Review of Activated Carbon Injection Cost

August 6, 2010
Costs used to assess activated carbon injection (ACI) systems in the proposed NESHAP for portland

cement manufacturing were developed using cost supplied by the New Jersey Department of

Environmental Protection.  They had prepared an analysis of ACI cost for utility boilers. Based on

those cost and exhaust airflow information, costs were developed for portland cement kilns. Cost

information on an ACI system that was being installed on a portland cement kiln was received. We

compared our cost with those submitted by a vendor supplying the system. A comparison of the

NJDEP costs and the vendor cost were compared. In addition, we updated our cost to 2005 as well as

updating the cost for powdered activated carbon.
Comparison of PAC Capital and Annual Cost Estimates from NJ DEP and Industry (FL Smidth)

3/12/2010

• The capital and annual cost estimates from industry (prepared by FL Smidth) are substantially

higher than those from EPA (prepared based on data from NJ DEP).

o NJ DEP: capital cost $1.69 ‐ $2.79/ton clinker; annual cost $0.80 ‐ $0.99/ton clinker

o Industry:  capital cost $13.33/ton clinker; annual cost $5.81/ton clinker

• We attempted to determine the source of the differences in the costs by comparing the sources

and algorithms for the NJ DEP and industry cost estimates.

• The capital costs from NJ DEP were derived from two sources:

o The capital costs for the PAC equipment ($3,000/MW) and polishing baghouse

($24,000/MW) were derived from estimates provided by a source identified as “Serpil”

(perhaps Serpil Guran of NJ DEP).  The basis for these estimates is not known.

o The other capital costs (instrumentation, sales tax & freight, and direct/indirect

installation costs) were derived from the fabric filter capital cost algorithms in the

OAQPS Control Cost Manual.

• The capital costs from industry include the purchased equipment cost (PEC) and the

direct/indirect installation costs, which were calculated based on the purchased equipment cost.

o The purchased equipment cost was based on a vendor quote, the components of which

are unknown.

o Industry's algorithms for direct/indirect installation costs include smaller cost factors

than NJ DEP's.

• Given that industry’s capital cost estimate includes smaller cost factors for direct/indirect

installation than the NJ DEP estimate, it is clear that the difference in PEC estimates is the main

reason for the difference in capital costs.  See Table 1 for a more specific comparison of the

capital cost estimates from NJ DEP and industry.

• The annual costs from NJ DEP are based on OAQPS Control Cost Manual cost equations,

although I was unable to determine the exact equation used to calculate ash disposal.  Industry

used its own approach to estimating annual costs.

• The following bullets illustrate the differences between the annual cost estimates provided by

NJ DEP and industry.  See Table 2 for a more specific comparison.

o Industry's estimates of labor requirements and wage rates are lower than NJ DEP's,

except for supervisory labor (20% vs. 15% of direct labor).

o Industry's estimate of PAC consumption is higher than NJ DEP's (3.15 lb/hr vs. 0.40 and

1.41 lb/hr).
o Industry's estimate of PAC unit cost ($1.15/lb) is more in line with current online cost

estimates , while NJ DEP's is considerably lower ($0.50/lb).

o Industry's estimate of PAC cost includes an extra factor of 57, the reason for which is

unknown, which greatly increases the cost.

o Industry's estimate of maintenance materials cost is based on direct capital cost, while

NJ DEP's is based on maintenance labor cost, which results in a much higher

maintenance materials cost.

o Industry's estimate of electricity usage (kW) is considerably higher than NJ DEP's.

o Industry's estimate of ash disposal (lb/yr) is considerably higher than NJ DEP's, likely due

to the higher PAC consumption estimate.

o Industry's estimate of ash disposal unit cost ($100/ton) is much higher than current

landfill tipping fees; NJ DEP's estimate ($40/ton) is more in line with current fees.

o Industry's equation for overhead includes a smaller cost factor than NJ DEP's, but the

factor is applied to a higher maintenance materials cost (based on direct capital cost

rather than maintenance labor).

o Industry's equations for indirect annual costs are similar to NJ DEP's (4% of TCI overall),

but its cost estimates are much higher due to its higher TCI.

