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 |Cortney_Higgins@omb.eop.gov 

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 |Charlotte Bertrand/DC/USEPA/US@EPA, Steven Silverman/DC/USEPA/US@EPA 

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 |Fw: DRAFT ISIS TSD for OMB 

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Keith W. Barnett

USEPA/OAQPS/SPPD/MMG

Mail Code D243-02

Research Triangle Park, NC 27711

919-541-5605

barnett.keith@epa.gov

----- Forwarded by Keith Barnett/RTP/USEPA/US on 07/29/2010 05:30 PM

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 |Elineth Torres/RTP/USEPA/US 

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 |Lisa Conner/RTP/USEPA/US@EPA, Ron Evans/RTP/USEPA/US@EPA, Charles 

Fulcher/RTP/USEPA/US@EPA, Ravi Srivastava/RTP/USEPA/US@EPA, Tom |

 |Walton/RTP/USEPA/US@EPA 

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 |DRAFT ISIS TSD for OMB 

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Keith,

Find attached the draft ISIS' TSD to be shared with OMB.

(See attached file: TSD ISIS NESHAP and NSPS with July 29.doc)

Elineth Torres

Environmental Protection Specialist

U.S. EPA

OAQPS/SPPD/Program Design Group

109 T.W. Alexander Dr.

Durham, NC 27711

Phone: 919-541-4347

Fax: 919-541-5600
i

DRAFT 

Technical Support Document

The Industrial Sectors Integrated Solutions (ISIS) 

Model and the Analysis for the National Emission 

Standards for Hazardous Air Pollutants and New 

Source Performance Standards for the Portland 

Cement Manufacturing Industry

U.S. Environmental Protection Agency

Sectors Policies and Program Division and

Air Pollution Prevention and Control Division

Research Triangle Park, NC 27711

July 2010
ii

Table of Contents

List of Tables...............................................................................................................................................iv

List of Figures...............................................................................................................................................v

Conversion Table – English Units to SI Units.............................................................................................ix

Chapter 1 Introduction ...............................................................................................................................1-1

1.1 The US Cement Industry............................................................................................................1-1

1.1.1 Cement Types and Categories............................................................................................1-1

1.1.2 Overview of the Cement Manufacturing Process ..............................................................1-2

1.1.3 Kiln Types and Their Use ..................................................................................................1-5

1.1.4 Portland Cement Production in the U.S. ............................................................................1-7

1.1.5 Imports of Portland Cement in the U.S..............................................................................1-8

1.1.6 Cement Demand Centers .................................................................................................1-10

1.2 Emissions from the U.S. Cement Industry and Applicable Regulations .................................1-10

1.3 Overview of ISIS .....................................................................................................................1-12

References for Chapter 1 .........................................................................................................................1-14

Chapter 2 ISIS Mathematical Framework .................................................................................................2-1

2.1 Indexes, Sets, and Mappings......................................................................................................2-3

2.2 Objective Function.....................................................................................................................2-4

2.3 Supply ........................................................................................................................................2-8

2.4 Production Capacity and Supply Costs....................................................................................2-10

2.5 Emissions.................................................................................................................................2-14

2.6 Controls and Costs...................................................................................................................2-16

2.7 Costs of Energy Efficiency Measures......................................................................................2-23

2.8 Policy Options..........................................................................................................................2-26

2.9 Optimization and Post-Processing ...........................................................................................2-27

References for Chapter 2 .........................................................................................................................2-28

Chapter 3 Input Data for ISIS-Cement Model...........................................................................................3-1

3.1 Data Requirements.....................................................................................................................3-1

3.2 Cement-Specific Data ................................................................................................................3-1

3.2.1 Industry, Fuel, and Emissions............................................................................................3-1

3.2.2 Control Technologies and Emission Abatement Approaches..........................................3-13

3.2.3 Policy and Economic Parameters.....................................................................................3-13

References for Chapter 3 .........................................................................................................................3-24

Chapter 4 Model Calibration .....................................................................................................................4-1
iii

4.1 Data for Calibration ...................................................................................................................4-1

4.2 Cement Prices in USGS Districts...............................................................................................4-1

4.3 Cement Production in USGS Districts.......................................................................................4-1

4.4 Cement Imports by Import Districts ..........................................................................................4-1

4.5 Calibration Methodology ...........................................................................................................4-5

4.6 Re-calibration of the Model .......................................................................................................4-5

References for Chapter 4 ...........................................................................................................................4-9

Chapter 5 Analysis and Results of the Portland Cement NESHAP and NSPS..........................................5-1

5.1 Affected Sources........................................................................................................................5-1

5.2 Emission Limits.........................................................................................................................5-2

5.3 Control Technologies.................................................................................................................5-3

5.4 ISIS Runs and Results................................................................................................................5-3

5.4.1 ISIS Results........................................................................................................................5-4

References for Chapter 5 .........................................................................................................................5-10

Disclaimer................................................................................................................................................5-11

Appendix A Andover Technology Partners and RTI International Memos .................................................1
iv

List of Tables

Table 1-1. Typical Average Heat Input by Cement Kiln Type ...........................................................1-5

Table 1-2. Number of Kilns by Kiln Type in the U.S. in 2005 and 2009 ...........................................1-6

Table 1-3. Largest Hydraulic Cement and Clinker Import Custom Districts in the U.S. in 2005.......1-9

Table 3-1. Summary of Kilns Modeled in the ISIS Cement Industry Model......................................3-1

Table 3-2. Portland Cement Demand in Millions of Metric Tons.......................................................3-4

Table 3-3. Bulk Shipment Costs (Cents per Metric Ton per Mile) .....................................................3-6

Table 3-4. Portland Cement and Clinker Imports in Million Metric Tons, by Customs District in 

2005...................................................................................................................................3-6

Table 3-5. Specific Fuel Consumption and Total Exhaust Gas Flow Rate (wet) for Various Kiln 

Types.................................................................................................................................3-9

Table 3-6. Estimated Uncontrolled NOX Emission Intensities for Cement Kilns.............................3-10

Table 3-7. Average SO2 Emissions for Each Kiln Type in Each State .............................................3-11

Table 3-8. Approximate CO2 and H2O Produced from Combustion of Fuels...................................3-12

Table 3-9. NOX Control Technologies for Cement Kilns..................................................................3-15

Table 3-10. SO2 Control Technologies for Cement Kilns...................................................................3-17

Table 3-11. CO2 Control Technologies for Cement Kilns ..................................................................3-19

Table 3-12. HCl, Hg, and THC Control Technologies for Cement Kilns...........................................3-20

Table 3-13. Multimedia Impacts of Process Capacity Replacement on Cement Kiln Operation1......3-20

Table 3-14. Energy Efficiency Measures for Raw Materials Preparation...........................................3-21

Table 3-15. Energy Efficiency Clinker Making Measures..................................................................3-22

Table 3-16. Energy Efficiency Measures for Finish Grinding ............................................................3-23

Table 3-17. Energy Efficiency Plant-wide Measures..........................................................................3-23

Table 4-1. Cement Prices ($/short ton) for Various USGS Districts...................................................4-2

Table 4-2. Cement Production (short tons) for Various USGS Districts ............................................4-3

Table 4-3. Cement Imports (except from Canada and Mexico) for Various Import Districts (short 

tons)...................................................................................................................................4-4

Table 4-4. Reported and Calculated Cement Prices in USGS Districts (2005)...................................4-6

Table 4-5. Reported and Calculated Cement Prices in USGS Districts (2006)...................................4-7

Table 4-6. Reported and Calculated Cement Prices in USGS Districts (2007)...................................4-8

Table 4-7. Aggregate production (reported and modeled) for 2005-2007 ..........................................4-8

Table 5-1. Final NESHAP Emission Limits........................................................................................5-2

Table 5-2. Final NSPS Emission Limits..............................................................................................5-2

Table 5-3. Control Technology and Control Efficiency Matrix by Pollutant......................................5-3

Table 5-4 Policy Impact on U.S. Cement Demand in 2013 ...............................................................5-4

Table 5-5 Policy Impact on U.S. Cement Production ........................................................................5-5

Table 5-6 Policy Impact on U.S. Cement Imports .............................................................................5-5
v

Table 5-6 Policy Impact on U.S. Cement Prices................................................................................5-5

Table 5-7 Control Technology Installation ........................................................................................5-6

Table 5-8 Control Cost......................................................................................................................5-6

Table 5-9 Cement Capacity................................................................................................................5-6

Table 5-10 Kiln Population ..................................................................................................................5-7

Table 5-11 Number of Cement Facilities.............................................................................................5-7

Table 5-12 Change in Employee Hours ...............................................................................................5-7

Table 5-13 PCA’s Labor Data: 2005 and 2008 ....................................................................................5-8

Table 5-14 Employment Impacts .........................................................................................................5-8

Table 5-15 Total Social Cost................................................................................................................5-8

Table 5-15 Emissions...........................................................................................................................5-9

List of Figures

Figure 1-1. Schematic of the Wet Cement Process...............................................................................1-3

Figure 1-2. Schematic of the Dry Cement Process with Cyclone Preheater.........................................1-4

Figure 1-3. Trends in Cement Kiln Type and Capacity in the U.S. (1995 to 2008).............................1-6

Figure 1-4. Portland Cement Plant Locations.......................................................................................1-8

Figure 1-5. Imports of Clinker and Cement from 1998 to 2008 (PCA, 2009a)..................................1-10

Figure 1-6. Portland Cement Facilities and O3 NAA, PM2.5 NAA, and Class 1 Areas......................1-12

Figure 1-7. An Integrated View of Pollution Generation Pathways, Emissions Abatement 

Approaches, and Multimedia Impacts for an Industrial Sector.......................................1-14

Figure 2-1. Consumer and Producer Surplus in a Market ....................................................................2-2

Figure 2-2. Broad Modules and Associated Information Flows Utilized in the ISIS Framework........2-2

Figure 2-3. Stepwise Calculation of the Demand Curve ......................................................................2-6

Figure 3-1. Distribution of Cement Kilns in the United States as of 2009...........................................3-3

Figure 3-2. Commercial Fuel Use Profile by U.S. Cement Industry in 2005.......................................3-8

Figure 5-1 ISIS Inputs: Portland Cement Facilities and Kilns Modeled in ISIS-Cement ...................5-1
vi

Acronyms and Abbreviations

ACI Activated Carbon Injection

AEO Annual Energy Outlook

APCA American Portland Cement Alliance

ARB Air Resources Board (see CARB)

ASD Adjustable Speed Drives

ASR Alkali-Silica Reactivity

ASTM American Society for Testing and Materials

AVC Average Variable Cost

AZ Arizona

BACT Best Available Control Technology

BAU Business As Usual

BLD Bag Leak Detector

BLS Bureau of Labor Statistics

BTS Bureau of Transportation Statistics

CA California

CARB California Air Resources Board

CC Carbon Capture 

CEMBUREAU European Cement Association based in Brussels

CEMS Continuous Emission Monitoring System

CGC Convert to Reciprocating Grate Cooler

CIF Cost, Insurance & Freight

CKD Cement Kiln Dust

CO Colorado

CO Carbon Monoxide

CO2 Carbon Dioxide

CSI Combustion System Improvement

DE Delaware

DLI Dry Lime Injection

EGFW Exhaust Gas Flow Rate (wet)

EIA Energy Information Administration

EMCS Energy Management and Control System

EMD Efficient Mill Drives

EMPC Energy Management and Process Control

EPA U.S. Environmental Protection Agency

ESP Electrostatic Precipitator

ETS Efficient Transport System

FL Florida
vii

FOM Fixed Operation and Maintenance

GA Georgia

GAMS General Algebraic Modeling System

GDP Gross Domestic Product

GHG Greenhouse Gas

H2O Water

HAP Hazardous Air Pollutant

HCl Hydrochloric Acid

HEC High-Energy Classifiers

HEM High Efficiency Motors

HERM High Efficiency Roller Mill

Hg Mercury

HPRP High-Pressure Roller Press

HRPG Heat Recovery for Power Generation

ID Idaho

IF Indirect Firing

IGMBM Improved Grinding Media (Ball Mills)

IL Illinois

IPCC Intergovernmental Panel on Climate Change

IPM International Petroleum Monthly

ISIS Industrial Sectors Integrated Solutions

KJ Kilojoules

LI Lime Injection

LNB Low NOX Burner

LWS Limestone Wet Scrubber

MBR Membrane Bags Retrofit

MI Michigan

MMBtu Million British Thermal Units

MO Missouri

MSA Mineralogical Society of America

MYB Minerals Yearbook (USGS)

NAA Nonattainment Area

NACT North American Cement Transportation

NAS National Academy of Science

NATA National Air Toxics Assessment

NC North Carolina

NEI National Emission Inventory

NESCAUM Northeast States for Coordinated Air Use Management
viii

NESHAP National Emission Standards for Hazardous Air Pollutants

NM New Mexico

NOX Oxides of Nitrogen

NSPS New Source Performance Standard

NRC National Research Council

NV Nevada

O&M Operations and Maintenance

OCAS Optimization of Compressed Air Systems

OGR Optimize Grate Cooler

OK Oklahoma

OMB U.S. Office of Management and Budget

OR Oregon

PA Pennsylvania

PC Pulverized Coal

PCA Portland Cement Association

PCVM Process Control Vertical Mill

PM Particulate Matter

PM Preventive Maintenance

PRB Powder River Basin

PSD Prevention of Significant Deterioration

RMB Raw Materials Blending

RMC Ready-Mix Concrete

RMTHEC Raw Materials Transport High Energy Classifiers

RTO Regenerative Thermal Oxidizer

SBH Slurry Blending and Homogenization

SC South Carolina

SCR Selective Catalytic Reduction

SFC Specific Fuel Consumption

SG&A Sales, General and Administration

SHLR Shell Heat Loss Reduction

SLC Salt Lake City

SNCR Selective Non-Catalytic Reduction

SOX Oxides of Sulfur

SPE Spatial Price Equilibrium

SR Seal Replacement

TDF Tire Derived Fuel

THC Total Hydrocarbons

TRAGIS Transportation Routing Analysis Geographical Information 

System
ix

USGS United States Geological Survey

UT Utah

WA Washington

WBCSD World Business Council for Sustainable Development

WDOT Washington State Department of Transportation

WMCCC Wash Mills with Closed Circuit Classifier

Conversion Table – English Units to SI Units

To Obtain From Multiply by

m ft 0.3048

m

2

ft29.29 × 10-2

m

3

ft32.83 × 10-2

°C °F 5/9 × (°F – 32)

kg lb 0.454

J/kg Btu/lb 1.33 × 10-4

m

3

/s cfm 4.72 × 10-4

m

3

/s gpm 6.31 × 10-5

J/kWh Btu/kWh 1055.056

mills $ 0.001

kg/m2in. Hg 345.31

metric ton short ton 0.907
1-1

Chapter 1

Introduction

In the National Academy of Science’s 2004 report, “Air Quality Management in the United States,” the 

National Research Council (NRC) recommended to the U.S. Environmental Protection Agency (EPA) 

that standard setting, planning, and control strategy development should be based on integrated 

assessments that consider multiple pollutants, and that these integrated assessments should be conducted 

in a comprehensive and coordinated manner (NAS, 2004). With these recommendations, EPA began to 

move toward establishing multipollutant and sector-based approaches to manage air quality and 

environmental protection. The benefits of multipollutant and sector-based analyses and approaches 

include the ability to identify optimum strategies (considering feasibility, costs, and benefits across all 

pollutant types such as criteria, toxics, and others), while streamlining administrative and compliance 

complexities and reducing conflicting and redundant requirements.

The development of policy options for managing emissions and air quality can be made more effective 

and efficient through sophisticated analyses of relevant technical and economic factors. Such analyses are 

greatly enhanced by the use of an appropriate modeling framework. Accordingly, the Industrial Sectors

Integrated Solutions (ISIS) model has been developed at EPA. Currently, the ISIS model is populated 

with US cement manufacturing data, and efforts are underway to build representations of the US pulp and 

paper sector and the US iron and steel sector. This document describes the framework of EPA’s ISIS 

model and its application to the US cement manufacturing industry and the analysis performed for the 

Portland Cement National Emission Standards for Hazardous Air Pollutants (NESHAPs) and the New 

Source Performance Standards (NSPS) for the Portland cement manufacturing industry.

1.1 The US Cement Industry

1.1.1 Cement Types and Categories

Cement is a finely ground powder which, when mixed with water, forms a hardening paste of calcium 

silicate hydrates and calcium aluminate hydrates. Cement is used in mortar (to bind together bricks or 

stones) and concrete (bulk rock-like building material made from cement, aggregate, sand, and water). 

Concrete production uses the majority of cement produced.

Portland cement and blended cement are used in concrete production, but Portland cement is by far the 

most common type of cement used for concrete production. By modifying the raw material mix and, to 

some degree, the temperatures utilized in manufacturing, slight compositional variations can be achieved 

to produce Portland cements with slightly different properties. In the U.S., the different varieties of 

Portland cement are denoted per the American Society for Testing and Materials (ASTM) Specification 

C-150. The ASTM standard C-150 recognizes eight types of Portland cement:

 Type I is for use in general construction (e.g., buildings, bridges, floors, etc.).

 Type IA is similar to Type I with the addition of an air-entraining agent.

 Type II generates less heat at a slower rate and has a moderate sulfate-attack resistance.

 Type IIA is similar to Type II with the addition of an air-entraining agent.

 Type III is used when concrete must set and gain strength rapidly.
1-2

 Type IIIA is similar to Type III with the addition of an air-entraining agent.

 Type IV has low heat of hydration and slow strength development.

 Type V is used when concrete must resist high sulfate concentration in soil and groundwater.

Portland cements are usually gray, but a more expensive white Portland cement (generally within the 

Type I or II designations) can be obtained by processing only raw materials with very low iron and 

transition-elements content. In addition to the eight types of Portland cement listed above, small volumes 

of specialty cements are also manufactured. Other types of specialty cement include blended cement 

(Portland cement mixed together with blast furnace slag or other pozzolan), pozzolan-lime cement, 

masonry cement, and aluminous cement (PCA, 2008a). The common industry practice, and that of the US

Geological Survey (USGS), includes, within the Portland cement designation, a number of other cements 

not within ASTM C-150, which are composed largely of Portland cement and are used for similar 

applications (e.g., concrete) (USGS, 2005). These cements include blended cement, block cement, 

expansive cement, oil well cement, regulated fast setting cement, and waterproof cement. Plastic cements 

and Portland-lime cements are being grouped within the masonry cement designation. Because Portland 

cement accounts for approximately 95% of the cement industry’s total production (van Oss, 2008), and 

because the costs and trends of this industry sector can be adequately captured by describing the market 

processes associated with the production, distribution, and use of Portland cement, in this work the focus 

is on Portland cement. In 2006, Portland cement’s market share in the U.S. was 94%, while masonry 

cement’s market share comprised the remaining 6% (USGS, 2007a).

1.1.2 Overview of the Cement Manufacturing Process

Portland cement is produced from raw materials such as limestone, chalk, shale, clay, and sand. These 

raw materials are quarried, crushed, finely ground, and blended to the correct chemical composition. 

Small quantities of iron ore, alumina, and other minerals may be added to adjust the raw material 

composition. The fine raw material is fed into a large rotary kiln (cylindrical furnace) where it is heated to 

extremely high temperatures [about 2640 °F (about 1450 °C)]. The high temperature causes the raw 

material to react and form a hard nodular material called “clinker”. Clinker is cooled and ground with 

approximately 5% gypsum and other minor additives to produce Portland cement. The main steps in the 

cement manufacturing process are illustrated in Figures 1-1 and 1-2 showing the wet process and the dry 

process with cyclone preheater. The schematic for a precalciner kiln would be very similar to that shown 

in Figure 1-2, with the addition of a calciner vessel.

The heart of the clinker production process is the kiln, which can be rotary or vertical shaft designs. 

Rotary kilns are commonly used in the U.S. and elsewhere. These kilns are 6-8 m in diameter and 60 m to 

well over 100 m long. The kilns are set at a slight incline and rotate at 1 to 3 revolutions per minute. The 

kiln is fired at the lower end and the feed materials move toward the flame as the kiln rotates. The 

materials reach temperatures between 1400-1500 °C in the kiln. Three steps occur with the raw material 

mixture during pyroprocessing. First, all moisture is driven off from the materials. Then the calcium 

carbonate in limestone dissociates into CO2 and calcium oxide (free lime) during calcination. Finally, the 

lime and other minerals in the raw materials react to form calcium silicates and calcium aluminates, the 

main components of clinker.
1-3

Figure 1-1. Schematic of the Wet Cement Process

Source: CEMBUREAU, 1999
1-4

Figure 1-2. Schematic of the Dry Cement Process with Cyclone Preheater

Source: CEMBUREAU, 1999
1-5

1.1.3 Kiln Types and Their Use

Rotary kilns are broadly categorized as dry- and wet-process kilns, depending on how the raw materials 

are prepared. Wet-process kilns are fed raw material slurry with moisture content ranging between 30 and 

40%. A wet-process kiln needs additional length to evaporate the water contained in the raw material 

feed. Nearly 33% additional kiln energy is consumed in evaporating the water in the slurry. 

