1 M E M O R ANDU M

To: David Putney, U.S. Environmental Protection Agency (EPA), OAQPS

From: David Green and Matt Hakos, RTI International

Date: September 1, 2015

Subject: Final Cost Impacts for the Primary Aluminum Production Source Category

This memo describes the estimated costs, in 2014 do llars, resulting from the final residual risk and technology review (RTR) amendments to the Nati onal Emission Standards (N ESHAP) for Hazardous Air Pollutants for Primary Aluminum Reduction Plants (found in 40 CFR part 63, subpart LL). Thr ough the RTR amendments, the EPA established maximum achievable control technology (MACT) standards at the MACT floor for the following eight previously unr egulated hazardous air pollutant (HAP) sources at primary aluminum reduction plants:

1. Polycyclic organic matter (POM) emissions from prebake potlines,

2. Carbonyl sulfide (COS) emi ssions from prebake potlines,

3. POM emissions from existing pitch storage tanks,

4. Particulate matter (PM) (as a surrogate for non-mercury (Hg) metal HAP) emissions from potlines,

5. PM (as a surrogate for non-Hg metal HAP) emissions from anode bake furnaces,

6. PM (as a surrogate for non -Hg metal HAP) emissions from paste production plants,

7. Hg emissions from anode bake furnaces, and

8. Polychlorinated biphenyl (PCB) emissions from Soderberg potlines.

In addition to these MACT standards, risk-based standards were establ ished for nickel (Ni) and arsenic (As) emissions from Soderberg potlines, and the st andard for POM emissions from VSS2 potlines was revised on the basis of the risk analysis.

The final numerical production-based MACT emission limits for POM, COS, and PM emissions were established by calculating the 99-percent upper pred iction limit (UPL) based on available performance test data. The final numerical concentration-based MA CT emission limit for Hg emissions from anode bake furnaces was based on a con centration equal to three times the expect ed representative detection limit (RDL). The development of these standard s is detailed in the Final MACT Floor Analysis for the Primary Aluminum Production Sour ce Category (available in Docket No. EPA-HQ-OAR-2011-0797). Emission limits for Ni and As and revise d emission limits for POM for Soderberg potlines are based on risk considerations detailed in Devel opment of Emissions Standards to Address Risks for the Primary Aluminum Production Source Category Pursuant to Section 112(f) of the Clean Air Act (Docket item EPA-HQ-OAR-2011-0797-0350). Note that particulate matter (PM) has been used as a surrogate for metal HAP (other than Hg) in the final MACT standards. Also, decrea sed testing frequencies have been finalized for secondary total fluoride (TF) emissions from potlines. See Table 1, below, for a summary of the MACT standards and risk-based standards fina lized via the primary al uminum RTR amendments.2 Table 1. Summary of Promulgated MACT and Risk-Based Standards

HAP Source Promulgated Standard
MACT Standards COS New potlines 3.1 lb/ton aluminum produced Existing potlines 3.9 lb /ton aluminum produced POM New potlines 0.77 lb/ton aluminum produced Existing potlines CWPB1 1.1 lb/ton aluminum produced CWPB2 12 lb/ton aluminum produced CWPB3 2.7 lb/ton aluminum produced SWPB 17 lb/ton aluminum produced Existing pitch storage tanks Minimum 95-percent reduction of inlet POM emissions PM New potlines 4.9 lb/ton aluminum produced Existing potlines CWPB1 7.4 lb/ton aluminum produced CWPB2 11 lb/ton aluminum produced CWPB3 20 lb/ton aluminum produced SWPB 4.9 lb/ton aluminum produced VSS2 26 lb/ton aluminum produced New anode bake furnace 0.07 lb/ton of green anode Existing anode bake furnace 0.20 lb/ton of green anode New paste production plant 0.0056 lb/ton of paste Existing paste production plant 0.082 lb/ton of paste

PCB New and existing Soderberg potlines 2.0 micrograms (μg) toxicity equivalence (TEQ) per ton of aluminum produced Hg New and existing anode bake furnaces 1.7 μg per dry standard cubic meter (dscm)

Risk-Based Standards POM New and existing Soderberg potlines 1.9 lb/ton aluminum produced As 0.006 lb/ton aluminum produced Ni 0.07 lb/ton aluminum produced CWPB1 = Center-worked prebake one CWPB2 = Center-worked prebake two CWPB3 = Center-wor ked prebake three SWPB = Side-worked prebake VSS2 = Vertical stud Soderberg two

