UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION 5 

MEMORANDUM 

AIR AND RADIATION DIVISION 

77 WEST JACKSON BOULEVARD 

CHICAGO, IL 60604-3590 

REPLY TO THE ATTENTION OF: 

SUBJECT: Review of Cost Effectiveness of Selective Noncatalytic Reduction (SNCR) at St. 

Marys Cement's (SMC) Facility in Charlevoix (SMC-Charlevoix) 

FROM: John Summerhays nvf~ J~-· ff . Attainment Planning~d Maintenance Sec~ 

TO: Files 

THRU: Douglas 

Attainment 

Aburano, 

Planning 

Chief 

and Maintenance 

~ Section 

In a notice published August 6, 2012, at 77 FR 46912, the United States Environmental 

Protection Agency (EPA) proposed a limit on nitrogen oxides (NOx) emissions from SMCCharlevoix that EPA anticipated would be met with the use of SNCR. EPA received extensive 

comments on this proposal from SMC. Most of these comments, including comments on 

assorted elements of the evaluation of the cost effectiveness of this emission control system, are 

to be addressed in the notice of final rulemaking. However, this technical support document is 

intended to provide additional detail on the evaluation of cost effectiveness of several options for 

using SNCR to achieve the limits EPA is finalizing. 

SMC commented that the emission limit should be predicated on the upper end of the 

distribution of baseline emissions, rather than on average emissions. While EPA assumed at 

proposal that SNCR at SMC-Charlevoix could achieve 50 percent reduction in NOx emissions 

on average and 60 percent control on occasions with above average baseline emissions, EPA 

is finalizing limits that are predicated on 50 percent reduction from 95th percentile emissions. 

In order to provide for close to 50 percent NOx emission reduction at all times rather than just 

during occasions with elevated emissions, EPA is promulgating a 12-month average emission 

limit as well as a 30-day rolling average emission limit. The two limits would be expected 

to involve the same purchase costs, but the 12-month average would require more emission 

reduction and thus more reducing reagent for much of the time than the 30-day average limit. 

Therefore, the cost effectiveness estimates in this technical support document are based on the 

12-month average limit. 

The 12-month average limit is 2.4 pounds ofNOx per ton of clinker. Compared to the average 

emissions from 2006 to 2008, 4.5 pounds ofNOx per ton of clinker, this requires an average 47 
percent emission reduction, which for 2006 to 2008 would have been a reduction of 1182 tons 

ofNOx per year. Thus, the cost effectiveness estimates in this technical support document are 

predicated on the achievement of a reduction of 1182 tons ofNOx per year. 

A key cost of using SNCR is reagent costs. Cost estimates were developed both using urea 

as the reagent and using ammonia as the reagent for reducing NOx emissions. Reagent costs 

were based on reagent prices provided by Fuel Tech, Inc., a reagent supplier. Most of the cost 

estimates derived below assumed that ammonia costs $600 per ton. This price represents the 

cost of anhydrous ammonia. The price of 19 percent ammonia solution translates to a price per 

ton of ammonia of about $1,050, so costs based on this price was also examined. Fuel Tech 

stated that urea, delivered to Central Michigan, would cost between $1.60 and $1.80 per gallon 

of 50 percent solution. The upper end of this range was used in these cost evaluations. At 

9.5 pounds per gallon of 50 percent urea solution, $1.80 per gallon of 50 percent urea solution 

translates to $758 per ton of actual urea. 

In all cases, the quantity of reagent was estimated in direct proportion to the quantity ofNOx 

emission removed. The quantity ofNOx emission removed per mole of reagent used expresses 

the efficiency of the reagent, which varies by reagent used and by conditions at the facility. 

SMC's comments express concern that, with the use of urea, SNCR at SMC-Charlevoix is 

relatively inefficient and is prone to cause material buildup and ammonia slip at problematic 

levels. Similar comments are presented in a paper by Joe Horton of Suwanee American Cement/ 

Votorantim Cimentos North America, a sister company to SMCN otorantim Cimentos North 

America. 1 This paper describes problems from the use of urea, which upon decomposition forms 

carbon monoxide as well as ammonia, and concludes that the use of ammonia is likely to be 

substantially more effective. 