In dry-process kilns, raw material is fed as dry powder. There are three major variations of dry-process 

kilns in operation in the U.S.: long dry kilns, preheater kilns, and preheater/precalciner kilns. In preheater 

kilns and preheater/precalciner kilns, the early stages of pyroprocessing occur before the materials enter 

the rotary kiln. Preheater and preheater/precalciner kilns have higher production capacities and greater 

fuel efficiency compared to other types of cement kilns. Table 1-1 shows heat input in terms of millions 

of British Thermal Units (MMBtu)/ton1of clinker for various types of kilns. As the data clearly 

demonstrate, preheater/precalciner kilns provide greater fuel efficiency. The replacement of wet and 

(certain) dry process kiln capacity with modern kiln processes can yield, theoretically, substantial 

reductions in fuel use due to fuel efficiency gains. As the industry moves toward more efficient processes, 

replacement of wet and long dry process capacity with more efficient kiln process technologies is

expected. 

Table 1-1. Typical Average Heat Input by Cement Kiln Type

Kiln Type

Heat Input,

MMBtu/ton of clinker

Wet 6.0

Long Dry 4.5

Preheater 3.8

Preheater/Precalciner 3.3

Source: EPA, 2007b (Table 3-3)

As expected, a recent trend in the cement sector has shown the replacement of lower capacity, inefficient 

wet and long dry kilns with bigger and more efficient kilns. This trend is expected to continue. In the 

U.S., the overall number of kilns decreased by 11% from 1995 to 2004. During the same period, total 

clinker production capacity increased by 18.6%. The Portland Cement Association (PCA) data show that 

average kiln capacity also increased by 27%, from 405,000 to 556,000 tons per year between 1995 and 

2004. The number of kilns operating in the U.S. in 2005 compared with the number of kilns in operation 

in 2009 is shown in Table 1-2. The trend in kiln design and average kiln capacity is shown in Figure 1-3.

 

1 PLEASE NOTE: for the purposes of this document, short tons will be referred to simply as “tons” and 

represents 2000 lbs. A unit conversion table is provided in the front matter of this document.
1-6

Table 1-2. Number of Kilns by Kiln Type in the U.S. in 2005 and 2009

Kiln Type Number of Kilns (2005) Number of Kilns (2009)

Wet 50 41

Dry 48 32

Preheater 36 29

Precalciner 47 66

Source: PCA, 2006 and 2009a

0

100

200

300

400

500

600

0

25

50

75

100

125

150

175

200

225

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Average Capacity, thousands of metric 

tons/year

Number of kilns

Dry Kilns Wet Kilns Average Kiln Capacity

Figure 1-3. Trends in Cement Kiln Type and Capacity in the U.S. (1995 to 2008)

Note: The PCA Plant Information Summary became biennial in 2004. The 2005 data were obtained by

personal communications between EPA and the PCA.

As reported by the USGS, in 2005, the U.S. Portland cement industry produced approximately 87 million

metric tons of clinker, of which 13.5% was produced by plants with wet process kiln systems while 81%

was produced by plants operating only dry kilns of all three types (long-dry, preheater and 

preheater/precalciner). The remaining 5.5% was produced by plants that operate both wet and dry kilns 

(USGS, 2007b: Table 7).
1-7

1.1.4 Portland Cement Production in the U.S.

The cement industry remains a vital industry in the U.S. and throughout the world. In the U.S., Portland 

cement is a $12 billion industry (van Oss, 2008). In 2005, the U.S. consumed a record 128 million metric 

tons of Portland cement (USGS, 2007b: Table 1).

In 2005, Portland cement was produced at 107 plants in the U.S., including 37 states and Puerto Rico. The 

locations of the clinker-producing Portland cement plant facilities in 2005 are shown in Figure 1-4. The 

cement manufacturing sector in the U.S. is concentrated among a relatively small number of companies, 

many of which are owned by or are subsidiaries of foreign companies (USGS, 2007b). Together, ten 

companies accounted for about 80% of the total cement production in U.S. for 2005 (USGS, 2007b).

California, Texas, Pennsylvania, Florida, and Alabama are the five leading cement-producing states, 

which accounted for about 43% of the total production in 2005 (USGS, 2007b: Table 3).

In 2009, PCA projected a capacity expansion of 27 million tons between 2008 and 2013, an 18% increase 

in existing capacity from 2006. PCA’s projected capacity expansions are to come from 23 kilns; 5 came 

on-line in 2008 and 18 more are expected to come on-line between 2009 and 2013 (PCA, 2009b). The 

investment in these projected capacity expansions is projected at $6.9 billion. Note that a typical project 

for a new facility (greenfield) from ground breaking to startup has a timeframe of about 2 to 3 years. 

Building a new kiln in an existing facility (brownfield) can take approximately 1 year (EPA, 2007b). If 

permitting for mining and (re)construction is accounted, a typical project can take as long as 4 to 6 years 

for a greenfield facility and up to 3 years for a brownfield facility (Staudt, 2009). 
1-8

Figure 1-4. Portland Cement Plant Locations

1.1.5 Imports of Portland Cement in the U.S.

Portland cement is not only produced and consumed domestically, but it is also traded internationally. In 

2005, the U.S. (not including Puerto Rico) produced 94 million metric tons of cement (USGS, 2007b:

Table 3) and imported 34 million metric tons of hydraulic cement and clinker (USGS, 2007b: Tables 3 

and 18). The level of imports to the U.S. is highly cyclical, with domestic producers importing primarily 

when domestic plants are at full capacity and cannot meet excess demand. Imports also occur when 

domestic producers seek to capture market share. Generally, imported cement and clinker make up 20 to 

27% of domestic cement consumption. In 2005, total imports of cement and clinker (especially clinker) 

increased, owing to continued high demand; imported cement accounted for about 24% of the total 

cement sales in the U.S. (USGS, 2007b).

In 2005, the ten leading international cement and clinker suppliers to the U.S. were, in descending order, 

Canada, China, Thailand, Greece, the Republic of Korea, Venezuela, Mexico, Colombia, Taiwan, and 
1-9

Sweden. The ten busiest ports of entry within customs districts existing in 2005 were, in descending

order, New Orleans, Tampa, Los Angeles, Houston-Galveston, San Francisco, Miami, Seattle, Detroit, 

New York, and Charleston (South Carolina) (USGS, 2007b). Table 1-3 shows the major customs districts 

for hydraulic cement and clinker imports in the U.S. Figure 1-5 shows the imports of clinker and cement 

from 1998 to 2008. 

Table 1-3. Largest Hydraulic Cement and Clinker Import Custom Districts in the U.S. in 2005

Custom District

Import of Hydraulic Cement and Clinker Percentage 

of Total US 

Imports thousands of metric tons thousands of tons

New Orleans, LA 4,095 4,514 12.31

Tampa, FL 3,478 3,834 10.46

Los Angeles, CA 3,053 3,365 9.18

Houston-Galveston, TX 2,619 2,887 7.87

San Francisco, CA 2,363 2,605 7.10

Miami, FL 2,265 2,497 6.81

Seattle, WA 1,489 1,641 4.48

Detroit, MI 1,317 1,452 3.96

New York, NY 1,264 1,394 3.80

Charleston, SC 1,102 1,215 3.31

Total 23,046 25,404* 69.29%

* rounding, original data in metric tons

Source: USGS, 2007b (Table 18)
1-10

Figure 1-5. Imports of Clinker and Cement from 1998 to 2008 (PCA, 2009a)

1.1.6 Cement Demand Centers

Because of the relatively high transportation costs, the U.S. cement industry is structured around statespecific cement demand centers. PCA reports that the vast majority of cement produced in the U.S. is 

being transported less than 300 miles by truck due to cement's low value by weight and high cost of 

transport (PCA, 2005). However, cement may be transported over longer distances, especially when the 

less expensive rail and water transportation modes are available (APCA, 1997). 

1.2 Emissions from the U.S. Cement Industry and Applicable Regulations

Criteria pollutants, hazardous air pollutants, and carbon dioxide (CO2) are released during cement 

manufacturing. Nitrogen oxide (NOx) emissions from cement kilns result primarily from the combustion 

process: oxidation of fuel nitrogen (fuel NOx) and the oxidation of nitrogen in the combustion air (thermal 

NOx). EPA’s 2005 National Air Toxics Assessment (NATA) Inventory reports that cement kilns released 

181,000 metric tons (200,000 short tons) of NOX emissions from the combustion of fuels (EPA, 2009).

Sulfur dioxide (SO2) emissions2from cement kilns result from the combustion of sulfur-bearing 

compounds in coal, oil, and petroleum coke, as well as sulfur compounds in raw materials. Sulfur in the 

fuel will oxidize to SO2 during pyroprocessing and a significant amount is likely to be captured in the 

form of sulfates as the flue gas passes through the calcination zone. Compared to long dry and wet kilns, 

preheater and precalciner kilns tend to be more effective at capturing fuel-generated SO2. Accordingly, 

 

2

Small amounts of SO3 may be released in addition to bulk SO2 but the SO3 emissions are treated as SO2for computational 

purposes. Small amounts of CO may be released in addition to bulk CO2 but CO emissions are treated as CO2for computational 

purposes.
1-11

oxidation of sulfur in the feed materials is likely to be the major component of total SO2 emissions. The 

2005 NATA Inventory reflects that cement kilns released 133,000 metric tons (147,000 short tons) of SO2

emissions in 2005. 

Particulate matter (PM) emissions result from quarrying operations (the crushing and grinding of raw 

materials and clinker) as well as kiln line operations. The 2005 NATA Inventory estimates show that, in 

2005, cement kilns released 10,000 tons of PM10 emissions. The cement industry is also a source of HAPs 

(e.g., hydrochloric acid vapor and chlorine), as well as metals including but not limited to mercury, 

antimony, cadmium, and lead (EPA, 2008).

The cement manufacturing process is also a source of carbon dioxide (CO2) emissions. CO2 emissions are 

a product of the combustion of fuel as well as the calcination of the limestone in the raw meal. The CO2

from fuel combustion can be calculated from heat input and fuel characteristics combined with clinker 

production. The CO2 from calcination can be calculated taking into account the amount of limestone used 

as a source of clinker calcium. Limestone currently is the predominant source of calcium for the clinker. 

Pure limestone would produce 0.44 tons of CO2 for every ton of limestone completely calcined to calcium 

oxide. Substitute materials may be used in lieu of limestone with the effect of reducing the CO2 emissions

from clinker production. The CO2 emissions reduction would be proportional to the amount of substitute 

materials added. 

Multiple regulatory requirements to reduce criteria air pollutants and HAPs emissions currently apply to 

the cement industry sector. The New Source Performance Standards (NSPS) and the National Emissions 

Standards for Hazardous Air Pollutants (NESHAPs) are two of the federal requirements that apply to 

cement facilities. Additionally, state and local regulatory requirements might apply to individual cement 

facilities depending on their locations. In 2008, 44 cement facilities were located within ozone (O3) 

nonattainment areas (NAA), while 20 facilities were within PM2.5 nonattainment areas. Seventeen 

facilities were found to be located in (or within 30 miles of) Class 1 areas, as shown in Figure 1-6. Class 1

areas are areas of special natural, scenic, recreational, or historic (national or regional) value for which the 

Prevention of Significant Deterioration (PSD) regulations provide special protection.
1-12

Figure 1-6. Portland Cement Facilities and O3 NAA, PM2.5 NAA, and Class 1 Areas

1.3 Overview of ISIS

ISIS, a sector-based dynamic programming model, will facilitate the analyses of emission reduction 

strategies for multiple pollutants while taking into account plant-level economic and technical factors 

such as the type of emission units (for cement –kiln), associated capacity, location, cost of production, 

applicable controls, and their costs. For each of the emission reduction strategies under consideration, the 

model is able to provide information on the following: 

 Optimal (least cost) industry operation.

 Cost-effective controls to meet the demand for cement.

 Emission reduction requirements over the time period of interest.
1-13

ISIS design allows for incorporating multiple industries within a multi-market, multi-product, 

multipollutant, and multi-region emissions trading framework. The objective function in ISIS maximizes 

total surplus and uses an elastic formulation of the demand function to estimate area under the demand 

curve.

The ISIS code is written in the General Algebraic Modeling System (GAMS) language. Input data, 

organized in various spreadsheets of a Microsoft Excel workbook, are passed on to the GAMS files. 

These input data consist of an industry database, which provides unit-level production, capacity, 

production cost, and emissions information. The controls database provides information regarding 

applicable air pollution control technologies and their cost and emission control characteristics. A policy 

module is used to specify various parameters of interest to the policy analyst, such as emissions cap, 

emission reduction scenarios, and discount rate. The input data, control data, and policy parameters are 

then transmitted to the optimization part of the ISIS model, where they are used to solve the selected base 

and policy cases. After solving, the results are post-processed to calculate values of various outputs of 

interest. The output data are exported to Excel spreadsheets for further analyses and graphical 

representation of selected results.

Within an industrial sector, generally emissions arise from four pathways: (1) on-site emissions due to 

combustion of fossil fuels for energy at plants; (2) on-site emissions due to processing of certain raw 

materials (e.g., limestone calcination in cement plants, non-energy uses of fossil fuels in chemical 

processing and metal smelting); (3) off-site emissions due to combustion of fossil fuels at power plants to 

generate the electricity needed by the industrial sector; and (4) overseas emissions associated with 

imports. These pathways are depicted in Figure 1-7.

Also shown in Figure 1-7 are the potential options for abating emissions from industrial sectors and 

multimedia impacts. The options shown in green are pollution prevention measures and the ones in red 

are mitigation measures. Clearly, the integrated picture presented in Figure 1-7 makes a compelling case 

for considering commodity production/supply activities along with emissions while developing holistic 

emission reduction strategies. While developing the ISIS framework, care has been taken to build the 

emission pathways and abatement options shown in Figure 1-7. Example emission reduction policies that 

can be evaluated using ISIS are:

 Criteria pollutants (NOX, SO2, PM, CO) –emission limits and/or cap-and-trade.

 Hazardous Air Pollutants (e.g. Hg, HCl) – emission limits.

 CO2 – cap-and-trade and/or emission taxes.

 Long and short time horizons: CO2 (decades), criteria pollutants (annual).

 Regional or national requirements.
1-14

Pollution Controls (NOx, SO2,PM, 

CO2, VOC, .. )

Industrial 

Plants

Improvements

Fuel(s)

Pollution Reduction Policy 

(Rate-based, cap-and-trade, 

emission taxes)

Air emissions

Product(s)

Product Substitution

Fuel Substitution/ 

Reduction (NOx, SO2, PM, 

CO2, ...)

Raw Materials 

Raw Material Substitution

Electricity

Change in use (Power 

plant emissions)

Water

Waste 

Market(s)

Imports

(Overseas emissions)

Figure 1-7. An Integrated View of Pollution Generation Pathways, Emissions Abatement 

Approaches, and Multimedia Impacts for an Industrial Sector

References for Chapter 1

APCA (1997). Comments on EPA’s Draft Economic Analysis of Air Pollution Regulations for the 

Portland Cement Industry (May 1996), prepared for American Portland Cement Alliance by 

Environomics, January 29, 1997.

CEMBUREAU (1999). Best Available Techniques for the Cement Industry, CEMBUREAU Report, The 

European Cement Association, December 1999. D/1999/5457/December, Brussels. 

http://www.cembureau.be

EPA (1998). June 1998. Regulatory Impact Analysis of Cement Kiln Dust Rulemaking. Washington, DC: 

U.S. Environmental Protection Agency. 

http://www.epa.gov/osw/nonhaz/industrial/special/ckd/ckd/ckdcostt.pdf, accessed October 21, 2008. 

EPA (2007a). Personal communication from Alvaro Linero, Florida Department of Environmental 

Protection to Keith Barnett, US EPA, on December 4, 2007.

EPA (2007b). Alternative Control Techniques Document Update – NOX Emissions from New Cement 

Kilns. EPA-453/R-07-006, November 2007. http://www.epa.gov/ttn/catc/dir1/cement_updt_1107.pdf, 

accessed October 21, 2008.

EPA (2008). AP 42, Fifth Edition, Compilation of Air Pollutant Emission Factors, Volume I, Chapter 11: 

Mineral Products Industry. http://www.epa.gov/ttn/chief/ap42/ch11/final/c11s06.pdf, accessed October 

21, 2008. Complete document: http://www.epa.gov/ttn/chief/ap42/, accessed October 21, 2008. 
1-15

EPA (2009). EPA 2005 National Air Toxics Assessment Inventory. U.S. Environmental Protection 

Agency. October 2009.

NAS (2004). Air Quality Management in the United States. National Research Council (U.S.), Committee 

on Air Quality Management in the United States, National Academies Press, Washington, 2004. 

http://books.nap.edu/catalog.php?record_id=10728, accessed October 21, 2008.

PCA (2005). Letter from David S. Hubbard, Director, Legislative Affairs, Portland Cement Association. 

RE: Hours of Service of Drivers; Proposed Rule (Docket Number FMCSA-2004-19608), March 10, 

2005. http://www.cement.org/exec/DHOS%20Comments%203.10.05.pdf, accessed October 21, 2008. 

PCA (2006). U.S. and Canadian Portland Cement Industry: Plant Information Summary. Portland Cement 

Association, Skokie, IL, 2006.

PCA (2008a). History & Manufacture of Portland Cement. Portland Cement Association. 

http://www.cement.org/basics/concretebasics_history.asp, accessed October 21, 2008.

PCA (2008b). Practical Application of PCA Economic Forecast and Market Assessments. Portland 

Cement Association, Education & Training, August 12-13, 2008, Skokie, IL. (Ed Sullivan PowerPoint 

presentation).

PCA (2008c). Forecast Report: Long-Term Cement Consumption Outlook. By Ed Sullivan January 31, 

2008. http://www.cement.org/econ/pdf/Long-TermFlashwinter2007nonmember.pdf, accessed October 21, 

2008. 

PCA (2009a). PCA Annual Yearbook 2009. North American Cement Industry. Portland Cement 

Association.

PCA (2009b). PCA Capacity Report. Flash Report. Portland Cement Association’s Economic Research 

Department. Updated October 19, 2009.

Staudt, J. (2009). NOX, SO2 and CO2 Emissions from Cement Kilns. Andover Technology Partners, 

Memorandum to Ravi Srivastava, March 10, 2009.

USGS (2005). Background Facts and Issues Concerning Cement and Cement Data. U.S. Geological 

Survey, Open-File Report 2005-1152. http://pubs.usgs.gov/of/2005/1152/2005-1152.pdf, accessed 

October 21, 2008.

USGS (2007a). Mineral Commodity Summaries. pp. 40-41, January 2007, 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/cemenmcs07.pdf, accessed September 24, 

2009.

USGS (2007b). 2005 Minerals Yearbook: Cement. U.S. Geological Survey, p. 16.2, February 2007, 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/cemenmyb05.pdf, accessed September 24, 

2009.

van Oss, H.G. (2008). Personal communication from Hendrik G. van Oss, USGS, to Elineth Torres, US 

EPA, on July 7, 2008.
1-16

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2-1

Chapter 2

ISIS Mathematical Framework

ISIS is a sector-based dynamic linear programming model that can determine optimal sector operation for 

meeting demand and pollution reduction requirements over specified time periods. The objective in an 

ISIS simulation is to maximize total surplus (see Figure 2-1) over a horizon of interest for an industry, 

which, in general, can be a multi-product one.

The general concept of spatial price equilibrium (SPE) in a network, where the mutual influences of 

production, transportation, and consumption patterns are given full consideration, has been developed 

over the past six decades. In SPE network models, interregional economies are simulated by finding the 

balance of demand, supply, and trade that will result in competitive market equilibrium among the 

regions. Enke (1951) first demonstrated how the cost of transportation might be included in an 

equilibrium analysis of spatially separated markets by means of analogy with resistance to the flow of 

current in an electric circuit. Shortly after Enke, Samuelson (1952) analyzed interregional flows of 

commodities and market equilibrium using a linear programming formulation. In this type of formulation, 

the equilibrium for each market of a sector is equivalent to the quantities and prices that result while 

maximizing the sum of consumer and producer surpluses for each market of the sector. This sum is 

referred to as the total surplus or net social payoff of the sector; McCarl and Spreen (1980) provide 

interpretation and justification. The linear programming formulation of the SPE problem was developed 

by Duloy and Norton (1975).

