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MEMORANDUM 

TO: Kim Teal and Keith Barnett, U.S. Environmental Protection Agency 

FROM: Eastern Research Group, Inc. (ERG) 

DATE: January 12, 2015 

SUBJECT: Estimated Cost Impacts for Proposed Amendments to 40 CFR 63, Subpart GG, 

National Emission Standards for Aerospace Manufacturing and Rework Facilities 

1.0 INTRODUCTION AND SUMMARY OF COSTS 

This memorandum describes the methodology and summarizes the results of estimating the 

annual costs of compliance for the proposed amendments to the Aerospace NESHAP. Cost 

impacts were calculated for complying with the requirements to meet VOC and HAP content 

limits for specialty coating operations, and for complying with requirements to use high 

efficiency application methods for spray applied specialty coatings. The cost impact for the 

proposed compliance demonstration alternative using coating manufacturers’ supplied data to 

document VOC and HAP content is also discussed. 

The proposed amendments would not affect compliance costs for operations already being 

regulated by the NESHAP. 

Of the 144 existing sources currently covered by this standard, 109 facilities have specialty 

coating operations. Therefore, the annual costs affecting specialty coating operations are 

calculated for only the 109 aerospace manufacturing and rework facilities that reported having 

these operations. 

The recordkeeping and reporting costs were estimated for each facility based on data reported by 

industry in the information collection request (ICR) sent to all known facilities in February 2011. 

The ICR requested information on material usage and control techniques used on all of the 

regulated and unregulated emission sources at aerospace facilities for 2008. 

The estimated annual costs for the industry to comply with the proposed amendments are about 

$848,000 in the first year and about $590,000 in succeeding years. The estimated average cost 

per facility is about $7,800 in the first year and about $5,400 per year in succeeding years. 

2.0 INPUTS FOR SPECIALTY COATING COST ESTIMATES 

Appendix 1 includes tables summarizing the activities and cost elements used to estimate the 

compliance costs in Year 1 and in Years 2 and later. These activities are the same as those 

www.erg.com 
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required in the Office of Management and Budget (OMB) burden estimate and the supporting 

statement for the proposed amendments, which is also included in docket EPA-HQ-OAR-2014-

0830 for the proposed amendments.1 Labor rates for this cost estimate were assumed to be 

$127.72 per hour for executive, administrative, and managerial labor; $101.60 per hour for 

technical labor, and $38.58 per hour for clerical labor.2 These rates account for operating 

overhead and benefit packages. A significant number of the compliance activities usually 

considered in the OMB burden estimate are already accounted for under the compliance costs for 

existing coating operations and would not be repeated to comply with the proposed amendments. 

Year-1 costs include one-time costs plus annual costs that apply in Year 1. One-time costs are 

assumed to be incurred by all 109 facilities and include "start-up" activities such as reading 

instructions, planning activities, developing a record system, and training personnel. Annual 

costs in both Year-1 and subsequent years include only compliance costs associated with 

maintaining records to demonstrate compliance with the specialty coating VOC and HAP content 

limits. These costs vary for each facility, and are calculated assuming one hour per year per 

specialty coating used by each facility. Appendix 2 shows the estimated number of specialty 

coatings used per facility, based on the 2011 ICR survey responses, and the estimated cost per 

facility in Year 1 and in following years. 

The EPA expects that the proposed amendments will not require any capital costs, other than the 

possible purchase of high efficiency coating application equipment for spray applied coatings. 

The EPA assumed that specialty coatings operations would not require installation of additional 

spray booths to control inorganic HAP emissions, because these spray booths are already present 

as part of the existing primer and topcoat application operations. The EPA does not estimate any 

additional startup or operation and maintenance costs. 

3.0 SPECIALTY COATING COST IMPACTS ON THE INDUSTRY 

The estimated annual costs to comply with the organic HAP and VOC content limits for 

specialty coatings in this proposed rule are about $848,000 in the first year and about $590,000 

in succeeding years. Thus, the average cost per facility is about $7,800 in the first year and about 

$5,400 per year in succeeding years. These costs are based on the need to maintain records of the 

HAP or VOC content and the annual volume purchased of each specialty coating at a facility. 

The costs are higher in the first year because they include some activities that do not need to be 

repeated in following years, such as reading the rule amendments and setting up recordkeeping 

systems for specialty coatings. Appendix 2 also includes sales data for some of the 109 facilities 

that reported specialty coating operations, when that information could be located from an online search. The 2011 ICR did not request sales data for responding facilities. 