SMC submitted results of tests using urea at SMC-Charlevoix in which a representative 

efficiency is that the number of moles ofNOx reduced is 40 percent of the number of moles 

of ammonia that would result from decomposition of injected urea. (Urea, which has the 

chemical formula CO(NH2) 2, decomposes to form two moles of ammonia per mole of urea.) No 

test results were available using ammonia at SMC-Charlevoix. Therefore, the best available 

evidence regarding the efficiency of SNCR at SMC-Charlevoix using ammonia is from tests 

using ammonia at other facilities. The notice of proposed rulemaking relies on tests using 

ammonia conducted at SMC's facility in Dixon, Illinois (SMC-Dixon), which showed that 

injection of 0.62 moles of ammonia per mole ofNOx in the flue gas sufficed to reduce NOx 

emissions by 50 percent. That is, these test results indicated that each mole of injected ammonia 

reduced approximately 0.81 moles ofNOx. Similarly, for "Plant A," a plant with a design 

similar to the design of SMC-Charlevoix, the Horton paper reports that ammonia injection 

achieved an average of 0.92 moles ofNOx reduction per mole of injected ammonia, with values 

ranging from 0.85 moles to 0.96 moles ofNOx reduction per mole of ammonia. 

This technical support document evaluates cost effectiveness of using SNCR to meet this 

reduction requirement based on a variety of assumptions and approaches. The first set of 

scenarios reflects minimal modifications to the facility. In the first of these scenarios, SMC 

1 Joe Horton, Suwannee American Cement/Votorantim Cimentos North America, 

Al Linero, Florida Department of Environmental Protection, and F. MacGregor 

Miller, Cement Etc., Inc, ''SNCR Emission Control," International Cement 

Review, August 2006. 
uses ammonia as the NOx reducing reagent, and the efficiency of this reagent in reducing NOx 

is similar to the efficiency found in tests at SMC-Dixon. The second scenario also assumed 

the use of ammonia and the efficiency found at SMC-Dixon but assumed an ammonia price of 

$1,050 per ton. While the efficiency ofNOx reduction found at "Plant A" in the Horton paper 

could equally well represent the prospective efficiency of ammonia in reducing NOx emissions 

at SMC-Charlevoix, the use of the SMC-Dixon test results provides a conservative estimate 

of costs that may be incurred from use of SNCR at SMC-Charlevoix. In these scenarios, the 

use of ammonia is considered to avoid the material buildup problems SMC anticipates would 

occur with the use of urea, and in particular no additional expenses are incurred to modifY the 

facility to mitigate material buildup and no production losses are incurred. Nevertheless, a third 

scenario is the same as the first scenario except that the ammonia efficiency in reducing NOx 

was assumed to reflect the efficiency that was found in tests using urea at SMC-Charlevoix. A 

similar scenario using urea could have been evaluated as well, but the achievement of 50 percent 

NOx reduction is more clearly feasible with use of ammonia, and ammonia is cheaper per mole 

of reducing reagent, so that the cost effectiveness of using urea in this approach was judged not 

to be germane. 

These scenarios assumed that SMC replaced its SNCR equipment with new SNCR equipment, 

as well as upgrading its reagent storage. However, SMC may be able to use its existing SNCR 

equipment, and so an additional scenario assumed that SMC would need to spend $400,000 to 

upgrade its reagent storage system (the cost estimated by SMC for a winterized urea storage 

system) but would incur no expense installing SNCR equipment. This scenario conservatively 

assumed that trials to facilitate effective SNCR design and upgrades to the reagent storage 

system would incur the same ancillary costs (such as engineering and contingency costs) that 

were assumed for scenarios involving SNCR installation. 

A second set of scenarios also assumes only modest modifications of SMC-Charlevoix's kiln 

system but assumes more expenses incurred to address material buildup issues that SMC 

anticipates occurring. These expenses are unlikely to occur, since experience at other plants 

suggests that material buildup issues can be avoided or minimized with proper design and 

management of reagent injection and kiln operating conditions (e.g. management of kiln gas 

chemistry), and available evidence suggests that the problems that SMC asserts occurred during 

its tests using urea are less likely and in fact are expected not to occur with the use of ammonia. 

Nevertheless, to assess cost effectiveness under a range of options that might be applied to meet 

the limits under consideration, these scenarios are analyzed to assess the cost effectiveness of 

SNCR application should material buildup prove more problematic than expected. 

