ESTIMATION OF THE MARGINAL GREENHOUSE GAS ABATEMENT 

CURVE FOR THE BENEFICIAL USE OF FLY ASH AS A SUBSTITUTE FOR 

PORTLAND CEMENT IN READY-MIX CONCRETE PRODUCTION 

Economic and Risk Analysis Staff 

Program Management, Communications, and Analysis Office 

Office of Resource Conservation and Recovery 

U. S. Environmental Protection Agency 

1200 Pennsylvania Ave., N. W. 

Washington, DC 20460 

June 19, 2009 
2

ACKNOWLEDGMENTS 

The Agency recognizes Industrial Economics, Inc. (IEc), for the overall organization and 

development of this paper. Significant input was also received from David Goss, former 

Executive Director of the American Coal Ash Association. Lyn D. Luben of the U.S. 

Environmental Protection Agency, Office of Resource Conservation and Recovery, provided 

guidance and review. 
3

Introduction: 

One of the benefits of the Coal Combustion Products Partnership (C2

P2) program is reduced 

emissions of greenhouse gases, such as carbon dioxide and methane. The use of coal combustion 

products as a substitute for virgin materials generally results in abatement of greenhouse gas 

emissions associated with the production of these materials.1

 

To help assess the C2

P2 program’s potential for reducing greenhouse gas emissions, we developed 

a marginal GHG abatement curve for the beneficial use of coal fly ash (generated by coal-fired 

power plants) as a substitute for portland cement in the production of ready-mix concrete. This 

marginal abatement curve (MAC) graphically illustrates the extent to which abatement of CO2

equivalents (CO2eq) would increase if the abatement costs incurred by private entities (i.e., power 

plants and concrete producers) were to decline. 

Several factors may contribute to a decline in abatement costs. These may include reduced power 

plant input costs (that are passed on in the form of lower fly ash costs) or a cost increase for 

portland cement (thereby reducing the price of coal fly ash relative to portland cement). In most 

cases, transportation costs have been found to be the single most limiting factor preventing the 

increased beneficial use of coal fly ash. Transportation costs become especially critical when 

accounting for the disparities in generation and use patterns between regions of the U.S. The 

limited scope of this analysis does not allow for a complex assessment of multiple cost impact 

factors. As such, our MAC analysis focuses only on hypothetical transportation cost adjustments. 

In effect, for this analysis, we assume that some outside entity (e.g., government, third-party 

certifying body (e.g., Green Building Council)) contributes to, or “incentivizes” the transportation 

of coal fly ash for beneficial use as a portland cement substitute.2

 This makes the expanded use 

of coal fly ash less expensive to both the supplier and the user (that is, it is cost effective to 

transport it greater distances). We apply this “pollution avoidance” approach for development of 

our modified marginal abatement curve. 

The purpose of this paper is to present our derivation of the marginal abatement curve based on 

the assumptions and limitations inherent in this analysis. The paper begins with a conceptual 

overview of marginal abatement curves, then presents the methodology used for developing the 

MAC used in this analysis, and finally presents our representation of the marginal abatement 

curve. 

Conceptual Overview: 

The marginal abatement curve developed for this paper graphically illustrates the extent to which 

abatement of CO2eq emissions would increase if the beneficial use of coal fly ash were made less 

expensive to the generators and users of this material, as shown in Exhibit 1. The horizontal axis 

in Exhibit 1 represents the transportation cost adjustment provided for the beneficial use of coal 

 

1

 The reduced environmental impact associated with the beneficial use of fly ash as a substitute for virgin materials results in pollution 

avoidance rather than pollution abatement. Throughout this paper, however, we use the term “pollution abatement” rather than 

“pollution avoidance” to highlight parallels and differences between the analysis presented in this paper and marginal abatement 

curves frequently developed by EPA in its analysis of air pollution policies and programs. 

2

 The analytical approach applied in this paper should not be construed as a recommendation or policy consideration for the expanded 

beneficial use of coal fly ash. 
4

fly ash, expressed in dollars per ton of C02eq abated, and the vertical axis represents the total 

level of abatement that would occur at each cost adjustment level.

