work practices
designed to limit emissions from slips. These work practices include:
• developing a work practice plan to minimize these events and submitting it to
EPA for approval
• installing devices to continuously monitor material levels in the blast furnace, at a
minimum of three locations, with alarms to inform operators of static conditions
which increase likelihood of slips
• installing instruments on the blast furnace to monitor temperature and pressure to
help determine when a slip has occurred
• and requiring raw material screening.
For planned BF bleeder valve openings, EPA is finalizing an 8 percent opacity limit but
is not mandating specific work practices to achieve this limit. This allows facilities flexibility in
determining how best to reduce emissions.
3-10
-------
For BF bell leaks, EPA is finalizing specific work practices and a 10 percent opacity
action level (which is slightly beyond-the-floor). The work practices require facilities to monitor
the top of the blast furnace monthly to identify leaks, measure the opacity of the fugitive
emissions if there is a leak, implement corrective action if the opacity action level is exceeded,
and repair the bell seal within four months if the corrective action does not decrease the opacity
below the action level. Facilities must also replace the small bell seal every six months or after
five million tons of hot metal throughput, conduct monthly visible emissions testing for 15
minutes, and amend the metal throughput limit in the O&M plan as needed.
For BF/BOPF slag processing, handling and storage, EPA is finalizing a BTF 10 percent
opacity limit. Facilities can control slag fugitive emissions by spraying water or using fogging as
needed. EPA is also finalizing a MACT floor limit for BF iron beaching, along with work
practice standards that require full or partial enclosures for beached iron and use of CO2 to
suppress fumes.
EPA is finalizing updated requirements for BOPF shop fugitive emissions, which have a
current opacity limit of 20 percent. The final standards do not make changes to the opacity limit,
but do include specific work practices for minimizing BOPF shop fugitive emissions. The work
practices for BOPF shops include:
• setting a maximum hot iron pour/charge rate (pounds/second) for the first 20
seconds of hot metal pour
• setting a maximum furnace tilt angle during charging
• keeping all openings, except roof monitors, closed during tapping and material
transfer events
• regularly inspecting BOPF shop structure for leaks
• optimizing positioning of hot metal ladles with respect to hood face and furnace
mouth
• setting a maximum furnace tilt angle
• using a higher draft velocity to capture more fugitives at a given distance from
the hood
3-11
-------
• and monitoring opacity once per month from all openings for 30 minutes (which
must include a tapping event).
This RIA also analyzes the less stringent regulatory option of not including work practice
standards for BOPF shops and maintaining current opacity testing requirements for BF
casthouses and BOPF shops. There are no costs associated with this option. EPA did not
consider more stringent regulatory options for any of the fugitive emissions sources discussed in
this section.
3.3.1.2 Other Regulatory Gaps
EPA identified two unregulated HAP emitted by BF and BOPF (HC1 and THC) and three
unregulated HAP emitted bby BF stoves and BOPF (HC1, THC, and D/F) and is finalizing a
numerical MACT floor limit for each pollutant except D/F from BF stoves. It is projected that
each facility can meet the MACT floor limit without installing additional controls or modifying
work practices, so the only expected costs for these requirements are from additional compliance
testing and monitoring, recordkeeping, and reporting. EPA did not identify a cost-effective BTF
limit these pollutants, so we will not be evaluating a more stringent option for these pollutants as
part of this RIA.
3,3.2 Sinter Plants
3.3.2.1 Dioxins/Furans and Poly cyclic Aromatic Hydrocarbons
EPA is finalizing a limit based on addition of ACI controls for D/F and PAH from sinter
plant windboxes. There are currently no specific requirements for these pollutants, but the
current VOC and oil content limits act as a surrogate standard for these HAP. Three II&S
facilities have on-site sinter plants: Gary Works, Burns Harbor Works, and Indiana Harbor
Works. Gary Works is owned by U.S. Steel and both Burns Harbor and Indiana Harbor Works
are owned by Cleveland-Cliffs Inc. These plants currently control windbox emissions using a
baghouse, Venturi scrubber, or a baghouse in combination with a dry scrubber. EPA anticipates
that all three affected facilities could meet this limit by installing an activated carbon injection
system to complement existing windbox controls.
3-12
-------
This RIA also analyzes a less stringent regulatory option for D/F and PAH emissions
from II&S sinter plants: setting a MACT limit. EPA anticipates these three facilities can meet the
MACT floor limits for D/F and PAH without installing additional controls. The only associated
costs would be for additional compliance testing.
3.3.2.2 Other Regulatory Gaps
EPA identified five unregulated HAP emitted by sinter plants (CS2, COS, HC1, HF, and
Hg) and is finalizing a numerical MACT floor limit for COS and HC1. It is projected that each
facility can meet the MACT floor limit without installing additional controls or modifying work
practices, so the only expected costs for these requirements are from additional compliance
testing and monitoring, recordkeeping, and reporting. For Hg, EPA is finalizing a numerical BTF
limit based on the addition of ACI controls on the sinter plant. It is projected that costs associated
with the BTF limit are reflective of installation of ACI controls on the sinter plants, which are
accounted for in the D/F and PAHs limits. CS2 emissions are being addressed through setting a
limit for COS, and HF emissions are being addressed through setting a limit for HC1.
3.3.3 Fenceline Monitoring
EPA is finalizing a fenceline monitoring requirement pursuant to CAA 112(d)(6). The
fenceline monitoring requirement includes a work practice action level for Cr. If a monitor at a
facility exceeds the action level for Cr, the facility must do a root-cause analysis and take
corrective action to lower Cr emissions. EPA is also finalizing a sunset provision in the fenceline
monitoring requirements: if facilities remain below the action level for two full years, they can
terminate the fenceline monitoring as long as they continue to comply with all other rule
requirements. Facilities must comply with fenceline monitoring requirements within two years
following promulgation of the final rule (expected in late 2024). As part of this RIA, EPA is also
analyzing a less stringent alternative regulatory option that does not include fenceline
monitoring.
3.3.4 Summary of Regulatory Alternatives
This RIA analyzes three sets of regulatory alternatives in the emissions and engineering
cost analysis presented in Sections 3.4 and 3.5: the final NESHAP amendments along with a set
3-13
-------
of less stringent and more stringent alternative regulatory options. The less stringent alternative
regulatory options differ from the final amendments in three ways:
• there is a MACT floor limit based on the addition of ACI controls for D/F and
PAH emissions from sinter plants rather than a BTF limit
• the opacity testing requirements for BF casthouses and BOPF shops are
maintained at the current requirements (i.e., Final rule, 85 FR 42074, published
07/31/2023) with no added work practice standards for BOPF shops,
• there is no fenceline monitoring requirement.
3.4 Emissions Reduction Analysis
3.4.1 Baseline Emissions Estimates
The baseline emissions estimates for BF/BOPF fugitive emissions and sinter plant
windbox D/F and PAH emissions are presented in Table 3-2 and Table 3-3 below. Estimates are
presented both as emitted tons (or grams, in the case of D/F) per year and over the entire analysis
period 2026-2035. Note that, since the number of facilities active in the sector is assumed
constant over the period, and EPA lacks data to project year to year changes in production by
each facility, projected emissions for each pollutant are assumed constant for each year in the
analysis period. For BF/BOPF fugitive emissions, EPA estimated PM emissions and imputed
PM2.5 and HAP emissions by assuming each accounts for a constant share of PM (23 percent for
PM2.5 and 3.7 percent for HAP). The development of the baseline emissions estimates is
described in the Emissions Memo.
Table 3-2: Baseline Emissions Estimates for II&S Blast Furnace and Basic Oxygen Process
Furnace Fugitive Emissions3
Pollutant
HAP
280
Tons per Year
PM
8,100
PM2.5
2,100
HAP
2,800
2026-2035
PM
81,000
PM2.5
21,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
3-14
-------
Table 3-3: Baseline Emissions Estimates for II&S Sinter Plant Windboxes"
Pollutant
Grams per Year
D/F TEQb
9.07
Tons per Year
PAH
6
D/F TEQ
90.1
2026-2035
PAH
60
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b TEQ stands for "toxic-equivalency." TEQs are a weighted-measure based on each member of the dioxin and
dioxin-like compounds category. See https://www.epa.gov/toxics-release-inventory-tri-program/dioxin-and-
dioxin-compounds-toxic-equivalency -information for more information.
3,4,2 Projected Emissions Reduction
Projected emissions reductions for BF/BOPF fugitive emissions are presented in Table
3-4 below. The final NESHAP amendments are expected to reduce PM, PM2.5, and HAP
emissions at BF/BOPF roughly 30 percent relative to baseline. The projected emissions
reduction from the stringent limit technology review for D/F and PAH emissions from sinter
plant windboxes are presented in Table 3-5. The limits for D/F and PAH from sinter plant
windboxes would control emissions about 90 percent relative to baseline. Table 3-6 shows the
assumed level of control for each emissions source. In particular cases, facilities are assumed to
already be implementing the required work practices for an emissions source and are not
projected to reduce emissions. For additional information on the methods and assumption used to
estimate emissions reductions, see the Emissions Memo and the Technical Memos.
Table 3-4: II&S Blast Furnace and Basic Oxygen Process Furnace Fugitive Emission
Reductions"
Less Stringent
Final
HAP
39
64
Tons per Year
PM
1,100
1,900
PM2.5
240
470
HAP
390
640
2026-2035
PM
11,000
19,000
PM2.5
2,400
4,700
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
3-15
-------
Table 3-5: II&S Sinter Plant Windbox Emission Reductions from Final Limit for D/F and
PAHa
Grams per Year
D/F TEQb
8.2
Tons per Year
PAH
5
D/F TEQ
66
2026-2035
PAH
44
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b TEQ stands for "toxic-equivalency." TEQs are a weighted-measure based on each member of the dioxin and
dioxin-like compounds category. See https://www.epa.gov/toxics-release-inventory-tri-program/dioxin-and-
dioxin-compounds-toxic-equivalency -information for more information.
Table 3-6: Estimated Control from Fugitive Work Practice Standards and Windbox ACI
Source % Control
BF Unplanned Openings 15-40
BF Planned Openings 0-50
BF Bell Leaks 25-50
BF Casthouse Fugitives 0
BOP Shop Fugitives 19-22
Beaching 0-50
Slag Handling 0-50
Sinter Plant Windbox D/F and PAHa 90
a This control percentage refers to the controls necessary to meet the limit for D/F and PAH, not the final MACT
standard.
Table 3-7 shows estimated emissions reductions for each source of BF/BOPF fugitive or
intermittent emissions. BOPF shop fugitives are by far the largest source of emissions
reductions, accounting for more than 50 percent of the total. This explains the large difference in
estimated reductions between the final option and the less stringent alternative option (the
reductions of which can be obtained by eliminating the reductions from BF casthouse and BOPF
shop fugitives. The less stringent and final options for sinter plant windboxes achieves no
emission reductions because EPA projects all three facilities with sinter plants can meet the
MACT floor limit for D/F and PAH without additional pollution controls.