Using Figure 2-1, the definition of the suppliers’ surplus corresponding to a quantity Q of a commodity is 

the difference between the total revenue and the total cost of supplying the commodity. This surplus 

(gross profit) is given by the area under the horizontal line P1-P minus the area under the inverse supply 

curve up to point P. Similarly, the consumers’ surplus corresponding to a quantity Q is given by the area 

under the inverse demand curve up to point C minus the area under the horizontal line C1-C. This area is 

the cumulative opportunity gain of all consumers who purchase the commodity at a price lower than the 

price they would have been willing to pay. It is evident from Figure 2-1 that the total surplus is 

maximized exactly when Q is equal to the equilibrium quantity QE. This is a very useful result, as it 

provides a method for computing the equilibrium.

The total surplus concept has long been a mainstay of social welfare economics because it takes in to 

account the interests of both consumers and of producers (Samuelson and Nordhaus, 1977).

The broad modules and associated information flows utilized in the ISIS framework are shown in Figure 

2-2. While ISIS structure permits accounting for multiple products, the description below is provided 

relative to one product to bring out the important elements of the formulation and not burden the reader 

with many details. Also, to make the description more readable and understandable, the input data (i.e., 

those supplied by the user, or derived from user-supplied data) are shown in bold and the variables, 

whose values are determined in the optimization process, are shown in italics. This scheme helps in 

organizing the numerous data elements and variables, and hopefully makes it easier for the reader to 

relate the data element to descriptions in the previous chapters. Finally, the names of variables and data 

elements have been chosen to be self-explanatory as far as possible.
2-2

Price

Supply curve

Quantity

Demand curve

Equilibrium

Consumer

surplus

Producer

surplus

C1

P1

Q QE

P

C

Figure 2-1. Consumer and Producer Surplus in a Market

Figure 2-2. Broad Modules and Associated Information Flows Utilized in the ISIS Framework
2-3

2.1 Indexes, Sets, and Mappings

Before we start the description of the mathematical structure of ISIS, it is helpful to define the sets of 

relevant entities and mappings describing the relationships among various entities. 

Indexes (one-dimensional sets)

 ISIS data structures (sets and parameters), variables, and equations use the following indexes:

 t is the set of years in the time horizon of interest;

 i is the set of all units, including existing, replacement, expansion, and new units. Subsets of i

described below define more-specific populations of units;

o iE(i) is the set of existing units

o irepl(i) is the set of replacement units

o iExp(i) represents the set of expansion units

o iNew(i) represents the set of new units

 f is the set of fuels applicable to the sector;

 m is the set of raw materials specific to the sector;

 j is the set of sector-specific pollutants of interest;

 k is the set of sector-specific controls relevant to the emission reduction policy of interest;

 ee is the set of energy efficiency measures; and

 r is the set of geographic regions where units are located.

Mappings

The mappings used in ISIS are:

 ri(i,r) is the mapping relating a unit i to its geographic location r;

 poltikjee(t,i,k,j,ee) is the mapping relating availability, applicability, and the ability to change 

emissions of controls k and energy efficiency measures ee to unit i, pollutant j, and year t;

 poltik(t,i,k) is the mapping relating availability and applicability of controls k to unit i and year t;

 poltiee(t,i,ee) is the mapping relating availability and applicability of energy efficiency measures ee

to unit i and year t;

 poltirk(t, ri(i,r),k) is the mapping relating availability and applicability of controls k to unit i located 

in geographic region r and year t; and
2-4

 poltiree(t, ri(i,r),ee) is the mapping relating availability and applicability of energy efficiency 

measures ee to unit i located in geographic region r and year t.

2.2 Objective Function

As mentioned above, the objective function solved in the ISIS model corresponds to maximizing the total 

surplus (or minimizing the negative of the total surplus) for the sector of interest over the selected time 

horizon. This objective function is:

 

























  

  

 

 

 

 

  

t d c

t,j

t,i,ee

t,i,k

t,id

t,dc

t,i

price(t,dc) ddemand(t,dc)

totalemissions(t,j)

teemeasurescost(t,i,ee)

tcontrolcost(t,i,k)

timportscost(t,id)

ttranscost(t,dc)

z tannualprodncost(t,i)

dis(t)

dis(t) alprice(t, j)

dis(t)

dis(t)

dis(t)

dis(t)

Minimize dis(t)

(2.2.1)

where the quantities appearing in the equation above are defined for year t as follows,

dis(t) is the discount factor,

tannualprodncost(t,i) is the annual production cost ($) for production unit i,

ttranscost(t,dc) is the cost ($) of transporting the product to demand center dc,

timportscost(t,id) is the cost ($) of importing foreign product in import district id,

tcontrolcost(t,i k) is each unit’s total control cost ($) using control technology k,

teemeasurescost(t, i, ee) is each unit’s total cost ($) using the energy efficiency measures ee,

alprice(t,j) is the allowance price input by the user, 

totalemissions(t,j) is emission of pollutant j from the sector, 





dc

price(t, dc) ddemand(t, dc)

is the area under the demand-price curves for all markets dc.
2-5

Note that in the objective function the term with alprice(t,j) comes into effect only if the user provides 

values for alprice(t,j). If these values are specified, the model runs as described under the “Allowance 

Price Inputs” in a later section.

A stepwise approximation of the demand curves (FPL-PELPS, 2003) is used in ISIS so that relevant area 

can be computed in a linear programming scheme. This approximation is explained below.

Stepwise Approximation of Demand Curves in ISIS

For clarity, the subscripts t and dc corresponding to time and demand center are dropped in the following 

explanation. 

The relationship between demand and price in a market dc is expressed as

σ

1

D0

P0 













D

P(D)

(2.2.2)

where

D is the demand for the commodity with corresponding price P(demand);



is the elasticity of demand relative to price;

D0 and P0 are the initially-specified demand quantity and price, respectively.

Figure 2-3 shows a representation of the above equation and also reflects how a stepwise approximation 

of the price-demand curve can be created.
2-6

P(d1)

P(d2)

P(d3)

P(d4)

P0

Dmin D0 Dmax

d1 d2 d3 d4

P(D)

Dwid

Dwid

Price

Quantity

Figure 2-3. Stepwise Calculation of the Demand Curve

First the range of the demand-price curve is defined using 

Dmin  D0(1- range)

(2.2.3)

Dmax D0(1 range)

(2.2.4)

where,

range is a user-supplied parameter with value between 0 and 1. This parameter defines the interval 

Dmin - Dmax within which the new equilibrium demand quantity is expected to be found. Note range 

should be large enough to ensure that the solution does fall in the interval Dmin - Dmax. On the other 

hand a smaller value of range can increase precision of the stepwise approximation. In ISIS a value 

of 0.5 is used for range.

Next, a series of steps is defined within the interval Dmin - Dmax with the width of each step given by

Number of steps

D - D

dwidth max min

(2.2.5)

where,

Number of steps is another user-supplied parameter. Increasing the value of this parameter will 

increase precision of the stepwise approximation, but will increase the model size. In ISIS, a value of 

100 is used for Number of steps.
2-7

Now the demand quantity at the center of the slice dstep inside the interval is

2

dwidth (2 dstep-1) D Dmin

dstep  

 

(2.2.6)

Using the above information, the price-demand curve is determined

σ

1

dstep

dstep

D0

D

P D P0 















( ) 

(2.2.7)

Finally, the approximated area under the price-demand curve is

( )

dstep dstep D P D

Numberof steps

dsteps 1





(2.2.8)

Substituting (2.2.8) in (2.2.1), the objective function becomes

 

























  

  

 

 

 

 

  

t d c dstep

t,j

t,i,ee

t,i,k

t,id

t,dc

t,i

demand t dc dstep

totalemissions(t,j)

teemeasurescost(t,i,ee)

tcontrolcost(t,i,k)

timportscost(t,id)

ttranscost(t,dc)

z tannualprodncost(t,i)

dis(t) P(demand(t,dc,dstep)

dis(t) alprice(t, j)

dis(t)

dis(t)

dis(t)

dis(t)

dis(t)

,

( , , )

Minimize

(2.2.9)

The above objective function is minimized with the constraints and related equations described in the 

following sections to arrive at the relevant optimum solution. 

Equation (2.2.7) is used to generate the price-demand curves for all time periods and demand centers. 

However, this equation needs specifications of one point on each demand function in each time period 

[i.e., {P0(t, dc), D0(t, dc)}]. To determine such points, a single run of the inelastic version of the ISIS 

model [with exogenous D0(t, dc)] is made and then the resulting shadow prices P0(t, dc) are used in 

Equation (2.2.7) to generate price-demand curves for all time periods and demand centers. These curves 

are used in the last term of the objective function and in the supply constraint, Equation (2.3.1), presented 

in the next section.
2-8

2.3 Supply

The demand for a commodity in a market can be satisfied by domestic production and foreign imports as 

follows:

 ( , , )  ( , , )   ( , , ).

i id dstep

prodnquantity t i dc importedquantity t id dc demand t dc dstep

(2.3.1)

where,

prodnquantity(t,i,dc) is the quantity supplied from the domestic production unit i to demand center dc

in year t, 

importedquantity(t,oi,id,dc) is the quantity of commodity received from the origin (country) of 

imports oi at the domestic import district id and supplied from that district to demand center dc in 

year t, and

demand(t, dc,dstep) is the demand for the commodity at the dstepth level of the price-demand curve 

for the demand center dc in year t. The construction of the price-demand curves has been explained 

above.

Note that transportation of quantity from production units and import districts to demand centers is 

implicit in the above equation. 

The sum of all quantities in year t supplied from a kiln i to various demand centers dc must equal the 

production level of unit i in that year. Then,

prodnquantity(t,i,dc) prodn(t,i).

d c

 

(2.3.2)

where

prodn(t, i) is the production level (tons/year) of manufacturing unit i in year t. Note that, in general, 

production can be from existing units, units added at a plant (i.e., expansion units), newer units

replacing units at a plant (i.e., replacement units), and new kilns. Treatment of these is explained in a 

subsequent section.

Production of a unit is constrained by its capacity. So,

prodn(t,i)  capacity(t,i).

(2.3.3)

where

capacity(t, i) is the capacity (tons product/year) of manufacturing unit i in year t.

The sum of all imported quantities supplied from an import district id to various demand centers dc in 

year t must equal the imports available at that import district in that year. Then,

  

d c o i istep

importedquantity(t,id,dc) Imports(t,oi id,istep)

,

,

(2.3.4)
2-9

where

Importedquantity(t,id,dc) is the imported quantity supplied from import district id to demand center 

dc in year t, and

Imports(t,oi,id,istep) is the imported quantity available at the import district id in year t at the istepth

level of the imports curve for country oi. Construction of the country (or region) and import district 

specific imports-cost curves is explained below.

Stepwise Approximation of Imports Curves in ISIS

The treatment of imports is similar to the treatment for elastic demand curves. Again, for clarity, the 

subscripts t, oi, and id corresponding to time, origin of imports, and import district are dropped in the 

following explanation. 

The relationship between imports arriving from oi at id and their price is expressed as



1

Imports0

Iprice0 

















Imports Iprice(Imports)

(2.3.5)

where

Imports is the imports of the commodity arriving from oi at id with corresponding imports price 

(value) Iprice



is the elasticity of imports relative to imports price.

{Imports0, Iprice0} is a point on the applicable quantity-price curve.

First the range of the imports-price curve is defined using 

I Imports0 (1 - range) min  

(2.3.6)

I Imports0 (1 range) max  

(2.3.7)

where

range is a user-supplied parameter with value between 0 and 1. This parameter defines the interval 

Imin - Imax within which the new equilibrium imports quantity is expected to be found. Note range

should be large enough to ensure that the solution does fall in the interval Imin - Imax. On the other 

hand a smaller value of range can increase precision of the stepwise approximation. In ISIS a value 

of 0.5 is used for range.

Next, a series of steps is defined within the interval Imin - Imax with the width of each step given by

Number of steps

I -I

Iwidth max min 

(2.3.8)

where
2-10

Number of steps is another user-supplied parameter. Increasing the value of this parameter will 

increase precision of the stepwise approximation, but will increase the model size. In ISIS, a value of 

100 is used for Number of steps.

Now the import quantity at the center of the slice istep inside the interval is

2

Iwidth (2 istep-1) Imports Imin

istep  

 

(2.3.9)

Using the above information, the imports-price curve is determined



1

istep

istep

Imports0

Imports Iprice Imports Iprice0 















( ) 

(2.3.10)

Equation (2.3.10) is used to generate the imports-cost curves for all time periods, origins of imports, and 

import districts. However, this equation needs specifications of one point on each import function in each 

time period [i.e., {Iprice0(t, oi, id), Imports0(t, oi, id)}]. To determine such points, a single run of the 

inelastic version of the ISIS model [with exogenous Imports0(t, oi, id) corresponding to capacities of 

import districts] is made and then the resulting Iprice0(t, oi, id) are used in Equation (2.3.10) to generate 

the imports-cost curves for all time periods, origins of imports, and import districts.

2.4 Production Capacity and Supply Costs

The ISIS model includes constraints for ensuring that endogenous production capacity changes occur in a 

realistic way. This section describes how the capacity changes take place in the ISIS framework and the 

treatment of related costs. Note that various cost elements [e.g., capital cost of a unit ($/ton clinker) in the 

cement sector] are escalated appropriately to reflect values in years of interest.

Production Capacity Related Constraints

Added capacity in year t is given by

i irepl(i) iExp(i) iNew(i).

vyear(v) tyear(t) (vyear(v) techlifepl ants);

capacity(t,i);

  

  

  

v

addcap(t,i) tcap(t,i,v)

(2.4.1)

where

v is the set of vintages of unit i,

vyear(v) and tyear(t) are parameters with values corresponding to years in the selected time horizon, 

tcap(t,i,v) is a binary variable that can bring v

th vintage of unit i online in year t, and

techlifeplants is the technical life of a unit.
2-11

Only one vintage of a unit is possible for the period starting when the vintage comes on line and ending 

with its technical life.

i irepl(i) iExp(i) iNew(i).

vyear(v) tyear(t) [(vyear(v) + techlifeplants];

t,v

  

 

tcap(t,i,v)  1;

(2.4.2)

The annual costs associated with meeting the demand for the commodity include: (1) annualized capital 

costs associated with capacity growth (i.e., replacement units, expansion units, and new capacity) and 

projected units; (2) annual fixed operation and maintenance (FOM) costs; (3) annual variable costs 

associated with use of labor, raw material, fuel, electricity, and operation and maintenance; (4) annual 

transportation costs; and (5) annual cost of imports. These costs are described below.

Capital Recovery

If the existing units are paid for and do not have capital recovery costs, then

plantcapcost(t,i)  0; iiE(i).

(2.4.3)

where 

plantcapcost(t,i) is the annual capital cost of a unit.

For projected units, for which startup date is known, annual capital cost is given by

 .

;

tstart(i) tyear(t) (tstart(i) ecolifeplants); i iP(i)

CRFplant capacity(t,i) pcapcostt(t,i)

   

plantcapcost(t,i)  

(2.4.4)

where

pcapcostt(t,i) is the capital cost (e.g., $/ton of clinker for the cement sector) of i

th unit in year t, and

CRFplant is the capital recovery factor calculated using an appropriate interest rate and time period, 

ecolifeplants, for capital recovery.

Annual capital costs for all populations except existing and projected is

(  .

( , , ) ;

vyear(v) tyear(t) vyear(v) ecolifeplants); i irepl(i) iExp(i) iNew(i)

vcapcostt(v,i) capacity(t,i)

     

    

v

plantcapcost(t,i) tcap t i v CRFplant

(2.4.5)

where 

vcapcostt(v,i) is the capital cost (e.g., $/ton of clinker for the cement sector) of vintage v for the i

th

unit. 
2-12

Variable Costs

The annual variable cost at a unit is calculated using

 

( , ) .

( , )

 

     

s w

f c t i H2Oconsumptncost(t,i) SWdispcost(t,i,SW)

varcost(t,i) RMTt(t,i) VOMt(t, i) LBRt(t,i) ELCt(t, i) prodn t i

(2.4.6)

where

RMTt(t,i) is the raw material cost ($/ton product) at unit i in year t,

VOMt(t,i) is the cost of operation and maintenance ($/ton product) at unit i in year t,

LBRt(t,i) is the cost of labor ($/ton product) at unit i in year t,

ELCt(t,i) is the cost of electricity use ($/ton product) at unit i in year t,

fc(t, i) is the cost of fuel ($/ton product) at unit i in year t, and

varcost(t,i) is the annual variable cost ($/ton product) at unit i in year t.

The fuel cost for a unit is calculated as follows:

.

1

]]

Number of pollutants

[eintensity(i) fuelcostt(t,i,f)

m,poltikjee(t,i,k,j,ee)

f



  





varprodn(t,i,f,m,j,k,ee)

fc(t,i)

(2.4.7)

where

eintensity(i) is the energy intensity (MMBtu/ton product) for unit i,

fuelcostt(t,i, f) is the cost of fuel f ($/MMBtu) at unit i in year t, and

varprodn(t,i,f,m,j,k,ee) is a production coefficient described in the next section. 

Annual water consumption related cost is given by

H2Oconsumptncost(t,i)  H2Oconsumptn(t,i)H2Ocostt(t)/1000

(2.4.8)

With annual water consumption given by

H2Oconsumptn(t,i)  H2Ointensity(i)  prodn(t,i).

(2.4.9)

where
2-13

H2Ocostt(t) is the cost of water ($/1000 gallon) in year t, and

H2Ointensity(i) is the gallons of water needed to produce a ton of product at unit i.

Annual solids discharge related cost is given by

SWdispcost(t,i,sw)  SWgen(t,i,sw)SWdisposalcostt(t,sw)

(2.4.10)

With annual solids discharges given by

SWgen(t,i,sw)  SWgeneration(i,sw) prodn(t,i).

(2.4.11)

where

SWdisposalcostt(t,sw) is the cost of disposing of a solid discharge sw in year t, and

SWgeneration(i,sw) is the discharge of a solid sw (tons) in the process of producing a ton of product 

at unit i.

Note that SWdisposalcostt(t,sw) value can be positive (disposal cost) or negative (sale price).

Total Annual Cost of Production

Using the above information, the total annual cost of production at unit i in year t is 

tannualprodncost(t,i)  plantcapcost(t,i) varcost(t,i).

(2.4.12)

Annual Cost of Imported Commodity

The cost of imports of commodity at import district id in year t is calculated using the following equation

[  ( , , , )].

,

Imports t oi id isteps

timportscost(t,id)

oi isteps

   



Iprice(t,oi,id, isteps) InsFreight(id) handling(id)

(2.4.13)

where 

Iprice(t,oi,id,isteps) is the price (value) of importing commodity from origin oi (foreign country) at 

the import district dc, at the istepth level of the relevant price-import curve.

InsFreight(id) is the insurance and freight at the import district.

handling(id) is the handling cost at the import district.

Total Annual Transportation Cost

The cost of transporting the commodity from unit i and import district id to demand center dc is 

calculated using
2-14

( , , )].

( , , )]

Importedquantity t id dc

ttranscost(t,dc) prodnquantity t i dc

i d

i







  

[imprttran sportcostt(t,id, dc)

[prodntran sportcostt(t,i,dc)

(2.4.14)

where

prodntransportcostt(t,i,dc) is the cost of transporting one ton of commodity ($/ton) from unit i to 

demand center dc, and

imprttransportcostt(t,id,dc) is the cost of transporting one ton of commodity ($/ton) from imprt 

district id to demand center dc.

2.5 Emissions

As discussed in the previous chapter, emissions can be generated from fuel firing and also from use of 

raw materials (e.g., CO2 emissions from calcination of limestone in cement kiln). As such, both of these 

emission generation pathways are included in ISIS. Further, the ISIS framework includes algorithms to 

account for tracking multiple pollutant streams associated with uncontrolled emissions, controlled 

emissions, pollution prevention from process modifications and energy efficiency measures, and any 

controls-related effects (e.g., generation of CO2 in a wet SO2 scrubber). These algorithms are described 

below.

emintensityfuel(i, f, j) modeintensity(i, k,ee) [1 cp(i, j, k)/100].

polfuel(t, i,f, j, k,ee)

  



(2.5.1)

eHIdispl(i, ee).

eintensity(i) primaryHIc hange(i,k ) secondaryHIchange(i,k )

modeintensity(i, k ,ee)



 



(2.5.2)

where

polfuel(t,i,f,j,k,ee) is emission (tons pollutant per ton product) of pollutant j resulting from 

processing (firing) fuel f and application of any control k and/or energy efficiency measure ee at unit i

in year t, taking into account whether a unit is available for operation in that year;

emintensityfuel(i,f,j) is the emission intensity (tons pollutant per ton product) of pollutant j resulting 

from processing (firing) fuel f at unit i, taking in to account whether any controls [(e.g., Best 

Available Control Technology (BACT)] are already installed on the unit;

modeintensity(i,k,ee) is the modified energy intensity (MMBtu per ton product) needed to produce 1 

ton of product at unit i. This energy intensity takes into account any heat input changes accompanying 

a control k and/or an energy efficiency measure ee;
2-15

eintensity(i) is the energy intensity (mmBtu per ton product) needed to produce 1 ton of product at 

unit i;

primaryHIchange(i,k) is the change in primary heat input (MMBtu per ton product) due to 

application of control k at unit i;

secondaryHIchange(i,k) is the change in heat input (MMBtu per ton product) due to any secondary 

fuel addition resulting from application of control k at unit i;

eHIdispl(i,ee) is the amount of heat input (MMBtu per ton product) displaced (reduced) due to 

application of energy efficiency measure ee at unit i; and

cp(i,j,k) is the reduction efficiency for pollutant j using control k at unit i.