POM Emissions from Prebake P o t li n es
Impacts at MACT Floor Level for Prebake Potlines

Based upon our analyses of availabl e data, we expect that all prebake facilities presently in operation will be able to comply with the final potline POM MACT floor emission limits without additional controls or modifications to exis ting controls. While no additional control costs are expected to comply3 with the MACT floor limits, the final rule will require periodic demonstrations of compliance with the appropriate POM emission limit. A compliance dem onstration will be required for each potline semiannually and this demonstrati on will be made by summing the re sults of the most recent annual primary control system emissions test result with the average of the two most recent semiannual secondary (roof vent) emissions test results. We estimate the annual cost of POM testing to be $15,000 per prebake potline (includes one annual test for primary POM and tw o semiannual tests for secondary POM). The 10 prebake facilities will be required to conduct performance test s for POM emissions from 35 prebake potlines resulting in an average annual cost of $52,500 per prebake facility or $525,000 total annual cost for the industry.

Beyond–the-Floor Analysis

Because the primary control devices for pot room PO M emissions are very effective, the appropriate beyond-the-floor potline POM emission control option is the installation of we t scrubbers to control roof vent emissions on the 9 existing facilities that are not currently equipped with these devices. An estimate of the cost of retrofitting we t roof scrubbers on a Soderberg primary aluminum facility was developed for EPA Region 8 1, 2 as part of a Best Available Retrof it Technology (BART) analysis. The objective was improved visibility associated with decreased SO 2 and PM emissions. These scrubbers are also expected to provide a high degree of control of TF and some control (estimated at approximately 50-percent control) of POM and PM . Based on engineering judgement, we assume that at scrubber temperatures nearly all of the POM will be PM. Scali ng the estimated capital cost s for this retrofit by the facility aluminum production capacity raised to the 0.6 power, and assuming th at operating costs are directly proportional to aluminum production capacity, the industry wide capital costs are estimated at $438 million and annual costs are estimated at $138 m illion per year. This is equivalent to $200,000 per ton of POM controlled. Afte r considering the capital costs, annualized costs, cost-effective and overall economic impacts, the EPA decided it is not appropriate to require wet scrubbers on these sources. Therefore the EPA has not promulgated beyond-the-fl oor standards for POM emissions from prebake potlines.

Additional information provided by The Aluminum Association 3 indicates that for prebake facilities, these costs are underestimates because the buildings housing the prebake potlines will likely require modification (e.g., expansion and structural reinforc ement) in order to accommodate the wet scrubbers. According to this information, the costs associated with installing wet scrubbers on prebake facilities could be on the order of 3 times the cost estimates provided above. The BART analysis 1 also considered the installation of fabric filters. This type of system would achieve approximately twice the mass of PM and HAP metals emissions reductions at a capital co st approximately 16 times the cost of wet roof scrubbers and an annual cost of approximately 9 times the cost of wet roof scrubbers. The EPA concluded that these beyond-the-fl oor controls would pose excessive economic impacts and therefore the EPA has not promulgated this beyond-the-floor option.

COS Emissions from P o t li n es
Impacts at MACT Floor Level

Based upon our analyses of availabl e data, we believe that all primary aluminum production facilities presently in operation will be able to comply with the existing source COS MACT floor emission limit without additional controls or modifications to existing controls. The owner or operator will be required to demonstrate compliance on a monthly basi s via a mass balance equa tion with 3 variables: anode consumption rate, aluminum production rate and anode coke sulfur content. However, the4 owners or operators of the affected facilities already monitor all 3 variables. Therefore, we estimate that there will be no cost impacts due to the final COS MA CT floor limit.

Beyond-the-Floor Analysis

In regard to beyond-the-floor analyses for COS em issions, we considered COS emission limits of 3.5 lb COS per ton of aluminum produced and 3.1 lb COS per ton of aluminum produced for existing sources. Facilities could comply with these lower COS emission limits by using lower sulfur content coke in their anodes. Based on current anode coke cost data, we estimate that th e limits of 3.5 lb COS per ton of aluminum produced and 3.1 lb COS per ton of aluminum produced will impose annual costs of approximately $2 million on two existing facilities and $13 million on 5 existing facilities, respectively. We predict these options will reduce COS emissions by about 52 tons per year and 220 tons per year, respectively, and result in cost effectiveness of about $38,000 per ton of COS removed and $59,000 per ton of COS removed, respectively. However, it is estimated that the amount of anode grade coke available with sulfur content low enough to comply with these standards is insufficient to accommodate current primary aluminum production rates. Because of the limited supply of coke with low sulfur and potential for adverse impacts on pr oduction, the EPA decided it was notappropriate to require this option. Therefore, the EPA has not promulgated this beyond-the-floor option for COS emissions from potlines.