3-16
-------
Table 3-7: II&S Blast Furnace and Basic Oxygen Process Furnace Fugitive Emission
Reductions by Source, Final Option (Tons per Year)3
Fugitive or Intermittent Emissions Source
PM
PM2.5
HAP
BF Unplanned Openings
14
3.1
0.50
BF Planned Openings
11
2.5
0.41
BF Bell Leaks
830
190
31
BF Casthouse Fugitives
0
0
0
BOPF Shop Fugitives
790
230
25
Iron Beaching
0.094
0.028
0.0035
Slag Handling
220
43
7.4
Total
1,900
470
64
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
3.5 Engineering Cost Analysis
3,5,1 Detailed Impacts Tables
This section presents detailed cost tables for each section of the final amendments. All
tables contain per-year figures with the exception of total capital investment. Total annualized
costs include capital cost annualized using the bank prime rate in accord with the guidance of the
EPA Air Pollution Control Cost Manual (U.S. EPA, 2017), operating and maintenance costs,
annualized costs of increased compliance testing, and costs of additional monitoring,
recordkeeping, and reporting (MRR) (when necessary). Additional compliance testing for occurs
initially and every 5 years thereafter, and is annualized over a 5-year period in calculating
annualized costs. To estimate these annualized costs, the EPA uses a conventional and widely
accepted approach, called equivalent uniform annual cost (EUAC) that applies a capital recovery
factor (CRF) multiplier to capital investments and adds that to the annual incremental operating
expenses to estimate annual costs. This cost estimation approach is described in the EPA Air
Pollution Control Cost Manual (U.S. EPA, 2017). These annualized costs are the costs to directly
affected firms and facilities (or "private investment"), and thus are not true social costs. Detailed
discussion of these costs, including all calculations and assumptions made in conducting
estimates of total capital investment, annual O&M, and compliance testing/MRR costs, can be
found in the Technical Memos. The bank prime rate was 7.00 percent at the time of the analysis
but has since risen to 7.71 percent. All cost figures are in 2022$.
3-17
-------
3.5.1.1 Fugitive or Intermittent Particulate Sources
Table 3-8 presents total capital investment and annualized costs for the final rule and less
stringent alternative option for fugitive sources. The less stringent alternative option does not
include work practice standards for BOPF shop fugitive emissions or change opacity testing
requirements for BF casthouse or BOPF shop fugitive emissions but are otherwise identical the
final option. The work practice standards for BOPF shop fugitive emissions and increased
opacity testing requirements for BF casthouse and BOPF shop fugitive emissions account for
approximately 23 percent of total capital investment, 28 percent of annual operation and
maintenance (O&M) cost, and 59 percent of annualized testing/MRR cost for the final fugitive
source standards. These estimates include the cost of labor and capital equipment necessary to
implement the necessary work practices to meet the limits and monitor compliance.
Table 3-8: Summary of Total Capital Investment and Annual Costs per Year for Fugitive
or Intermittent Particulate Sources (2022$)a
Less Stringent Final Rule
Total Capital Investment
$3,100,000
$4,700,000
Annual O&M
$1,900,000
$1,500,000
Annualized Capital
$1,200,000
$1,700,000
Annualized Testing/MRR
$230,000
$370,000
Total Annualized Cost
$3,300,000
$3,600,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
Table 3-9 and Table 3-10 present the facility- and firm-level cost breakdown of the final
and less stringent alternative option for fugitive sources. For the final option, estimated costs are
roughly evenly split between Cleveland-Cliffs Inc. and U.S. Steel, with slightly more of the cost
falling on Cleveland-Cliffs Inc., which owns five of eight II&S facilities.
3-18
-------
Table 3-9: Summary of Total Capital Investment and Annual Costs per Year of the Final
Option by Facility for Fugitive or Intermittent Particulate Sources (2022$)a
Ultimate Parent Company
Facility
Total Capital
Investment
Annual
O&M
Annualized
Cost
Cleveland-Cliffs Inc.
Burns Harbor
Cleveland
Dearborn
Indiana Harbor
Middletown
$810,000
$460,000
$150,000
$890,000
$260,000
$130,000
$260,000
$68,000
$440,000
$68,000
$290,000
$560,000
$180,000
$940,000
$160,000
Firm Total
$2,600,000
$970,000
$2,100,000
U.S. Steel
Mon Valley
Gary
Granite City
$800,000
$720,000
$640,000
$280,000
$68,000
$160,000
$700,000
$290,000
$430,000
Firm Total
$2,200,000
$510,000
$1,400,000
Industry
Total
$4,700,000
$1,500,000
$3,600,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
Table 3-10: Summary of Total Capital Investment and Annual Costs per Year of the Less
Stringent Alternative by Facility for Fugitive or Intermittent Particulate Sources (2022$)a
Ultimate Parent Company
Facility
Total Capital
Investment
Annual O&M
Annualized
Costb
Cleveland-Cliffs Inc.
Burns Harbor
Cleveland
Dearborn
Indiana Harbor
Middletown
$440,000
$280,000
$56,000
$670,000
$50,000
$370,000
$260,000
$63,000
$460,000
$190,000
$460,000
$430,000
$89,000
$820,000
$220,000
Firm Total
$1,500,000
$1,300,000
$2,000,000
U.S. Steel
Mon Valley
Gary
Granite City
$660,000
$450,000
$500,000
$290,000
$58,000
$170,000
$640,000
$160,000
$380,000
Firm Total
$1,600,000
$520,000
$1,200,000
Industry
Total
$3,100,000
$1,900,000
$3,200,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b Includes annualized cost of compliance testing and MRR.
3.5.1.2 Sinter Plants
The final option for D/F and PAH from sinter plant windboxes sets a limit derived from
technology review for D/F and PAH from sinter plant windboxes at II&S facilities. The
estimates assume each facility will install an ACI system on stacks with existing PM controls.
The Gary facility includes two stacks, which the Burns Harbor and Indiana Harbor facility have
3-19
-------
one stack each. The annualized costs assume a 20-year equipment life for each installed ACI
system. EPA also analyzes a less stringent MACT floor limit for each pollutant. EPA estimates
all three facilities with on-site sinter plants could meet the MACT floor without additional
controls or changes to work practices, so this option would not reduce emissions. The only
additional costs would be for compliance testing.
Table 3-11: Summary of Total Capital Investment and Annual Costs per Year of the Final
Option for Sinter Plants D/F and PAH (2022$)a presents the facility- and firm-level costs
associated with the limit for D/F and PAH from sinter plant windboxes at II&S facilities. Table
3-12 presents the facility- and firm-level costs associated with the less stringent MACT floor
limit for D/F and PAH from sinter plant windboxes at II&S facilities.
Table 3-11: Summary of Total Capital Investment and Annual Costs per Year of the Final
Option for Sinter Plants D/F and PAH (2022$)a
Total
Annual
O&M
Annualized
Costb
Ultimate Parent Company
Facility
Capital
Investment
Cleveland-Cliffs Inc.
Burns Harbor
$240,000
$550,000
$600,000
Indiana Harbor
$240,000
$550,000
$600,000
Firm Total
$470,000
$1,100,000
$1,200,000
U.S. Steel
Gary
$470,000
$1,100,000
$1,200,000
Firm Total
$470,000
$1,100,000
$1,200,000
Industry
Total
$950,000
$2,200,000
$2,400,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b Includes annualized cost of compliance testing and MRR.
Table 3-12: Summary of Total Capital Investment and Annual Costs per Year of the Less
Stringent Option for Sinter Plants D/F and PAH (2022$)a
Ultimate Parent Company
Facility
Total
Capital
Investment
Annual
O&M
Annualized
Costb
Cleveland-Cliffs Inc.
Burns Harbor
$0
$0
$11,000
Indiana Harbor
$0
$0
$11,000
Firm Total
$0
$0
$22,000
U.S. Steel
Gary
$0
$0
$22,000
Firm Total
$0
$0
$22,000
Industry
Total
$0
$0
$44,000
3-20
-------
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b Includes annualized cost of compliance testing and MRR.
3.5.1.3 Fenceline Monitoring
Table 3-13 presents the estimated costs for the final fenceline monitoring requirements by
year. The costs include the capital cost of installing 4 monitors per facility in year one (2026and
O&M, testing, and MRR costs for each year. Table 3-14 presents facility- and firm-level costs.
EPA is also finalizing a sunset provision in the fenceline monitoring requirements: if facilities
remain below the action level for two full years, they can terminate the fenceline monitoring as
long as they continue to comply with all other rule requirements. Costs could decrease for
particular facilities after two years of fenceline monitoring if they meet the requirements of the
sunset provision. Facilities must comply with fenceline monitoring requirements within two
years following promulgation of the final rule (expected in late 2024), so we assume costs are
not incurred until 2026. Note that the less stringent alternative option analyzed in this RIA does
not include fenceline monitoring.
Table 3-13: Costs by Year for the Final Fenceline Monitoring Requirements (2022$)a
Year
Capital
Annual O&M
Testing/MRR
Total
2026
$0
$0
$0
$0
2027
$800,000
$1,300,000
$0
$2,100,000
2028
$0
$1,300,000
$0
$1,300,000
2029
$0
$1,300,000
$0
$1,300,000
2030
$0
$1,300,000
$0
$1,300,000
2031
$0
$1,300,000
$0
$1,300,000
2032
$0
$1,300,000
$0
$1,300,000
2033
$0
$1,300,000
$0
$1,300,000
2034
$0
$1,300,000
$0
$1,300,000
2035
$0
$1,300,000
$0
$1,300,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
3-21
-------
Table 3-14: Summary of Total Capital Investment and Annual Costs per Year of the Final
Fenceline Monitoring Requirements (2022$)a
Ultimate Parent Company
Facility
Total Capital
Investment
Annual
O&M
Annualized
Cost
Burns Harbor
$100,000
$160,000
$200,000
Cleveland
$100,000
$160,000
$200,000
Cleveland-Cliffs Inc.
Dearborn
$100,000
$160,000
$200,000
Indiana Harbor
$100,000
$160,000
$200,000
Middletown
$100,000
$160,000
$200,000
Firm Total
$500,000
$820,000
$1,000,000
Mon Valley
$100,000
$160,000
$200,000
U.S. Steel
Gary
$100,000
$160,000
$200,000
Granite City
$100,000
$160,000
$200,000
Firm Total
$300,000
$490,000
$610,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
3.5.1.4 Summary of Facility-Level Costs
Table 3-15 and Table 3-16 present total facility- and firm-level costs for the final
amendments and the less stringent alternative option. For the differences between the three sets
of alternatives, see Section 3.3.4.