Similarly,

[1 cp(i, j, k)/100].

secondaryRMTchangepercent(i,k)/100

1 primaryRMT changepercent(i,k)/100

polrmt(t, i,m, j, k,ee) emintensityrmt(i, m, j)















  

 

(2.5.3)

where

polrmt(t,i,m,j,k,ee) is emission (tons pollutant per ton product) of pollutant j resulting from 

processing raw material m and application of any control k and/or energy efficiency measure ee at 

unit i in year t, taking into account whether a unit is available for operation in that year;

emintensityrmt(i,m,j) is the emission intensity (tons pollutant per ton product) of pollutant j

resulting from processing raw material m at unit i, taking into account whether any controls (e.g., 

BACT) are already installed on the unit;

primaryRMTchangepercent(i,k) is the percent change in primary raw material input (tons raw 

material per ton product) due to application of control k at unit i; and

secondaryRMTchangepercent (i,k) is the percent change in raw material input (tons raw material

per ton product) due to any secondary raw material addition resulting from application of control k at 

unit i.

Finally, 

pol(t,i,f, m, j, k,ee)  polfuel(t, i,f, j, k,ee) polrmt(t, i,m, j, k).

(2.5.4)

where
2-16

pol(t,i,f,m,j,k,ee) is emission (tons pollutant per ton product) of pollutant j resulting from processing 

fuel f and raw material m, and application of any control k and/or energy efficiency measure ee, at 

unit i in year t, taking into account whether a unit is available for operation in that year.

Emissions of pollutant j at unit i in year t are given by

( , , )    ( , , , , , , ).

f ,m,poltikjee(t,i,k,j,ee)

emissions t i j pol(t,i,f,m,j,k ,ee) varprodn t i f m j k ee

(2.5.5)

where

varprodn(t,i,f,m,j,k,ee) is the production variable associated with use of k

th control and/or eeth energy 

efficiency measure for j

th pollutant at unit i using fuel f and raw material m in year t;

emissions(t,i,j) are the emissions (tons of pollutant per ton of clinker) of pollutant j at unit i; and

poltikjee(t,i,k,j,ee) is the mapping described above.

Now total emissions from all units are

( , )   ( , , ).

i

totalemissions t j emissions t i j

(2.5.6)

where

totalemissions(t,,j) are total emissions (tons of pollutant per ton of clinker) of pollutant j resulting 

from production activity in the entire sector.

Note that production associated with each pollutant is the same and therefore

prodnpol(t,i, f ,m, j)  prodnpol(t,i, f ,m, j j); j  j j;

(2.5.7)

with,

( , , , , ) ( , , , , , , ).

( , , , , )

 

poltikjee t i k j ee

prodnpol t i f m j varprodn t i f m j k ee

(2.5.8)

where 

prodnpol(t,i,f,m,j,) production variable associated with pollutant j.

2.6 Controls and Costs

The ISIS framework includes constraints to ensure that endogenous applications of sector-based controls 

and energy efficiency options occur in a realistic manner. A description of these constraints and costs for 

controls is presented in this section. The treatment of energy efficiency measures is described in a 

subsequent section. 

Controls Related Constraints
2-17

Only one vintage of a control on a unit is possible for the period starting when the vintage comes on line 

and ending with its technical life.

vyear(v) tyear(t) [(vyear(v)+ techlifecontrols(k)].

1;

 

 

t v

ts c(poltik t,i,k ,v)

,

_ ( )

(2.6.1)

where

v is the set of vintages of a control for unit i,

vyear(v) and tyear(t) are parameters with values corresponding to years in the selected time horizon, 

ts_c(t,i,k,v) is a binary variable that can bring v

th vintage of control k for unit i online in year t, and

techlifecontrols(k) is the technical life of control k.

In any year, no two incompatible controls can coexist on a unit,

 _ ( , , )  _ ( , , )  1.

v

ts c(poltik t i k ,v) ts c(poltik t i k k ,v)

(2.6.2)

where

k and kk are incompatible controls.

Finally, the production coefficient associated with a control is less than the capacity of the unit the control 

is installed on,

vyear(v) tyear(t).

capacity(t,i)

umber of pollutants



 



_ ;

( , , , , )

v

f,m,poltikjee t i k j ee

ts c(t,i,k,v)

N

varprodn(t,i,f,m,j,k,ee)

(2.6.3)

where

capacity(t,i) is the capacity of unit i in year t.

In general, the costs associated with controls comprise the following components: (1) capital and fixed 

operation and maintenance costs; (2) costs associated with any reagent and/or catalyst consumption; (3) 

costs associated with any reduction in fuel and/or raw material use; (4) cost associated with electricity 

consumption; (5) cost associated with byproduct(s); and (6) costs associated with water use. The 

calculations of these costs are described below. Note that various cost elements [e.g., capital cost of a 

control ($/ton clinker) for the cement sector] are escalated appropriately to use values in years of interest.

Capital Recovery and Fixed Cost
2-18

Annual recovery of capital cost of control k is given by

vyear(v) tyear(t) [vyear(v) ecolifecontrols].

vcntrlcapitalcostt(v,i,k ) capacity(t,i) CRFcontrol

  

  



 _ ;

_

v

ts c(t,i,k,v)

capcost c(poltik(t, i,k))

(2.6.4)

Similarly, annual FOM cost is given by

vyear(v) tyear(t) [vyear(v) techlifecontrols(k)].

capacity(t,i) vcntrlfixedcostt(v,i,k )

  

 



 _ ;

_ ( )

v

ts c(t,i,k,v)

FOMcost c poltik(t, i,k)

(2.6.5)

where

vcntrlcapitalcostt(v,i,k) is the capital cost ($/ton of clinker) of application of v

th vintage of control k

on i

th unit,

vcntrlfixedcostt(t,i,v) is the annual fixed operation and maintenance (FOM) cost ($/ton of clinker) of

application of v

th vintage of control k on ith unit,

capcost_c(t,i,k) is the annualized capital cost ($) of k

th control application on ith unit, 

FOMcost_c(t,i,k) is the annual fixed operation and maintenance cost ($) of k

th control application on 

i

th unit, and

CRFcontrol is the capital recovery factor calculated using an appropriate interest rate and time 

period, ecolifecontrols, for capital recovery.

Variable Costs

Change in fuel cost associated with application of controls is given by

.

]

[

( , , , )

( , ) , ( , , , )

Number of pollutants

secondaryHIchange(i,k ) fuelcostt(t,r,f)

primaryHIchange(i,k ) fuelcostt(t,r,f





  

 



kf(k,f),m,poltikjee t i k j,ee

fi i f , m poltikjee t i k j,ee

varprodn(t,i,f,m,j,k,ee)

varprodn(t,i,f,m,j,k,ee) )

fuelcostchange_c(poltirk(t,ri(i,r),k))

(2.6.6)

where
2-19

primaryHIchange(i,k) is the primary heat input change (MMBtu per ton clinker) with use of k

th

technology,

secondaryHIchange(i,k) is the primary heat input change (MMBtu per ton clinker) with use of k

th

technology,

fuelcostt(t,r,f) is the regional cost of fuel ($/MMBtu) in year t,

ri(i,r) is a set with elements corresponding to mapping between kiln and their geographic locations, 

and

kf(k,f) is a set with elements corresponding to mapping between fuels and technologies.

poltirk(t, ri(i,r),k) is a mapping described above.

Change in raw material cost associated with application of controls is given by

.

/100 ]

[ /100

( , ) ( , , , )

( , ) ( , , , )

Number of pollutants

secondaryRMTchangepe rcent RMTt(t, i)

primaryRMTchangepercent RMTt(t, i)





  

 



fi i f ,m,poltikjee t i k j,ee

fi i f ,m,poltikjee t i k j,ee

varprodn(t,i,f,m,j,k,ee)

varprodn(t,i,f,m,j,k,ee)

RMTcostchange_c(poltirk(t,ri(i,r),k))

(2.6.7)

where

primaryRMTchangepercent is the percent change in primary raw material with use of k

th

technology,

secondaryRMTchange(i,k) is the percent change raw material input corresponding to any secondary 

raw material addition with use of k

th technology, and

RMTt(t,i) is the unit-specific cost of raw material ($/ton clinker) in year t.

Annual reagent consumption costs are

reagentpricet(t,rgnt).





rgnt

rgntconsumpt c t i k rgnt

rgntconsumptcost c poltik t i k

_ ( , , , )

_ ( ( , , ))

(2.6.8)

The annual consumption of a reagent given by
2-20

.

[ ]

_ ( , , ) ,

, ( , ) ( , , , , )

( , ) ( , , , , )

Number of pollutants

reagentconsumptrmt(i,m ,k ,j, rgnt)

Number of pollutants

reagentconsumptfuel(i,f ,k ,j, rgnt)

[ varprodn(t,i,f,m,j,k,ee)]

varprodn(t,i,f,m,j,k,ee)

rgntconsumpt c(poltik t i k rgnt)

m j fi i f ,poltikjee t i k j ee

fi i f , j m,poltikjee t i k j ee

 

 









(2.6.9)

where

reagentconsumptfuel(i,f,k,j,rgnt) is the reagent consumption due to control (tons reagent/tons 

clinker) associated with fuel-based emission intensity,

reagentconsumptrmt(i,m,k,j,rgnt) is the reagent consumption due to control (tons reagent/tons 

clinker) associated with raw material-based emission intensity,

reagentpricet(t,rgnt) is the price of reagent rgnt ($/ton of reagent) in year t, and

rgntconsumpt_c(t,i,k,rgnt) is the annual reagent consumption due to control (tons reagent/year).

Catalyst consumption cost is

_ ( , , , ) );

_ ( ( , , )

 



cat

catconsumpt c t i k cat

catconsumptcost c poltik t i k )

catalystprice(t,cat

(2.6.10)

with

.

_ ( , , )

( , ) ( , , , , )

Number of pollutants

EGFW(i) catalystconsumpt(i,k ,j, cat)    



j fi i f ,m,poltikjee t i k j ee

varprodn(t,i,f,m,j,k,ee)

10000

catconsumpt c(poltik t i k ,cat)

(2.6.11)

where

catalystconsumpt(i,k,j,cat) is the catalyst consumption rate (ft3catalyst/10000 ft3flue gas),

EGFW(i) is the exhaust gas flow rate (scf/ton clinker),
2-21

catalystpricet(t,cat) is the price of the catalyst ($/ft3) in year t,

catconsumpt_c(t,i,k,cat) is the catalyst consumption rate (ft3/year), and

catconsumptcost_c(t,i,k) is the catalyst cost ($/year).

Annual cash flow associated with byproduct generation disposal/sale is

byproductp ricet(t,byprod);





byprod

byproductgen c(t,i,k,byprod)

byproductcost c(poltik t i k )

_

_ ( , , )

(2.6.12)

with annual generation of a byproduct given by

.

_ ( , , )

( , ) ( , , , , )

( , ) ( , , , , )

Number of pollutants

byproductp rodnrmt(i,m ,k ,j,byprod)

Number of pollutants

byproductp rodnfuel(i,f ,k ,j,byprod)

[ varprodn(t,i,f,m,j,k,ee)]

[ varprodn(t,i,f,m,j,k,ee)]

byproductgen c(poltik t i k ,byprod)

m,j fi i f ,poltikjee t i k j ee

fi i f , j m,poltikjee t i k j ee

 

 









(2.6.13)

where

byproductprodnfuel(i,f,k,j,byprod) is the byproduct generation due to control (tons reagent/tons 

clinker) associated with fuel-based emission intensity,

byproductprodnrmt(i,m,k,j,byprod) is the byproduct generation due to control (tons reagent/tons 

clinker) associated with raw material-based emission intensity,

byproductpricet(t, byprod) is the price of disposing or selling the byproduct byprod ($/ton of 

reagent) in year t, and

byproductgen_c(t,i,k,byprod) is the annual byproduct generation due to control (tons reagent/year).

Note that byproductpricet value can be positive (disposal cost) or negative (sale price).
2-22

Annual electricity consumption (kWh/yr) due to control is

.

[ ]

( , , )

( , ) , ( , , , , )

Number of pollutants

 kWhperton(i,f,k ) 



fi i f m poltikjee t i k j ee

varprodn(t,i,f,m,j,k,ee)

kwh_c(poltik t i k )

(2.6.14)

The cost of electricity consumption is

kwhcost_c(poltik(t,i,k))  kwh_c(t,i,k )electricitycostt(t,i).

(2.6.15)

where

KWhperton(i,f,k) is the electrical requirement (kWh per ton of clinker) for technology k, and

electricitycostt(t,r) is the electricity price ($/kWh) in year t at unit i.

Annual water consumption associated with control k is

.

2 _

( , ) ( , , , , )

( , ) ( , , , , )

Number of pollutants

H2Ousermt(i,m,k )

Number of pollutants

H2Ousefuel(i,f,k )

[ varprodn(t,i,f,m,j,k,ee)]

[ varprodn(t,i,f,m,j,k,ee)]

H Oconsumpt c(poltik(t,i,k))

m,j fi i f ,poltikjee t i k j ee

fi i f , j m,poltikjee t i k j ee

 

 









(2.6.16)

The cost of water consumption is

H2Ocost_c(poltik(t,i,k)) H2Oconsumpt_c(t,i,k)H2Ocostt(t)/1000.

(2.6.17)

where

H2Ousefuel(i,f,k) is the water use due to control (tons reagent/tons clinker) associated with fuelbased emission intensity,

H2Ousermt(i,m,k) is the water use due to control (tons reagent/tons clinker) associated with raw 

material-based emission intensity,

H2Ocostt(t) is the price of water ($/1000 gallons) in year t, and

H2Oconsumpt_c(t,i,k) is the annual water use due to control (gallons/year).
2-23

Total Annual Cost

Using the above costs, the total annual cost of controls is

kWhcost_c(t,i,k) H2Ocost_c(t,i,k)

rgntconsumptcost_c(t,i,k) catconsumptcost_c(t,i,k) byproductcost_c(t,i,k )

fuelcostchange_c(t,i,k) RMTcostchange_c(t,i,k )

capcost_c(t,i,k) FOMcost_c(t,i,k)

tcontrolcost(t,i,k)

 

  

 





(2.6.18)

2.7 Costs of Energy Efficiency Measures

As described below, the treatment of energy efficiency measures in ISIS is similar to that for control.

Energy Efficiency Measures Related Constraints

As for controls, constraints are needed to ensure realistic applications of energy efficiency measures. 

These constraints are described below.

Only one vintage of an energy efficiency measure on a unit is possible for the period starting when the 

vintage comes on line and ending with its technical life.

vyear(v) tyear(t) [(vyear(v) + eetechlife(ee)].

1;

 

 

t v

ts ee(poltiee t,i,ee ,v)

,

_ ( )

(2.7.1)

where

v is the set of vintages of measure ee,

poltiee(tpolc(t) is the mapping described before,

vyear(v) and tyear(t) are parameters with values corresponding to years in the selected time horizon, 

ts_ee(t,i,ee,v) is a binary variable that can bring v

th vintage of measure ee online on unit i in year t, 

and

eetechlife (ee) is the technical life of measure ee.

In any year, no two incompatible measures can coexist on a unit,

 _ ( , , )  _ ( , , )  1;

v

ts ee(poltiee t i ee ,v) ts ee(poltiee t i eee ,v)

(2.7.2)
2-24

where

ee and eee are incompatible measures.

Finally, production coefficient associated with an energy efficiency measure is less than the capacity of 

the unit the measure is installed on,

vyear(v) tyear(t)

capacity(t, i);

Number of pollutants



  



v

f,m,poltikjee(ti k j,ee ts ee(t,i,ee,v)

varprodn(t,i,f,m,j,k,ee)

_

, , , )

(2.7.3)

where 

capacity(t,i) is the capacity of unit i in year t.

Capital Recovery and Fixed Cost

For an energy efficiency measure ee, annual recovery of capital and annual FOM cost are given by 

Equations 2.7.4 and 2.7.5, respectively.

vyear(v) tyear(t) [vyear(v) ecolifeee].

vecapitalcostt(v,i, ee) capacity(t, i) CRFee

  

  



 _ ;

_

v

ts ee(t,i,ee,v)

capcost ee(poltiee(t, i,ee))

(2.7.4)

vyear(v) tyear(t) [vyear(v) eetechlife(ee)].

capacity(t, i) vefixedcostt(v, i, ee)

  

 



 _ ;

_ ( )

v

ts ee(t,i,ee,v)

FOMcost ee poltiee(t, i,ee)

(2.7.5)

where

vecapitalcostt(v,i,ee) is the capital cost ($/ton of clinker) of v

th vintage of eeth energy efficiency 

measure application on i

th unit,

vefixedcostt(v,i,ee) is the annual fixed operation and maintenance (FOM) cost ($/ton of clinker) of

v

th vintage of eeth energy efficiency measure application on ith unit,

ts_ee(t,i,ee,v) is a binary variable that can bring v

th vintage of measure ee online on unit i in year t,

capcost_ee(t,i,ee) is the annualized capital cost ($) of ee application on i

th unit, and

FOMcost_ee(t,i,ee) is the annual fixed operation and maintenance cost ($) of ee application on i

th

unit, and
2-25

CRFee is the capital recovery factor calculated using an appropriate interest rate and time period, 

ecolifeee, for capital recovery.

Variable Costs

Change in fuel cost associated with application of ee measures is given by

Number of pollutants

eHIdispi(i, ee)  fuelcostt(t, r, f



( , , , , )

_

f,m,poltikjee t i k j ee

varprodn(t,i,f,m,j,k,ee) )

fuelcostchange ee(poltiree(t,ri(i,r),ee))

(2.7.6)

where

eHIdispi(i,ee) is the displacement of primary heat input (MMBtu per ton clinker) with use of eeth

energy efficiency measure,

fuelcostt(t,r,f) is the regional cost of fuel ($/MMBtu) in year t,

ri(i,r) is a set with elements corresponding to mapping between kiln and their geographic locations,

poltiree(t, ri(i,r),ee) is a mapping described above.

Annual electricity consumption (kWh/yr) due to an energy efficiency measure is

Number o f pollutants

kWhperton(i, ee) 



, , ( , , , , )

_ ( , , )

f m poltikjeet i k j ee

e varprodn(t,i,f,m,j,k,ee)

kwh ee(poltiee t i ee )

(2.7.7)

The cost of electricity consumption is

kwhcost_ee(poltiee(t,i,ee))  kwh_ee(t,i,ee)electricitycostt(t,i)

(2.7.8)

where

eKWhperton(i,f,ee) is the electrical requirement (kWh per ton of clinker) for ee,

electricitycostt(t,i) is the electricity price ($/kWh) in year t at unit i.

Total Annual Cost

Using the above costs, the total annual cost of energy efficiency measures is
2-26

fuelcostchange ee(t,i,ee) kWhcost ee(t,i,ee)

capcost ee(t,i,ee) FOMcost ee(t,i,ee)

teemeasurescost(t,i,ee)

_ _

_ _



 



(2.7.9)

2.8 Policy Options

ISIS can help design and evaluate a number of emissions reduction policy options including cap-andtrade, emissions taxes, and emissions limits. Additionally, appropriate combinations of these options can 

also be evaluated. The policy options included in ISIS are described below.

Cap-and-Trade

Under this option, an emissions cap is set on the amount of a pollutant that can be emitted. Sources, 

companies, or other groups are issued emission permits (allowances) which represent the right to emit a 

specific amount of the pollutant. Allowances may be banked for use in future. The total amount of 

allowances available in the current period and those banked in previous periods cannot exceed the cap in 

the current period. Sources or companies that need to increase their emissions must buy allowances from 

those who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a 

charge for polluting, while the seller is being rewarded for having reduced emissions by more than was 

needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the 

pollution reduction at the lowest possible cost to society.

Generally, annual caps have been utilized in ongoing programs (e.g., Title IV SO2 reduction program). 

However, ISIS does permit evaluation of potential programs with caps over user-selected time periods 

(e.g., 5-yearly caps). This evaluation is accomplished using, 

totalemissions(t, j)  ec(t,j)  bnk(t, j) bnk(t  period, j)

(2.8.1)

where

ec(t,j) is the emission cap for pollutant j in year t,

bnk(t+period, j) are the allowances of the pollutant j banked in year t for the year t + period.

Cap-and-Trade with a Minimum Reduction Requirement

While designing a cap-and-trade program, there may be an interest in requiring a minimum level of 

emission reduction from each affected entity. Such a requirement may be able to help address any local 

emissions-related concerns. In ISIS, this requirement can be imposed using

emissions(t,i,j)  ecpminer(t,i,j)

(2.8.2)

where

ecpminer(t,i,j) is the unit-specific minimum emission reduction requirement for pollutant j in year t.