We also considered substitution of metallurgical coke for petroleum coke as a means of decreasing COS emissions, but ruled this out on the basis of techni cal infeasibility due to increased ash content and mechanical weakness in anodes produced from metallurgical coke (for more information refer to the memorandum title d Final Technology Review for the Primar y Aluminum Production Source Category, which is available in the docket for th is action (Docket No. EPA-HQ-OAR-2011-0797).

POM Emissions from Existing Pitch S t o r a ge T a nk s
Impacts at MACT Floor Level

The final MACT floor for existing pitch storage ta nks is a HAP control efficiency of 95 percent, represented by a fume capture and return system acco mpanied by a charcoal scrubber. This is identical to the MACT floor for new pitch storage tanks in the 1997 NESHAP. We estimate that eight facilities will be affected by this standard and will need to add controls, at a capital cost of approximately $75,000 per facility or $600,000 for the industry and an annual cost of approximately $21,000 per facility or $168,000 for the industry. There are no available data on pitch storage tank POM emissions, however, potential POM emissions were estimated on the basis of vapor displacement during storage tank loading. These calculations assumed anode paste was comprised of 22 percen t pitch (the industry average value provided by The Aluminum Associa tion), a pitch specific gravity of 1.25 and vapor pressure equal to that of oxidized asphalt at 300 °F (estimates based on available data), 35-percent HAP content and an average HAP molecular weight of 250 (based on testing conducted at the Kaiser-Tacoma Soderberg facility). Estimated emission re ductions are 1.43 tons of POM per year.

Beyond-the-Floor Analysis

One existing facility is required by permit to achieve 99-percent control of pitch storage tank POM emissions. This facility operates a water-cooled co ndenser to recover pitch storage tank emissions. We have limited data regardi ng the capital and operating costs of this system, and there are no test data to confirm that it is actually more effective than the untested systems which are estimated to control 95 percent of POM emissions. The installed capital cost of a non-contact single stage refrigerated watercooled condenser system, assuming 1 ton of refriger ation, and 35 degree F cooling water, is estimated5 at $31,000. Total annualized cost for such a system, including capital recovery, labor, maintenance materials, electricity, overhead, administration, property tax and insurance is estimated at $184,000 per facility or $2.02 million per year for 11 facilities in the source category. This beyond-the-floor option represents an incremental cost of $1.85 million and w ill be expected to contro l an estimated additional 0.074 tons of POM. This is equivalent to about $25 m illion per ton of POM controlled. The EPA considers this not cost-effec tive and has not promulgated be yond-the-floor standards for POM emissions from pitch storage tanks.

PM Emissions from P o t li n es
Impacts at MACT Floor Level for Potlines

Based upon our analyses of available data, we expect that all existing facilitie s will be able to comply with the final potline PM MACT floor emission limits without any additional c ontrols or modifications to existing controls. Performance te st data obtained from one facility operating center-worked prebake one potlines exceeded the final standard, however the facility indicated 4 that conditions during testing may not have been representative, and that expected emissions will meet the final emission limit. Under the final rule, annual tests of PM emissions will be required from primary potline exhausts and semiannual tests of PM em issions will be required from seconda ry pot room exhausts at prebake facilities. Since these tests can be combined with currently required tests of TF emissions, the incremental cost of the PM test beyond the cost of the cu rrently required TF test is estimated at $1,000 per test. We estimate the annual cost of PM testing to be $3,000 per potline (incl udes one annual test for primary PM and two semiannual tests for secondary PM ). Eleven facilities will be required to conduct performance tests for PM emissions from 37 potlines resulting in an average annual cost of approximately $10,000 per facility or $111,000 total annual co st for the industry. Further, since monitoring presently required for compliance with TF emission standards is adequate to ensure compliance with the final PM standards, no additional monitoring costs are expected.