As the graph indicates, some abatement would occur if no cost adjustment were provided (i.e., 

where the adjustment is $0, abatement is approximately 17 million tons (MMton) per year in this 

hypothetical example. This would occur because power plants find it in their economic interest to 

supply coal ash as a portland cement substitute (i.e., engage in abatement activity) under the 

market conditions assumed for this analysis. However, according to the hypothetical marginal 

abatement curve in Exhibit 1, if a cost adjustment of $15 per ton were provided, total abatement 

would increase to 26 MMton per year. In other words, as the transport cost of coal fly ash is 

more heavily adjusted downward, more coal-fired power plants would find it in their economic 

interest to manage their coal fly ash through beneficial use. 

 EXHIBIT 1. HYPOTHETICAL MARGINAL ABATEMENT CURVE FOR COAL FLY ASH 

The MAC presented in Exhibit 1 differs from the marginal abatement cost curves often used in 

analyses of air pollution control costs. This hypothetical curve reflects how power plant behavior 

would change in response to a transport cost adjustment for the beneficial use of coal fly ash. In 

other words, it reflects how abatement would increase as abatement costs decline (or profits 

associated with abatement activities increase). In contrast, a conventional marginal abatement 

cost curve shows how costs increase as abatement increases. More specifically, a standard 

marginal abatement cost curve normally shows how the per-ton cost of abatement would increase 

with increasing levels of abatement, if abatement were to occur (i.e., a marginal abatement cost 

curve does not reflect an explicit representation of facility decision-making). 

Exhibit 2 below presents a hypothetical conventional marginal cost curve for the beneficial use of 

coal fly ash as a portland cement substitute in ready-mix concrete production. Based on this 

hypothetical figure, the abatement cost for the 5th MMton of abatement would be $6 per ton, but 

as abatement increases, the incremental abatement cost per ton would also increase. Achieving 

the 30th MMton of abatement would cost approximately $40 per ton in this hypothetical example, 

more than six times the per ton cost for the 5th MMton. 

0

5

10

15

20

25

30

35

40

45

$0 $15 $30 $45 $60

Transportation Cost Adjustment, in $/Ton CO2eq

Abatement (MMtons of CO2eq)
5

EXHIBIT 2. HYPOTHETICAL CONVENTIONAL MARGINAL ABATEMENT COST CURVE FOR 

COAL FLY ASH 

Summary of Methodology: 

To generate a marginal abatement curve for the beneficial use of coal fly ash in ready-mix 

concrete production, we designed a methodology that accounts for (1) the costs and benefits that 

individual power plants would realize if they were to send their coal fly ash offsite for beneficial 

use, (2) the national capacity for ready-mix concrete facilities to use coal fly ash as a portland 

cement substitute, and (3) the distribution of this capacity across different regions of the U.S. 

The following steps comprise our methodology. 

1. Estimate coal fly ash generation by plant. As an initial step in our analysis, we estimate 

the tonnage of coal fly ash generated by each coal-fired power plant in the U.S. 

According to data from the U.S. Department of Energy’s EIA-767 survey data, coal-fired 

utilities generated approximately 77 million tons of coal fly ash in 2004.3

 We distribute 

this tonnage to individual coal-fired electric generating units (EGUs) in proportion to 

their share of national coal-fired EGU capacity. We obtained capacity information for 

each coal-fired EGU from EPA’s 2006 National Electric Energy Data System (NEEDS). 

2. Estimate benefits and costs of coal fly ash beneficial use for power plants. For each 

coal-fired EGU, the benefits of sending coal fly ash offsite for beneficial use include 

avoided disposal costs (including transportation for EGUs that send their coal fly ash 

offsite for disposal) and the revenue received from the sale of coal fly ash. The 

corresponding costs include transportation and, in the case of coal fly ash with a high 

 

3

 U.S. Department of Energy, Energy Information Administration, EIA-767: Annual Steam-Electric Plant Operation and Design Data for 

2004, as cited in U.S. EPA, Study on Increasing the Usage of Recovered Mineral Components in Federally Funded Projects Involving 

Procurement of Cement or Concrete to Address the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for

Users, June 3, 2008. Data from the 2005 edition of EIA-767 also suggest that fly ash generation among power plants is approximately 

77 million tons per year, although the geographic distribution by state in the 2005 EIA-767 data differs from the distribution suggested 

by the 2004 data. This most likely reflects normal year-to-year variation. 

