September 27, 2010

MEMORANDUM

TO: Docket No.: EPA-HQ-OAR-2010-0786

FROM: Kaye Whitfield, Project Lead Risk and Technology Review (RTR) - National Emission Standards for Hazardous Air Pollutants (NESHAP) fo r Wood Furniture Operations

SUBJECT: Cost Analyses for Control Options

The purpose of this memorandum is to present es timated emissions reductions, costs, and cost effectiveness of control options for surface coati ng operations at wood furniture facilities subject to MACT subpart JJ. Costs were estimated for the use of a regenerativ e thermal oxidizer (RTO) system installed on a wood furniture coating boo th, and for the use of lower VOC coatings.

The costs in this memo are based on two cost an alysis reports. In 2003, the Indiana Department of Environmental Management (IDEM) conduc ted a Best Available Control Technology (BACT) analysis on the MasterBrand Cabinets , Inc. facility in Ferdinand, Indiana. 1 In 2009, the Bay Area Air Quality Management District (BAAQMD) of California analyzed compliance costs of Regulation 8-32, which mandated lowe r coating limits for w ood furniture coatings. 2

1 Indiana Department of Environmental Management. Title V Significant Source Modi fication (Major PSD/EO). MasterBrand Cabinets, Inc. 2003. http://permits.air.idem.in.gov/13893f.pdf . Accessed August 2, 2010. Pages 52-

62.

2 Bay Area Air Quality Management District. Regulation 8, Rule 32; Wood Products Coatings Staff Report. 2009. http://www.baaqmd.gov/~/media/Files/Board%20of% 20Directors/2009/Board%20of%20Directors%20080509%20 Agenda%20Pkt.ashx . Accessed August 11, 2010. Pages 137-166.

1I. MASTERBRAND CABINETS, INC.

The facility is located in Ferdinand, Indiana, and manufactures kitc hen cabinets. The volatile organic compound (VOC) BACT analys is evaluated 4 types of add-on control technologies: thermal oxidation, catalytic incineration, flare, and carbon adsorption. Only thermal oxidation was found to be t echnologically feasible for wood cabinet operations and was used in the cost analysis . Catalytic incineration was not considered feasible due to the fact that the catalyst is often not compatible with the coatings used by wood furniture finishing operations . Flares were not considered to be feasible due to the fact that they work best w ith >13,000 ppm, which is higher than typical wood furniture surface coating operations. Carbon adsorption was not considered feasible because it does not work as effectively when more than one VOC is in the airstream. Wood furniture coatings rarely contain a single VOC and wood furniture coating operations use more than one coating type and all the coat ings are not likely to have the same single VOC component.

The cost analysis included the use of a rege nerative thermal oxidizer (RTO), and a partial enclosure constructed on the spray booths. The facility currently has th ree types of finishing lines: stain, sealer , and topcoat booths; toner booths ; and touch-up booths. All cabinets are coated with stain, sealer, and topcoats, leading to a high volume emission

stream with consistent concentrations and ai r flow. The other two types of booths were evaluated separately because they are only used intermittently. The results of the cost

evaluations are s hown in Table 1.

Table 1. Cost Analysis for MasterBrand Cabinets in Ferdinand, Indiana

2II. BAY AREA AIR QUALITY MANAGEM ENT DISTRICT (BAAQMD)

On July 29, 2010, the BAAQMD met to review Regulation 8, Rule 32: Wood Products Coatings, which regulates VOC emissions from the wood products manufacturing industry by setting standards for applicat ion techniques and the amount of VOC in coatings that can be used in surface prepar ation, coatings applicat ion, and cleanup for the manufacture of wood products, including furniture, bathroom vanities, kitchen cabinets, picture frames, outdoor speakers, architect ural millwork, and other wood products.

The proposed amendments to Rule 8-32 reduce VOC limits for some types of coatings used on the three types of wood products subj ect to VOC limitations in the rule: general wood products; wood furniture, custom cabinetry and custom architectural millwork; and

custom furniture. The lower VOC limits b ecame effective July 1, 2010, and provided for alternative standards for each type of high- solids coating based on grams VOC per gram of coating solid.

The proposed BAAQMD amendments reduce VOC emissions by at least 0.45 tons per day, representing a 30 percent reduction in cu rrent emissions. The most significant costs of implementation are higher coating costs. A few manufacturers would need to add additional drying trays or ve ntilation during damp and c ool winter months. Cost effectiveness of the proposed amendments is estimated to range in costs from $7,000 to $26,000 per ton of VOC reduced ; $7,000 to $22,000 per ton depending on the costs of new coatings only, and up to $26,000 if additional drying facilities are required.

The Board determined that a VOC cost e ffectiveness of $15,000 per ton was within a reasonable range to be acceptable.

3III. WOOD FURNITURE RISK AS SESSMENT COST ANALYSES

Multiple control cost options were evaluate d for wood furniture operations. The options

include the use of add-on cont rol equipment and the use of lower VHAP coatings. All of the costs were based on the two cost analyses in Parts I and II of this memo. This section explains how the analyses were adapted for the two different kinds of control.