 

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 However, the OMB burden estimate differs slightly from this cost estimate in two respects. First, it did not 

consider Federal government-operated facilities the same as privately owned facilities, and their compliance costs 

are counted as part of the annual Federal government (Agency) cost. Second, the OMB estimate used different 

labor rates for privately-operated facilities and Federal government-operated facilities. For the OMB estimate, the 

EPA estimated that approximately 27 Federal government-operated facilities and 82 privately-operated facilities 

have specialty coating operations. 

2

 U.S. Department of Labor, Bureau of Labor Statistics, March 2013, Table 2. Civilian Workers, by Occupational and 

Industry group. 
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4.0 COMPLIANCE COSTS FOR HIGH EFFICIENCY COATING APPLICATION

METHODS

The EPA does not have sufficient data from the 2011 ICR to estimate the total cost impacts for 

specialty coatings having to comply with the proposed high-efficiency application equipment 

requirement. Because high-efficiency application equipment generates less coating overspray 

than conventional equipment, the costs of upgrading to new equipment can be offset by cost 

savings from reduced coating consumption and reduced spray booth filter maintenance. For these 

reasons, many facilities are likely to have already switched to high-efficiency application 

methods for specialty coating operations, as they are already required to for primer and topcoat 

application operations. The 2011 ICR did not request information on which specialty coatings 

were being applied with spray application equipment, or on the types of spray application 

equipment being used. 

However, it is possible to estimate the savings that would be needed to offset the costs of 

purchasing new spray guns for a typical facility. Based on the 2011 ICR data, the average 

volume of specialty coatings used per facility is 3,000 gallons per year. The estimated purchase 

cost for an industrial-quality high-volume, low-pressure (HVLP) spray gun is $700 for the gun 

and accessories (e.g., larger diameter hoses, gauges, extra air caps), based on vendor 

information.3 If a typical facility had to purchase three new HVLP spray guns, and the facility 

was spending an average of $30 per gallon of spray applied coating, the facility would need to 

see a decrease in coating consumption of only 70 gallons per year to recover the initial cost of 

those three spray guns in one year: 

Three HVLP spray guns @ $700 per gun = $2,100 

($2,100 for three guns) ÷ ($30/gallon specialty coating) = 70 gallons of specialty coatings saved 

to recover the cost of three HVLP spray guns 

This reduction in coating consumption needed to recover the cost of the spray guns would be 

equal to 2.3 percent of coating consumption at a facility using 3,000 gallons of specialty coatings 

per year. Therefore, the EPA expects that the requirement to apply specialty coatings with highefficiency methods when spray applying these coatings would not have negative cost impact on 

facilities using spray applied specialty coatings. 

5.0 COMPLIANCE COST IMPACTS FROM ALTERNATIVE COMPLIANCE 

DEMONSTRATION PROVISIONS

 

The EPA expects some additional potential cost savings from the proposed alternative 

compliance demonstration provision included in 40 CFR 63.750(c), (e), (k) and (m). This 

provision would allow owners or operators using primers, topcoats, specialty coatings and 

 

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 For the cost of HVLP spray guns, see the memo, Estimate of Capital and Annual Costs For Automotive Refinishing 

Operations and Miscellaneous Surface Coating Operations Subject to the Proposed National Emission Standards 

for Hazardous Air Pollutants for Paint Stripping and Miscellaneous Surface Coating Operations at Area Sources, 

May, 2007, included in the docket for the proposed amendments to subpart GG, EPA-HQ-OAR-2014-0830. 
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chemical milling maskants to use coating manufacturer’s supplied data to demonstrate 

compliance with the VOC and HAP content limits for those coatings, instead of using EPA 

Method 24 and performing certain compliance calculations to determine VOC and HAP content. 

We do not have sufficient data to estimate the cost savings associated with the proposed 

alternative compliance demonstration for individual facilities or for the industry as a whole. 

However, the estimated cost to perform an analysis of VOC content according to EPA Method 

24, based on published vendor data, is about $575 per sample.4 Because the proposed alternative 

compliance demonstration would allow facilities to use coating manufacturers’ supplied data to 

determine the VOC or HAP content of coatings, based on coating formulation, the cost of these 

coating analyses using EPA Method 24 would be avoided. 

 

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 See, for example, http://www.cleanair.com/Home/downloads/DocServerRequest.php?short=Analytical-PriceSchedule.pdf, accessed January 9, 2015.