Emissions Limits
2-27

ISIS permits evaluation of the costs and emissions reductions associated with more traditional emission 

reduction programs utilizing unit-specific rate-based emission limits. Such requirements are imposed 

using

emissions(t,i, j)  el(t,j) prodn(t,i)

(2.8.3)

where

el(t,j) is the rate-based emission limit for pollutant j in year t and every affected unit complies with

this limit.

Allowance Price Inputs

In some cases, there may be an interest in endogenously determining the level of emission reduction 

corresponding to a certain allowance price. This information may be useful, for example, in a situation 

where an allowance price is set for reducing emissions from many industrial sectors. In such a case the 

levels of emission reductions corresponding to the same allowance price may be different for the sectors 

under consideration. The emissions response to a given allowance price is driven by the following term in 

the objective function (see section 2.1),

( ) ( , )

,

dis t totalemissions t j

t j

 alprice(t,j)  (2.8.4)

where

alprice(t,j) is the exogenous allowance price of pollutant j in year t.

Note that the allowance price inputs scheme above is equivalent to emission-tax-based programs in which 

affected units or companies pay a tax for every unit of pollution they produce. Thus this scheme can also 

be used to evaluate such programs.

2.9 Optimization and Post-Processing

In ISIS, the input data are pre-processed to arrive at suitable input parameters for use in the model 

equations explained in this chapter. Once the data have been pre-processed, ISIS solves for the 

appropriate levels of production, imports and controls required to meet the constraints associated with 

commodity demand and emissions, while maximizing total surplus. Once the surplus maximization 

problem has been solved, the results are post-processed to obtain parameters and level values of the 

variables of interest. The key variables of interest are: production level of each production unit to meet 

regional demand, level of imports in each region, installation of various controls, emissions, and various 

costs. Output data are written in appropriate worksheets in an Excel workbook and further linked to 

various plots to enable visual presentation and analyses of the results. 
2-28

References for Chapter 2

Duloy, J. H.; Norton, R.D. (1975). Prices and incomes in linear programming models. American Journal 

of Agricultural Economics. 57(4): 591.600.

Enke, S. (1951). Equilibrium among spatially separated markets: solution by electric analogue.

Econometrica. 19: 40.47.

FPL-PELPS, A price endogenous linear programming system for economic modeling, supplement to 

PELPS III, version 1.1, USDA Research paper FPL-RP-614, 2003.

McCarl, B.A.; Spreen, T.H. (1980). Price endogenous mathematical programming as a tool for sector 

analysis. American Journal of Agricultural Economics. 62: 87.102.

Samuelson, P.A. (1952). Spatial price equilibrium and linear programming. American Economic Review. 

42(3): 283.303.

Samuelson, P.A.; and W. Nordhaus. (1977). Economics (17th edition), John Wiley.
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3-1

Chapter 3

Input Data for ISIS-Cement Model

3.1 Data Requirements

Data requirements for ISIS include sector-specific (in this case, cement-specific) data as well as policy 

and economic parameters. The cement-specific data requirements are discussed below.

3.2 Cement-Specific Data

The inputs to the ISIS model for the cement industry can be broadly categorized into three main 

components: 

 Industry production, fuel, and emissions;

 Control technologies, and emission abatement approaches; and

 Policy and economic parameters.

3.2.1 Industry, Fuel, and Emissions

3.2.1.1 Existing, Planned/Committed, and Potential Units

The ISIS cement industry model contains information on 168 cement kilns that were in existence in 2009

and PCA’s projected capacity expansions from 2010 to 2012, as shown in Table 3-1 (PCA, 2009b). 

Additionally, the model also includes potential kiln representations that may come on line as a result of 

endogenous capacity addition [i.e., new production capacity (by state) and replacements (by kilns)].

Table 3-1. Summary of Kilns Modeled in the ISIS Cement Industry Model

Kiln Population Number of Kilns

Existing (2009) 1683

PCA’s Projected New Kilns (2010 – 2012) 9

Each kiln modeled in ISIS is characterized by its location, design (i.e., wet, dry, preheater, or precalciner),

daily and annual clinker capacity4, vintage, and retirement information when available (PCA, 2006). In 

addition, each kiln is characterized by its average variable costs components (AVC). 

 

3 Does not include 2 white cement kilns neither 2 cement kilns in Puerto Rico. 

4 Annual clinker capacity as reported by PCA refers to the kiln daily capacity multiplied by 365 less normal downtime days, 

where daily capacity is the normal clinker output a kiln can produce per day given a realistic work pattern and normal downtime 

days are number of days of downtime required for maintenance, repair or cleanup.
3-2

3.2.1.2 Average Variable Costs

In previous economic analyses, five input variables in cement production have been identified to 

determine the kiln-level AVC functions: raw materials, repair and maintenance, labor, electricity, and fuel 

(Depro, 2007, Depro, 2010, Depro and Lentz, 2010). Raw materials serve as the kiln feed, and repair and 

maintenance are required for periodic upkeep of the kiln. Labor is used in the quarry, in the operation of 

the kiln, and for packing. Electricity is consumed mainly by the auxiliary equipment and fuel is largely 

consumed in the kilns. The AVC for raw materials, labor, repair and maintenance, and electricity was 

determined following the methodology in the EPA regulatory impact analysis of the cement kiln dust 

rulemaking (EPA, 1998).

3.2.1.3 Cement Demand Centers

The U.S. cement markets are organized in state-specific demand centers. Figure 3-1 shows the 

distribution of Portland cement kilns operating in 2009. Each state containing at least one kiln is shaded. 

The ISIS-cement model simulates each cement plant’s ability to compete in each of the demand centers as 

a function of the plant’s production cost and transportation cost associated with supply to each demand 

center.

3.2.1.4 Portland Cement Demand 

One of the key data inputs for the ISIS-cement model is the demand projection for each demand center. In 

general, this demand is a function of gross domestic product (GDP) growth, interest rates, special 

construction projects (e.g., highways), and public sector construction spending. Portland cement demand 

was 128 million metric tons in 2005. PCA expects cement demand will reach 192 million metric tons by 

2035, which reflects an increase of nearly 64 million metric tons with a compound annual growth rate of 

1.4%. Cement demand through year 2035 is reported in the PCA Long-Term Cement Consumption 

Outlook (PCA, 2009c). PCA projections of cement demand (in million metric tons) by state for 2005 

through 2035, in 5-year increments, are shown in Table 3-2.
3-3

Figure 3-1. Distribution of Cement Kilns in the United States as of 2009
3-4

Table 3-2. Portland Cement Demand in Millions of Metric Tons

State Demand Center 2005 2010 2015 2020 2025 2030 2035

Alabama 1.92 1.45 2.02 2.16 2.32 2.49 2.67

Arizona 4.77 2.21 3.85 5.16 6.55 7.95 9.59

Arkansas 1.30 0.93 1.29 1.41 1.54 1.67 1.81

California 16.01 8.33 13.88 15.43 17.11 18.95 20.96

Colorado 2.55 1.74 2.76 3.08 3.47 3.90 4.33

Connecticut 0.82 0.54 0.77 0.83 0.88 0.94 0.98

Delaware 0.22 0.18 0.26 0.28 0.29 0.31 0.32

District of Columbia 0.21 0.15 0.18 0.18 0.17 0.18 0.18

Florida 12.28 4.77 8.99 11.05 13.47 16.33 19.67

Georgia 4.75 2.52 3.95 4.96 5.67 6.17 6.65

Hawaii 0.44 0.35 0.47 0.49 0.52 0.55 0.57

Idaho 0.70 0.44 0.70 0.82 0.92 1.03 1.15

Illinois 4.64 3.10 4.29 4.62 4.99 5.44 5.98

Indiana 2.27 1.69 2.30 2.49 2.73 2.98 3.25

Iowa 1.94 1.59 1.98 2.04 2.10 2.15 2.20

Kansas 1.55 1.36 1.65 1.71 1.78 1.85 1.91

Kentucky 1.60 1.06 1.48 1.59 1.71 1.84 1.97

Louisiana 2.23 2.44 2.91 3.15 3.29 3.42 3.52

Maine 0.35 0.20 0.29 0.31 0.32 0.34 0.35

Maryland 1.66 1.12 1.63 1.78 1.94 2.12 2.31

Massachusetts 1.26 0.81 1.11 1.21 1.31 1.43 1.56

Michigan 3.06 1.54 2.05 2.19 2.44 2.68 2.75

Minnesota 2.06 1.29 1.86 2.09 2.34 2.57 2.80

Mississippi 1.14 1.07 1.50 1.58 1.66 1.76 1.85

Missouri 2.87 2.03 2.71 3.18 3.58 3.90 4.29

Montana 0.38 0.30 0.42 0.45 0.48 0.51 0.53

Nebraska 1.37 1.14 1.46 1.55 1.66 1.76 1.87

Nevada 2.63 1.20 2.33 3.26 4.27 5.14 6.16

New Hampshire 0.37 0.23 0.33 0.36 0.39 0.42 0.45

New Jersey 2.06 1.45 1.89 1.99 2.09 2.18 2.28

New Mexico 0.91 0.65 0.94 1.00 1.07 1.12 1.15
3-5

State Demand Center 2005 2010 2015 2020 2025 2030 2035

New York 3.29 2.84 3.60 3.73 3.87 3.98 4.08

North Carolina 3.25 2.16 3.43 3.92 4.50 5.16 5.88

North Dakota 0.36 0.39 0.47 0.47 0.46 0.44 0.42

Ohio 4.06 2.59 3.61 3.75 3.90 4.02 4.12

Oklahoma 1.67 1.57 1.68 1.76 1.87 1.98 2.11

Oregon 1.24 0.83 1.22 1.40 1.61 1.86 2.15

Pennsylvania 3.44 2.61 3.49 3.64 3.78 3.89 3.97

Rhode Island 0.19 0.12 0.17 0.18 0.19 0.19 0.20

South Carolina 1.94 1.07 1.81 1.99 2.19 2.38 2.56

South Dakota 0.48 0.44 0.55 0.57 0.61 0.64 0.67

Tennessee 2.52 1.54 2.38 2.61 2.89 3.19 3.53

Texas 15.09 12.11 17.51 21.03 24.10 27.48 30.58

Utah 1.53 1.22 1.82 2.08 2.40 2.78 3.23

Vermont 0.16 0.11 0.16 0.17 0.18 0.20 0.21

Virginia 2.87 1.87 2.84 3.13 3.45 3.80 4.17

Washington 2.24 1.68 2.50 2.75 3.04 3.36 3.73

West Virginia 0.54 0.47 0.59 0.60 0.60 0.59 0.58

Wisconsin 2.37 1.59 2.18 2.32 2.45 2.59 2.74

Wyoming 0.47 0.43 0.55 0.55 0.55 0.55 0.54

Total 128.03 83.54 122.81 139.06 155.70 173.14 191.51

3.2.1.5 Transportation-Interregional Trade

In ISIS-cement, a transportation matrix is used to describe the costs for transporting cement from kiln and 

import district locations to demand centers. To develop these costs, information on distances between 

supply and demand points and costs of transportation modes (truck, rail, or water transport) was obtained. 

In particular, the Transportation Routing Analysis GIS (TRAGIS) model (TRAGIS, 2003) was used to 

develop the origin-destination distances. Also, in the matrix, the applicable lowest cost transportation 

option is used to connect a supply point with a destination. While the cement demand centers are

interlinked through a transportation matrix, the competition is generally maintained on a regional level 

because the cost of transporting cement is relatively high.

The cost of transportation for interregional trade takes into account the impact of terminals and the 

frequent use of modes other than truck. According to the USGS (2007), nearly half of cement shipments 

reach customers via terminals rather than direct. Shipments to terminals are more than 80% by rail or 

water, rather than by truck. Table 3-3 provides information on cost per ton mile for bulk shipping via 

truck, rail, and barge. In ISIS-cement, transportation costs for each mode of transportation (truck, rail,

and barge) are calculated from each kiln and import district to each demand center. For a given origin-
3-6

destination pair, the dominant mode (lowest cost of shipment) is used to determine the transportation cost 

for that route. The TRAGIS model was used to arrive at the origin-destination distances and feasible 

routes for rail and barge; Google Maps was used for truck transportation. The shipment costs shown in 

Table 3-3 were used to determine the transportation costs for the routes in ISIS.

Table 3-3. Bulk Shipment Costs (Cents per Metric Ton per Mile)

Mode Journal of Transport 

Geography Report, 2005

N&S American 

Cement, 2004

American 

University, 1994

Averages Used 

in Model

BTS1 WDOT2 NACT3

Truck 33.06 7.64 11.02 7.18 14.73

Rail 2.78 3.32 5.51 N/A 3.87

Barge 0.89 1.05 2.20 N/A 1.38

1 (Bureau of Transportation Statistics) General Bulk Transportation "...can only be considered the upper boundary of 

transport costs for each mode assuming each industry is operating at-cost or at a profit".

2 (Washington State Department of Transportation) Cost study to examine options for the transport of wheat (Jessup 

and Casavant, 1998).

3 (North American Cement Transportation) Report covers cement-specific transportation costs, assumes short tons--

converted to metric.

3.2.1.6 Imports

U.S. cement markets receive imported quantities of cement and clinker from a number of countries, and 

these imports arrive at more than 30 import districts (USGS, 2009). In ISIS-cement, international supplies 

from exporting countries to U.S. import districts are modeled using supply elasticity and then these 

imports are transported to the demand centers.

The five largest international suppliers of cement and clinker to the U.S. are China, Thailand, Venezuela, 

South Korea, and Greece. An econometric study was conducted to provide an estimate of international 

supply elasticity for supplies from these countries and the rest of the world. The results of this study 

(Burtraw, 2010) reflected that the best estimate of the international supply elasticity of cement and clinker 

from China, Thailand, Venezuela, South Korea, Greece, and the rest of the world into the U.S. is 3.94. 

This value indicates that if the price of cement were to increase by 1% within any import district in the 

U.S., then, ceteris paribus, the quantity of cement imported from each of these five supply countries into 

that district would increase by 3.94%. 

Table 3-4 shows the import levels by USGS Customs District, then state, for 2005, estimated by using 

USGS data (USGS, 2007).

Table 3-4. Portland Cement and Clinker Imports in Million Metric Tons, by Customs District in 

2005

USGS Customs District Quantity, million 

metric tons

Alabama, Mobile 0.51

Alaska, Anchorage 0.14

Arizona, Nogales; Mexico 1.07
3-7

USGS Customs District Quantity, million 

metric tons

California, Los Angeles 3.05

California, San Diego 0.72

California, San Francisco 2.36

Florida, Miami 2.27

Florida, Tampa 3.48

Georgia, Savannah 0.08

Hawaii, Honolulu 0.43

Illinois, Chicago 0.01

Louisiana, New Orleans 4.18

Maine, Portland 0.16

Maryland, Baltimore 0.13

Massachusetts, Boston 0.13

Michigan, Detroit 1.32

Minneapolis, MN, Canada 0.04

Minnesota, Duluth; Canada 0.16

Missouri, St. Louis 0.01

Montana, Great Falls 0.06

New York, Buffalo 0.82

New York, New York 1.26

New York, Ogdensburg 0.33

North Carolina, Wilmington 0.39

North Dakota, Pembina; Canada 0.18

Ohio, Cleveland 0.79

Oregon, Columbia-Snake 0.87

Pennsylvania, Philadelphia 0.49

Rhode Island, Providence 0.74

South Carolina, Charleston 1.1

Texas, El Paso; Mexico 0.72

Texas, Houston-Galveston 2.61

Texas, Laredo; Mexico 0.14

U.S. Virgin Islands 0.06

Vermont, St. Albans; Canada 0.13
3-8

USGS Customs District Quantity, million 

metric tons

Virginia, Norfolk 0.7

Washington, Seattle 1.49

Wisconsin, Milwaukee; Canada 0.19

Total 33.33

Source: USGS, 2007. Data do not include Puerto Rico

3.2.1.7 Capacity Changes

Cement plants have a relatively long lifespan, typically 50 years or more (FLSmidth, 2007). Various 

factors, including (but not limited to) raw material availability in the quarry, technology changes, 

productivity, efficiency, longevity, reliability, maintenance, and long-term costs can affect the lifespan of 

a cement kiln/plant. In ISIS-cement, retirements from 2002 to 2009 and projected retirements after 2009 

of existing kilns were based on information from PCA on capacity expansion estimates. These estimates 

were supplemented with information from individual cement companies on their plans for shut-downs, 

new construction, and kiln consolidation (PCA, 2004a). Further, as mentioned earlier, ISIS-cement 

includes algorithms for endogenous capacity growth and retirement of kilns. To determine capital 

recovery factor for capital costs associated with kiln capacity changes, an economic life of 25 years and 

an interest rate of 15% are used. Capital costs in 2005 $ per short ton of clinker for new, replacement of 

wet, and replacement of dry capacity are 208, 296, and 238, respectively (PCA, 2009a).

3.2.1.8 Fuel Intensity

The Annual Energy Outlook (2008) energy use profile for 2005 is shown in Figure 3-2. In 2005, the 

cement sector consumed 451.2 trillion Btu (476.0 trillion kJ) of energy (EIA, 2008c). As shown in Figure 

3-2, the primary fuel being burned in kilns is coal. Coal is projected to remain the dominant fuel used by 

the U.S. cement industry. However, there has been an increasing trend towards using other fuels, 

particularly alternative fuels, such as coke,5 waste tires, and other wastes, especially oily wastes. 

3.72%

0.76%

64.11%

19.30%

3.20%

0.50%

8.40%

Chart Title

Natural Gas

Fuel Oil

Coal

Petroleum Coke

Tires

Other Solid Wastes

Liquid Wastes

Figure 3-2. Commercial Fuel Use Profile by U.S. Cement Industry in 2005.

 

5

PCA does not specify if “coke” is metallurgical coke or petroleum coke. Authors believe it is the latter.
3-9

Source: EIA, 2008a

In the ISIS-cement model, to determine the fuel intensity of each kiln, correlations of kiln type to heat 

input and/or gas flow were developed (see Appendix A). Once determined, the kiln’s specific fuel 

intensity is used to calculate fuel cost for each kiln. PCA’s data on heat input to various kilns by type 

were used to develop kilns’ fuel intensities. The data, expressed in heat input per unit of clinker (specific 

fuel consumption [SFC]) and exhaust gas flow rate (wet) (EGFW) per unit of clinker, are summarized in 

Table 3-5.

Table 3-5. Specific Fuel Consumption and Total Exhaust Gas Flow Rate (wet) for Various Kiln 

Types

Kiln Type

SFC EGFW

MMBtu/tona Nm3/kg SCF/tona

Wet 6.0 3.4 108,990

Dry 4.5 1.8 57,701

Preheater 3.8 1.5 48,084

Preheater/Precalciner 3.3 1.4 44,878

a

short ton

Note: SFC=specific fuel consumption; Source: EPA, 2007a (Table 3-3)

EGFW=exhaust gas flow rate (wet): Source: PCA, 2004 (original data in metric units)

For each individual kiln, the ISIS model determines the optimal fuel type(s) based on the regional cost of 

the chosen fuel and the kiln’s specific fuel intensity.

3.2.1.9 Emissions

The design of the ISIS Model can accommodate any number of pollutants of interest. In ISIS-cement, 

each kiln is characterized by its NOx, SO2, PM, hydrochloric acid (HCl), mercury (Hg), total hydrocarbon 

(THC), and CO2 emission intensities. The characterization by kiln of the NOx, SO2, PM, HCl, mercury 

and THC emissions is presented in "Summary of Environmental and Cost Impacts for Final Portland 

Cement NESHAP and NSPS" (August 6, 2010) (EPA, 2010).

NOX emissions from cement kilns result primarily from the following combustion process: oxidation of 

fuel nitrogen (fuel NOX) and the oxidation of nitrogen in the combustion air (thermal NOX). Oxidation of 

nitrogen in the feed materials (feed NOX) can also influence total NOX emissions. Table 3-6 shows NOX

emission intensities for cement kilns in lb/ton of clinker and in lb/MMBtu (EPA, 2007a).
3-10

Table 3-6. Estimated Uncontrolled NOX Emission Intensities for Cement Kilns

Kiln Type

Heat Input,

MMBtu/ton of clinker

Uncontrolled NOx Emissions

lb/ton of clinker * lb/MMBtu

Wet 6.0 9.7 1.62

Long Dry 4.5 8.6 1.91

Preheater 3.8 5.9 1.55

Preheater/Precalciner 3.3 3.8 1.15

* Average

Source: EPA 2007 (Table 3-3 and Table 6-1)

SO2 emissions from cement kilns are the product of sulfur in the fuel as well as sulfur in the feed 

materials. Sulfur in the fuel will oxidize to SO2 during pyroprocessing, and a significant amount is likely 

to be captured in the form of sulfates as the gas passes through the calcination zone. Compared to long 

dry and wet kilns, preheater and preheater/precalciner kilns tend to be more effective at capturing fuelgenerated SO2. Accordingly, oxidation of sulfur in the feed materials is likely to be a major component of 

total SO2 emissions. Table 3-7 shows average SO2 emissions for each kiln type for each state (Andover

Technology Partners, 2009a). State-specific emission intensities of SO2 were determined from emissions 

reported for the kilns in that state. For any state where the emission intensity was not available for a kilntype, the national average emission intensity was assigned to kilns in that state.