A. Regenerative thermal oxidizer

Based on the cost analysis for MasterBrand Cabinets in Ferdinand, Indiana, the only addon control that was considered potentially a pplicable for wood furniture operations was the regenerative thermal oxidize r. All other add-on contro l options are not compatible with wood furniture coatings or emission ch aracteristics.

There are two type of coating operations that were evaluated for add-on control equipment. The first type of operation is more automated with steady coating rates. This type of operation is less common in wood fu rniture manufacturing. At this time, only

three wood furniture manufactur ing facilities are controlled by RTO. For our cost analysis, we assumed the operations include all three spray booth options in Table 1, using a weighted average based on the amount of VOC removed.

The second type of operations is less automa ted and more intermittent. This type of operation is more common in wood furniture manufacturing. For that analysis, we assumed the operations would most closely resemble the intermittent operations from the touch-up booths.

The cost analyses needed a few changes to work for the risk analysis. First, the MasterBrand Cabinets analysis was based on VOC. Second, the costs are based on 2003

dollars.

The amount of VHAP was estimated base d on EPA’s Toxics Release Inventory. 3 In 2003, 54% of the MasterBrand Cabinets VOC em issions were classified as VHAP. The

Marshall and Swift Index was used to c onvert the costs in 2003 to a 2010 basis. 4 In 2003, the Index was 1,123.6, and 1,515.1 in the firs t quarter of 2010. Table 2 show emissions and costs expected for both options. s the

3 Toxics Release Inventory. http://www.epa.gov/enviro/html/tris/index.html

.

4 Marshall and Swift Index. Chemical Engineering. April 2010.

45 B. Compliant Coatings

Based on the cost analysis by the Bay Area Air Quality Management District, this analysis is for the cost of lower VOC coa tings, assuming that the NESHAP was revised to match the requirements of Regulation 8-32. These lower VOC limits for wood

furniture are shown as Table 3.

The only update that was requi red for the analysis was to convert the VOC to VHAP. In terms of VOC, the cost effectiveness wa s determined to be about $20,000/ton VOC. Based on EPA case studies, VOC content of w ood furniture coatings are typically 50%

HAP 5 , so $10,000/ton VOC converts to approximately $20,000/ton VHAP.

Additional work practice standa rds were also evaluated. Wo rk practice standards include cleaning up spills as soon as possible and keep ing containers of vola tile materials closed when not being used. The reduction in emi ssions is low and costs are difficult to estimate. The complete control cost analys is for wood furniture operations is shown in

Table 5.

C. Conclusions

Overall, the annual costs for wood furniture control options range from $589,000 to $1.7 million and VHAP reductions range from 9 to 128 tons per year of VHAP. These estimates lead to cost effectiveness ranging from $20,000 per ton of VHAP to $65,000 per ton of VHAP.

5 Wood Coating Case Studies by Company. http://www.epa.gov/ttn/atw /wood/low/casebyco.html . Accessed August 2010.Table 2. Control Options using RTO as an add-on controlControl OptionVOCRemoved(tpy)Total Annual Cost($)2003 basisCostEffectiveness($/ton VOC)HAPRemoved(tpy)Total Annual Cost($)2010 basisCost Effectiveness($/ton HAP)Finishing operations on automated,higher speed coating lines237$1,904,148$8,034128$2,566,790$20,000Finishing operations on automated,higher speed coating lines16$436,614$26,5549$588,745$65,4166Table 3. Regulation 8-32-30378Table 4. Control Optionusing Lower VOC coatingsControl OptionVOC Removed (tpy)Total Annual Cost($)Cost Effectiveness($/ton VOC)HAPRemoved(tpy)Cost Effectiveness($/ton HAP)Lower VOC Coatings112$1,687,500$15,00056$30,000Table 5. Costs of Control Options for Wood Furniture Coating Operations(per facility basis)Type of facilityControl OptionNumber ofAffected FacilitiesEmission reduction(TPY VHAP)aCapitalcosts($million)aAnnualizedcosts($million/yr)aCost-effectiveness($/ton VHAP)aFinishing operations onautomated, higher speed coatinglinesRTO<10128b$10.3c$2.57b$20,000bFinishing operations on lowerspeed or intermittent linesRTO3759d$3.0c$0.589d$65,400dAll finishing operationsLower coating limits(California Rule 8-32)3850.22e$0.03c$0.007e$30,000eRevise and/or add workpractices385<5% (est)No dataNo dataNo dataFlareUnlikely to be usedHigh inlet concentration requirement (>13,000 ppm)b,cCatalytic IncinerationUnlikely to be used.Furniture coatings are often incompatible with the catalystb,cCarbon AdsorptionUnlikely to be usedNot effective on streams with multiple VOCb,caThese estimates are on a per-facility basis.bCost Evaluation of MBCI in Ferdinand, Indiana. Control Scenario: using all 3 types of booths .cAssumed that capital costs are 4 times annualoperating costs. Estimated from reference e.dCost Evaluation of MBCI in Ferdinand, Indiana. Control Scenario: Touch-Up Booths.eBay Area Air Quality Management District. Regulation 8, Rule 32; Wood Products Coatings Staff Report. July 23, 2009.