1 **MEMORANDUM** Date: August 9 , 2011 Subject: Estimated Cost Impact for Mineral Wool Production Industry to Comply with Proposed Residual Risk and Technology Review (RTR) Amendments Mineral Wool Production RTR RTIProject No. 021 0426 .01 0 From: Dave Reev es, RTI International To: Susan Fairchild

OAQPS/SPPD/NRG (D243

- 02) U.S. Environmental Protection Agency Research Triangle Park, NC 27711 The purpose of this memorandum is to present the estimated costs related to the mineral wool production source c ategory for their processes and facilities to comply with the proposed RTR amendments and associated emission limit s . **I. BACKGROUND**  Based on the information provided b y the mineral wool production industry and their primary trade association , North American Insulation Manufacturers Association (NAIMA) , there are currentl y 7 facilities in the U.S. producing mineral wool. W e estimate that all 7 of those facilities will incur additional testing cost to demonstrate compliance with the new (proposed) carbonyl sulfide (COS), hydrogen fluoride (HF), and hydrogen chloride (HCl) emission limits for cupolas. One facility

will also incur additional annual costs to purchase low

- sulfur raw materials in order to comply with the proposed COS emission limit for cupolas . W e also estimate that the 3 facilities with bonded product lines will incur additional testing cost to demonstrate compliance with the revised formaldehyde and new (proposed) phenol and methanol emission limits that will apply to collection and curing operations combined

. Table 1 summarizes the above information and the associated cost impacts.2



### Table 1. **Summary of Mineral Wool Production Facilities Costs to Comply with RTR Amendments**
**Cupolas a**  **Total Facility Costs**  **Low -**  **Sulfur Mat'ls**  **# Testing**  **Collection/ Curing**  **Facility Location**  **Incremental Cost Cupolas**  **Cost b**  **# Bonded Lines Test Cost**  **c** Industrial Insulation Group (IIG) Phenix City, AL 0 1 1 8 ,000 1 14,000 32 ,000 Thermafiber Wabash IN 0 2 34 ,000 1 14,000 4 8 ,000 USG Int eriors Red Wing, MN 0 2 34 ,000 0 0 34 ,000 USG Interiors Walworth, WI 0 1 1 8 ,000 0 0 1 8 ,000 Amerrock Products Nolanville, TX 0 2 34 ,000 0 0 34 ,000 Isolatek Int ’l Huntington, IN 0 2 34 ,000 0 0 34 ,000 Rock Wool M fg Leeds, AL 360,000 1 1 8 ,000 1 14 ,000 3 92 ,000 SubTotal $360,000 11 $1 90 ,000 3 $ 4 2,000 **$592,000**

a – 6 of the 11 cupolas currently have incineration control (RTOs) ; Rock Wool is the only facility that is not currently meeting the proposed COS limit based on emission testing results provided by industry

. Low

- sulfur material incremental cost based on an estimated 50% increase (per ton) of slag costs . No other facility is expected to have any additional equipment or material cost impact s . b

– Cupola testing costs reflect inc remental costs for COS, HF, and HCl testing; current test requirements for PM not included. c – Collection/curing costs reflect incremental costs for phenol and methanol testing; current test requirements for formaldehyde not included.3

**II. COMPLIANCE**  **TESTING COSTS**  Mr. Stef Johnson of EPA’s Measurement Policy Group provided the following estimates for compliance testing based on the test methods being proposed in the RTR amendments: **Emission Source**  **HAP Test Method**  **Test Cost Comment**  Cupola COS 318 $14,000 $12,000 for each additional test HF and HCl 320 (add

- on to M318 FTIR) $4,000

(combined HF/HCl) In addition to COS

testing cost Collection/ Curing (combined) Phenol and Methanol

(already testing for formaldehyde) 318 $14,000 (combined Phenol & Methano l) $12,000 for each

additional test

**III. LOW** **- SULFUR RAW MATERIAL COSTS**  Based on the emission test data provided in the ICR responses , we estimate that only one facility (Rock Wool Manufacturing) is not currentl y meeting the proposed COS emission limit for cupolas

. We a ssumed that the least costl y compliance option would be for the facility to switch to low

- sulfur raw materials to reduce the amount of COS generated in the cupolas. Rock Wool reported that slag comprises approximately 90% of the raw material going into their cupola . Since there is no readil y available source of low

- sulfur slag, we estimated an incremental cost of 50% more (per ton) for switching to other low

- sulfur raw materials. No raw material cost information was provided by any of the companies, so we assumed a 50% cost increase per ton and then used Rock Wool’s reported annual slag usage to calculate an annual raw material cost increase of $360,000. (Production data and raw material usage and costs are considered confidential bu siness information).