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

5 10 15 20 25 30 35 40 45 50

Abatement (MMtons of CO2eq)

Cost of Abatement ($/ton of 

CO2eq)
6

carbon content, beneficiation. Exhibit 3 summarizes the per-ton monetary value of these 

benefits and costs. 

EXHIBIT 3. SUMMARY OF AVERAGE NATIONWIDE BENEFITS AND COSTS ASSOCIATED WITH 

THE BENEFICIAL USE OF COAL FLY ASH AS A SUBSTITUTE FOR PORTLAND CEMENT1

BENEFITS COSTS 

Avoided coal fly ash disposal costs2

: 

Estimate 1 (onsite): $12.50 per ton 

Estimate 2 (onsite/offsite): $32.50 per ton 

Revenue from the sale of coal fly ash: $34 per ton3 

Transportation: $0.15 per ton-mile4

Beneficiation: $1.46 per ton5

Notes: 

1. All values presented in this table are expressed in year 2007 dollars. 

2. The fly ash disposal cost estimates presented in this exhibit were provided by David Goss, American 

Coal Ash Association (ACAA), September 9, 2008. The lower of the two estimates (Estimate 1) 

represents the midpoint of the $10 - $15 per ton cost for onsite disposal. According to David Goss 

of the ACAA, 70 percent of fly ash is disposed onsite by electric generating units. The higher of the 

two estimates (Estimate 2) represents the midpoint of the $30 - $35 national average (i.e., mean) 

disposal cost per ton for all fly ash (i.e., fly ash disposed onsite and fly ash shipped offsite for 

disposal). 

3. According to ACAA’s David Goss (personal communication, June 18, 2008), fly ash has historically 

been valued at one-third the price of cement. The $34 per ton estimate represents one-third of 

the 2007 price of portland cement as reported by the U.S. Geological Survey, 2008 Mineral 

Commodity Summary for Portland Cement, available at 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/mcs-2008-cemen.pdf, accessed July 

28, 2008. 

4. Personal communication with a transportation and logistics firm located in the western U.S., June 

18, 2009. 

5. According to ACAA’s David Goss (personal communication, June 25, 2008), approximately 2 million 

of the 15 million tons of fly ash beneficially used in concrete in the U.S. (or 13.3 percent) 

undergoes beneficiation. In addition, based on the range of beneficiation costs presented in 

Electric Power Research Institute, Beneficiation of Fly Ash Containing Mercury and Carbon, we 

estimate that a reasonable central tendency value for the cost of beneficiation is approximately 

$10 per ton. The estimate of $1.46 per ton presented in this exhibit reflects this $10 estimate 

multiplied by the probability of fly ash requiring beneficiation (13.3 percent). 

 

As indicated in Exhibit 3, we identified two estimates for coal fly ash disposal costs. 

Estimate 1 ($12.50 per ton) represents the typical cost of onsite disposal, whereas 

Estimate 2 represents the average (i.e., mean) disposal cost per ton for all coal fly ash 

(i.e., fly ash disposed onsite and fly ash shipped offsite for disposal). According to David 

Goss of the American Coal Ash Association, approximately 70 percent of all coal fly ash 

is disposed onsite by electric generating units.4

 Therefore, the $12.50 per ton estimate 

(Estimate 1) represents a reasonable approximation of the median disposal cost per ton 

(i.e., the 50th percentile). Because Estimate 1 represents the median cost per ton and 

Estimate 2 represents the mean, we developed two versions of the marginal abatement 

 

4

 Personal communication with David Goss, American Coal Ash Association, September 9, 2008. 
7

curve for the beneficial use of coal fly ash as a portland cement substitute: one curve 

based on Estimate 1 and a second based on Estimate 2. 

3. Assess national and regional beneficial use capacity: Based on information obtained 

from the American Coal Ash Association, U.S. ready-mix concrete producers could 

potentially use up to 35 million tons of coal fly ash per year as a substitute for portland 

cement.5

 This represents 20 million tons more than the industry currently uses. For the 

purposes of this analysis, we distribute these 35 million tons of capacity to individual 

Census Divisions in proportion to each Census Division’s share of ready-mix concrete 

production.6

 Exhibit 4 presents a map that shows the states that make up each Census 

Division. 