Table 3-15: Summary of Total Capital Investment and Annual Costs per Year of the Final
Amendments (2022$)a
Ultimate Parent
Company
Facility
Total Capital
Investment
Annual
O&M
Annualized
Costb
Burns
Harbor
$1,100,000
$850,000
$1,100,000
Cleveland-Cliffs Inc.
Cleveland
Dearborn
Indiana
Harbor
$560,000
$250,000
$1,200,000
$420,000
$230,000
$1,200,000
$770,000
$380,000
$1,700,000
Middletown
$360,000
$230,000
$370,000
Firm Total
$3,500,000
$2,900,000
$4,400,000
U.S. Steel
Mon Valley
Gary
Granite City
$900,000
$1,300,000
$740,000
$450,000
$1,300,000
$320,000
$900,000
$1,700,000
$630,000
Firm Total
$2,900,000
$2,100,000
$3,200,000
Industry
Total
$6,500,000
$5,000,000
$7,600,000
3-22
-------
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b Includes annualized cost of compliance testing and MRR.
Table 3-16: Summary of Total Capital Investment and Annual Costs per Year of the Less
Stringent Alternative Options (2022$)a
Ultimate Parent
Company
Facility
Total Capital
Investment
Annual
O&M
Annualized
Costb
Burns
Harbor
$440,000
$370,000
$470,000
Cleveland-Cliffs Inc.
Cleveland
Dearborn
Indiana
Harbor
$280,000
$56,000
$670,000
$260,000
$63,000
$460,000
$430,000
$89,000
$830,000
Middletown
$50,000
$190,000
$220,000
Firm Total
$1,500,000
$1,300,000
$2,000,000
U.S. Steel
Mon Valley
Gary
Granite City
$660,000
$450,000
$500,000
$290,000
$58,000
$170,000
$640,000
$180,000
$380,000
Firm Total
$1,600,000
$520,000
$1,200,000
Industry
Total
$3,100,000
$1,900,000
$3,200,000
a Totals may not sum due to independent rounding. Numbers rounded to two significant digits unless otherwise
noted.
b Includes annualized cost of compliance testing and MRR.
3,5,2 Summary Cost Tables for the Final Regulatory Options
Table 3-17 presents estimated costs by year based on when costs are likely to be incurred.
Although firms may spread capital investment across the three years prior to full implementation
of the final standards, we conservatively assume that all initial capital investment occurs in the
first year of full implementation to represent a highest-cost scenario. Additional compliance
testing occurs initially and once every five years thereafter to monitor compliance with the final
MACT standards for BF/BOPF and sinter plants. Since compliance must occur within one year
of the effective date of the final amendments, these costs are assumed to occur in 2026 (the first
year of full implementation). Facilities must comply with fenceline monitoring requirements
within two years following promulgation of the final rule (expected in early 2024), so we assume
costs for that provision are not incurred until 2026. Table 3-18 presents total costs for each year
discounted to 2024, along with the present-value (PV) and equivalent annualized value (EAV)
3-23
-------
over the analysis period, using both a 3 percent and 7 percent social discount rate. The EAV
represents a flow of constant annual values that would yield a sum equivalent to the PV. The
estimated present-value of compliance costs in 2024 is about $51 million ($6.0 million EAV)
using a 3 percent social discount rate and about $41 million ($5.8 million EAV) using a 7 percent
social discount rate from 2026-2035.
Table 3-17: Costs by Year for the Final Options (2022$)
Year
Capital
Annual O&M
Testing/MRR
Total
2026
$2,700,000
$1,300,000
$1,500,000
$5,500,000
2027
$2,800,000
$2,800,000
$0
$5,600,000
2028
$950,000
$5,000,000
$240,000
$6,200,000
2029
$0
$5,000,000
$60,000
$5,100,000
2030
$0
$5,000,000
$60,000
$5,100,000
2031
$0
$5,000,000
$1,600,000
$6,600,000
2032
$0
$5,000,000
$60,000
$5,100,000
2033
$0
$5,000,000
$240,000
$5,200,000
2034
$0
$5,000,000
$60,000
$5,100,000
2035
$0
$5,000,000
$60,000
$5,100,000
Note: Totals may not sum due to independent rounding. Numbers rounded to two significant
digits unless otherwise noted.
Table 3-18: Present-Value, Equivalent Annualized Value, and Discounted Costs for Final
Options, 2026-2035 (million 2022$)
Year
Discount Rate (Discounted to 2024)
3%
7%
2026
$5.2
$4.8
2027
$5.1
$4.6
2028
$5.5
$4.7
2029
$4.4
$3.6
2030
$4.3
$3.4
2031
$5.4
$4.1
2032
$4.0
$3.0
2033
$4.0
$2.8
2034
$3.8
$2.6
2035
$3.7
$2.4
PV
$45
$36
EAV
$5.3
$5.1
Note: Totals may not sum due to independent rounding. Numbers rounded to two significant
digits unless otherwise noted.
3-24
-------
4 HUMAN HEALTH BENEFITS OF EMISSIONS REDUCTIONS
4.1 Introduction
Implementing emissions controls required by the final NESHAP amendments is expected
to reduce HAP emissions, including emissions of manganese (Mn), lead (Pb), arsenic (As),
chromium/chromium VI (Cr/Cr+6), dioxins/furans (D/F), polycyclic aromatic hydrocarbons
(PAH), and other HAP. The emission controls are also expected to reduce emissions of non-HAP
pollutants, such as particulate matter (including PM2.5). In this chapter, we provide the benefits
analysis for the final NESHAP amendments. Data, resource, and methodological limitations
prevented the EPA from monetizing some of the human health benefits from reduced exposure to
the HAP directly targeted by this final rule. In addition, the potential benefits from reduced
adverse ecosystem effects and improved visibility from the reduction in PM2.5 emissions are also
not monetized here. The EPA provides a qualitative discussion of HAP health effects later in this
chapter.
In this section, we quantify the economic value of benefits of this final rule such as those
associated with potential reductions in PM2.5-related premature deaths and illnesses expected to
occur as a result of implementing this rule. PM2.5 emissions reductions occur as a result of
implementing the HAP emission controls described earlier in the RIA.
The PV of the lower-bound benefits for the final option for this rule are $1.8 billion at a 3
percent discount rate and $1.2 billion at a 7 percent discount rate with EAVs of $200 and $170
million respectively. The PV of the upper-bound benefits for the final option for this rule are
$3.7 billion at a 3 percent discount rate and $2.6 billion at a 7 percent discount rate with EAVs of
$420 million and $340 million respectively. All estimates are reported in 2022 dollars.
4.2 Health Effects from Exposure to Hazardous Air Pollutants (HAP)
In the subsequent sections, we describe the health effects associated with the main HAP
controlled by the final NESHAP amendments: manganese (Mn), lead (Pb), arsenic (As), and
chromium (Cr). The final ruleis projected to reduce 110 tons HAP per year. With the data
available, it was not possible to estimate the change in emissions of each individual HAP.
4-1
-------
Quantifying and monetizing the economic value of reducing the risk of cancer and non-
cancer effects is made difficult by: the lack of a central estimate of estimate of cancer and non-
cancer risk and estimates of the value of an avoided case of cancer (fatal and non-fatal) and
morbidity effects. Due to methodology and data limitations, we did not attempt to monetize the
health benefits of reductions in HAP in this analysis. Instead, we are providing a qualitative
discussion of the health effects associated with HAP emitted from sources subject to control
under the final action.
4.2.1 Manganese (Mn)
Health effects in humans have been associated with both deficiencies and excess intakes
of Mn. Chronic exposure to high levels of Mn by inhalation in humans results primarily in
central nervous system effects. Visual reaction time, hand steadiness, and eye-hand coordination
were affected in chronically-exposed workers. Manganism, characterized by feelings of
weakness and lethargy, tremors, a masklike face, and psychological disturbances, may result
from chronic exposure to higher levels. Impotence and loss of libido have been noted in male
workers afflicted with manganism attributed to inhalation exposures. The EPA has classified Mn
in Group D, not classifiable as to carcinogenicity in humans (U.S. EPA, 1995).
4.2.2 Lead(Pb)
Lead is associated with toxic effects in every organ system including adverse renal,
cardiovascular, hematological, hepatic, reproductive, and developmental effects. However, the
major target for Pb toxicity is the nervous system, both in adults and children. Long-term
exposure of adults to Pb at work has resulted in decreased performance in some tests that
measure functions of the nervous system. Lead exposure may also cause weakness in fingers,
wrists, or ankles. Lead exposure also causes small increases in blood pressure, particularly in
middle-aged and older people and may also cause anemia. Children are more sensitive to the
health effects of Pb than adults. No safe blood Pb level in children has been determined. At
lower levels of exposure, Pb can affect a child's mental and physical growth. Fetuses exposed to
Pb in the womb may be born prematurely and have lower weights at birth. Exposure in the
womb, in infancy, or in early childhood also may slow mental development and cause lower
intelligence later in childhood. There is evidence that these effects may persist beyond childhood
4-2
-------
(ATSDR, 2020). EPA has determined that Pb is a probable human carcinogen (Group 2B) (U.S.
EPA, 2004).
4.2.3 Arsenic (As)
Arsenic, a naturally occurring element, is found throughout the environment, and is
considered toxic through the oral, inhalation and dermal routes. Acute (short-term) high-level
inhalation exposure to As dust or fumes has resulted in gastrointestinal effects (nausea, diarrhea,
abdominal pain, and gastrointestinal hemorrhage); central and peripheral nervous system
disorders have occurred in workers acutely exposed to inorganic As. Chronic (long-term)
inhalation exposure to inorganic As in humans is associated with irritation of the skin and
mucous membranes. Chronic inhalation can also lead to conjunctivitis, irritation of the throat and
respiratory tract, and perforation of the nasal septum (ATSDR, 2007).
Chronic oral exposure has resulted in gastrointestinal effects, anemia, peripheral
neuropathy, skin lesions, hyperpigmentation, and liver or kidney damage in humans. Inorganic
As exposure in humans, by the inhalation route, has been shown to be strongly associated with
lung cancer, while ingestion of inorganic As in humans has been associated with a form of skin
cancer and also to bladder, liver, and lung cancer. EPA has classified inorganic As as a Group A,
human carcinogen (U.S. EPA, 1998a).
4.2.4 Chromium (Cr)
Chromium may be emitted in two forms, trivalent Cr (Cr+3) or hexavalent Cr (Cr+6).
The respiratory tract is the major target organ for Cr+6 toxicity, for acute and chronic inhalation
exposures. Shortness of breath, coughing, and wheezing have been reported from acute exposure
to Cr+6, while perforations and ulcerations of the septum, bronchitis, decreased pulmonary
function, pneumonia, and other respiratory effects have been noted from chronic exposures.
