1 

MEMORANDUM 

Date: June 24, 2015 

Subject: Costs and Emission Reductions for the Final Wool Fiberglass Manufacturing 

NESHAP - Residual Risk and Technology Review (RTR) Amendments 

From: Susan Fairchild 

OAQPS/SPPD/NRG (D243-02) 

U.S. Environmental Protection Agency 

Research Triangle Park, NC 27711 

To: Docket EPA-HQ-OAR-2010-1042 

This memorandum presents the estimated costs for the wool fiberglass manufacturing industry to 

comply with the final RTR amendments. 

I. BACKGROUND 

Based on the information provided by the wool fiberglass manufacturing industry and their 

primary trade association, North American Insulation Manufacturers Association (NAIMA), there 

are currently 30 facilities in the U.S. producing wool fiberglass. A letter from NAIMA dated June 

8, 2011, stated “non-formaldehyde binder products represent the vast majority of the industry” and 

“all major sources have already converted or have announced plans to convert to non-phenol 

formaldehyde binders.” After conducting a review of the current permit status of all sources and 

recent information provided by industry, 10 facilities are major sources (subject to the existing 

MACT rule, subpart NNN) and 20 facilities are area source facilities. The 10 major source 

facilities will have to comply with the RTR amendments to the NESHAP (subpart NNN) 

requirements. These sources operate 8 gas-fired glass-melting furnaces, 13 flame attenuation (FA) 

manufacturing lines, and 5 RS lines. Based on our current emissions data, two of the major source 

facilities, operating a total of two gas-fired glass-melting furnaces will be required by the final rule 

to reduce chromium compound emissions. 

Industry comments on the proposed major source rule amendments (76 FR 72770) stated that 

some of the major source facilities have already switched some or most of their lines to non-HAP 

binders and would no longer be subject to subpart NNN. With the phase-out of phenolformaldehyde binders, those sources will become area sources. While industry sources also 

predicted before proposal of the RTR amendments that no major sources would exist by the end of 

2012, we now believe this to be inaccurate. The following cost impacts are based on the estimated 

10 facilities that were identified as major sources in the most recent industry information provided 

in December 2012. 
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II. GLASS-MELTING FURNACES 

 

We estimate that there are currently 8 gas-fired furnaces located at five facilities designated as 

major sources. We also estimate that there are currently two gas-fired furnaces located at two 

facilities that emit chromium compounds above the final chromium emission limit (2.5E-04 lb/ton 

of glass pulled). We have estimated the cost impact for those facilities based on the assumption 

that those furnaces will have a shortened operational life cycle and will be rebuilt (or replaced) 

earlier than they might have been otherwise before degradation of the refractory causes elevated 

chromium emissions. Based on comments received in response to the November 13, 2014 

supplemental proposal, we changed from using the net present value (NPV) approach to using a 

replacement cost method for estimating the annualized cost of rebuilding a furnace. The 

replacement cost method is described in section 2.5.5.6 of the EPA Air Pollution Control Cost 

Manual (EPA/452/B-02-001), January 2002. 

The furnace age and chromium emissions data show that furnaces may operate into their 10th year 

and still emit chromium at levels below the final chromium emission limit. The data also show 

that all furnaces older than 10 years emitted chromium at levels exceeding the proposed final 

emission limit. We considered basing the replacement cost method on an expected 12-year furnace 

life and an early rebuild at 10 years. While supported by the available data and resulting in a lower 

cost estimate, we decided to use a more conservative approach (e.g., more likely to overstate 

control costs) and based our costs on an expected 10-year furnace life1 and an early rebuild at 7 

years, an analysis supported by industry comments and which is described in the following 

analyses. 

For this cost analyses, the replacement cost method uses the following assumptions: 

1) furnace rebuild cost = $10.7 million; 

2) normal furnace life cycle = 10 years; 

3) Cr compliant furnace life cycle = 7 years; and 

4) industry interest rate = 7%.2 

The replacement cost method determines the incremental capital recovery cost as the difference 

between the annualized capital recovery cost (CRC) of rebuilding the furnace in 7 years versus 10 

years. The CRC is calculated by multiplying the total capital cost ($10.7 million) by the capital 

recovery factor (CRF): 

CRC = Total Capital Cost x CRF 

Where CRF is defined according to the formula: 

 

1

 Letter dated August 6, 2014 from A. Crane, NAIMA to S. Fairchild, EPA states “Please note that a typical life span of an 

oxy-fuel furnace is 6 to 10 years.” 

2

 7% interest rate is in accordance with OMB guidance under Circular A-4. 
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CRF

Using the 10- and 7-year furnace lives and a 7% interest (discount) rate, the CRF values3 are 

0.1424 (for 10 years) and 0.1856 (for 7 years). The table below shows the calculations used to 

determine the incremental capital recovery cost. 