CO2 emissions from cement kilns result from limestone calcination and fuel combustion. Calcination 

releases 0.52 tons of CO2 per ton of clinker produced, while fuel-based CO2 emission factors range from 

199.52 lb CO2/MMBtu for coal to 105.02 lb CO2/MMBtu for natural gas (Andover Technology Partners, 

2009b; Andover Technology Partners, 2010). Table 3-8 shows approximate CO2 and H2O produced from 

combustion for the most important fuels for cement kilns.
3-11

Table 3-7. Average SO2 Emissions for Each Kiln Type in Each State

SO2 (lb/ton clinker)

State Precalciner Preheater Dry Wet

AL 0.09 0.61 9.02 13.99

AZ 1.30 0.07 8.51 7.81

AR 2.94 2.32 3.45 7.59

CA 0.33 1.12 0.81 0.00

CO 0.32 0.10 1.07 4.24

CT 1.15 2.32 9.02 7.81

DE 1.15 2.32 9.02 7.81

FL 0.45 0.02 9.02 7.81

GA 0.95 2.73 11.42 12.25

ID 0.13 2.32 9.02 0.70

IL 5.58 5.77 5.88 9.50

IN 1.15 2.32 9.02 7.81

IA 1.15 2.32 9.02 7.81

KS 1.25 5.88 24.85 8.61

KY 0.19 5.04 12.53 7.81

LA 1.15 2.32 9.03 7.81

ME 0.30 0.30 ? 11.98

MD 3.14 3.95 7.31 7.49

MA 1.15 2.32 9.03 7.81

MI 5.23 2.32 5.31 18.00

MN 1.15 2.32 9.03 7.81

MS 0.09 0.61 9.02 13.99

MO 2.18 2.32 1.51 7.02

MT 0.13 2.32 9.02 0.70

NE 1.25 5.88 24.85 8.61

NV 0.49 0.05 1.51 7.81

NH 1.15 2.32 9.02 7.81

NJ 1.15 2.32 9.02 7.81

NM 1.30 0.07 8.51 7.81

NY 0.30 0.30 9.02 11.98
3-12

SO2 (lb/ton clinker)

State Precalciner Preheater Dry Wet

NC 1.15 2.32 9.02 7.81

ND 1.15 2.32 9.02 7.81

OH 0.19 5.04 12.53 7.81

OK 1.25 5.88 24.85 8.61

OR 0.13 2.32 9.02 0.70

PA 1.15 2.32 9.02 7.81

RI 1.15 2.32 9.02 7.81

SC 0.95 2.73 11.42 12.25

SD 0.32 0.10 1.07 4.24

TN 0.95 2.73 11.42 12.25

TX 1.15 2.32 9.02 7.81

UT 0.13 2.32 9.02 0.70

VT 1.15 2.32 9.02 7.81

VA 0.95 2.73 11.42 12.25

WA 0.53 2.32 9.02 3.80

WV 3.14 3.95 7.31 7.49

WI 1.15 2.32 9.02 7.81

WY 0.32 0.10 1.07 4.24

National Average 1.15 2.32 9.02 7.81

Table 3-8. Approximate CO2 and H2O Produced from Combustion of Fuels

Variable Name Flue Gas Tires Petroleum 

Cokes

Heavy 

Fuel 

Oil

Rosemont 

PRB

Logan, 

WV 

BIT

Natural

Gas

LBMCO2MMBTU lbmoles 

CO2/MMBtu 4.26 4.83 3.85 4.25 4.53 2.39

LBCO2MMBTU lb CO2/MMBtu 187.44 212.56 169.32 186.83 199.52 105.02

LBMH2OMMBTU lbmoles 

H2O/MMBtu 2.76 2.76 2.23 3.23 4.14 2.77

LBH2OMMBTU lbs H20/MMBtu 49.71 49.73 40.26 58.21 74.64 49.92

PRB = Powder River Basin coal WV BIT = West Virginia bituminous coal
3-13

3.2.2 Control Technologies and Emission Abatement Approaches 

ISIS-cement contains information on abatement approaches for NOx, SO2, PM, HCl, Hg, THC, and CO2 

emissions described above. The three categories of abatement approaches included are: process 

modifications and upgrades, raw material and/or fuel substitution, and mitigation technologies. For each 

emission abatement approach, where possible, information on the following parameters was developed 

(Andover Technology Partners, 2008) and included in the model: capital cost, fixed operating cost, 

variable operating cost, emission reduction performance for all of the pollutants, impacts on fuel and/or 

raw material use, impact on electricity consumption, byproduct generation and cost, and impact on water 

use.

To estimate capital recovery factors for capital costs associated with control technologies, economic life 

values of 15 and an interest rate of 7% are generally used, but different values can be selected by the user. 

Payback periods and technical life for the energy efficiency measures shown in Tables 3-14 through 3-17

are given in Worrell and Galitsky (2004). Economic life for each of these measures can be taken to be the 

average of the technical life and the payback period. Again, an interest rate of 7% can be used for capital 

recovery in the absence of more specific information.

Tables 3-9 through 3-12 show the NOX, SO2, CO2, HCl, Hg, THC emissions control technologies being 

used in the ISIS-cement model. Tables also reflect the impacts of these technologies on pollution 

reduction, electricity use, and water use. Multimedia impacts of changes to the capacity of cement kilns 

are listed in Table 3-13. Tables 3-14 through 3-17 show the electricity consumption and heat input 

changes accomplished as a result of implementation of energy efficiency measures for Raw Materials 

Preparation, Clinker Making, Finish Grinding, and Plant-Wide Measures, respectively. 

3.2.3 Policy and Economic Parameters

3.2.3.1 Policy Parameters

The ISIS model framework allows the user to select a variety of potential policy options for evaluation. 

The user can select from cap-and-trade policy (with or without deminimis requirements), emissions 

charge policy, or rate-based policies. In a cap-and-trade policy scenario, separate caps on pollutants of 

interest can be specified. The user has the option to run a cap-and-trade policy scenario with or without 

banking of emissions. Further, a cap-and-trade policy scenario can include deminimis requirements, 

where the user defines a minimum level of emission reduction required for each emission unit. As 

mentioned before, it is also possible for the user to input an emission charge for pollutants of interest. 

Furthermore, traditional policy scenarios (rate-based policies) with unit specific emission reduction 

requirements specified by the user can be modeled in ISIS. 

The user can specify the policy horizon (time period) to be used for the model runs. The user can also

choose to run ISIS with blocks of years (e.g., 5-year blocks). The simulation horizon and blocks of years 

can be chosen by the user subject to availability of data. 

3.2.3.2 Additional Economic Parameters

In the ISIS framework, the following additional economic parameters are used: discount rate, escalation 

rates, and demand elasticity. For the ISIS-cement model, the default discount rate has been chosen as 7%, 

as recommended by the U.S. Office of Management and Budget (OMB) for project evaluation (OMB, 

1992). Escalation rates used can be found in the “ISIS_Inputs.xls” workbook. Escalation rates for labor 

are based on historical data from Bureau of Labor and Statistics (BLS). Raw materials escalation factors 

are calculated from historical price data of crushed sandstone and gypsum from USGS. The escalation 
3-14

factors for variable operating and maintenance costs are based on Chemical Engineering Index. Escalation 

factors for various fuels and electricity are estimated based on data from the EIA’s Annual Energy 

Outlook 2008 (RTI, 2010). Demand for cement is relatively inelastic and an elasticity value of -0.88 is 

used in the model (EPA, 1998).
3-15

Table 3-9. NOX Control Technologies for Cement Kilns

Control Type

Impact on Emissions,

±% change

Electricity Consumption,

kWh/ton of cement

Water 

Consumption,

gal/ton of 

NOX cement SO2 PM Hg Other Grinding Kiln Operation

Low NOX Burners –

Indirect Firing -20% to -30%1 No impact2

0

3

-1.240

3

Mid Kiln 

Firing-Tires -20% to -40%1 May vary5

0

3

0

6

0

3

Low NOX Burner + Mid 

Kiln Firing- Tires -20% to -40%1 May vary5

0

3

-1.24,6 0

3

Low NOX Burners + Tire 

Derived Fuel -20% to -40%7 May vary5

0

3

-1.24,6 0

3

Low NOX Burner + 

Selective Non Catalytic 

Reduction

-50%2 No data5 No data8 No data8 No data80 -1.24,9 +1.259

Low NOX Burner + 

Selective Catalytic 

Reduction

-90%2 Oxidation10 No data8 Oxidation10 No data80 -1.24,9 +1.259

Low NOX Burners + 

CemStara -30%11

-1.3 (wet 

process); 

-1.9 (dry 

process) 12

-1.24,12 from LNB 

and 

-1.5 (wet process) 

or 

-2.2 (dry process) 

from CemStar13

0

CemStar/Fly Ash Injection

-20%14

-1.3 (wet 

process);

-1.9 (dry 

process) 13

-1.5 (wet process) 

or 

-2.2 (dry process) 

from CemStar 13

0

Notes to Table 3-9

1. See EPA (2004), Table 5-1. 
3-16

2. Andover Technology Partners 2009b.

3. These technologies do not use and do not affect the consumption of water in raw mix preparation or significantly affect electric power consumption in 

cement manufacturing processes.

4. Conversion from direct firing systems typical of wet and dry process kilns and older preheater kilns to indirect firing systems, required to implement 

low NOX burner (LNB) technology, could result in reductions in primary air fan and kiln-induced draft fan power requirements and concomitant slight 

increases in coal conveying power requirements. A reduction in fan/blower power on the order of 100 hp might be anticipated for a moderately sized 

(300,000 – 500,000 clinker tons per year) kiln converted from direct firing to indirect firing. No power savings on adding an LNB would be anticipated 

if the kiln system is already indirect-fired. 

5. SO2 emissions from cement kilns are strongly related to fuel and raw materials sulfur content and to method of kiln operation. Sulfur content of TDF 

(typically, 1.24% by weight, dry) may be higher or lower than the sulfur content of other fuels commonly used in cement kilns, such as coal or coke. 

Therefore it is not practical to relate SO2 emissions to the use of these NOX control methods. With respect to use of an SO2 wet scrubber using ground 

limestone, it is assumed that, for wet process kiln systems, uncontrolled SO2 emissions of 8.2 lb per ton of clinker (8.9 lb/ton of cement) (EPA Pub. AP 

42, Table 11.6-8, 1995) are treated by use of a stoichiometric amount (with respect to uncontrolled SO2) of limestone of 90% purity in a 15% limestone 

slurry. Limestone and water consumption are 15.5 lb and 87.7 lb, respectively, per ton of cement produced. For a precalciner kiln, it is assumed that 

uncontrolled SO2 emissions of 1.1 lb per ton of clinker (1.2 lb/ton of cement) (EPA, 1995: Table Table 11.6-8) are treated similarly (stoichiometric 

amount limestone of 90% purity in a 15% limestone slurry). Limestone and water consumption are 2.1 lb and 11.8 lb per ton of cement produced. For a 

precalciner kiln, it is assumed that uncontrolled SO2 emissions of 1.1 lb per ton of clinker (1.2 lb/ton of cement) (EPA, 1995: Table 11.6-8) are treated 

similarly (stoichiometric amount limestone of 90% purity in a 15% limestone slurry). Limestone and water consumption are 2.1 lb and 11.8 lb per ton of 

cement produced. 

6. Kiln system and raw materials grinding electric power consumption would not be significantly affected by introduction of tires or tire-derived fuel. 

7. Combined effect will vary. Low NOx 20 to 40%, MKF 20 to 40%.

8. While there may be theoretical or limited experimental bases to assume increases or decreases in emissions of various pollutants in connection with 

NOX emission controls, statistics on such effects are not available. See, generally, EPA (2007), Chapter 11. 

9. Assumes SNCR or SCR both stoichiometric additions of NH3 in 20-percent solution. Typical precalciner NOX emissions of 4.2 lb/ton clinker before 

treatment (EPA 1995, Table 11.6-8), and 0.92 tons of clinker are used in each ton of cement. It should also be noted that SNCR is not applicable to wet 

process, long dry process, and many preheater kilns because the kiln gas exit temperatures are too low from those units for the necessary reactions to 

take place. See EPA (2007a). SNCR is assumed to achieve 63% reduction in NOX emissions from applicable kiln systems. See EPA (2007a), Chapter 8. 

There may be an attendant small increase in kiln system electric power in connection with injection of water into the kiln system due to an increase in 

gas volume handled by the kiln’s fan system. The increase is not considered in the calculation.

10. Typically, up to about 1% of SO2 can be oxidized to SO3, Elemental form of Hg oxidized across SCR provided sufficient concentration of halogens in 

flue gas.

11. On a lb/ton of clinker basis.

12. Use of the CemStar process may have multiple effects on electric power consumption, including reduced raw mix preparation costs in the event that 

unground CemStar material is fed to the rotary kiln, and reduced fan power requirements resulting from reduced kiln gas volumes in connection with 

both combustion gases and raw mix calcination. Assuming a 5% replacement of raw mix with carbonate-free CemStar material, a concomitant 5% 

reduction in raw mix preparation energy is also assumed. A very approximate resulting 5% reduction in kiln electrical energy consumption is assumed 

based on a roughly 5% reduction in kiln exit gases from both calcination and combustion.

13. CemStar and fly ash injection are expected to have similar effects on raw mix preparation and kiln process electrical energy requirements. 
3-17

14. See NESCAUM (2000) for effect of CemStar on NOX reductions from cement kilns. Investigation of the combined effects of multiple technologies on 

pollutant emissions was not carried out for this summary. 

General Notes

A. Cement kiln processes do not use steam.

B. Cement kiln dust (CKD) disposal rates as functions of NOX or SO2 emissions control technology has not been reported. Typical CKD disposal rates 

range from 0.042 to 0.115 tons CKD/ton clinker (0.046 to 0.125 tons CKD/ton cement assuming 0.92 tons clinker per ton of cement).

C. CKD disposal costs vary widely by region, CKD characteristics, CKD volumes, and location of disposal site (on-site or off-site). In addition, disposal 

costs are expected to be of comparable cost to transportation costs in connection with off-site disposal. For example, prices at three northern California 

landfills range from $26/short ton to $69/short ton of CKD plus transportation, which may range from approximately $500 to $1,200 per truck load. Pers. 

Comm., E. Leamer (ARCADIS) Feb. 26, 2009. CKD disposal prices would be expected to be generally unaffected by the type of cement kiln pollution 

controls employed.

References for Table 3-9 (references called out in the above notes can be found at the end of the chapter)

Air Pollution Controls and Efficiency Improvement Measures for Cement Kilns, Prepared by ARCADIS Under Contract No. EP-C-04-023, March 31, 2008.

Srivastava et al., ES&T, March 2006, pp.1385-1393.

Theoretical Approach for Enhanced Mass Transfer Effects in-Duct Flue Gas Desulfurization Processes. Final Report. 1992.

Table 3-10. SO2 Control Technologies for Cement Kilns

Control Type

Impact on Emissions,

±% change

Electricity Consumption,

kWh/ton of cement

Water 

Consumption,

gal/ton of 

NOX cement SO2 PM Hg Other Grinding Kiln Operation

Wet Scrubber -90% to -95%1-80% -99.9% for HCl

+0.2 

(wet process 

kilns) 2

+52

+12 (wet 

process); +1.5 

(dry process) 3

Dry Lime Injection -50%4-75% for HCl 5 5 5

Notes to Table 3-10

1. Andover Technology Partners 2009b.

2. Electric power consumption in connection with wet scrubbing is assumed to be primarily a result of: 1) grinding of limestone to below 45 to 74 

micrometers in particle size and pumping limestone slurry; and 2) increased kiln exhaust gas fan power requirements. The latter energy increase is 

caused by increased pressure drop demand on kiln ID fans due to conveying kiln exit gases across the scrubber spray tower plus increased gas volume 
3-18

demand on kiln ID fans due to the addition of water in the limestone slurry. Slurry preparation and pumping is assumed to require 20 kWh per ton of 

limestone. The spray tower pressure drop is assumed to add 500 hp to ID fan requirements on a 300,000 to 500,000 ton per year cement kiln process.

3. SO2 emissions from cement kilns are strongly related to fuel and raw materials sulfur content and to method of kiln operation. Sulfur content of TDF 

(typically 1.24% by weight, dry) may be higher or lower than the sulfur content of other fuels commonly used in cement kilns, such as coal or coke. 

Therefore it is not practical to relate SO2 emissions to the use of these NOX control methods. With respect to use of an SO2 wet scrubber using ground 

limestone, it is assumed that, for wet process kiln systems, uncontrolled SO2 emissions of 8.2 lb per ton of clinker (8.9 lb/ton of cement) (EPA, 1995: 

Table 11.6-8) are treated by use of a stoichiometric amount (with respect to uncontrolled SO2) of limestone of 90% purity in a 15% limestone slurry. 

Limestone and water consumption are 15.5 lb and 87.7 lb, respectively, per ton of cement produced. For a precalciner kiln, it is assumed that 

uncontrolled SO2 emissions of 1.1 lb per ton of clinker (1.2 lb/ton of cement) (EPA, 1995 Table 11.6-8) are treated similarly (stoichiometric amount 

limestone of 90% purity in a 15% limestone slurry). Limestone and water consumption are 2.1 lb and 11.8 lb per ton of cement produced. 

4. 20 percent at Ca:S stoichiometry of 2:1 to 5:1. Dry Sorbent Injection report.(ARCADIS, 1992)

5. Dry lime injection technology is not well developed for the cement industry and no statistics are available. 

General Notes: See Table 3-9

References for Table 3-10 (references called out in the above notes can be found at the end of the chapter)

Andover Technology Partners, Cost and Performance of Controls, March 10, 2009.

Srivastava et al., ES&T, March 2006, pp.1385-1393.

Theoretical Approach for Enhanced Mass Transfer Effects in-Duct Flue Gas Desulfurization Processes. Final Report. ARCADIS, 1992.

EPA (1995). Compilation of Air Pollution Emission Factors - Volume 1: Stationary Point and Area Sources. Fifth Edition, Supplements A-F, AP-42. U.S. 

Environmental Protection Agency, Research Triangle Park, North Carolina.
3-19

Table 3-11. CO2 Control Technologies for Cement Kilns

Control Type

Impact on Emissions,

+/- % change

Electricity 

Consumption,

MWh/ton of 

clinker

Process Water 

Consumption,

ton/ton of 

clinker

Cooling Water 

Consumption,

NO ton/ton of clinker

X SO2 PM Hg CO2 Other

Solvent CC1 New -99% -99% -85% -0.022 0.429 4.82

Solvent CC1 Retrofit -99% -99% -85% -0.103 0.160 4.82

Oxy-combustion -99% -99% -85% 0.174 14.3

Notes to Table 3-11

1. CC = carbon capture

References for Table 3-11

Andover Technology Partners, Cost and Performance of Controls, March 10, 2009.

EPA, Report to Congress on Cement Kiln Dust, Chapter 3: CKD Generation and Characteristics; US Environmental Protection Agency: 1993.
3-20

Table 3-12. HCl, Hg, and THC Control Technologies for Cement Kilns

Control Type1

Impact on Emissions,

± % change

NOX SO2 PM Hg Other

ACI2-99.9% -90% -50% for THC

Membrane Bag -99.9%

RTO3-98% for THC

Dry Lime Injection -50% -75% for HCl

Wet Scrubber -90% to 

-95% -80%

Notes to Table 3-12

1. Feasible combinations of the above control technologies may be utilized as necessary. 

2. ACI = activated carbon injection.

3. RTO = regenerative thermal oxidizer

Table 3-13. Multimedia Impacts of Process Capacity Replacement on Cement Kiln Operation1

Kiln Type

Water 

Consumption,

gal/ton of 

cement2

Electricity Consumption,

kWh/ton of cement

Waste

Grinding

3

Kiln 

Operation4

Generatio

n Rate, 

ton/ton of 

cement5

Disposal Cost,

$/ton of cement

Wet to 

Precalciner -2142,6

-128-7

8

-0.072 see notes 9,10

Long Dry to 

Precalciner No change2 Not available7 Not available7

-0.062 see notes 9,10

Preheater to 

Precalciner No change2 Not available7 Not available7

0

11 see notes 9,10

Notes to Table 3-13. 