Further, animal studies have reported adverse reproductive effects from exposure to Cr+6.
Human studies have clearly established the carcinogenic potential of Cr+6 by the inhalation
route, resulting in an increased risk of lung cancer (ATSDR, 2012). EPA has classified Cr+6 as a
Group A, human carcinogen (U.S. EPA, 1998b). Trivalent Cr is less toxic than Cr+6. The
respiratory tract is also the major target organ for Cr+3 toxicity, similar to Cr+6. EPA has not
classified Cr+3 with respect to carcinogenicity (U.S. EPA, 1998c).
4-3
-------
4.2.5 Dioxins/Furans (D/F)
Dioxins and furans are a group of chemicals formed as unintentional byproducts of
incomplete combustion. They are released to the environment during the combustion of fossil
fuels and wood, and during the incineration of municipal and industrial wastes. Dioxins and
furans are generally compared to 2,3,7,8-Tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD) as a
reference (or index) chemical because it is relatively well-studied and the most toxic compound
within the group. Out of all HAPs for which a health benchmark has been assigned, 2,3,7,8-
TCDD is the most potent for both cancer and non-cancer hazard. 2,3,7,8-TCDD causes chloracne
in humans, a severe acne-like condition. It is known to be a developmental toxicant in animals,
causing skeletal deformities, kidney defects, and weakened immune responses in the offspring of
animals exposed to 2,3,7,8-TCDD during pregnancy. Human studies have shown an association
between 2,3,7,8-TCDD and soft-tissue sarcomas, lymphomas, and stomach carcinomas
(ATSDR, 1998). EPA has classified 2,3,7,8- TCDD as a probable human carcinogen (Group B2)
(U.S. EPA, 1985).
4.2.6 Polycyclic Aromatic Hydrocarbons (PAH)
PAH are a group of chemicals that are formed as byproducts of incomplete combustion.
PAHs can be released to the environment during the burning of coal, oil, gas, wood, garbage,
tobacco, or charbroiled meat. There are over 100 individual PAH compounds, and the health
effects of these individual chemicals can vary (ATSDR, 1995). PAH are generally compared to
benzo(a)pyrene as a single reference (or index) chemical as it is relatively well-studied and
among the most toxic compound within the group. In animals, benzo[a]pyrene has been
associated with adverse developmental, reproductive, and immunological effects. In humans,
exposure to PAH mixtures is associated with adverse birth outcomes (including reduced birth
weight, postnatal body weight, and head circumference), neurobehavioral effects, and decreased
fertility. EPA has classified benzo(a)pyrene as carcinogenic to humans (U.S. EPA, 2017). In
addition EPA has classified other PAH including, benz[a]anthracene, benzo[b]fluoranthene,
benzo[k]fluoranthene, chrysene, dibenz[a,h]anthracene, and indeno[ l,2,3-c,d]pyrene, as
probable human carcinogens (Group B2).
4-4
-------
4,2,7 Other Air Toxics
In addition to the compounds described above, other toxic compounds might be affected
by this action. Other HAP that are emitted by II&S facilities that could be reduced by the final
NESHAP amendments include copper (Cu), mercury (Hg), nickel (Ni), selenium (Se), carbonyl
sulfide (COS), carbon disulfide (CS2), hydrogen chloride, (HC1), and hydrogen fluoride (HF).
Information regarding the health effects of those compounds can be found in the EPA's IRIS
database.21
4.3 Approach to Estimating PM2.5-related Human Health Benefits
This section summarizes the EPA's approach to estimating the incidence and economic
value of the PIVh.s-related benefits estimated for this rule. The Regulatory Impact Analysis for
the Final National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric
Utility Steam Generating Units Review of the Residual Risk and Technology Review (U.S. EPA,
2023a) and its corresponding Technical Support Document Estimating PM2.5 -and Ozone -
Attributable Health Benefits (TSD) (U.S. EPA, 2023b) provide a full discussion of the EPA's
approach for quantifying the incidence and value of estimated air pollution-related health
impacts. In these documents, the reader can find the rationale for selecting the health endpoints
quantified; the demographic, health and economic data applied in the environmental Benefits
Mapping and Analysis Program—Community Edition (BenMAP-CE); modeling assumptions;
and the EPA's techniques for quantifying uncertainty.
Implementing this rule will affect the distribution of PM2.5 concentrations throughout the
U.S.; this includes locations both meeting and exceeding the NAAQS for PM. This RIA
estimates avoided PM2.5-related health impacts that are distinct from those reported in the RIA
for the PM NAAQS (U.S. EPA, 2022). The PM2.5 NAAQS RIA provides an illustrative example
of, but does not predict, the benefits and costs of strategies that States may choose to enact when
implementing a revised NAAQS. Since these costs and benefits are illustrative, theycannot be
added to the costs and benefits of policies that prescribe specific emission control measures.
21 U.S. EPA Integrated Risk Information System (IRIS) database is available at www.epa.gov/iris. Accessed March
30, 2022.
4-5
-------
We estimate the quantity and economic value of air pollution-related effects by
estimating counts of air pollution-attributable cases of adverse health outcomes, assigning dollar
values to these counts, and assuming that each outcome is independent of one another. We
construct these estimates by adapting primary research—specifically, air pollution epidemiology
studies and economic value studies—from similar contexts. This approach is sometimes referred
to as "benefits transfer." Below we describe the procedure we follow for: (1) selecting air
pollution health endpoints to quantify; (2) calculating counts of air pollution effects using a
health impact function; (3) specifying the health impact function with concentration-response
parameters drawn from the epidemiological literature.
4,3,1 Selecting Air Pollution Health Endpoints to Quantify
As a first step in quantifying PM2.5-related human health impacts, the EPA consults the
Integrated Science Assessment for Particulate Matter (PM ISA) (U.S. EPA, 2019a) as
summarized in the TSD for the Final Revised Cross State Air Pollution Rule Update (U.S. EPA,
2021b). This document synthesizes the toxicological, clinical, and epidemiological evidence to
determine whether each pollutant is causally related to an array of adverse human health
outcomes associated with either acute (i.e., hours or days-long) or chronic (i.e., years-long)
exposure. For each outcome, the ISA reports this relationship to be causal, likely to be causal,
suggestive of a causal relationship, inadequate to infer a causal relationship, or not likely to be a
causal relationship.
The ISA for PM2.5 found acute exposure to PM2.5 to be causally related to cardiovascular
effects and mortality (i.e., premature death), and respiratory effects as likely-to-be-causally
related. The ISA identified cardiovascular effects and total mortality as being causally related to
long-term exposure to PM2.5 and respiratory effects as likely-to-be-causal; and the evidence was
suggestive of a causal relationship for reproductive and developmental effects as well as cancer,
mutagenicity, and genotoxicity.
The EPA estimates the incidence of air pollution effects for those health endpoints listed
above where the ISA classified the impact as either causal or likely-to-be-causal. Table 4-1
reports the effects we quantified and those we did not quantify in this RIA. The list of benefit
categories not quantified shown in the table is not exhaustive. Among the effects we quantified,
we might not have been able to completely quantify either all human health impacts or economic
4-6
-------
values. The table below omits health effects associated with SO2 and NO2, and any welfare
effects such as acidification and nutrient enrichment. These effects are described in the Technical
Support Document "Estimating PM2.5- and Ozone-Related Benefits", which details the approach
EPA followed for selecting and quantifying PM-attributable effects (U.S. EPA, 2023b).
Table 4-1: Human Health Effects of PM2.sand whether they were Quantified and/or
Monetized in this RIA
Category
Effect
Effect
Quantified
Effect
Monetized
More
Information
Premature
mortality
from
exposure
Adult premature mortality from long-term exposure (age
65-99 or age 30-99)
S
V
PM ISA
Infant mortality (age <1)
S
V
PM ISA
to PM2.5
Heart attacks (age >18)
S
V
PM ISA
Hospital admissions—cardiovascular (ages 65-99)
S
V
PM ISA
Emergency department visits— cardiovascular (age 0-99)
S
V
PM ISA
Hospital admissions—respiratory (ages 0-18 and 65-99)
V
V
PM ISA
Emergency room visits—respiratory (all ages)
S
V
PM ISA
Cardiac arrest (ages 0-99; excludes initial hospital and/or
emergency department visits)
V
S
PM ISA
Stroke (ages 65-99)
V
S
PM ISA
Asthma onset (ages 0-17)
V
V
PM ISA
Asthma symptoms/exacerbation (6-17)
V
V
PM ISA
Nonfatal
Lung cancer (ages 30-99)
V
V
PM ISA
morbidity
Allergic rhinitis (hay fever) symptoms (ages 3-17)
S
V
PM ISA
from
Lost work days (age 18-65)
S
V
PM ISA
exposure
Minor restricted-activity days (age 18-65)
-------
published the Regulatory Impact Analysis (RIA) for the final Particulate Matter National
Ambient Air Quality Standards (U.S. EPA, 2024c). EPA quantified the PM-related benefits of
this rule prior to publishing of the final PM NAAQS RIA. For this reason, the PM-related
benefits reported in this RIA reflect methods consistent with an earlier version of the TSD (U.S.
EPA, 2021b). Though the methodology employed in this RIA is largely consistent with the PM
NAAQS RIA, here we estimate PM-attributable mortality using concentration-response
parameters that differ from those applied in the PM NAAQS RIA. Specifically, we estimate PM-
attributable deaths using concentration-response parameters from the Di et al. (2017) and Turner
et al. (2016) long-term exposure studies of the Medicare and American Cancer Society cohorts,
respectively. The user manual for the environmental Benefits Mapping and Analysis Program-
Community Edition (BenMAP-CE) program22 separately details EPA's approach for
quantifying and monetizing PM-attributable effects in the BenMAP-CE program. In these
documents the reader can find the rationale for selecting health endpoints to quantify; the
demographic, health and economic data we apply within BenMAP-CE; modeling assumptions;
and our techniques for quantifying uncertainty.
The PM ISA, which was reviewed by the Clean Air Scientific Advisory Committee of the
EPA's Science Advisory Board (U.S. EPA-SAB-CASAC, 2019), concluded that there is a causal
relationship between mortality and both long-term and short-term exposure to PM2.5 based on the
body of scientific evidence. The PM ISA also concluded that the scientific literature supports the
use of a no-threshold log-linear model to portray the PM-mortality concentration-response
relationship while recognizing potential uncertainty about the exact shape of the concentration-
response function. The PM ISA identified epidemiologic studies that examined the potential for a
population-level threshold to exist in the concentration-response relationship. Based on such
studies, the ISA concluded that".. .the evidence from recent studies reduce uncertainties related
to potential co-pollutant confounding and continues to provide strong support for a linear, no-
threshold concentration-response relationship" (U.S. EPA, 2019a). Consistent with this evidence,
the EPA historically has estimated health impacts above and below the prevailing NAAQS.23
22 BenMAP-CE Manual and Appendices, 2022. https://www.epa.gov/benmap/benmap-ce-manual-and-appendices
23 The Federal Register Notice for the 2012 PM NAAQS notes that "[i]n reaching her final
decision on the appropriate annual standard level to set, the Administrator is mindful that the
CAA does not require that primary
4-8
-------
Following this approach, we report the estimated PIVh.s-related benefits (in terms of both
health impacts and monetized values) calculated using a log-linear concentration-response
function that quantifies risk from the full range of simulated PM2.5 exposures (U.S. EPA, 2021b).