In this set of scenarios, the first scenario examined an option in which SM C adds lime. The 

purpose of adding lime would be to reduce the sulfur dioxide concentration in the flue gas, which 

would be intended to reduce sulfate formation in the flue gas and condensation on surfaces 

within the kiln system. SMC has indicated that it operates a bypass system that is intended to 

achieve similar purposes, but the information it provided does not expressly describe adding 

lime. Therefore, this scenario is evaluated both to evaluate the cost effectiveness of this possible 

approach to minimizing material buildup issues and to provide a sample cost effectiveness 

evaluation that represents a range of actions that the company might use to address material 

buildup issues. 

The second scenario in this set of scenarios assumes a combination of structural changes to the 

facility (e.g. additional air cannons to remove material buildup or reconfigurations to change air 
flow) and assumes that material buildup issues lead to loss of production. The cost estimates 

assumed here are cost estimates that SMC used in its comments. The estimated cost of structural 

changes was half the estimated cost of SNCR equipment. SMC criticized this estimate as 

unjustified but nevertheless used this estimate in its own cost estimates. This estimate is used 

to represent costs of any of a range of relatively significant structural changes, so as to evaluate 

whether SNCR in combination with relatively significant structural changes is cost effective. 

SMC's comments stated that the most effective approach to addressing material buildup issues at 

SMC-Charlevoix may be to replace the pre-calciner at the facility. Therefore, cost effectiveness 

was estimated for a third set of scenarios involving SMC installing a replacement pre-calciner. 

SMC estimated that the cost of a replacement pre-calciner to be $18,000,000. Although SMC 

did not document the basis of this estimate, this evaluation of cost effectiveness used SMC's 

estimate. The first of these scenarios assumed use of ammonia, and a second scenario assumed 

use of urea. SMC implied that conditions for use of urea to reduce NOx would be more 

favorable with a replacement pre-calciner, so both of these scenarios assumed the efficiency of 

NOx removal found at SMC-Dixon. 

SMC applied for a permit for a replacement pre-calciner, and then cancelled this permit. SMC 

did not comment on this permit or explain the cost analysis which led the company to take these 

actions. Nevertheless, these actions indicate that the replacement pre-calciner was initially 

expected to provide sufficient return on the investment, whether through improvements in plant 

efficiency, capacity to use cheaper fuels, or increase in plant capacity, in effect to offset the 

cost ofthis investment. SMC's decision to cancel the permit suggests that the company then 

decided that the economic benefits of the project would be less than the cost. EPA does not have 

the information necessary to do its own analysis of how much of the cost of a replacement precalciner would be offset by its economic benefits, but presumably most but not all of the costs of 

a replacement pre-calciner would be offset by its economic benefit. Therefore, cost effectiveness 

was estimated for an additional scenario in which the costs of a replacement pre-calciner are 

entirely offset. A more accurate estimate of the cost effectiveness of meeting the candidate limit 

would likely lie between the estimate assuming the replacement pre-calciner cost is fully offset 

and the estimate assuming none of this cost is offset. 

The above scenarios assume that the replacement pre-calciner has no effect on NOx emissions. 

However, SMC's comments suggest that they expect that a replacement pre-calciner would 

reduce baseline NOx emissions from 4.5 pounds per ton of clinker to 3.9 pounds per ton of 

clinker. This suggests that less reagent would be needed to achieve a 12-month average limit of 

2.4 pounds per ton of clinker. Based on emissions data from 2006 to 2008, using this estimate of 

the emission reduction resulting from replacement of the pre-calciner, the replacement would be 

expected to reduce average annual NOx emissions by 336 tons per year, and SNCR would only 

need to achieve a reduction of 846 tons ofNOx per year. Thus, the SNCR would only need to 

achieve 72 percent as much emission reduction, and SMC would need 28 percent less reagent. 

Cost effectiveness for this scenario was estimated assuming no offset of the pre-calciner cost and 

assuming the use of ammonia as the reagent. 

A fourth set of cost effectiveness calculations was based on a different approach for estimating 

the costs of installing air pollution control equipment. The EPA Air Pollution Control Cost 

Manual recognizes that different types of air pollution control equipment have different types 

and magnitudes of installation on operation costs and therefore warrant different assumptions 

regarding these costs. In the evaluation of BART that SMC provided to Michigan, SMC's 
consultant used the set of assumptions applicable to installation and use of gas absorbers, 

which are similar to the assumptions for various other types of control equipment as well. This 

approach may be labeled the gas absorber approach. EPA also used the gas absorber approach in 

estimating costs in its proposed rulemaking, except that EPA observed in its notice of proposed 

rulemaking that overhead costs, which are assumed to be substantial in the gas absorber 

approach, are assumed to be negligible for SNCR. 