o Industry's estimate of capital recovery is based on 7% interest (consistent with current

EPA guidance) and 10‐year equipment life (20 years is more typical for fabric filter),

resulting in a higher capital recovery factor than NJ DEP.

o NJ DEP's estimate of capital recovery is based on 9% interest (7% interest is current EPA

guidance) and 20‐year equipment life (typical for fabric filter), resulting in a lower

capital recovery factor than industry.
Table 1. Comparison of PAC Capital Cost Estimates from NJ DEP and FL Smidth (3/12/2010)

NJ DEP NJ DEP‐Vineland NJ DEP‐BL England I FL Smidth 

Parameters Equations $/yr $/ton $/yr $/ton Equations Stack Flow Rate, acfm 132,600 132,600 470,000 470,000 Capacity

MW 23 23 135 135Equiv/actual ton clinker/yr 438,068 438,068 1,552,731 1,552,731 

Purchased equipment costs

PAC equipment $3,000/MW $69,000 $0.16 $405,000 $0.26Polishing baghouse $24,000/MW $552,000 $1.26 $3,240,000 $2.09

Total (A) PAC + Pol. BH $621,000 $1.42 $3,645,000 $2.35Instrumentation 0.1A included includedSales tax & freight 0.08A included included

Total PEC (B) sum of PECs $621,000 $1.42 $3,645,000 $2.35

vendor

quote 

Direct installation costs

Foundation & supports 0.04B $24,840 $0.06 $145,800 $0.09Handling & erection 0.50B included includedElectrical 0.08B $49,680 $0.11 $291,600 $0.19

Piping 0.01B included included

Insulation for ductwork 0.07B $43,470 $0.10 $255,150 $0.16

Painting 0.04B included included

Total DIC (C) 0.74B $117,990 $0.27 $692,550 $0.45 0.45B Indirect costs (installation)

Engineering 0.10B included included

Construction & field expense 0.20B included includedContractor fees 0.10B included included

Start‐up 0.01B included included

Performance test 0.01B included included 0.03(B+C) 
Contingencies 0.03B included included 0.20B 

Total indirect costs (D) 0.45B $0 $0 0.2435B Total capital investment (TCI) E = B + C + D $738,990 $1.69 $4,337,550 $2.79 E = B + C + D TCI (using 6/10 rule) $1,113,533 $2.54 $3,058,979 $1.97
Table 2. Comparison of PAC Annual Cost Estimates from NJ DEP and FL Smidth

NJ DEP NJ DEP‐Vineland NJ DEP‐BL England I FL Smidth 

Parameters Equations $/yr $/ton $/yr $/ton Equations Stack Flow Rate, acfm 132,600 132,600 470,000 470,000 Capacity

MW 23 23 135 135Equiv/actual ton clinker/yr 438,068 438,068 1,552,731 1,552,731 

Direct Capital Costs $738,990 $1.69 $4,337,550 $2.79 Total Capital Investment $738,990 $1.69 $4,337,550 $2.79 Direct Annual Costs

Operating labor

Direct labor 2 hr/shift * 3 shifts/d * $30/hr * 360 d/yr $64,800 $0.15 $64,800 $0.04

1 man‐yr at $60,000/yr * 0

man‐yrs 

Supervisory labor 15% of direct labor $9,720 $0.02 $9,720 $0.01 20% of direct labor 

Operating materials

PAC consumption 3 lb PAC/M acfm * stack flow rate / 1E6 0.40 1.41

12 lb PAC/M acfm * stack 

rate / 1E6 

PAC cost $0.50/lb PAC * lb/hr PAC * 8760 hr/yr $1,742 $0.004 $6,176 $0.004

$1.15/lb PAC * lb/hr PAC *

8,760 hr/yr * 57? 