1. Unless specifically noted otherwise, impacts are presented on a per-short-ton-of-cement basis and generally 

make use of published data reported on a per-short-ton-of-clinker basis. These values are converted to a per-tonof-cement basis by assuming that cement consists of 92-percent clinker. All weight units in this table are short 

tons.

2. Water is not normally consumed in dry process cement kiln processes, except on an emergency basis to prevent 

damage to process equipment by hot gas or solid process streams. Water is used in non-contact cooling 

processes that are common in both wet process and dry process cement plants, some of which may or may not 

use closed circuit cooling systems with no evaporation losses. Water is consumed in direct contact cooling 

processes such as cement grinding in both wet process and dry process plants. However, the nature and amount 

of such water consumption is not intrinsically different between wet process and dry process plants.

3. Power data reported in Worrell and Galitsky (2004) are used for raw mix preparation and kiln process electrical 

energy consumption for wet and all dry processes.
3-21

4. Air pollution control device contributions to electric power consumption data on cement kiln process systems 

are assumed to include only existing particulate matter control devices and not scrubbers for SO2 or other 

criteria pollutants.

5. Solid waste from all process types is assumed to be cement kiln dust (CKD). Data used here are as reported in 

EPA (1993).

6. Cement is assumed to consist of 92-percent clinker. Clinker is assumed to require 1.42 tons of raw kiln feed 

(dry) per ton of clinker. Kiln feed loss on ignition is assumed to be 35 percent. Kiln feed slurry is assumed to 

contain 36-percent water.

7. Industry-wide statistics on electrical energy use do not distinguish among the various cement processing stages 

between the various dry processes – all dry process plants are averaged together. Published data that distinguish 

between various process types combine all process phases without indicating energy use for individual process 

phases. Therefore, electrical energy use is reported here to be the same for all dry process plants. See Worrell 

and Galitsky (2004).

8. As stated in note 7, industry data on electric power use in raw materials preparation and kiln processing are not 

available for every dry process. Data are for all dry processes are combined.

9. Data reported in EPA (1993) on CKG generation by cement plants doe not distinguish between preheater and 

precalciner kilns with respect to net CKD generation rates.

10. CKD disposal prices vary widely by location. Transportation of CKD is a significant component of the cost of 

disposal if disposal is off-site. For example, an estimated off-site disposal cost ranging from $26 to $69 per ton 

of CKD for disposal, plus transportation costs ranging from $500 - $1,500 per truck load for one northern 

California location, depending on the landfill chosen. (ARCADIS, 2009) On-site disposal costs would include 

costs of transportation, dust control, and landfill operation. These costs have not been determined and would 

most certainly vary widely by location based on terrain, site geology, landfill operating requirements, and 

permit and future closure costs.

11. Modern preheater cement kilns and precalciner cement kilns generate similar volumes of CKD. Older preheater 

cement kilns are similar in CKD generation to long dry process cement kilns.

Table 3-14. Energy Efficiency Measures for Raw Materials Preparation

Energy Efficiency Improvement Method

Electricity Consumption Change, 

kWh/ton clinker

Dry Wet Preheater

Precalciner

ETS (Efficient Transport System) -3.20 -3.20 -3.20

RMB (Raw Materials Blending) -2.70 -2.70 -2.70

PCVM (Process Control Vertical Mill) -0.90 -0.90 -0.90

HERM (High Efficiency Roller Mill) -11.05 -11.05 -11.05

SBH (Slurry Blending and Homogenization) -0.35

WMCCC (Wash Mills with Closed Circuit Classifier) -12.00

RMTHEC (High-Efficiency Classifiers) -5.05 -5.05 -5.05 -5.05
3-22

Table 3-15. Energy Efficiency Clinker Making Measures

Energy Efficiency 

Improvement 

Method

Electricity Consumption Change, 

kWh/ton clinker

Heat Input Change, MMBtu/ton of 

clinker

Dry Wet Preheater

Precalciner Dry Wet PreheaterPrecalciner

EMCS (Energy 

Management and 

Control System)

-1.90 -1.50 -1.90 -1.90 -0.15 -0.21 -0.15 -0.15

SR (Seal 

Replacement)

-0.02 -0.02 -0.02 -0.02

CSI (Combustion 

System Improvement)

-0.25 -0.35 -0.25 -0.25

IF (Indirect Firing) -0.16 -0.16 -0.16 -0.16

SHLR (Shell Heat 

Loss Reduction)

-0.20 -0.20 -0.20 -0.20

OGR (Optimize Grate 

Cooler) 0.90 0.90 0.90 -0.09 -0.10 -0.09 -0.09

CGC (Convert to 

reciprocating grate 

cooler)

2.40 2.40 2.40 2.40 -0.23 -0.24 -0.23 -0.23

HRPG (Heat 

Recovery for Power 

Generation)

-18.0

EMD (Efficient Mill 

Drives)

-2.00 -1.70 -2.00 -2.00
3-23

Table 3-16. Energy Efficiency Measures for Finish Grinding

Energy Efficiency Improvement Method

Electricity Consumption Change, kWh/ton 

clinker

Dry Wet Preheater Precalciner

EMPC (Energy Management and Process Control) -1.60 -1.60 -1.60 -1.60

IGMBM (Improved Grinding Media [Ball Mills]) -1.80 -1.80 -1.80 -1.80

HPRP (High-Pressure Roller Press) -

16.00 -16.00 -16.00 -16.00

HEC (High-Efficiency Classifiers) -3.85 -3.55 -3.85 -3.85

Table 3-17. Energy Efficiency Plant-wide Measures

Energy Efficiency Improvement Method

Electricity Consumption Change, kWh/ton 

clinker

Dry Wet Preheater Precalciner

PM *(Preventive Maintenance) -2.50 -2.50 -2.50 -2.50

HEM (High Efficiency Motors) -2.50 -2.50 -2.50 -2.50

ASD (Adjustable Speed Drives) -6.25 -6.00 -6.25 -6.25

OCAS (Optimization of Compressed Air Systems) -1.00 -2.50 -1.00 -1.00

*This is the only occurrence wherein “PM” does not stand for “particulate matter”
3-24

References for Chapter 3

American University (2008). TED Case Studies: Cemex Case. http://www.american.edu/TED/cemex.htm, 

accessed October 21, 2008.

Andover Technology Partners (2008). Cost and Performance of Controls, memorandum to U.S. EPA, 

September 25, 2008.

Andover Technologies Partners (2009a). Memorandum: NOX, SO2 and CO2 Emissions from Cement Kilns 

(Emissions Memo), from Jim Staudt to Ravi Srivastava, Samudra Vijay, Elineth Torres. Dated March 10, 

2009 (see Appendix A of this document).

Andover Technology Partners (2009b). Memorandum: Costs and Performance Controls, from Jim Staudt 

to Ravi Srivastava, Samudra Vijay, Elineth Torres. Dated March 10, 2009 (see Appendix A of this 

document).

Andover Technologies Partners (2010). Memorandum: Wet Scrubber Cost Algorithms, from Jim Staudt to 

Ravi Srivastava, Elineth Torres, Keith Barnett. Dated February 26, 2010 (see Appendix A of this 

document).

ARCADIS (1992). Theoretical Approach for Enhanced Mass Transfer Effects in-Duct Flue Gas 

Desulfurization Processes. Final Report. ARCADIS, 1992.

ARCADIS (2009). Personal Comm. with E. Leamer of ARCADIS, 26 February, 2009.

Burtraw, D. (2010). Supply Elasticity Estimation, memorandum to Ravi Srivastava, U.S. EPA, March 10, 

2010.

Depro, B.M. (2007). RTI International. “Documentation for Portland Cement Kiln Cost Functions 

(2005)”, Memorandum to Keith Barnett, US EPA, August 31, 2007.

Depro, Brooks. (2010). RTI International. “ISIS Cement Production Costs”, Memorandum to Elineth 

Torres, US EPA, March 31, 2010.

Depro, Brooks and Lentz, Anthony. (2010). RTI International. “ISIS Cement Production Costs”, Excel 

Spreadsheet Attachment to Memo of Same Name from Brooks Depro (2010), February 16, 2010.

BLS (2008). Bureau of Labor Statistics, Databases, Tables & Calculators by Subject, Major Sector 

Productivity and Costs Index. Series ID: PRS30006112, Sector: Manufacturing. 

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=PRS30006112, 

accessed November 24, 2008.

EIA (2008) Annual Energy Outlook 2008, DOE/EIA-0383(2008), June 2008. 

http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2008).pdf, accessed October 21, 2008.

EPA (1993). Report to Congress on Cement Kiln Dust, Chapter 3: CKD Generation and Characteristics; 

US Environmental Protection Agency: 1993.

EPA (1995). Compilation of Air Pollution Emission Factors - Volume 1: Stationary Point and Area 

Sources. Fifth Edition, Supplements A-F, AP-42. U.S. Environmental Protection Agency, Research 

Triangle Park, North Carolina.
3-25

EPA (1998). June 1998. Regulatory Impact Analysis of Cement Kiln Dust Rulemaking. Washington, DC: 

U.S. Environmental Protection Agency. 

http://www.epa.gov/osw/nonhaz/industrial/special/ckd/ckd/ckdcostt.pdf, accessed October 21, 2008. 

EPA (2004). Alternative Control Techniques Document - NOX Emissions from Cement Manufacturing, 

dated March 1994 (EPA-453/R-94-004)

EPA (2005). EPA 2002 National Emission Inventory v3. 

http://www.epa.gov/ttn/chief/net/2002inventory.html, accessed October 21, 2008 

EPA (2006). EPA 2005 National Emissions Inventory Version 2. 

http://www.epa.gov/ttn/chief/net/2005inventory.html accessed November 17, 2008

EPA (2007). November 2007. Alternative Control Techniques Document Update - NOX Emissions from 

New Cement Kilns. EPA-453/R-07-006. Research Triangle Park, NC. US Environmental Protection 

Agency.

EPA (2010). August 6, 2010. "Summary of Environmental and Cost Impacts for Final Portland Cement 

NESHAP and NSPS" Memorandum prepared for Keith Barnett by RTI. US Environmental Protection 

Agency.

FLSmidth & Co. A/S (2007). Q2 Report 2007. August 2007 

http://hugin.info/2106/R/1148414/219358.pdf, accessed October 21, 2008.

NESCAUM (2000). Status Report on NOX Controls for Gas Turbines, Cement Kilns, Industrial Boilers, 

Internal Combustion Engines: Technologies & Cost Effectiveness. Northeast States for Coordinated Air 

Use Management, December 2000. Accessed at http://www.nescaum.org/documents/nox-2000.pdf/

OMB (1992). Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs. OMB 

Circular No.A-94 (Revised). U.S. Office of Management and Budget, October 29, 1992. 

http://www.whitehouse.gov/omb/circulars/a094/a094.html#8, accessed October 21, 2008.

PCA (2004). Innovations in Portland Cement Manufacturing. Portland Cement Association. Edited by J. 

I. Bhatty, F. M. Miller, and S. H. Kosmatka. 2004.

PCA (2004a). U.S. and Canadian Portland Cement Industry: Plant Information Summary of December 

31, 2004.

PCA (2006). U.S. and Canadian Portland Cement Industry: Plant Information Summary. Portland Cement 

Association, Skokie, IL, 2006.

PCA (2008). Forecast Report: Long-Term Cement Consumption Outlook. By Ed Sullivan January 31, 

2008. http://www.cement.org/econ/pdf/Long-TermFlashwinter2007nonmember.pdf, accessed October 21, 

2008. 

PCA (2009a). PCA Capacity Report. Flash Report. Portland Cement Association’s Economic Research 

Department. Updated October 19, 2009.

PCA (2009b). Forecast Report: Long-Term Cement Consumption Outlook. By Ed Sullivan. October 28, 

2009. Portland Cement Association. 
3-26

Ryan, S. (2006). The Costs of Environmental Regulation in a Concentrated Industry. Department of 

Economics, MIT, Cambridge, MA, October 5, 2006. http://econ-www.mit.edu/files/1166, accessed 

October 21, 2008.

RTI (2010). ISIS Input Price Escalation Factors, Excel Spreadsheet.

TRAGIS (2003). Transportation Routing Analysis Geographic Information System (TRAGIS) User’s 

Manual, Revision 0, Oak Ridge National Laboratory, June 2003.

https://tragis.ornl.gov/TRAGISmanual.pdf.

USGS (2005). Background Facts and Issues Concerning Cement and Cement Data. U.S. Geological 

Survey, Open-File Report 2005-1152. http://pubs.usgs.gov/of/2005/1152/2005-1152.pdf, accessed 

October 21, 2008.

USGS (2007a). 2005 Minerals Yearbook: Cement. U.S. Geological Survey, p. 16.2, February 2007, 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/cemenmyb05.pdf, accessed October 21, 2008

USGS (2007b). Mineral Commodity Summaries: Cement, U.S. Geological Survey, pp. 40-41, January 

2007. http://minerals.er.usgs.gov/minerals/pubs/commodity/cement/cemenmcs07.pdf, accessed October 

21, 2008.

USGS (2009). 2005 Minerals Yearbook: Cement. U.S. Geological Survey (Table 17), pp. 16.21. 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/myb1-2007-cemen.pdf.

Worrell, E.; Galitsky, C. (2004). Energy Efficiency Improvement Opportunities for Cement Making; 

Lawrence Berkeley National Laboratory, LBNL-54036, Jan 2004. An ENERGY STAR® Guide for 

Energy and Plant Managers, http://www.osti.gov/energycitations/servlets/purl/821915-Re2kcK/native/.

Yates, J.R. et al. (2003). CemStar Process and Technology for Lowering Greenhouse Gases and Other 

Emissions while Increasing Cement Production. 

http://www.hatch.ca/Environment_Community/Sustainable_Development/Projects/Copy%20of%20Cem

Star-Process-final4-30-03.pdf accessed February 27, 2009.
4-1

Chapter 4

Model Calibration

4.1 Data for Calibration

Production quantities in various USGS production districts, import levels in various import districts and 

reported cement prices for various USGS districts are the key quantities used for calibration of the model. 

Reported data for years 2005, 2006 and 2007 were used to calibrate the model and obtain values of 

appropriate calibration parameters. 

4.2 Cement Prices in USGS Districts

Reported cement prices in various USGS districts are shown in Table 4.1 for years 2005 through 2007. 

For a given year, the reported cement price shows significant variation across USGS districts. For most 

districts the cement price has increased over the three year period.

4.3 Cement Production in USGS Districts

Reported cement production in various USGS districts is shown in Table 4.2 for years 2005 through 

2007. For a given year, the reported cement production shows significant variation across USGS districts. 

Generally production dropped from 2005 to 2007, due to a decrease in demand resulting from the 

economic downturn.

4.4 Cement Imports by Import Districts

Reported cement import quantity in various import districts is shown in Table 4.3 for years 2005 through 

2007. For a given year, the reported cement imports show a significant variation across import districts. 

Generally imports dropped from 2005 to 2007, due to a decrease in demand resulting from the economic 

downturn. New Orleans (LA), San Francisco (CA) and Tampa (FL) suffered large drops in the quantities 

imported in 2007 compared to that in 2005.
4-2

Table 4-1. Cement Prices ($/short ton) for Various USGS Districts

USGS District 2005 2006 2007

Alabama 74.61 81.74 87.09

Illinois 80.29 89.81 91.17

Indiana 72.03 80.04 79.99

Kansas 76.58 86.50 92.87

Maryland 74.76 81.19 80.18

Missouri 78.92 86.61 89.36

Ohio 82.08 90.24 91.47

South Carolina 68.57 80.46 87.54

Maine and New York 80.74 92.53 96.62

Pennsylvania 79.73 89.99 90.85

Michigan and Wisconsin 79.83 84.82 90.12

Iowa, Nebraska and South Dakota 78.72 89.83 93.08

Florida 77.56 90.44 95.55

Georgia, Virginia and West Virginia 84.49 95.93 93.60

Kentucky, Mississippi and Tennessee 84.37 89.81 88.90

Arkansas and Oklahoma 89.00 96.99 97.74

Texas 74.72 85.10 88.33

Arizona and New Mexico 75.76 84.16 86.64

Colorado and Wyoming 82.24 92.90 92.73

Idaho, Montana, Nevada and Utah 83.61 90.26 95.25

California 88.20 99.09 100.24

Oregon and Washington 79.38 90.72 90.72
4-3

Table 4-2. Cement Production (short tons) for Various USGS Districts

USGS District 2005 2006 2007

Alabama 5,647,141 5,733,121 5,578,650

Illinois 3,568,182 3,425,984 3,434,254

Indiana 3,370,868 3,334,492 3,285,999

Kansas 3,182,373 3,310,241 3,039,164

Maryland 2,813,098 2,922,227 3,305,160

Missouri 5,877,524 5,776,111 5,763,479

Ohio 1,086,879 1,064,833 1,010,077

South Carolina 3,601,251 3,654,162 4,057,414

Maine and New York 3,572,591 3,699,357 3,471,388

Pennsylvania 6,931,334 6,631,505 6,239,551

Michigan and Wisconsin 6,171,841 5,993,267 6,047,588

Iowa, Nebraska and South Dakota 4,962,606 5,024,335 4,889,607

Florida 6,311,835 6,477,181 6,076,137

Georgia, Virginia and West Virginia 2,612,478 2,696,253 2,528,648

Kentucky, Mississippi and Tennessee 3,649,753 3,849,271 3,770,250

Arkansas and Oklahoma 3,097,495 2,979,547 2,879,982

Texas 12,737,207 12,510,131 12,038,919

Arizona and New Mexico 3,073,244 2,809,792 2,902,131

Colorado and Wyoming 2,918,920 2,842,861 2,797,240

Idaho, Montana, Nevada and Utah 3,400,630 3,354,333 3,308,645

California 12,747,128 12,069,207 11,941,198

Oregon and Washington 2,175,963 2,101,005 2,103,481
4-4

Table 4-3. Cement Imports (except from Canada and Mexico) for Various Import Districts (short tons)

Import District 2005 2006 2007

Baltimore, MD 146,300 203,500 18,700

Boston, MA 145,200 50,600 3,300

Buffalo, NY 6,600 4,400 0

Charleston, SC 1,212,200 1,100,000 363,000

Chicago, IL 1,100 1,100 0

Cleveland, OH 0 1,100 0

Columbia-Snake, ID-OR-WA 831,600 1,115,400 1,180,300

Detroit, MI 59,400 0 0

Duluth, MN 0 0 0

El Paso, TX 0 0 0

Great Falls, MT 0 0 0

Houston-Galveston, TX 2,880,900 3,705,900 3,641,000

Laredo, TX 0 0 0

Los Angeles, CA 3,357,200 3,759,800 2,029,500

Miami, FL 2,395,800 2,311,100 980,100

Minneapolis, MN 0 0 0

Mobile, AL 565,400 573,100 0

New Orleans, LA 4,503,400 5,090,800 1,171,500

New York, NY 1,390,400 1,327,700 810,700

Nogales, AZ 0 0 0

Norfolk, VA 767,800 793,100 447,700

Ogdensburg, NY 0 0 0

Pembina, ND 0 0 0

Philadelphia, PA 544,500 665,500 342,100

Portland, ME 0 0 0

Providence, RI 814,000 680,900 509,300

San Diego, CA 620,400 708,400 427,900

San Francisco, CA 2,599,300 3,081,100 1,524,600

Savannah, GA 88,000 204,600 376,200

Seattle, WA 368,500 733,700 644,600

St. Albans, VT 0 0 0

St. Louis, MO 0 0 3,300

Tampa, FL 3,825,800 3,791,700 1,523,500

Wilmington, NC 427,900 416,900 284,900
4-5

4.5 Calibration Methodology

First, the model is set to run for 2005-2007 by making appropriate changes in the input “Policy” 

worksheet, and GAMS input files. The import quantities are then adjusted equal to reported import 

quantity for each of the import district, except for those of Mexico and Canada. Then the value of 

calibration parameter, calconst(i), is set by trial and error, to minimize the absolute difference in the 

reported and model predicted prices (which are marginal values of the supply equation) for each USGS 

district. Further, we also monitor impact of changing the calibration constant on estimated production 

quantities to keep the difference between reported and model predicted production values within 

reasonable limits6. The calibration constant modifies each kiln’s variable cost of production. “Calibration” 

worksheet within the Inputs workbook has values of calibration constant assigned for each USGS district. 

Then in the input GAMS file, we assign the values for a given USGS district to each of the kilns located 

in that USGS district. Reported and calculated values of prices by USGS district are shown (Table 4-4, 

Table 4-5 and Table 4-6, ) for year 2005-2007. In most of the districts reported and calculated prices are 

within 10% range, whereas in a few they are higher. Current values of the parameter Calconst(i) being 

used in the model runs can be found in the worksheet “Calibration” of the “ISIS_Inputs.xls” workbook. 