As noted in the preamble to the 2020 PM NAAQS final rule, the "health effects can occur over
the entire distributions of ambient PM2.5 concentrations evaluated, and epidemiological studies
do not identify a population-level threshold below which it can be concluded with confidence
that PM-associated health effects do not occur."24 In general, we are more confident in the size
of the risks we estimate from simulated PM2.5 concentrations that coincide with the bulk of the
observed PM concentrations in the epidemiological studies that are used to estimate the benefits.
Likewise, we are less confident in the risk we estimate from simulated PM2.5 concentrations that
fall below the bulk of the observed data in these studies (U.S. EPA, 2021b). As described
further below, we lacked the air quality modeling simulations to perform such an analysis for this
final rule and thus report the total number of avoided PIVh.s-related premature deaths using the
traditional log-linear no-threshold model noted above.
4.3.3 Economic Valuation
After quantifying the change in adverse health impacts, we estimate the economic value
of these avoided impacts. Reductions in ambient concentrations of air pollution generally lower
the risk of future adverse health effects by a small amount for a large population. Therefore, the
appropriate economic measure is willingness to pay (WTP) for changes in risk of a health effect.
For some health effects, such as hospital admissions, WTP estimates are generally not available,
so we use the cost of treating or mitigating the effect. These cost-of-illness (COI) estimates
generally (although not necessarily in every case) understate the true value of reductions in risk
of a health effect. They tend to reflect the direct expenditures related to treatment but not the
standards be set at a zero-risk level, but rather at a level that reduces risk sufficiently so as to
protect public health,
including the health of at-risk populations, with an adequate margin of safety. On balance, the
Administrator
concludes that an annual standard level of 12 ug/m3 would be requisite to protect the public
health with an
adequate margin of safety from effects associated with long- and short-term PM2.5 exposures,
while still
recognizing that uncertainties remain in the scientific information."
24 https://www.govinfo.gOv/content/pkg/FR-2020-12-18/pdf/2020-27125.pdf
4-9
-------
value of avoided pain and suffering from the health effect. The unit values applied in this
analysis are provided in Section 5.1 of the TSD for the Revised Cross State Update rule (U.S.
EPA, 2021b).
Avoided premature deaths account for 98 percent of monetized PM-related benefits. The
economics literature concerning the appropriate method for valuing reductions in premature
mortality risk is still developing. The value for the projected reduction in the risk of premature
mortality is the subject of continuing discussion within the economics and public policy analysis
community. Following the advice of the SAB's Environmental Economics Advisory Committee
(SAB-EEAC), the EPA currently uses the value of statistical life (VSL) approach in calculating
estimates of mortality benefits, because we believe this calculation provides the most reasonable
single estimate of an individual's WTP for reductions in mortality risk (U.S. EPA-SAB, 2000).
The VSL approach is a summary measure for the value of small changes in mortality risk
experienced by a large number of people.
The EPA continues work to update its guidance on valuing mortality risk reductions and
consulted several times with the SAB-EEAC on the issue. Until updated guidance is available,
the EPA determined that a single, peer-reviewed estimate applied consistently best reflects the
SAB-EEAC advice it has received. Therefore, the EPA applies the VSL that was vetted and
endorsed by the SAB in the Guidelines for Preparing Economic Analyses while the EPA
continues its efforts to update its guidance on this issue (U.S. EPA, 2016). This approach
calculates a mean value across VSL estimates derived from 26 labor market and contingent
valuation studies published between 1974 and 1991. The mean VSL across these studies is $6.3
million (2000$).25
The EPA is committed to using scientifically sound, appropriately reviewed evidence in
valuing changes in the risk of premature death and continues to engage with the SAB to identify
scientifically sound approaches to update its mortality risk valuation estimates. Most recently,
the Agency final new meta-analytic approaches for updating its estimates which were
subsequently reviewed by the SAB-EEAC. The EPA is taking the SAB's formal
recommendations under advisement (U.S. EPA-SAB, 2017).
25 In 1990$, this base VSL is $4.8 million. In 2016$, this base VSL is $10.7 million.
4-10
-------
4.4 Monetized PM2.5 Benefits
4,4,1 Benefit-per- Ton Estimates
The EPA did not conduct air quality modeling for this rule. Rather, we quantified the
value of reducing PM concentrations using a "benefit-per-ton" approach, due to the relatively
small number of facilities and the fact that these facilities are located in a discrete location.
These BPT estimates provide the total monetized human health benefits (the sum of premature
mortality and premature morbidity) of reducing one ton of PM2.5 (or PM2.5 precursor such as
NOx or SO2) from a specified source. Specifically, in this analysis, we multiplied the estimates
from the "II&S Facilities" sector, which are large enough to provide substantial benefits, by the
corresponding emission reductions. The method used to derive these estimates is described in
the BPT Technical Support Document (BPT TSD) on Estimating the Benefit per Ton of
Reducing Directly-Emitted PM2.5,PM2.5 Precursors and Ozone Precursors from 21 Sectors and
its precursors from 21 sectors (U.S. EPA, 2023d). As noted above, we were unable to quantify
the value of changes in exposure to HAP, CO, NO2.
As noted below in the characterization of uncertainty, all BPT estimates have inherent
limitations. Specifically, all national-average BPT estimates reflect the geographic distribution of
the modeled emissions, which may not exactly match the emission reductions that would occur
due to rulemaking, and they may not reflect local variability in population density, meteorology,
exposure, baseline health incidence rates, or other local factors for any specific location. Given
use of a regional, sector specific BPT and the small changes in emissions considered in this
rulemaking, the difference in the quantified health benefits that result from the BPT approach
compared with if EPA had used a full-form air quality model should be minimal.
The EPA systematically compared the changes in benefits, and concentrations where
available, from its BPT technique and other reduced-form techniques to the changes in benefits
and concentrations derived from full-form photochemical model representation of a few different
specific emissions scenarios. Reduced form tools are less complex than the full air quality
modeling, requiring less agency resources and time. That work, in which we also explore other
reduced form models is referred to as the "Reduced Form Tool Evaluation Project", began in
2017, and the final report became available in 2019 (Industrial Economics, Inc., 2019). The
Agency's goal was to create a methodology by which investigators could better understand the
4-11
-------
suitability of alternative reduced-form air quality modeling techniques for estimating the health
impacts of criteria pollutant emissions changes in the EPA's benefit-cost analysis, including the
extent to which reduced form models may over- or under-estimate benefits (compared to full-
scale modeling) under different scenarios and air quality concentrations. The EPA Science
Advisory Board (SAB) convened a panel to review this report.26 In particular, the SAB assessed:
the techniques the Agency used to appraise these tools; the Agency's approach for depicting the
results of reduced-form tools; and steps the Agency might take for improving the reliability of
reduced-form techniques for use in future Regulatory Impact Analyses.
The scenario-specific emission inputs developed for this project are currently available
online. The study design and methodology are described in the final report summarizing the
results of the project27. Results of this project found that total PM2.5 BPT values were within
approximately 10 percent of the health benefits calculated from full-form air quality modeling
when analyzing the Pulp and Paper sector. The ratios for individual species varied, and the
report found that the ratio for the directly emitted PM2.5 for the pulp and paper sector was 0.7 for
the BPT approach compared to 1.0 for full air quality modeling combined with BenMAP. This
provides some initial understanding of the uncertainty which is associated with using the BPT
approach instead of full air quality modeling.
4,4,2 PM2.5 Benefits Results
Table 4-2 lists the estimated PIVh.s-related benefits per ton applied in this national level
analysis. Benefits are estimated using two concentration-response parameters for quantifying
PM-attributable mortality and discounted at 3 and 7 percent for a 2022 currency year. For all
estimates, we summarize the monetized PIVh.s-related health benefits using discount rates of 3
percent and 7 percent for the 10-year analysis period of this rule discounted back to 2024
rounded to 2 significant figures as presented in Table 4-3. The PV of the lower-bound estimated
benefits for the final rule are $1.8 billion at a 3 percent discount rate and $1.3 billion at a 7
percent discount rate with EAVs of $200 million and $170 million respectively. The PV of the
upper-bound benefits for the final rule are $3.7billion at a 3 percent discount rate and $2.6 billion
at a 7 percent discount rate with EAVs of $420 million and $350 million respectively. All
26 85 FR 23823. April 29, 2020.
27 Available here: https://www.epa.gov/benmap/reduced-form-evaluation-project-report.
4-12
-------
estimates are reported in 2022 dollars. Undiscounted benefits are presented by year for the final
and less stringent alternative options in Table 4-4 and Table 4-5. For the full set of underlying
calculations see the "Integrated Iron and Steel Benefits workbook", available in the docket for
the proposal.
Table 4-2: II&S Benefit per Ton Estimates of PM2.5-Attributable Premature Mortality and
Illness for the Final Option, 2025-2035 ($2022)
Discount Rate
Year
3 Percent
7 Percent
2025 $414,202 and $885,807
2030 $447,968 and $927,452
2035 $501,995 and $1,012,993
$372,556 and $798,014
$402,946 and $834,031
$451,345 and $911,694
Note: The standard reporting convention for EPA benefits is to round all results to two significant figures. Here, we report all
significant figures so that readers may reproduce the results reported below. The monetized health benefits are quantified using
two alternative concentration-response relationships from the Di et al. (2016) and Turner et al. (2017) studies and presented at
real discount rates of 3 and 7 percent.
Table 4-3: II&S Benefit Estimates of PM2.5-Attributable Premature Mortality and Illness
for the Proposal (million 2022$)a'b'c
Less Stringent Regulatory Option
Final Regulatory Option
Discount Rate
Discount Rate
3 Percent
7 Percent
3 Percent
7 Percent
p
V
900
an
d
1,90
0
640
an
d
1,30
0
1,80
0
an
d
3,70
0
1,30
0
an
d
2,60
0
E
an
d
an
d
an
d
an
d
A
V
100
210
85
180
200
420
170
350
a Discounted to 2024
b Rounded to 2 significant figures.
c The monetized health benefits are quantified using two alternative concentration-response relationships from the Di et al. (2016)
and Turner et al. (2017) studies and presented at real discount rates of 3 and 7 percent.