Maintenance

Maintenance labor 1 hr/shift * 3 shifts/d * $30/hr * 360 d/yr $32,400 $0.07 $32,400 $0.02

1 man‐yr at $60,500/yr * 0

man‐yrs 

Maintenance materials 100% of maintenance labor $32,400 $0.07 $32,400 $0.02 5% of direct capital cost 

Utilities

Electricity

0.000181 * stack flow rate * 5.15 in. H2O *

8,640 hr/yr * $0.0671/kWh $71,658 $0.16 $253,992 $0.16

(25 + 925) kW * $0.0665/k* 8,760 hr/yr 

Compressed air

1.5 scfm/1000 acfm * stack flow rate *

$0.25/1000 scf * 8,640 hr/yr * 60 min/hr $25,777 $0.06 $91,368 $0.06 ‐‐  

Ash disposal $40/ton ($0.02/lb) $2,142 $0.005 $22,882 $0.01

1,573,538 lb/yr * $0.05/lb

($100/ton) 

Total DAC $240,640 $0.55 $513,738 $0.33 

Indirect Annual Costs
Overhead 60% of labor & material $84,637 $0.19 $87,297 $0.06

30% of operating labor + 2of total labor & maint. ma

Administrative charges 2% of TCI $14,780 $0.03 $86,751 $0.06 2% of TCI Property tax 1% of TCI no change no change no change no change 1% of TCI Insurance 2% of TCI $14,780 $0.03 $86,751 $0.06 1% of TCI Capital recovery 0.10955 * TCI (9%, 20 yrs) $80,956 $0.18 $475,179 $0.31 0.14238 * TCI (7%, 10 yrs) Total IAC $195,153 $0.45 $735,978 $0.47 

Total Annual Cost $435,793 $0.99 $1,249,716 $0.80 
Revised PAC Capital Cost Estimates from NJ DEP, April 2, 2010

NJ DEP NJ DEP‐Vineland NJ DEP‐BL England I

Parameters Equations $/yr $/ton $/yr $/tonStack Flow Rate, acfm 132,600 132,600 470,000 470,000Capacity

MW 23 23 135 135Equiv/actual ton clinker/yr‐

revised 446,046 446,046 1,581,006 1,581,006Purchased equipment costs

PAC equipment 2005 $3,000/MW $80,423 $0.18 $472,046 $0.30Polishing baghouse 2005 $24,000/MW $643,382 $1.44 $3,776,370 $2.39

Total (A)

PAC + Pol.

BH $723,804 $1.62 $4,248,417 $2.69

Instrumentation 0.1A included includedSales tax & freight 0.08A included included

Total PEC (B) sum of PECs $723,804 $1.62 $4,248,417 $2.69Direct installation costs

Foundation & supports 0.04B $28,952 $0.06 $169,937 $0.11Handling & erection 0.50B included includedElectrical 0.08B $57,904 $0.13 $339,873 $0.21

Piping 0.01B included included

Insulation for ductwork 0.07B $50,666 $0.11 $297,389 $0.19

Painting 0.04B included included

Total DIC (C) 0.74B $137,523 $0.31 $807,199 $0.51Indirect costs (installation)

Engineering 0.10B included included

Construction & field expense 0.20B included included
Contractor fees 0.10B included included

Start‐up 0.01B included included

Performance test 0.01B included includedContingencies 0.03B included included

Total indirect costs (D) 0.45B $0 $0Total capital investment (TCI) E = B + C + D $861,327 $1.93 $5,055,616 $3.20Average TCI 2.56
Revised PAC Annual Cost Estimates from NJ DEP, April 2, 2010

NJ DEP NJ DEP‐Vineland 

Parameters Equations $/yr $/ton Stack Flow Rate, acfm 132,600 132,600 Capacity

MW 23 23 Equiv/actual ton clinker/yr‐revised 446,046 446,046 

Direct Capital Costs $861,327 $1.93Total Capital Investment $861,327 $1.93Direct Annual Costs

Operating labor

Direct labor 2 hr/shift * 3 shifts/d * $30/hr * 360 d/yr $64,800 $0.15 

Supervisory labor 15% of direct labor $9,720 $0.02 

Operating materials

PAC consumption 3 lb PAC/M acfm * stack flow rate / 1E6 0.40 PAC cost, updated $1.15/lb PAC * lb/hr PAC * 8760 hr/yr $4,007 $0.009 