Description

Furnace Rebuild

10 Years 7 Years 

Furnace rebuild cost (total capital 

cost) $10,700,000 $10,700,000 

Furnace life with rebuild (yr) 10 7 

Interest rate 0.07 0.07 

Capital recovery factor 0.1424 0.1856 

Annualized capital recovery cost 

of furnace rebuild $1,523,680 $1,985,920 

Incremental capital recovery costs 

(CRC7yr – CRC10yr) $462,240 

Total annual cost for furnace 

rebuild ($/yr) $462,240 

 

It should be noted that the calculation using the replacement cost method does not include any 

improvements in productivity and energy efficiency, among other factors, resulting from 

rebuilding a furnace, factors that would typically come into play when a wool fiberglass company 

assesses the need for a furnace rebuild using this approach. 

III. FLAME ATTENUATION MANUFACTURING LINES 

As noted previously, several facilities have already switched all or most of their rotary spin (RS) 

manufacturing lines to non-PF binders. Based on the most recent information provided by 

industry, we estimate that two facilities have 13 bonded flame attenuation (FA) manufacturing 

lines and all of the FA lines are in compliance with the emission limits in the final rule. Therefore,

additional controls are not needed for existing FA lines. However, the two facilities will incur 

additional testing costs to demonstrate compliance with the new emission limits for FA lines. 

IV. COMPLIANCE TESTING COSTS 

The annual cost estimates for compliance testing is estimated below in Table 1: 

 

 

3

 Table A-2: Capital Recovery Factors (from EPA Air Pollution Cost Manual, EPA/452/B-02-001, January 2002). 
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Table 1. Summary of Compliance Testing Costs (2013 Dollars) 

Emission 

Source HAP 

EPA 

Test 

Method 

Test 

Costs4 

(in 2013 $) 

Test 

Frequency 

Annualized 

Test Costs 

(in 2013 $) 

Comment 

Gas-Fired 

Furnace 

Chromium 

Compounds 

29 $10,000 Annual $10,000 PM testing part 

of current 

requirements. 

Collection/ 

Curing 

(combined) 

Phenol and 

Methanol 

(already testing 

formaldehyde) 

318 

(part of 

M318 

FTIR) 

$4,000 

(combined 

phenol & 

methanol)

Every 

5 years $800 

Current rule 

specifies 

Method 316 or 

318 for 

formaldehyde. 

V. EMISSION REDUCTIONS

Based on the recent test data provided by the facilities, the 8 gas-fired furnaces emit approximately 

588 pounds of chromium compounds annually. We identified two gas-fired furnaces with 

emission rates above the final emission limit and their associated annual emissions of 12 and 555 

pounds of chromium compounds, respectively. With the assumption that the reduced operational 

life for the two furnaces will reduce chromium compound emissions to a level that would meet the 

final emission limit, approximately 524 pounds of chromium compounds would be reduced 

annually at major sources, which is a 89 percent reduction compared to baseline emissions. 

The annualized control costs for rebuilding the two gas-fired furnaces and compliance testing 

($944,000) divided by the emission reduction (524 pounds of chromium compounds) results in a 

cost effectiveness of $1,800 per pound of chromium compounds reduced (2013 dollars). 

 

 

4

 Personal communication with Mr. Steffan Johnson, US EPA, Measurement Policy Group, March 2014. 
Table 2. Summary of Costs for Wool Fiberglass Mfg Facilities to Comply with Final RTR Amendments (2013 do

Company 

Facility 

Location 

Source 

Type 

Gas-Fired Furnaces 

Flame Attenuation (FA) 

Manufacturing Lines 

Annualized 

Capital 

Cost* 

Annual 

O&M 

Cost 

No. of 

Furnaces 

Cr 

Testing 

Cost 

Cost Effectiveness 

($/lb Cr 

reduced) 

No. of 

Lines 

Testing 

Cost 

Cost Effectiveness 

($/ton HAP 

reduced)*** 

1 CertainTeed Kansas City, KS Major 462,000 0 2 20,000 850 0 0 NA 2 Guardian Albion, MI Major 0 0 0 0 - 0 0 NA 3 Guardian Inwood, WV Major 0 0 0 0 - 0 0 NA 4 Guardian Mineral Wells, MS Major 0 0 0 0 - 0 0 NA 5 Guardian Winnsboro, SC Major 0 0 0 0 - 0 0 NA 6 Johns Manville Cleburne, TX Major 0 0 1 10,000 NA 2 1,600 NA 7 Johns Manville Defiance, OH Major 0 0 2 20,000 NA 11 8,800 NA 8 Knauf Shelbyville, IN Major 0 0 0 0 - 0 0 NA 9 Owens-Corning Newark, OH Major 462,000 0** 2 20,000 39,700 0 0 NA 

10 Owens-Corning Waxahachie, TX Major 0 0 1 10,000 NA 0 0 NA 

 $924,000 $0 8 $80,000 $1,700 13 $10,400 NA 

Table 2 notes: * Capital cost = $10.7M per furnace (using replacement cost approach); annualized capital cost based on 7% interest rate and a reduced equipment (furn** One (high-emitting) furnace already scheduled for replacement. *** The EPA is not promulgating RTR standards for RS lines at this time. The EPA has issued a Clean Air Act section 114 information collection request t

manufacturing facilities to obtain process and emissions data for RS manufacturing lines. The EPA will analyze ICR data and evaluate RTR limits for RS