The review of comments led to a finding that the approach underlying the proposed rulemaking 

significantly overestimated the costs of installing and operating SNCR. For example, the gas 

absorber approach assumes significant installation costs for erection, handling and piping, with 

total installation costs being estimated at adding over 150 percent of the cost of the SNCR 

equipment beyond the cost of the SNCR itself. In contrast, the EPA Air Pollution Control Cost 

Manual recommends assuming a different set of costs for installing SNCR equipment that add 

up to only about 40 percent of the cost of the SNCR equipment beyond the cost of the SNCR 

equipment itself. 

Although use of the gas absorber approach in estimating costs of installing and operating SNCR 

must be considered erroneous, cost estimates using this approach (except considering overhead 

costs to be negligible) were nevertheless obtained. These cost estimates were obtained for the 

purpose of judging whether EPA would have found SNCR to be cost effective even using the 

cost estimation approach used in the proposed rulemaking, as otherwise modified in response 

to comments. In response to comments regarding the inefficiency of urea in reducing NOx 

emissions, costs were estimated using ammonia as the reagent. One scenario assumed the 

efficiency found at SMC-Dixon, and a second scenario assumed the efficiency found using urea 

at SMC-Charlevoix. 

Tables I to 4 present detailed cost estimates and estimates of cost effectiveness for the scenarios 

described above. Table I presents cost information for the first set scenarios, involving the 

existing configuration at SMC-Charlevoix. Table 2 presents cost information for the second set 

of scenarios, in which relatively expensive supplemental efforts are needed for successful SNCR 

operation. Table 3 presents cost information for the third set of scenarios, involving replacement 

of the pre-calciner. Table 4 presents cost information for the fourth set of scenarios, in which 

costs are estimated in most respects using the gas absorber approach to cost estimation. 

The estimated cost effectiveness of operating SNCR using ammonia in the existing configuration 

of SMC-Charlevoix, assuming the efficiency demonstrated at SMC-Dixon and assuming 

purchase of a new SNCR to replace the existing SNCR, is $4 75 per ton ofNOx removed. 

Estimates for other scenarios examined range from $398 to $2,252 per ton ofNOx removed. 

These estimates support a conclusion that implementation of SNCR at SMC-Charlevoix is cost 

effective. 
Table 1. Cost Effectiveness using ammonia with existing configuration 

Dixon Costlier Charlevoix No new SNCR 

efficiency Ammonia efficiency 

Capital costs Notes 

SNCR $1,371,630 $1,371,630 $1,371,630 $400,000 Includes 

winterizing 

cost 

General facilities $68,582 $68,582 $68,582 $68,582 5% 

Engineering $137' 163 $137,163 $137,163 $137' 163 10% 

Process contingency $68,582 $68,582 $68,582 $68,582 5% 

Project contingency $246,893 $246,893 $246,893 $246,893 15% 

Subtotal SNCR $1,892,849 $1,892,849 $1,892,849 $921,219 

Preproduction $37,857 $37,857 $37,857 $37,857 2% 

Ammonia inventory $12,465 $21,813 $25,130 $12,465 2 weeks 

inventory 

Total Capital cost $1,943,171 $1,952,519 $1,955,837 $971,541 

Annual costs 

Ammonia $324,970 $568,697 $655,181 $324,970 

Maintenance $28,393 $28,393 $28,393 $28,393 1.5% 

Reagent heating $8,600 $8,600 $8,600 $16,427 

Power loss $16,427 $16,427 $16,427 $8,600 

Total direct Annual $378,389 $622,117 $708,601 $378,389 

Capital recovery $183,435 $184,318 $184,631 $91,713 Amortizes 

over 20 

years 

Total $561,825 $806,434 $893,232 $470,103 

Emission reduction 1182 1182 1182 1182 

(ton/year) 

Cost per ton $475 $682 $756 $398 
Table 2. Cost Effectiveness assuming costs from problems with SNCR use 

Lime Structural 

Injection mod, prod. 