Maintenance

Maintenance labor 1 hr/shift * 3 shifts/d * $30/hr * 360 d/yr $32,400 $0.07 Maintenance materials 100% of maintenance labor $32,400 $0.07 

Utilities

Electricity

0.000181 * stack flow rate * 5.15 in. H2O * 8,640 hr/yr *

$0.0671/kWh $71,658 $0.16 

Compressed air

1.5 scfm/1000 acfm * stack flow rate * $0.25/1000 scf * 8,640

hr/yr * 60 min/hr $25,777 $0.06 

Ash disposal $40/ton ($0.02/lb) $2,142 $0.005 

Total DAC $242,905 $0.54 
Indirect Annual Costs

Overhead 60% of labor & material $85,996 $0.19 Administrative charges 2% of TCI $17,227 $0.04 Property tax 1% of TCI no change

no

change

Insurance 2% of TCI $17,227 $0.04 Capital recovery, revised 0.0944 * TCI (7%, 20 yrs) $81,309 $0.18 Total IAC $201,759 $0.45 

Total Annual Cost $444,664 $1.00

Average cost/ton clinker ($1.00+$0.82)/2 0.91

Annual cost, excluding capital recovery $363,355 $0.81 

Average cost/ton

clinker(w/o CR) ($0.81+$0.52)/2 0.67
ACI Capital, Annual, and Annualized Capital Costs ($2005)

Total Cost ($)

Clinker Production

(tpy) Cost/Ton Clinker

Avg $/Ton Clinker

VL

plant BLE plant

VL

plant BLE plant

VL

plant

BLE

plant

TCI 861,327 5,055,616 446,046 1,581,006 1.93 3.20 2.56

                       

Annual Cost, excluding CR and carbon 359,348 801,902 446,046 1,581,006 0.81 0.51 0.66

Carbon ($/yr) 4,007 14,204 446,046 1,581,006 0.01 0.01 0.01

Capital Recovery (7%, 20yr) 81,309 477,250 446,046 1,581,006 0.18 0.30 0.24

Total Annualized Cost 444,664 1,293,356 446,046 1,581,006 1.00 0.82 0.91

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2007 Price Announcement 

December 1, 2006 - As the cost of energy, packaging, and coal 

continues to rise along with costs for employee healthcare and pensions, 

it is impossible for Norit Americas Inc. to maintain our current activated 

carbon pricing. Therefore, effective December 30, 2006, we will increase 

pricing for all products shipped after that date, regardless of the date the 

order was placed. 

View the Producer Price Index PDF for Basic Organic Chemicals with 

data shown from 1996 until present. This is the US Government Pricing 

Index that best mirrors our industry and is accepted by most companies. 

As you can see from this chart, between 1996 and 2002 the cost of 

producing basic organic chemicals (such as activated carbon) did not 

increase a significant amount (annual average). During those times Norit 

did not increase prices to any extent. 

From 2002 until 2005 the cost of producing basic organic chemicals 

increased over 56%. During that time, Norit improved its efficiency in 

carbon production. As a result of those efforts, we were able to minimize 

price increases. Over the past 18 months we instituted moderate price 

increases that have captured a small fraction of our cost increases. While 

those price increases have been helpful, they certainly have not recouped 

the tremendous cost increases we have experienced over the last four 

years in spite of our efficiency improvements. The year 2006 has been no 

exception to the latest trend as costs increased over 10% through 

October. Therefore, the action we are taking at this time is an important 

step, as we work toward a return to reasonable profitability. 

You may also be aware of the antidumping duties recently imposed on all 

steam-activated carbon imported from China. The effects of low market 

pricing caused by dumped Chinese imports have greatly contributed to 

the situation in which the carbon industry finds itself. However, as can be 

seen by the PPI, rising costs continue to be the major component of the 

need for price increases. 

We value the business you have entrusted to us and assure you that we 

are continuing our cost control efforts. We appreciate your patience and 

understanding during this challenging period. If you have questions 

please feel free to contact us at 800-641-9245. 

More Press Releases

FOR IMMEDIATE RELEASE Contact

Norit Americas Inc.

800-641-9245

Press Release - Norit Americas - 2007 Price Announcement Page 1 of 1

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