4-13
-------
Table 4-4: Undiscounted Monetized Benefits Estimates of PM2.5-Attributable Premature
Mortality and Illness for the Final Option (million 2022$), 2026-2035a'b
Year
3%
7%
2026
$180 and $380
$160 and $340
2027
$200 and $420
$180 and $380
2028
$210 and $440
$190 and $390
2029
$210 and $440
$190 and $390
2030
$210 and $440
$190 and $390
2031
$210 and $440
$190 and $390
2032
$210 and $440
$190 and $390
2033
$240 and $480
$210 and $430
2034
$240 and $480
$210 and $430
2035
$240 and $480
$210 and $430
a Rounded to 2 significant figures
b The monetized health benefits are quantified using two alternative concentration-response relationships from the Di et al. (2016)
and Turner et al. (2017) studies and presented at real discount rates of 3 and 7 percent.
Table 4-5: Undiscounted Monetized Benefits Estimates of PM2.5-Attributable Premature
Mortality and Illness for the Less Stringent Alternative Option (million 2022$), 2026-
2035a'b
Year
3%
7%
2026
$80 and $170
$72 and $150
2027
$99 and $210
$89 and $190
2028
$110 and $220
$97 and $200
2029
$110 and $220
$97 and $200
2030
$110 and $220
$97 and $200
2031
$110 and $220
$97 and $200
2032
$110 and $220
$97 and $200
2033
$120 and $240
$110 and $220
2034
$120 and $240
$110 and $220
2035
$120 and $240
$110 and $220
a Rounded to 2 significant figures
b The monetized health benefits are quantified using two alternative concentration-response relationships from the Di et al. (2016)
and Turner et al. (2017) studies and presented at real discount rates of 3 and 7 percent.
4.4.3 Characterization of Uncertainty in the Monetized PM2.5 Benefits
In any complex analysis using estimated parameters and inputs from a variety of models,
there are likely to be many sources of uncertainty. This analysis is no exception. This analysis
includes many data sources as inputs, including emission inventories, air quality data from
models (with their associated parameters and inputs), population data, population estimates,
health effect estimates from epidemiology studies, economic data for monetizing benefits, and
assumptions regarding the future state of the world (i.e., regulations, technology, and human
behavior). Each of these inputs are uncertain and generate uncertainty in the benefits estimate.
4-14
-------
When the uncertainties from each stage of the analysis are compounded, even small uncertainties
can have large effects on the total quantified benefits. Therefore, the estimates of annual benefits
should be viewed as representative of the magnitude of benefits expected, rather than the actual
benefits that would occur every year.
4-15
-------
5 ECONOMIC IMPACT ANALYSIS AND DISTRIBUTIONAL ASSESSMENTS
5.1 Introduction
The final NESHAP amendments are projected to result in environmental control
expenditures and work practice adjustments to comply with the rule. The national-level
compliance cost analysis in Section 3.5 does not speak directly to potential economic and
distributional impacts of the final rule, which may be important consequences of the action. This
section is directed towards complementing the compliance cost analysis and includes an analysis
of potential firm-level impacts of regulatory costs and a discussion of potential employment and
small entity impacts.
5.2 Economic Impact Analysis
Although facility-specific economic impacts (production changes or closures, for
example) cannot be estimated by this analysis, the EPA conducted a screening analysis of
compliance costs compared to the revenue of firms owning II&S facilities. The EPA often
performs a partial equilibrium analysis to estimate impacts on producers and consumers of the
products or services provided by the regulated firms. This type of economic analysis estimates
impacts on a single affected industry or several affected industries, and all impacts of this rule on
industries outside of those affected are assumed to be zero or inconsequential (U.S. EPA, 2016).
If the compliance costs, which are key inputs to an economic impact analysis, are small
relative to the receipts of the affected industries, then the impact analysis may consist of a
calculation of annual (or annualized) costs as a percent of sales for affected parent companies.
This type of analysis is often applied when a partial equilibrium or more complex economic
impact analysis approach is deemed unnecessary given the expected size of the impacts. The
annualized cost per sales for a company represents the maximum price increase in the affected
product or service needed for the company to completely recover the annualized costs imposed
by the regulation. We conducted a cost-to-sales analysis to estimate the economic impacts of this
proposal, given that the EAV of the compliance costs are $5.1 million using a 7 percent discount
rate and $5.3 million using a 3 percent discount rate in 2022 dollars, which is small relative to
the revenues of the steel industry.
5-1
-------
The EPA prefers a "sales test" as the impact methodology in economic impact analyses
as opposed to a "profits test", in which annualized compliance costs are calculated as a share of
profits.28 This is consistent with guidance published by the U.S. Small Business Administration
(SBA) Office of Advocacy, which suggests that cost as a percentage of total revenues is a metric
for evaluating cost impacts on small entities relative to large entities.29 This is because revenues
or sales data are commonly available for entities impacted by the EPA regulations and profits
data are often private or tend to misrepresent true profits earned by firms after undertaking
accounting and tax considerations.
While a "sales test" can provide some insight as to the economic impact of an action such
as this one, it assumes that the impacts of a rule are solely incident on a directly affected firm
(therefore, no impact to consumers of an affected product), or solely incident on consumers of
output directly affected by this action (therefore, no impact to companies that are producers of
affected product). Thus, an analysis such as this one is best viewed as providing insight on the
polar examples of economic impacts: maximum impact to either directly affected companies or
their consumers. A "sales test" analysis does not consider shifts in supply and demand curves to
reflect intermediate economic outcomes such as output adjustments in response to increased
costs.
As discussed in Chapter 2, only two firms own the eight remaining II&S manufacturing
facilities in the United States: Cleveland-Cliffs Inc. (Burns Harbor, Cleveland, Dearborn, Indiana
Harbor, and Middletown Works) and U.S. Steel (Gary, Granite City, and Mon Valley Works).
Both firms reported sales greater than $20 billion in 2021 (see Table 5-1).
Table 5-1: II&S Facility Owner Sales and Employment, 2021
Parent Company
HQ Location
Legal Form
Sales (million USD)
Employment
U.S. Steel
Pittsburgh, PA
Public
$20,275
24,500
Cleveland-Cliffs Inc.
Cleveland, OH
Public
$20,444
26,000
Total
$40,719
50,500
Sources: U.S. Steel Corporation Form 10-K 2021 and Cleveland-Cliffs Inc. Form 10-K 2021
28 More information on sales and profit tests as used in analyses done by U.S. EPA can be found in the Final
Guidance for EPA Rulewriters: Regulatory Flexibility Act as Amended by the Small Business Regulatory
Enforcement Fairness Act, November 2006, pp. 32-33.
29 U.S. SBA, Office of Advocacy. 2010. A Guide for Government Agencies, How to Comply with the Regulatory
Flexibility Act, Implementing the President's Small Business Agenda and Executive Order 13272.
5-2
-------
Table 5-2 and Table 5-3 present total annualized cost and total capital investment relative
to sales for each set of regulatory alternatives. Firm revenues have been converted to 2022
dollars to accord with the dollar-year of the cost estimates. As shown in the tables, both total
annualized cost and total capital investment (which could potentially be incurred by each firm in
a single year) are small compared to total revenue for each firm (less than 0.02 percent). These
costs include the costs of BF/BOPF fugitive emission work practices and monitoring, the costs of
installing ACI at sinter plants to meet the limit for D/F and furans, the costs of fenceline
monitoring, and the cost of additional compliance testing and monitoring, recordkeeping, and
reporting. Based on this estimate, the maximum necessary price increase caused by the final
regulation is small relative to the size of the firms that own facilities in the source category, and
the potential economic impacts of the final rule are likely to be small.
Table 5-2: Total Annualized Cost-to-Sales Ratios for II&S Facility Owners by Regulatory
Alternative
2021
Revenue
(million
2022$)
Total
Annualized
TAC-Sales
Ratio
Ultimate Parent Company
Regulatory Alternative
Cost
(million
2022$)
Cleveland-Cliffs Inc.
Less Stringent
Final
$21,742
$2.0
$4.4
0.0092%
0.020%
U.S. Steel
Less Stringent
Final
$21,562
$1.2
$3.2
0.0056%
0.015%
Table 5-3: Total Capital Investment-to-Sales Ratios for II&S Facility Owners by
Regulatory Alternative
2021
Total Capital
Ultimate Parent Company
Regulatory Alternative
Revenue
(million
2022$)
Investment
(million
2022$)
TCI-Sales
Ratio
Cleveland-Cliffs Inc.
Less Stringent
Final
$21,742
$1.5
$3.5
0.0069%
0.016%
U.S. Steel
Less Stringent
Final
$21,562
$1.6
$2.9
0.0074%
0.013%
5-3
-------
5.3 Employment Impacts Analysis
This section presents a qualitative overview of the various ways that environmental
regulation can affect employment. Employment impacts of environmental regulations are
generally composed of a mix of potential declines and gains in different areas of the economy
over time. Regulatory employment impacts can vary across occupations, regions, and industries;
by labor and product demand and supply elasticities; and in response to other labor market
conditions. Isolating such impacts is a challenge, as they are difficult to disentangle from
employment impacts caused by a wide variety of ongoing, concurrent economic changes. The
EPA continues to explore the relevant theoretical and empirical literature and to seek public
comments in order to ensure that the way the EPA characterizes the employment effects of its
regulations is reasonable and informative.
Environmental regulation "typically affects the distribution of employment among
industries rather than the general employment level" (Arrow, et al., 1996). Even if impacts are
small after long-run market adjustments to full employment, many regulatory actions have
transitional effects in the short run (Office of Management and Budget, 2015). These movements
of workers in and out of jobs in response to environmental regulation are potentially important
and of interest to policymakers. Transitional job losses have consequences for workers that
operate in declining industries or occupations, have limited capacity to migrate, or reside in
communities or regions with high unemployment rates.
As indicated by the potential impacts on II&S manufacturing firms discussed in Section
5.2 , the final requirements are unlikely to cause large shifts in steel production and prices. As a
result, demand for labor employed in steel production activities and associated industries is
unlikely to see large changes but might experience adjustments as there may be increases in
compliance-related labor requirements such as labor associated with the manufacture,
installation, and operation of pollution control devices as well as changes in employment due to
quantity effects in directly-regulated sectors and sectors that consume steel produced by
integrated manufacturing facilities. For this proposal, however, we do not have the data and
analysis available to quantify these potential labor impacts.
5-4
-------
5.4 Small Business Impact Analysis
To determine the possible impacts of the final NESHAP amendments on small
businesses, parent companies producing iron and steel in integrated facilities are categorized as
small or large using the SBA's general size standards definitions. For NAICS 331110 (Iron and
Steel Mills and Ferroalloy Manufacturing), these guidelines indicate a small business employs
1,500 or fewer workers.30 Only two ultimate parent companies, Cleveland-Cliffs Inc. and U.S.