loss 

Capital costs Notes 

SNCR $1,371,630 $1,371,630 Includes 

winterizing cost 

General facilities $68,582 $68,582 5% 

Engineering $137,163 $137,163 10% 

Process contingency $68,582 $68,582 5% 

Project contingency $246,893 $246,893 15% 

Subtotal SNCR $1,892,849 $1,892,849 

Preproduction $37,857 $37,857 2% 

Ammonia inventory $25,132 $25,132 2 weeks inventory 

Lime injection system $300,000 --

Structural -- 685,815 

modifications 

Total Capital cost $2,255,839 $2,641,654 

Annual costs 

Ammonia $655,239 $655,239 

Maintenance $28,393 $28,393 1.5% 

Reagent heating $8,600 $8,600 

Power loss $16,427 $16,427 

Production loss -- $387,200 

Total direct Annual $1,008,658 $1,095,858 

Capital recovery $212,951 $249,372 Amortizes over 20 

years 

Total $1,221,610 $1,345,231 

Emission reduction 1182 1182 

(ton/year) 

Cost per ton $1,034 $1,138 
Table 3. Cost effectiveness for replacement pre-calciner options 

Ammonia, Urea, Dixon Urea, pre- Ammonia, 

Dixon efficiency calciner preefficiency costs calciner 

offset reduces NOx 

to 3.9 

Capital costs Notes 

SNCR $1,371,630 $1,371,630 $1,371,630 $1,371,630 Includes 

winterizing 

cost 

General facilities $68,582 $68,582 $68,582 $68,582 5% 

Engineering $137,163 $137,163 $137,163 $137,163 10% 

Process contingency $68,582 $68,582 $68,582 $68,582 5% 

Project contingency $246,893 $246,893 $246,893 $246,893 15% 

Subtotal SNCR $1,892,849 $1,892,849 $1,892,849 $1,892,849 

Preproduction $37,857 $37,857 $37,857 $37,857 2% 

Replacement pre- $18,000,000 $18,000,000 -- $18,000,000 Company 

calciner estimate 

Reagent inventory $12,465 $27,789 $27,789 $8,922 2 weeks 

inventory 

Total Capital cost $19,943,171 $19,958,495 $1,958,495 $19,939,629 

Annual costs 

Reagent $324,970 $724,492 $724,492 $232' 613 

Maintenance $28,393 $28,393 $28,393 $28,393 1.5% 

Reagent heating $8,600 $8,600 $8,600 $8,600 

Power loss $16,427 $16,427 $16,427 $16,427 

Total direct Annual $378,389 $777,911 $777' 911 $286,033 

Capital recovery $1,884,082 $1,882,635 $184,882 $1,882,301 Amortizes over 

20 years 

Total $2,661,993 $2,2467,147 $962,793 $2,168,333 

Emission reduction 1182 1182 1182 1182 (846 

(ton/year) by SNCR) 

Cost per ton $1,901 $2,252 $815 $1,835 
Table 4. Cost effectiveness using gas absorber cost estimation 

approach 

Ammonia, Ammonia, 

Dixon Charlevoix 

efficiency efficiency 

Capital costs Notes 

Purchased equipment 

SNCR $1,371,630 $1,371,630 Includes 

winterizing cost 

Instrumentation $137,163 $137,163 10% 

Freight $68,582 $68,582 5% 

Subtotal $1,577,375 $1,577,375 

Installation 

Foundations $189,285 $189,285 12% 

Handling, erection $630,950 $630,950 40% 

Electrical $15,774 $15,774 1% 

Piping $473,212 $473,212 30% 

Insulation $15,774 $15,774 1% 

Painting $15,774 $15,774 1% 

Subtotal $1,340,768 $1,340,768 85% of equipment 

Subtotal 

Indirect costs 

Engineering $157,737 $157,737 10% 

Construction $157,737 $157,737 10% 

Contractor fees $157,737 $157,737 10% 

Start-up $15,774 $15,774 1% 

Performance test $15,774 $15,774 1% 

Contingencies $34,734 $34,734 3% 

Total capital costs $3,470,224 $3,470,224 

Annual costs 

Operator $12,690 $12,690 ~ hr/shift $25.38 

Supervisor $1,904 $1,904 15% of operator 

Reagent $324,970 $655,181 

Maintenance - labor $8,885 $8,885 

Materials $8,885 $8,885 100% of labor 

Reagent heating $8,600 $8,600 

Administrative $69,404 $69,404 2% 

Insurance $34,702 $34,702 1% 

Capital recovery $381,031 $381,031 Amortizes over 15 

years 

Annualized total $851,071 $1,181,282 

Emission reduction 1182 1182 

(ton/year) 

Cost per ton $720 $999