 EXHIBIT 4. MAP OF U.S. CENSUS DIVISIONS 

 

5

 Personal communication with David Goss, American Coal Ash Association, July 16, 2008. 

6

 Each Census Region’s share of ready-mix production was derived from U.S. EPA, Study on Increasing the Usage of Recovered Mineral 

Components in Federally Funded Projects Involving Procurement of Cement or Concrete to Address the Safe, Accountable, Flexible,

Efficient Transportation Equity Act: A Legacy for Users, June 3, 2008. 
8

4. Estimate breakeven transport distance by EGU, assuming no transport cost 

adjustment: Based on the benefit and cost information presented in Exhibit 3, we 

estimated the average breakeven transport distance below which each coal-fired EGU 

would find it in its economic interest to send coal fly ash offsite for beneficial use. 

Assuming no transport cost adjustment, we estimate that this breakeven distance is 

approximately 292 to 422 miles for each coal-fired EGU in the U.S.7

 The low end of this 

range reflects the disposal cost of $12.50 per ton presented in Exhibit 3, and the high end 

reflects fly ash disposal costs of $32.50 per ton. 

5. Estimate distance to nearest ready-mix plant: For each coal-fired EGU, we estimated 

the distance to the nearest ready-mix concrete facility that would accept coal fly ash 

based on EGU locational information in EPA’s NEEDS database and U.S. Census 

County Business Pattern data that indicate which counties in the U.S. have ready-mix 

concrete facilities with 100 or more employees.8,9 We measured these distances based on 

the centroids of the counties where coal-fired EGUs and ready-mix facilities are 

located.10 

6. Determine which EGUs are most likely to send coal fly ash offsite for beneficial use, 

assuming no transport cost adjustment. In Step 4, we estimated that EGUs would find it 

in their economic interest to send their coal fly ash to a ready-mix facility if such a 

facility was located within 292 to 422 miles of the EGU. Based on this information and 

the distances estimated in Step 5, we can determine which EGUs would realize an 

economic benefit by sending their coal fly ash offsite for beneficial use. Due to regional 

capacity constraints, however, not all of these EGUs would be able to send their coal fly 

ash to a ready mix facility. Therefore, in regions where the tonnage of coal fly ash that 

EGUs would like to send to a ready-mix facility exceeds regional capacity, we assume 

that those EGUs that are closest to a ready-mix facility would send their coal fly ash 

offsite for beneficial use. For example, if two EGUs in a given region would find it in 

their interest to send coal fly ash offsite for beneficial use but regional capacity 

constraints would prohibit one from doing so, we assume that the EGU that is closest to a 

ready-mix facility would send its coal fly ash offsite. We assume that the other EGU 

would either dispose of its coal fly ash or recycle it through some other means. 

7. Estimate CO2eq Impact: To estimate the extent to which the beneficial use of the coal fly 

ash identified in Step 6 leads to a reduction in CO2eq emissions, we use lifecycle 

information presented in EPA’s 2008 Report to Congress on the use of recovered mineral 

components in federally funded construction projects. Based on this report, each ton of 

coal fly ash used as a substitute for portland cement in the production of ready mix 

concrete reduces CO2eq emissions by approximately 0.72 tons.11 This estimate reflects 

 

7

 [(Avoided disposal cost + revenues) – beneficiation]/(transportation cost per ton-mile). 

8

 According to David Goss of the American Coal Ash Association (personal communication, July 16, 2008), ready-mix concrete facilities 

that do not have significant storage capacity for fly ash often cannot use fly ash as a portland cement substitute. Therefore, for the 

purposes of this analysis, we assume that only those ready-mix facilities with 100 or more employees have significant storage capacity 

and would be able to accept fly ash. 

9

 U.S. Census Bureau, 2006 County Business Pattern Data, available at http://www.census.gov/epcd/cbp/view/cbpview.html. 

