SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis September 20, 2007 

Final Staff Report with Appendices 

for Revised Proposed Amendments to Rule 4682

APPENDIX C 

Cost Effectiveness for Revised Proposed Amendments to 

Rule 4682 (Polystyrene Foam, Polyethylene, 

and Polypropylene Manufacturing) 

September 20, 2007 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis September 20, 2007 

Final Staff Report with Appendices 

for Revised Proposed Amendments to Rule 4682

C - 2

I. INTRODUCTION 

The California Health and Safety Code 40920.6(a) requires the San Joaquin Valley 

Unified Air Pollution Control District to conduct both an "absolute" cost effectiveness 

analysis and an incremental cost effectiveness analysis of available emission control 

options prior to adopting each Best Available Retrofit Control Technology (BARCT) rule. 

The purpose of conducting a cost effectiveness analysis is to evaluate the economic 

reasonableness of the pollution control measure or rule. The analysis also serves as a 

guideline in developing the control requirements of a rule. 

Absolute cost effectiveness of a control option is the added annual cost (in $/year) of a 

control technology or technique, divided by the emission reduction achieved (in tons 

reduced/year). The costs include capital equipment costs, engineering design costs, 

labor and maintenance costs. 

Incremental cost effectiveness is intended to measure the change in costs, in $/yr, and 

change in emissions reductions in tons reduced/year between two progressively more 

effective control options or technologies. For this rule project, the limits are considered 

the lowest achieved in practice. Installing VOC control equipment would not reduce 

emissions beyond that mandated by the low VOC content limits. This means that there 

are no additional VOC emission reductions to be realized by installing a VOC emission 

control device. Therefore, no incremental cost effectiveness analysis was conducted. 

It is estimated that stakeholders will spend about $5.1 million annually to meet the 

proposed rule requirements. With estimated VOC emission reductions of 137.9 tons 

per year, the overall cost effectiveness would be about $37,000 per ton VOC reduced. 

III. COST EFFECTIVENESS ANALYSIS 

The cost data for this analysis was taken from information submitted by stakeholders. 

The proposed changes to Rule 4682 allow an operator to minimize VOC emissions 

through a menu of choices. For this analysis, three different compliance options were 

evaluated: 

• Modify or add more control to a manufacturing process; 

• Vent the air from an existing warehouse to a new regenerative/recuperative 

thermal oxidizer (RTO); 

• Build a new warehouse that vents to a new regenerative/recuperative thermal 

oxidizer. 

District staff then estimated how the affected facilities would comply with the proposed 

rule provisions. The two extruded polystyrene facilities will make minor modifications to 

meet the new limits. One facility will continue to maintain its exemption from the VOC 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis September 20, 2007 

Final Staff Report with Appendices 

for Revised Proposed Amendments to Rule 4682

C - 3

limits. The EPS cup molder will meet the requirements by installing a new RTO in an 

existing warehouse, and the remainder will build a warehouse with new RTO. 

As shown in Table 1, stakeholders will spend about $5.1 million annually to meet the 

proposed rule requirements. With estimated VOC emission reductions of 136.9 tons 

per year, the overall cost effectiveness would be about $37,000 per ton VOC reduced. 

Table 1 – Annualized Costs and Cost Effectiveness 

Facility Type Proposed Control 

Estimated Annualized Cost 

$/yr 

EPS Cup Molder New RTO $574,050 

recycled plastics Remain exempt from rule $0 

polyethylene facility Already meet - no cost $0 

EPS Shape Molder New warehouse $795,263 

XPS Already meet - no cost $0 

high/low density 

polyethylene resin, 

polypropylene New RTO $574,050 

EPS Shape Molder New warehouse $795,263 

XPS Already meet - no cost $0 

EPS Shape Molder New warehouse $795,263 

EPS Shape Molder New warehouse $795,263 

EPS Shape Molder New warehouse $795,263 

Total Annualized Cost $5,124,415 

Estimated Emission Reductions 136.9 

Overall Cost Effectiveness $37,438.65 
SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

Appendix C: Cost Effectiveness Analysis September 20, 2007 

Final Staff Report with Appendices 

for Revised Proposed Amendments to Rule 4682

C - 4

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