Steel, own II&S manufacturing facilities in the United States. Based on the SBA definition and
the company employment shown in Table 5-1, this industry has no small businesses.
30 U.S. Small Business Administration, Table of Standards, Effective December 19, 2022. Available at:
https://www.sba.gov/document/support--table-size-standards. Accessed January 17, 2023.
5-5
-------
6 COMPARISON OF BENEFITS AND COSTS
In this chapter, we present a comparison of the benefits and costs of this final action. As
explained in the previous chapters, all costs and benefits outlined in this RIA are estimated as the
change from the baseline, which reflects the requirements already promulgated, and does not
take into account other ongoing rulemakings, which may impose similar or identical
requirements on a subset of facilities affected by this rule (thus reducing the additional economic
impact of complying with this rule). As stated earlier in this RIA, there is no monetized estimate
of the benefits for the HAP emission reductions expected to occur as a result of this final action.
Further, the monetized benefits associated with PM2.5 only include health benefits associated
with reduced premature mortality and morbidity associated with exposure to PM2.5, and do not
include other health and environmental impacts associated with reduced PM emissions, such as
ecosystem effects and reduced visibility. EPA expects these benefits are positive, and as a result
the net benefits presented in this section are likely understated.
6.1 Results
As part of fulfilling analytical guidance with respect to E.O. 12866, EPA presents
estimates of the present value (PV) of the benefits and costs over the period 2026 to 2035. To
calculate the present value of the social net benefits of the final action, annual benefits and costs
are in 2022 dollars and are discounted to 2024 at 3 percent and 7 percent discount rates as
directed by OMB's Circular A-4. The EPA also presents the equivalent annualized value (EAV),
which represents a flow of constant annual values that would yield a sum equivalent to the PV.
The EAV represents the value of a typical cost or benefit for each year of the analysis, consistent
with the estimate of the PV, in contrast to year-specific estimates.
Table 6-1 presents a summary of the monetized benefits, compliance costs, and net
benefits of the final NESHAP amendments and the less stringent alternative regulatory options,
in terms of present value (PV) and equivalent annualized value (EAV). Table 6-1 lists benefits
using two alternative concentration-response from Di et al. (2016) and Turner et al. (2017).
6-1
-------
Table 6-1: Summary of Monetized Benefits, Compliance Costs, Net Benefits, and Non-
Monetized Benefits PV/EAV, 2026-2035 (million 2022$, discounted to 2024)a'b
Final Rule
Less Stringent Alternative
3%
PV
EAV
PV
EAV
Monetized Health
Benefits
$1,800
and
$3,700
$200
and
$420
$890
and
$1,800
$100
and
$210
Compliance Costs
$45
$5.3
$21
$2.5
$1,800
$190
$870
$98
Net Benefits
and
and
and
and
$3,700
$410
$1,800
$210
7%
Monetized Health
Benefits
$1,200
and
$2,600
$170
and
$340
$630
and
$1,300
$83
and
$170
Compliance Costs
$36
$5.1
$17
$2.4
$1,200
$160
$610
$81
Net Benefits
and
and
and
and
$2,600
$330
$1,300
$170
64 tpy HAP, 8.2 grams/year D/F, 5 tpy
PAH, 471b s/yr Hg
39 tpy HAP
Non-monetized
Benefits
Health effects of reduced exposure to HAP°,D/F, PAH, and Hg
Non-health benefits from reducing 18,000 tons of PM, of which 4,700
tons is PM2.5 from 2026-2035
Benefits from reducing HC1, HF, Hg, D/F TEQ, COS, and CS2
Reduced Ecosystem/Vegetation Effects
a Rounded to two significant figures. Rows may not appear to add correctly due to rounding.
b Monetized benefits include health benefits associated with reductions in PM2.5 emissions. The health benefits are associated
with several point estimates and are presented at real discount rates of 3 and 7 percent. The monetized health benefits are
quantified using two alternative concentration-response relationships from the Di et al. (2016) and Turner et al. (2017) studies
and presented at real discount rates of 3 and 7 percent. Benefits from HAP reductions remain unmonetized and are thus not
reflected in the table. Rows may not appear to add correctly due to rounding.
c For details on HAP health effects associated with the rule, see Section 4.2.
6-2
-------
Given these results, the EPA expects that implementation of the final NESHAP
amendments, based solely on an economic efficiency criterion, will provide society with a
substantial net gain in welfare, notwithstanding the set of health and environmental benefits and
other impacts we were unable to quantify such as monetization of benefits from HAP emission
reductions. Further quantification of directly-emitted PM2.5 and HAP would increase the
estimated net benefits of the final action. Undiscounted net benefits of the final amendments are
presented in Table 6-2 and Table 6-3 below.
Table 6-2: Undiscounted Net Benefits Estimates for the Final Option (million 2022$), 2026-
2035a'b
Year
3%
7%
2026
$170 and $370
$150 and $330
2027
$190 and $410
$170 and $370
2028
$200 and $430
$180 and $380
2029
$200 and $430
$180 and $380
2030
$200 and $430
$180 and $380
2031
$200 and $430
$180 and $380
2032
$200 and $430
$180 and $380
2033
$230 and $470
$200 and $420
2034
$230 and $470
$200 and $420
2035
$230 and $470
$200 and $420
a Rounded to 2 significant figures
b The monetized health benefits are quantified using two alternative concentration-response relationships from the Di et al. (2016)
and Turner et al. (2017) studies and presented at real discount rates of 3 and 7 percent.
Table 6-3: Undiscounted Net Benefits Estimates for the Less Stringent Alternative Option
(million 2022$), 2026-2035a
Year
3%
7%
2026
$74 and $160
$66 and $140
2027
$97 and $210
$87 and $190
2028
$110 and $220
$95 and $200
2029
$110 and $220
$95 and $200
2030
$110 and $220
$95 and $200
2031
$110 and $220
$94 and $200
2032
$110 and $220
$95 and $200
2033
$120 and $240
$110 and $220
2034
$120 and $240
$110 and $220
2035
$120 and $240
$110 and $220
a Rounded to 2 significant figures
b The monetized health benefits are quantified using two alternative concentration-response relationships from the Di et al. (2016)
and Turner et al. (2017) studies and presented at real discount rates of 3 and 7 percent.
6-3
-------
6.2 Uncertainties and Limitations
Throughout the RIA, we considered a number of sources of uncertainty, both
quantitatively and qualitatively, regarding the benefits, and costs of the final NESHAP
amendments. We summarize the key elements of our discussions of uncertainty here:
• Projection methods and assumptions: The number of facilities in operation is
assumed to be constant over the course of the analysis period. Multiple facilities have
idled or closed over the last several years, and if this trend were to continue then the
costs and emissions impacts of the proposal may be overestimated. Unexpected
facility closure or idling affects the number of facilities subject to the final
amendments. We also assume 100 percent compliance with these final rules and
existing rules, starting from when the source becomes affected. If sources do not
comply with these rules, at all or as written, the cost impacts and emission reductions
may be overestimated. Additionally, new control technology may become available in
the future at lower cost, and we are unable to predict exactly how industry will
comply with the final rules in the future.
• Years of analysis: The years of the cost analysis are 2026, to represent the first-year
facilities are fully compliant with the final amendments, through 2035, to present 10
years of potential regulatory impacts, as discussed in Chapter 3. Extending the
analysis beyond 2035 would introduce substantial and increasing uncertainties in the
projected impacts of the final regulations.
• Compliance Costs: There is uncertainty associated with the costs required to install
and operate the equipment and perform the work practices necessary to meet the final
emissions limits. There is also uncertainty associated with the exact controls a facility
may install to comply with the requirements, and the interest rate they are able to
obtain if financing capital purchases. There may be an opportunity cost associated
with the installation of environmental controls (for purposes of mitigating the
emission of pollutants) that is not reflected in the compliance costs included in
Chapter 3. If environmental investment displaces investment in productive capital, the
difference between the rate of return on the marginal investment (which is
discretionary in nature) displaced by the mandatory environmental investment is a
6-4
-------
measure of the opportunity cost of the environmental requirement to the regulated
entity. To the extent that any opportunity costs are not included in the control costs,
the compliance costs presented above for this final action may be underestimated.
There is also uncertainty over which facilities will require fenceline monitoring after
the sunset provision takes effect after two years; to the extent some facilities become
exempt from these requirements, the costs presented in this RIA are overstated.
Finally, the compliance costs presented above do not take into account whether other
ongoing rulemakings (including those affecting lime manufacturing, coke ovens,
taconite iron ore processing, and electric arc furnace sources) impose identical or
similar requirements. If these other rulemakings impose similar emissions control
technology requirements, the marginal compliance cost of this rulemaking would be
substantially lower than the compliance costs presented above.
• Emissions Reductions: Baseline emissions and projected emissions reductions are
based on AP-42 emissions factors, assumptions about current emissions controls, and
facility stack testing. To the extent that any of these data or assumptions are
unrepresentative, the emissions reductions (and therefore benefits) associated with the
final amendments could be over or underestimated.
• BPT estimates: All national-average BPT estimates reflect the geographic
distribution of the modeled emissions, which may not exactly match the emission
reductions that would occur due to the action, and they may not reflect local
variability in population density, meteorology, exposure, baseline health incidence
rates, or other local factors for any specific location. Recently, the EPA
systematically compared the changes in benefits, and concentrations where available,
from its BPT technique and other reduced-form techniques to the changes in benefits
and concentrations derived from full-form photochemical model representation of a
few different specific emissions scenarios. Reduced form tools are less complex than
the full air quality modeling, requiring less agency resources and time. That work, in
which we also explore other reduced form models is referred to as the "Reduced
Form Tool Evaluation Project" (Project), began in 2017, and the initial results were
available at the end of 2018. The Agency's goal was to better understand the
6-5
-------
suitability of alternative reduced-form air quality modeling techniques for estimating
the health impacts of criteria pollutant emissions changes in the EPA's benefit-cost
analysis. The EPA continues to work to develop refined reduced-form approaches for
estimating benefits. The scenario-specific emission inputs developed for this project
are currently available online. The study design and methodology are described in the
final report summarizing the results of the project, available at
.
• Non-monetized benefits: Numerous categories of health and welfare benefits are not
quantified and monetized in this RIA. These unquantified benefits, including benefits
from reductions in emissions of pollutants such as HAP which are to be reduced by
this final action, are described in detail in Chapter 4 of this RIA.
• PM health impacts: In this RIA, we quantify an array of adverse health impacts
attributable to emissions of PM. The Integrated Science Assessment for Particulate
Matter (U.S. EPA, 2019) identifies the human health effects associated with ambient
particles, which include premature death and a variety of illnesses associated with
acute and chronic exposures. As described in the TSD "Estimating PM2.5 and Ozone-
Attributable Health Benefits" (U.S. EPA, 2023b), EPA did not quantify endpoints
classified in the ISA as being "less than causally" related to PM2.5.