10 Due to resource constraints, we estimated these distances as straight-line distances rather than as road distances. 

11 Derived from U.S. EPA, Study on Increasing the Usage of Recovered Mineral Components in Federally Funded Projects Involving 

Procurement of Cement or Concrete to Address the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for

Users, June 3, 2008, Table D-10. 
9

emissions reductions associated with avoided portland cement production and transport 

(to ready-mix concrete facilities) and the increase in emissions associated with 

transporting coal fly ash to ready-mix concrete facilities. For coal fly ash that is currently 

disposed offsite, however, this estimate does not reflect the emissions reductions 

associated with avoided transport to a disposal facility. 

8. Determine which EGUs are most likely to send coal fly ash offsite for beneficial use 

under each transport cost adjustment scenario. To determine which EGUs would send 

their coal fly ash offsite under each transport cost adjustment scenario, we follow an 

approach similar to that outlined above for the no-adjustment scenario. Our analysis of 

the scenarios assumes that EGUs that send their coal fly ash offsite for beneficial use 

under the no-adjustment scenario would continue to do so if a cost adjustment were in 

place. We then estimate how a transport cost adjustment would increase the beneficial 

use of coal fly ash based on (a) the proximity of EGUs that do not send their coal fly ash 

offsite under the no-adjustment scenario to the Census Divisions with capacity available 

and (b) the extent to which each cost adjustment affects the breakeven distance estimated 

in Step 4. We account for regional capacity constraints using the same general approach 

outlined in Step 6, but we also constrain total beneficial use so that it cannot exceed the 

capacity of 35 million tons per year referenced in Step 3. 

9. Estimate CO2eq Impact for each cost adjustment scenario: For each transport cost 

adjustment scenario analyzed, we estimate CO2eq impacts using the approach described 

in Steps 7 and 8. 

Estimated Marginal Abatement Curve: 

Exhibit 5 presents the marginal abatement curves that we developed for the beneficial use of coal 

fly ash as a substitute for portland cement based on the methodology outlined in the previous 

section. As indicated above, we developed two marginal abatement curves: one that reflects coal 

fly ash disposal costs of $12.50 per ton (referred to as the low end MAC in Exhibit 5) and a 

second that reflects disposal costs of $32.50 per ton (referred to as the high end MAC in Exhibit 

5). 

When the transport cost adjustment is below $5 per ton of CO2eq reduced, the high end MAC 

suggests slightly more significant reductions in CO2eq emissions than the low end MAC, as 

shown in Exhibit 5. This is because the transport cost adjustment increases the EGU breakeven 

distance more significantly under our high disposal cost assumptions than under our low disposal 

cost assumptions. When the cost adjustment is between $5 and $30 per ton of CO2eq reduced, 

both curves remain relatively flat. This reflects the spatial disconnect between where coal fly ash 

is generated and where capacity exists to use coal fly ash as a substitute for portland cement in 

ready-mix concrete production. Once the transport cost adjustment reaches $5 per ton of CO2eq 

reduced, our analysis suggests that most of the remaining capacity among ready mix concrete 

producers to accept coal fly ash is concentrated in the Pacific Census Division (i.e., at lower cost 

adjustment levels, our analysis suggests that capacity in the Midwest and other regions is fully 

utilized). Because most coal fly ash is generated in other regions, a cost adjustment greater than 
10

$30 per ton of CO2eq reduced would be necessary to cover the cost of transporting this material 

to the west coast. 

As indicated in Exhibit 5, both marginal abatement curves plateau when the transport cost 

adjustment reaches $45 per ton of CO2eq reduced. This reflects the national capacity constraint 

referenced in the methodology section above. At a cost adjustment level of $45 per ton, we 

estimate that the coal fly ash re-directed to beneficial use will fully consume the 35-million ton 

capacity of U.S. ready-mix concrete facilities. Therefore, our analysis suggests that cost 

adjustments beyond $45 per ton of CO2eq reduced would yield no additional abatement impact. 

For additional context, Exhibit 6 presents the tonnage of coal fly ash diverted to beneficial use 

under each transport cost adjustment scenario reflected in Exhibit 5. 