Beyond-the-Floor Analysis

Because the primary control devices for potline PM emissions are very effective, the appropriate beyond-the-floor potline PM emission control option is the installation of we t scrubbers on the roof vent (secondary) emissions on the 10 existing facili ties that are not currently equipped with these devices. The annual cost of wet sc rubbers (described above under “Beyond the Floor Analysis” for POM emissions from potlines) including capital recovery and operating costs is $138 million for the industry. This is equivalent to $6.7 m illion per ton of metal HAP controlled. The EPA considers this not cost-effective and have not promulgated beyond-the-floor standards for PM emissions from potlines.

Note again that, as discussed above, additi onal information provided by The Aluminum Association suggests that the actual capital and an nual costs could be 3 time s these cited values. As described under “Beyond the Floor Analysis” for POM emissions from potlines, the installation of fabric filters will control approximately twice as much metal HAP at approximately 9 times the annual cost of wet roof scrubbe rs. We also considered substitu tion of metallurgical coke for petroleum coke as a means of decreasing metal HA P emissions, but ruled th is out on the basis of technical infeasibility due to increased ash cont ent and mechanical weakness in anodes produced from metallurgical coke (for more informati on refer to the memorandu m titled Final Technology Review for the Primary Aluminum Production Source Category, which is available in Docket ID No. EPA-HQ-OAR-2011-0797). Theref ore, the EPA has not promul gated this beyond-the-floor option.6 PM Emissions from Anode Bake F u r n a ces
Impacts at MACT Floor Level

Based upon our analyses of available data, we expect that all existing facilitie s will be able to comply with the final anode bake furnace PM MACT floor emission limits wit hout any additional controls or modifications to existing controls. Performance test data obtained from one facility exceeded the final standard, however the facility indicated 5 that conditions during te sting may not have been representative, and that expected emissions will meet the final emission limit. Each facility will be required to conduct an annual compliance test for PM, at an estimated cost of $5,000 per test, or $60,000 per year for the industry. Monitoring costs for the industry’s 12 bake furnaces are estimated at $67,500 per year.

Beyond-the-Floor Analysis

A beyond-the-floor option for control of PM emissions from anode bake furnaces is the retrofit of membrane bags in existing baghouses. The capital cost of this retrofit is estimated at $20.9 million for 10 facilities. Assuming capital recovery based on a 3 year bag life and a 7 percent interest rate, annual costs for the 10 facilities will be $7.9 million. This is equivalent to $292 million per ton of metal HAP controlled. The EPA considers this not cost-effective and have not promulgated beyond-the-floor standards for PM emissions from anode bake furnaces.

PM Emissions from Paste Production P l a n t s
Impacts at MACT Floor Level

Based upon our analyses of available data, we expect that all existing facilitie s will be able to comply with the final paste production plant PM MACT floor emission limits without any additional controls or modifications to existing controls. Performance test data obtained from one facility exceeded the final standard, however the facility indicated v that conditions during testing may not have been representative, and that expected emissions will meet the final emission limit. Each facility will be required to conduct an annual compliance test for PM, at an estimated cost of $5,000 per test, or $50,000 per year for the industry. Monitoring costs fo r the 10 paste production plants are estimated at $56,250 per year.

Beyond-the-Floor Analysis

A beyond-the-floor option for control of PM emissi ons from paste production plants is the retrofit of membrane bags in existing baghouses. The capital cost of this retrofit is estimated at $1.48 million for 10 facilities. Assuming capital recovery based on a 3 ye ar bag life and a 7 percent interest rate, annual costs for the 10 facilities will be about $560,000. This is equivalent to about $96 million per ton of metal HAP controlled. The EPA co nsiders this not cost-effective and have not promulgated beyondthe-floor standards for PM emissi ons from paste production plants.

Mercury Emissions from Anode Bake Furnaces

Impacts at MACT Floor Level

Based upon our analyses of availa ble data, we expect that all ex isting facilities will be able to comply with the final anode bake furnace Hg emissi on limit without installati on of additional controls or modifications to existing contro ls. Facilities will be required to conduct an annual compliance test7 for Hg emissions from each anode bake furnace, at an estimated cost of $5,000 per test, or $60,000 per year for the industry.