6-6
-------
7 REFERENCES
• Arrow, K. J., Cropper, M. L., Eads, G. C., Hahn, R. J., Lave, L. B., Noll, R. J., . . .
Stavins, R. N. (1996). Benefit-Cost Analysis in Environmental, Health, andSaftey
Regulation: A Statement of Principles. American Enterprise Institute Press.
• ATSDR. (1995). Toxicological profile for polycyclic aromatic hydrocarbons. Atlanta,
GA: Public Health Service, U.S. Department of Health and Human Services.
• ATSDR. (1998). Toxicological Profile for Chlorinated Dibenzop-Dioxins. Atlanta, GA:
Public Health Service, U.S. Department of Health and Human Services.
• ATSDR. (2007). Toxicological Profile for Arsenic (Update). Atlanta, GA: U.S.
Department of Health and Human Services.
• ATSDR. (2012). Toxicological Profile for Chromium. Atlanta, GA: U.S. Department of
Health and Human Services.
• ATSDR. (2020). Toxicological Profile for Lead. U.S. Department of Health and Human
Services.
• Di, Q., Wang, Y., Zanobetti, A., Wang, Y., Koutrakis, P., Choirat, C., . . . Schwartz, J.
(2017). Air pollution and mortality in the Medicare population. New Engl J Med,
376(26): 2513-2522.
• Huang, X., Fan, X., Chen, X., & Gan, M. (2018). Soft-measuring models of thermal state
in iron ore sintering process. Measurement.
• IEA. (2020). Iron and Steel Technology Roadmap: Towards more sustainable
steelmaking. Paris, France: OECD Publishing, https://doi.org/10.1787/3dcc2alb-en.
• Industrial Economics, Inc. (2019). Evaluating Reduced-Form Tools for Estimating Air
Quality Benefits. Available at: https://www.epa.gov/sites/default/files/2020-
09/documents/adapted_rft_report_10.31.19.pdf.
• Minnesota Department of Revenue. (2022). Mining Tax Guide. Available at:
https://www.revenue.state.mn.us/sites/default/files/2022-10/2022_mining_guide_0.pdf.
• Occupational Safety and Health Administration (2006). Occupational Exposure to
Hexavalent Chromium, Final Rule. Available at: https://www.osha.gov/laws-
regs/federalregister/2006-02-28-0.
7-7
-------
OECD. (2021). Latest Developments in Steelmaking Capacity. Available at:
https://www.oecd.org/industry/ind/latest-developments-in-steelmaking-capacity-
2021.pdf.
Office of Management and Budget. (2015). 2015 Report to Congress on the Benefits and
Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates
Reform Act. U.S. Office of Management and Budget, Office of Information and
Regulatory Affairs.
Turner, M., Jerrett, M., Pope, A., Krewski, D., Gapstur, S., Diver, W., . . . Burnett, R.
(2016). Long-term ozone exposure andmortality in a large prospective study. Am JRespir
Crit Care Med, 193(10): 1134-1142.
U.S. EPA. (1985). Health Assessment Document for Poly chlorinated Dibenzo-P-Dioxins.
Washington, DC: EPA/600/8-84/014F (NTIS PB86122546).
U.S. EPA. (1995). Integrated Risk Information System (IRIS) on Manganese.
Washington, DC: National Center for Environmental Assessment, Office of Research and
Development.
U.S. EPA. (1998a). Integrated Risk Assessment File for Arsenic. Washington, DC:
National Center for Environmental Assessment, Office of Research and Development.
U.S. EPA. (1998b). ToxicologicalReview of Trivalent Chromium. Washington, DC:
National Center for Environmental Assessment, Office of Research and Development.
U.S. EPA. (1998c). Toxicological Review of Hexavalent Chromium. Washington, DC:
National Center for Environmental Assessment, Office of Research and Development.
U.S. EPA. (2001). National Emission Standards for Hazardous Air Pollutants (NESHAP)
for Integrated Iron and Steel Plants - Background Information for Final Standards.
Available at: https://www.regulations.gov/document/EPA-HQ-OAR-2002-0083-0838.
U.S. EPA. (2002). Economic Impact Analysis of Final Integrated Iron and Steel
NESHAP. EPA 452/R-02-009, available at: https://www.epa.gov/sites/default/files/2020-
07/documents/iron-steel_eia_neshap_final_09-2002.pdf.
U.S. EPA. (2004). IRIS Summary on Lead and compounds (inorganic). Washington, DC:
National Center for Environmental Assessment, Office of Research and Development.
U.S. EPA. (2012a). Regulatory Impact Analysis for the Particulate Matter National
Ambient Air Quality Standards. Available at:
https://www3.epa.gov/ttnecasl/regdata/RIAs/finalria.pdf.
7-8
-------
U.S. EPA. (2012b). Regulatory Impact Analysis for the Final Revisions to the National
Ambient Air Quality Standards for Particulate Matter. Office of Air Quality Planning
and Standards, available at: https://www3.epa.gov/ttn/ecas/docs/ria/naaqs-
pm_ria_final_2012-12.pdf.
U.S. EPA. (2016). Guidelines for Preparing Economic Analyses. Available at:
https://www.epa.gov/environmental-economics/guidelines-preparing-economic-analyses.
U.S. EPA. (2017). EPA Air Pollution Control Cost Manual. Office of Air Quality
Planning and Standards, available at: https://www.epa.gov/economic-and-cost-analysis-
air-pollution-regulations/cost-reports-and-guidance-air-pollution.
U.S. EPA. (2017). IRIS ToxicologicalReview of Benzo[A]Pyrene (FinalReport).
Washington, DC: EPA/635/R-17/003F.
U.S. EPA. (2019a). Integrated Science Assessment for Particulate Matter. Office of Air
Quality Planning and Standards, EPA/600/R-08/139F.
U.S. EPA. (2019b). Regulatory Impact Analysis for the Repeal of the Clean Power Plan,
and the Emissions Guidelines for Greenhouse Gases from Existing Electric Energy
Generating Units. Office of Air Quality Planning and Standard, EPA-452/R-19-003,
Available at: https://www.epa.gov/sites/production/files/2019-
06/documents/utilities_ria_final_cpp_repeal_and_ace_2019-06.pdf.
U.S. EPA. (2019c). Development of Emissions Estimates for Fugitive or Intermittent
HAP Emissions Sources for an Example II&S Facility for input to the RTR Risk
Assessment. Available at: https://www.regulations.gov/document/EPA-HQ-OAR-2002-
0083-0956.
U.S. EPA. (2021a). Regulatory Impact Analysis for the Final Revised Cross-State Air
Pollution Rule (CSAPR) Update for the 2008 Ozone NAAQS. Available at:
https://www.epa.gov/sites/default/files/2021-
03/documents/revi sedcsaprupdateriafinal. pdf.
U.S. EPA. (2021b). Technical Support Document (TSD) for the Final Revised Cross-
State Air Pollution Rule Update for the 2008 Ozone Season NAAQS Estimating PM2.5-
and Ozone-Attributable Health Benefits. Available at
https://www.epa.gov/sites/default/files/2021-03/documents/estimating_pm2.5-
_and_ozone-attributable_health_benefits_tsd.pdf.
U.S. EPA. (2023a). Regulatory Impact Analysis fo the Final National Emission
Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam
Generating Units Review of the Residual Risk and Technology Review. Office of Air
Quality Planning and Standards. EPA-452/R-23-002.
-------
U.S. EPA. (2023b). EstimatingPM2.5- and Ozone-Attributable Health Benefits.
Research Triangle Park, NC: Office of Air Quality Planning and Standards. Available at:
https://www.regulations.gov/docket/EPA-HQ-OAR-2018-0794.
U.S. EPA. (2023c). Regulatory Impact Analysis for the Final Reconsideration of the
National Ambient Air Quality Standards for Particulate Matter. Available at:
https://www.epa.gov/system/files/documents/2024-01/naaqs-pm_ria_final_2022-12.pdf.
U.S. EPA. (2023d). Estimating the Benefit per Ton of Reducing PM2.5 Precursors from
21 Sectors (Technical Support Document). Available at:
https://www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-
pm25-precursors-and-ozone-precursors .
U.S. EPA-SAB. (2000). An SAB Report on EPA's White Paper Valuing the Benefits of
Fatal Cancer Risk Reduction. Available at:
https://nepis. epa.gov/Exe/ZyNET. exe/P100JOK2.TXT?ZyActionD=ZyDocument&Clien
t=EPA&Index=2000+Thru+2005&Docs=&Query=&Time=&EndTime=&SearchMethod
=1 & T ocRestri ct=n& T oc=& T ocEntry=& QFi el d=& QF i el d Y ear=& QFiel dMonth=& QF i el
dDay=&IntQFieldOp=0&ExtQField.
U.S. EPA-SAB. (2017). SAB Review of EPA's Final Methodology for Updating Mortality
Risk Valuation Estimates for Policy Analysis. Available at:
https://nepis. epa.gov/Exe/ZyNET. exe/P100ROQR.TXT?ZyActionD=ZyDocument&Clie
nt=EPA&Index=2016+Thru+2020&Docs=&Query=&Time=&EndTime=&SearchMetho
d= 1 & T ocRestri ct=n& Toc=& T ocEntry=& QF i eld=& QF i el d Y ear=& QF i el dMonth=& QF i e
ldDay=&IntQFieldOp=0&ExtQField.
U.S. EPA-SAB-CASAC. (2019). CASAC Review of the EPA's Integrated Science
Assessment for Particulate Matter. Available at:
https://casac.epa.gov/ords/sab/f?p=105:18:34242723037117: ::RP,18:P18_ID:2461.
USGS. (2020). Iron and Steel [table-only release], Metals and Minerals: USGS Minerals
Yearbook 2020, volume 1. Available at: https://www.usgs.gov/centers/national-minerals-
information-center/iron-and-steel-statistics-and-information.
USGS. (2022a). Iron and Steel Mineral Commodity Summary 2022. Available at:
https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-iron-steel.pdf.
Tuck. (2022b). Iron Ore [tables only release], U.S. Geological Survey Minerals
Yearbook - 2020. Available at https://www.usgs.gov/centers/national-minerals-
information-center/iron-ore-statistics-and-information.
World Steel Association. (2022). 2022 World steel in figures. Available at:
https://worldsteel.org/wp-content/uploads/World-Steel-in-Figures-2022-l.pdf.
7-10
-------
• Yildirim, I. Z., & Prezzi, M. (2011). Chemical, Mineralogical, and Morphological
Properties of Steel Slag. Advances in Civil Engineering.
7-11
-------
United States Office of Air Quality Planning and Standards Publication No. EPA-452/R-24-012
Environmental Protection Health and Environmental Impacts Division March 2024
Agency Research Triangle Park, NC
------- |