EXHIBIT 5. ESTIMATED MARGINAL ABATEMENT CURVE FOR THE BENEFICIAL USE OF COAL 

FLY ASH AS A SUBSTITUTE FOR PORTLAND CEMENT IN THE PRODUCTION OF READY-MIX 

CONCRETE 

0.0

5.0

10.0

15.0

20.0

25.0

30.0

$0 $5 $10 $15 $20 $30 $45 $65

Transport Subsidy (2007$/ton of CO2eq reduced)

MMT CO2eq

MAC (low end) MAC (high end)
11

EXHIBIT 6. BENEFICIAL USE OF COAL FLY ASH UNDER EACH TRANSPORT COST 

ADJUSTMENT LEVEL 

ESTIMATED QUANTITY OF COAL FLY ASH BENEFICIALLY USED IN READY-MIX 

CONCRETE PRODUCTION (MILLIONS OF TONS) 

COST ADJUSTMENT 

($ PER TON OF CO2EQ) LOW END ESTIMATE1 HIGH END ESTIMATE1

$0 15 15 

$5 30 34 

$10 30 34 

$15 30 34 

$20 30 34 

$30 31 34 

$45 35 35 

$65 35 35 

1. The low end estimate reflects fly ash disposal costs of $12.50 per ton, and the high end estimate 

reflects fly ash disposal costs of $32.50 per ton. 

Sensitivity Analysis: Estimated Marginal Abatement Curve Under Alternative 

Transportation Cost Assumptions 

As indicated above, one of the main assumptions of our analysis is that the cost of transporting fly 

ash is approximately $0.15 per ton-mile. Data from EPA’s economic assessment of the use of 

chat in transportation projects indicates, however, that this cost may be as high as $0.37 per tonmile.12 As a sensitivity analysis, we re-estimated the low-end and high-end MACs based on this 

value. Exhibit 7 presents these alternative versions of the MAC, and Exhibit 8 shows the 

corresponding fly ash tonnages associated with the CO2eq values in the alternative MACs. 

To achieve a given CO2eq reduction, the alternative MACs in Exhibit 7 suggest that a higher 

transport cost adjustment would be necessary than the primary MACs shown in Exhibit 5. 

Because the alternative MACs reflect higher baseline transportation costs than the primary 

MACs, more significant transport cost adjustments would be necessary to achieve a given CO2eq 

reduction under the alternative scenario. 

Despite the difference in the transport cost adjustments necessary for a given CO2eq reduction, 

the primary and alternative MACs share two key similarities. First, both MACs initially slope 

upward but then remain fairly flat over a significant range of potential transport cost adjustments 

before increasing again. As suggested in the above discussion regarding the primary MAC, this 

reflects the location of fly ash generation relative to ready-mix concrete capacity. While much of 

the fly ash generation in the U.S. is concentrated in the eastern half of the country, much of the 

capacity among ready-mix concrete facilities is located in the Pacific Census Division. The 

second similarity between the two MACs is that both plateau at approximately 25 million tons of 

 

12 U.S. EPA, Assessment of the Potential Costs, Benefits, and Other Impacts of Chat Use in Transportation Projects, January 2006. 
12

CO2eq, which is consistent with the 35-million ton (of fly ash) capacity of U.S. ready-mix 

facilities referenced above. 

EXHIBIT 7. MARGINAL ABATEMENT CURVE FOR THE BENEFICIAL USE OF COAL FLY ASH 

UNDER ALTERNATIVE BASELINE TRANSPORTATION COST ASSUMPTIONS 

EXHIBIT 8. BENEFICIAL USE OF COAL FLY ASH UNDER ALTERNATIVE BASELINE 

TRANSPORTATION COST ASSUMPTIONS 

ESTIMATED QUANTITY OF COAL FLY ASH BENEFICIALLY USED IN READY-MIX 

CONCRETE PRODUCTION (MILLIONS OF TONS) 

COST ADJUSTMENT 

($ PER TON OF CO2EQ) LOW END ESTIMATE1 HIGH END ESTIMATE1

$0 15 15 

$15 15 26 

$30 28 29 

$45 29 29 

$60 29 29 

$135 30 34 

$240 35 35 

$300 35 35 

1. The low end estimate reflects fly ash disposal costs of $12.50 per ton, and the high end estimate 

reflects fly ash disposal costs of $32.50 per ton. 

0.0

5.0

10.0

15.0

20.0

25.0

30.0

$0 $15 $30 $45 $60 $135 $240 $300

Transport Cost Adjustment (2007$/ton of CO2eq reduced)

MMT CO2eq

MAC (low end) MAC (high end)