Beyond-the-Floor Analysis

A beyond-the-floor option for control of mercury emissions from anode bake furnaces is the installation of activated carbon injection upstream of a polishing ba ghouse. This type of system sized for a typical 100,000 actual cubic foot per minute exhaus t stream has an estimat ed capital cost of $1 million and estimated total annual costs of $750,000 per year. The estimated cost effectiveness of such a system is $240,000 per pound of Hg. The feasib ility of this option is subject to technical uncertainties including the actua l carbon requirement to remove Hg in the presence of POM. Notwithstanding the techni cal uncertainties a ssociated with this beyond-the-floor option, the EPA considers this not cost-effec tive and has not promulgated be yond-the-floor standards for Hg emissions from anode bake furnaces.

Ni, As, POM and PCB Emissions from Soderberg Potlines

The owner/operator of the only facility in the U. S. with existing Soderberg potlines (the Columbia Falls facility in Montana) has a nnounced the permanent shut down of that facility. Therefore, there are no currently operating VSS2 potlines. Further, we expect that no existing VSS2 facilities will restart and that, due to the less-e fficient and less cost-effective natu re of the Soderberg technology, no new Soderberg facilities will be constructed in the three years following promulgation. Thus, costs for additional controls and testing associated with the As and Ni risk-based standards and revised POM MACT standards for Soderberg potlines ha ve not been estimated and the cost impacts associated with these risk-based standards are estimated to be zero.

Additional Work Practices

In addition to the numerical MACT standards addr essed above, the EPA promulgated work practice standards for potlines, anode bake furnaces and past e production plants. These work practice standards will ensure proper control device operation and prom pt corrective action, when necessary; improve the capture and control of all HAP emitted from thes e sources; and serve as MACT standards for PCB emissions from anode bake furnaces and prebake potlines, dioxin and furan (D/F) emissions from Soderberg potlines, and Hg emissions from both Soderberg and prebake potlines. The final rule also provides the owner or operator of existing sources the options of (1) installing PM continuous emissions monitoring systems (CEM), (2) installing bag leak detection systems (BLDS), or (3) increasing the frequency of required visual emissi ons observations for all control devi ce exhausts from daily to twice daily. According to our analyses and comments and additional informa tion received during the public comment period for the December 2014 supplemental proposal 6 , the estimated costs associated with BLDS and PM CEMS far exceed those associated w ith increasing the frequency of visual emissions observations. Therefore, we presume all existing facilities will forgo in stallation of BLDS or PM CEMS and instead implement increased frequency of vi sual emissions observatio ns. The cost of the promulgated work practices, presuming no facility(i es) install BLDS or PM CEMS, is estimated at $500,000 per year.

Additional Monitoring Equipment for Potlin e Secondary POM and PM Emissions Testing

Two potlines (one currently operating and one current ly idle) are not currently equipped with either EPA Method 14 sampling manifolds or EPA Met hod 14A cassette sampling systems. Either a manifold or cassette system is necessary to sample secondary potline emissions. Note that in the final rule amendments, the owner/operator of a potline is provided the option of establishing “similarity”8 of potlines to the regulatory authority pursuant to §63.848(d) of 40 CFR part 63, subpart LL, thereby avoiding these costs. However, it is not certain that such similarity can be demonstrated, therefore, we are including the costs for these manifolds in this analysis. Annualized capital costs associated with installation of each potline sampling manifold is estimated at $55,000.

Reduced Testing F r e qu e n cy for TF from P o t li n es
The final change in TF testing frequency for secondary potline emissions from monthly to semiannual is estimated to result in an indus try-wide cost reducti on of $1,900,000 per year for the 37 existing potlines.

Total Cost of Final Standards at the MACT F loo r
It is estimated that the final standards, if implemented at the MACT floor levels, will result in a cost savings to the primary aluminum industry of $140,000 per year.

1 Bison Engineering Inc., Best Available Retrofit Technology (BART) Analysis: Columbia Falls Aluminum

Company, LLC, November 5, 2007

2 Robbins, H. W., Bison Engineering, to C. Videtich, EPA Region 8, June 19, 2008

3 Johnson, C.D., Aluminum Association, email to D. Putney, US EPA. July 9, 2014

4 Backfisch, D., Noranda Aluminum, email to D. Putney, US EPA. April 29, 2014.

5 Mitchell, K., Alcoa Intalco Works, email to D. Putney, US EPA. June 6, 2014.

6 Johnson, C.D., Aluminum Association, Docket ID No. EPA-HQ-OAR-2011-0797-0372, February 6, 2015.