The model is first calibrated for year 2005, to obtain values of the calibration parameter calconst(i) for the 

year. Next, we use calconst(i) values for 2005 as starting point and obtain values for the same parameter 

for 2006. Similarly, the process is repeated to obtain the values for 2007. Then, we take an average of the 

calconst(i) values over the three years, and use it for the future model runs. Calibration is a dynamic 

process, and it is recommended that model calibration be performed periodically, to incorporate 

availability of the new production, imports and price data. We note that in general the price differentials 

are smaller in the year 2005 and have increased in 2007. Further while calibrating for price we also track 

aggregate production level to make sure that it is within reasonable limits (Table 4-7). In some USGS 

districts the reported and calculated prices are different than the model predicted prices due to several 

factors, including error in reported prices, and potentially missing information in the transportation 

matrix.

4.6 Re-calibration of the Model

If any of the key input parameters, specifically those relating to production quantities and costs, are 

refined or modified, model needs to be re-calibrated. Transportation matrix, modes, and cost of 

transportation also have significant impact on the behavior of production distribution across the districts 

and production prices. Therefore, if any further modifications or refinements are made to the 

transportation matrix, the model needs to be re-calibrated.

The current set of calibration constant values are averaged over the years of calibration, and are available 

in the “Calibration” worksheet in the “ISIS_Inputs.xls” workbook.

Further, at the time of calibration of the current version of the model, production, import and price values 

for only 2005 to 2007 were available. As the new values become available, the model needs to be 

recalibrated. The model can be and should be recalibrated as soon as new information or actual observed 

data become available. However, due to practical limitations it is recommended that the model be recalibrated every two years. Further, since the calibration data is available only for three years, we have 

given equal weight to the parameters obtained for each year. Once larger data-set is available, a modified 

weighing system can be adopted to give highest weight to the most-recent year data.

 

6 There is no standard method to guide us to determine acceptable level of “error” in the reported and predicted values for the 

purpose of calibration. We have set acceptable level for the absolute gap between the individual reported and predicted values to 

± 15%, although effort has been made to keep this level below 10% for most of the quantities. However, due to discontinuities in 

the transportation matrix, error in the reported data, or other unknowns, in certain markets the gap in the estimated and reported 

values may be higher.
4-6

Table 4-4. Reported and Calculated Cement Prices in USGS Districts (2005)

USGS District Reported Calculated %Δ

Alabama 74.61 78 5

Illinois 80.29 83 3

Indiana 72.03 84 16

Kansas 76.58 81 6

Maryland 74.76 74 -1

Missouri 78.92 82 4

Ohio 82.08 83 1

South Carolina 68.57 76 10

Maine and New York 80.74 73 -9

Pennsylvania 79.73 77 -3

Michigan and Wisconsin 79.83 81 2

Iowa, Nebraska and South Dakota 78.72 81 3

Florida 77.56 75 -3

Georgia, Virginia and West Virginia 84.49 80 -6

Kentucky, Mississippi and Tennessee 84.37 81 -4

Arkansas and Oklahoma 89.00 87 -2

Texas 74.72 78 4

Arizona and New Mexico 75.76 105 39

Colorado and Wyoming 82.24 98 20

Idaho, Montana, Nevada and Utah 83.61 70 -16

California 88.20 85 -4

Oregon and Washington 79.38 69 -13
4-7

Table 4-5. Reported and Calculated Cement Prices in USGS Districts (2006)

USGS District Reported Calculated %Δ

Alabama 81.74 85 4

Illinois 89.81 83 -8

Indiana 80.04 85 6

Kansas 86.50 83 -4

Maryland 81.19 80 -1

Missouri 86.61 81 -6

Ohio 90.24 83 -8

South Carolina 80.46 85 6

Maine and New York 92.53 78 -16

Pennsylvania 89.99 80 -11

Michigan and Wisconsin 84.82 80 -6

Iowa, Nebraska and South Dakota 89.83 81 -10

Florida 90.44 82 -10

Georgia, Virginia and West Virginia 95.93 86 -10

Kentucky, Mississippi and Tennessee 89.81 84 -6

Arkansas and Oklahoma 96.99 91 -6

Texas 85.10 81 -4

Arizona and New Mexico 84.16 105 25

Colorado and Wyoming 92.90 100 8

Idaho, Montana, Nevada and Utah 90.26 83 -8

California 99.09 85 -14

Oregon and Washington 90.72 74 -18
4-8

Table 4-6. Reported and Calculated Cement Prices in USGS Districts (2007)

USGS District Reported Calculated %Δ

Alabama 87.09 73 -17

Illinois 91.17 72 -21

Indiana 79.99 75 -7

Kansas 92.87 71 -24

Maryland 80.18 74 -8

Missouri 89.36 71 -21

Ohio 91.47 76 -17

South Carolina 87.54 69 -21

Maine and New York 96.62 74 -24

Pennsylvania 90.85 75 -17

Michigan and Wisconsin 90.12 76 -15

Iowa, Nebraska and South Dakota 93.08 71 -23

Florida 95.55 66 -31

Georgia, Virginia and West Virginia 93.60 74 -20

Kentucky, Mississippi and Tennessee 88.90 71 -20

Arkansas and Oklahoma 97.74 88 -10

Texas 88.33 80 -10

Arizona and New Mexico 86.64 101 17

Colorado and Wyoming 92.73 89 -4

Idaho, Montana, Nevada and Utah 95.25 83 -13

California 100.24 81 -20

Oregon and Washington 90.72 75 -18

Table 4-7. Aggregate production (reported and modeled) for 2005-2007

Year

Reported Production

(million short tons)

Calculated Production

(million short tons) %Δ

2005 111.84 112.54 0.63

2006 110.30 111.23 0.84

2007 108.17 101.95 -5.75
4-9

References for Chapter 4

United States Geological Service. Mineral Yearbook 2008. Table 5. 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/

United States Geological Service. Mineral Yearbook 2008. Table 3. 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/

United States Geological Service. Mineral Yearbook 2008. Table 11. 

http://minerals.usgs.gov/minerals/pubs/commodity/cement/
5-1

Chapter 5

Analysis and Results of the Portland Cement NESHAP and NSPS

5.1 Affected Sources

EPA is finalizing amendments to the NESHAP for the Portland cement manufacturing industry and the 

NSPS for Portland cement plants. The final amendments to the NESHAP add or revise, as applicable, 

emission limits for mercury (Hg), total hydrocarbons (THC), and particulate matter (PM) from nonhazardous waste (nhw) kilns located at major or area sources, and hydrochloric acid (HCl) from nhw kilns 

located at major sources. The amendments to the NSPS add or revise, as applicable, emission limits for 

PM, NOx and SO2 for facilities that commence construction, modification, or reconstruction after June 

16, 2008. 

ISIS-cement was used to conduct an integrated engineering and economic analysis for the final Portland

Cement NESHAP and final NSPS. Figure 5-1 shows the cement facilities and the kilns modeled in ISIS

for the final NESHAP and final NSPS analysis. Even though the Portland cement NESHAP affects only 

nhw kilns, in ISIS-cement all cement kilns projected to be in the U.S. in 2013 are modeled to meet the 

cement demand. 

Figure 5-1 Portland Cement Facilities and Kilns Modeled in ISIS-Cement

ISIS Inputs: 2013

Total Cement Facilities = 108

Total Cement Kilns = 177

Total Cement Capacity = 127.6 Million metric tons

Non-hazardous Waste Facilities = 97

Total Non-hazardous Waste Kilns = 157

Total Cement Capacity = 115.2 Million metric tons

Hazardous Waste Facilities = 11

Total Kilns = 20

Total Cement Capacity = 12.4 Million metric tons

Existing Facilities in 2009 = 93

Existing Kilns = 148

Total Cement Capacity = 103.8 

Million metric tons

Projected New Facilities in 2010-2012 = 4

Projected New Kilns = 9

Total Cement Capacity = 11.4 Million 

metric tons
5-2

From the 108 Portland cement facilities modeled in ISIS-cement for the final NESHAP and final NSPS 

analysis, 97 facilities or 157 nhw kilns are projected to be subject to the final NESHAP. From these 157 

nhw kilns projected to be subject to the NESHAP, 16 kilns are projected to be subject to the limits for 

new sources while 137 kilns are projected to be subject to the limits for existing sources. Seven facilities 

or 7 kilns are projected to be subject to the final NSPS.

7

 

5.2 Emission Limits

Table 5-1 shows the emission limits for the final NESHAP analyzed in ISIS, while Table 5-2 shows the 

emission limits for the final NSPS. Emission limits in tables 5-1 and 5-2 are average annual emissions. 

EPA’s analysis using ISIS-cement focused on the individual rules and also on the combination of the final 

NESHAP and the final NSPS. The limits used in the analysis were input as lbs/ton cement produced 

annually.

Table 5-1. Final NESHAP Emission Limits

NESHAP Limits for ISIS' Runs

Pollutant Existing New Units Average Average

Hg

31.7 14 lb/MM ton clinker

0.0000317 0.000014 lb/ton clinker

0.000029164 0.00001288 lb/ton cement

THC

5 5 ppmv

0.050856164 0.050856164 lb THC/ton clinker

0.046787671 0.046787671 lb/ton cement

HCl

0.4 0.4 ppmv

0.003378699 0.003378699 lb HCl/ton clinker

0.003108403 0.003108403 lb/ton cement

PM 0.012 0.005 lb/ton clinker

0.01104 0.0046 lb/ton cement

Table 5-2. Final NSPS Emission Limits

NSPS Limits for ISIS' Runs

Pollutant

New

Limit Average Units

NOx

1.5 1.5 lb/ton clinker

1.38 1.38 lb/ton cement

SO2

0.4 0.4 lb/ton clinker

0.368 0.368 lb/ton cement

 

7 Under the NESHAP any source that commenced construction after May 6, 2009 is a new source. Under 

the NSPS, any source constructed, reconstructed or modified after June 16, 2008 is a new source.
5-3

5.3 Control Technologies

Kilns subject to the final NESHAP and/or final NSPS are expected to add one or more control devices to 

comply with the final emission limits. Table 5-3 shows control technologies and control efficiencies 

used in the final NESHAP and final NSPS analysis. The cost of these control technologies can be found 

in the "Summary of Environmental and Cost Impacts for Final Portland Cement NESHAP and NSPS". 

August 6, 2010. The final NESHAP and final NSPS rules also include additional testing and monitoring 

requirements for affected sources. In the final NESHAP, in addition to meeting the emission limits, each 

affected kiln will be required to install Continuous Emission Monitoring Systems (CEMS) to monitor Hg, 

THC and HCl, while bag leak detector (BLD) will be required to monitor performance of all baghouses 

(fabric filters). In the final NSPS, in addition to meeting the emission limits, each kiln affected will be

required to install CEMS for NOx and SO2. The cost of these devices can also be found in "Summary of 

Environmental and Cost Impacts for Final Portland Cement NESHAP and NSPS", August 6, 2010.

Table 5-3. Control Technology and Control Efficiency Matrix by Pollutant

Control Technologies Pollutants

Hg THC HCl PM SO2 NOx

Limestone Wet Scrubbers (LWS) 80% 99% 90%

Activated Carbon Injection (ACI) 

with polishing baghouse 90% 80% 99.9%

Regenerative Thermal Oxidizer 

(RTO) 98%

Dry Lime Injection (DLI) 75% 70%

Low NOx Burner (LNB) + Selective 

Non-Catalytic Reduction (SNCR) 65%

Baghouse with Membrane Bags 

(BHMB) 99.9%

Membrane Bags Retrofit (MBR) 99.9%

ACI + LWS 90% 80% 99% 99.9% 90%

LWS + RTO 80% 98% 99% 90%

5.4 ISIS Runs and Results

EPA’s analysis focuses on the results of the final NESHAP and final NSPS. We also present additional 

information on different combinations of the regulatory programs to help stakeholders better understand 

the size and scope of each. The three policies analyzed are:

o Final NSPS only,

o Final NESHAP only, and

o Final NSPS and NESHAP.
5-4

Because all existing sources under the NESHAP will be required to come into compliance in 2013, the 

analysis presented here reflects the impact of the final NESHAP and final NSPS in 2013.

As explained in Chapter 3, one of the key data inputs for the ISIS-cement model is the demand forecast

for each demand center. For cement, the demand is a function of gross domestic product (GDP) growth, 

interest rates, special construction projects (e.g., highways), and public sector construction spending. In 

2005, Portland cement demand reached a record high of 128 million metric tons. The economic distress in 

the U.S during 2008 and 2009 resulted in a decline in cement demand. The demand for cement compared

with 2005 levels declined from nearly 89% in 2007 to less than 60% in 2009 (PCA, 2009). Per PCA, 

cement demand is not expected to reach past cyclical peak levels (2005) until 2015 (PCA, 2010). Since 

multiple years were not modeled, the average demand for the years 2013 through 2018 of PCA’s 2009 

Long-Term Cement Consumption Outlook (PCA, 2009) was used as the exogenous demand in 2013. 

This average demand is expected to be more representative of what will be typical after implementation 

of the regulation. 

On the domestic supply side, ISIS uses the industry data for all the kilns operating in 2009 (see Figure 5-

1) and optimizes the industry in 2013 taking into account retirements, replacements, and new kilns 

projected by PCA from 2010 to 2013. For the policy scenarios analyzed here, ISIS simultaneously 

estimated 1) optimal industry operation to meet demand and emission reduction requirements; 2) the suite 

of control technologies needed to meet the emission limits; 3) the engineering cost of controls; and 4) the 

economic impacts of the policies.

5.4.1 ISIS Results

5.4.1.1 Cement Demand

As mentioned in Chapter 3, in ISIS-cement the U.S. cement industry is organized in state-specific demand 

centers. The model simulates each cement kiln’s ability to compete in each of the demand centers as a 

function of the kiln’s production cost and transportation cost associated with supplying to each demand 

center. At the same time the cement demand at each demand center can be met by local production, 

foreign imports, or by inter-market trading (i.e., shipping from other demand center). 

The exogenous cement demand used in ISIS for this analysis was the average demand for 2013 through

2018 or 123.6 million metric tons of cement. Table 5-4 shows the impact of the three policies analyzed 

on the cement demand in 2013. As shown in Table 5-4, in 2013 the US cement demand could drop 

0.06% under the NSPS, 5.82% under the NESHAP, and 8.44% under the combination of the NSPS and 

NESHAP policies. 

Table 5-4 Policy Impact on U.S. Cement Demand in 2013

Cement Demand (metric tons of cement)

Policy Run Reference Case Policy Case Change in Demand % Change

NSPS 123,653,270 123,733,005 79,735 -0.06

NESHAP 123,653,270 116,460,063 7,193,207 -5.82

NSPS and NESHAP 123,653,270 113,222,314 10,430,956 -8.44
5-5

5.4.1.2 Cement Production

Table 5-5 shows the impact of the three policies analyzed on the US cement production in 2013. As 

shown in Table 5-5, U.S. cement production could drop 0.12% under the NSPS, 10.02% under the 

NESHAP, and 13.46% under the combination of the NSPS and NESHAP policies. 

Table 5-5 Policy Impact on U.S. Cement Production

Cement Production (metric tons of cement)

Policy Run Reference Case Policy Case Change in Production % Change

NSPS 94,036,939 93,920,258 116,681 -0.12

NESHAP 94,141,619 84,710,916 9,430,703 -10.02

NSPS and NESHAP 94,141,619 81,473,143 12,668,475 -13.46

5.4.1.3 Cement Imports

Table 5-6 shows the impact of the three policies analyzed on US cement imports in 2013. As shown in 

Table 5-6, U.S. cement imports could rise 0.66% under the NSPS; 7.58% under the NESHAP and 7.58% 

under the combination of the NSPS and NESHAP policies.

Table 5-6 Policy Impact on U.S. Cement Imports

Cement Imports (metric tons of cement)

Policy Run Reference Case Policy Case Change in Imports % Change

NSPS 29,616,331 29,812,747 196,416 0.66

NESHAP 29,511,650 31,749,147 2,237,496 7.58

NSPS and NESHAP 29,511,650 31,749,170 2,237,519 7.58

5.4.1.4 Cement Prices

Table 5-7 shows the estimated average national price in 2013 for Portland cement under the policies

analyzed. As shown in Table 5-7, cement prices may increase 0.75% under the NSPS, 6.99% under the 

NESHAP, and 10.74% under the combination of the NSPS and NESHAP policies.

Table 5-7 Policy Impact on U.S. Cement Prices

Cement Price (S)

Policy Run Reference Case Policy Case Change in Price % Change

NSPS 87.77 88.43 0.66 0.75

NESHAP 85.25 91.21 5.96 6.99

NSPS and NESHAP 85.25 94.17 8.93 10.47

5.4.1.5 Control Technology Installation

Table 5-8 shows the projected control technology installation in 2013 for the policies analyzed. 
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Table 5-8 Control Technology Installation

Controls

Policy Run LNB +

SNCR LWS ACI LWS +ACI MBR RTO LWS +RTO DLI BHMB

NSPS 7 7 - - - - - - -

NESHAP - 28 40 26 8 11 9 1 3

NSPS and 

NESHAP 7 26 44 20 4 8 9 1 1

Table 5-9 shows control cost associated with the control installation shown in Table 5-8. Table 5-9 also 

shows the monitoring cost associated with the three policy scenarios analyzed.

Table 5-9 Control Cost

Control Cost ($)

Policy Run Control Cost Monitoring Total Cost

NSPS 33,225,564 1,386,821 34,612,385

NESHAP 323,556,215 16,641,847 340,198,062

NSPS and NESHAP 298,504,950 15,453,143 313,958,093

5.4.1.6 Cement Capacity

One important feature of the ISIS-cement model is that the cement capacity is dynamically optimized by 

endogenously installing new capacity, replacing existing capacity and retiring non-competitive existing 

capacity. Table 5-10 shows the projected capacity in 2013 for the three policies analyzed. 

Table 5-10 Cement Capacity

Capacity (metric tons cement)

Policy Run Reference Case Policy Case Capacity Change % Change 

NSPS 94,036,939 93,920,258 116,681 -0.12

NESHAP 94,141,619 84,710,916 9,430,703 -10.02

NSPS and NESHAP 94,141,619 81,473,143 12,668,476 -13.46

With respect to the reference case in 2013 ISIS identified that 116,681 metric tons of existing capacity 

may idle under the NSPS, 9.4 million metric tons of existing capacity under NESHAP and 12.7 million 

metric tons of existing capacity under the combination of the NSPS and NESHAP policies.

Table 5-11 shows the number of kilns active in each policy analyzed in ISIS. A kiln that is active in ISIScement will run at 100% of its capacity after taking into account normal downtime days. A kiln is 

considered to be idling if it was producing cement in the reference case but is not in the policy case. As 

shown in Table 5-11, 1 kiln may idle under the NSPS, 16 kilns under the NESHAP, and 22 kilns under 

the combination of NESHAP and NSPS. The average size of the kilns that may idle under the NESHAP 

and the combination of NESHAP and NSPS is 589,419 and 575,840 million metric tons of cement,

respectively. 
5-7

Table 5-11 Kiln Population

Kilns

Policy Run Reference Case Policy Case Kilns Idling % Change

NSPS 129 128 1 -0.78

NESHAP 114 98 16 -14.04

NSPS and NESHAP 114 92 22 -19.30

Table 5-12 shows the number of cement facilities that may idle as result of the policies analyzed in ISIS. 

The changes in cement capacity and kiln population may cause 6 facilities to idle under the NESHAP and 

11 under the combination of the NESHAP and NSPS. A facility is considered idling if one or more kilns 

at the facility were producing cement in the reference case but they are not producing in the policy case. 

Table 5-12 Number of Cement Facilities

Facilities

Policy Run Reference Case Policy Case Facilities Idling % Change

NSPS 85 85 0 0.00

NESHAP 81 75 6 -7.41

NSPS and NESHAP 81 70 11 -13.58

5.4.1.7 Employment Impacts

Table 5-13 shows the total number of employee hours for each policy analyzed. The difference between 

the reference and policy case in each scenario gives an estimate of the change in the number of employee 

hours due to the policy under analysis. Using PCA’s labor use data, we can calculate the number of jobs 

that could potentially be affected by each policy under analysis. Table 5-14 shows PCA’s labor use data 

for 2005 and 2008 (PCA 2005, 2008). Table 5-15 shows the estimated impact on employment for each 

policy under analysis.

Table 5-13 Change in Employee Hours

Employee Hours

Policy Run Reference Case Policy Case Difference % Change

NSPS 24,586,999 24,586,069 930 0.00

NESHAP 24,069,236 21,558,859 2,510,377 -10.43

NSPS and NESHAP 24,069,320 20,761,183 3,308,137 -13.74
5-8

Table 5-14 PCA’s Labor Data: 2005 and 2008

Year Process Labor hours: Direct

Number of 

Employees

Number of Direct Hours 

per Employee

2005

Wet Process 3,970,188 1,962 2,024

Dry Process 35,448,534 16,562 2,140

Total 39,418,722 18,524 2,128

Average 19,709,361 9,262 2,082

2008

Wet Process 3,607,766 1,769 2,039

Dry Process 34,767,447 16,504 2,107

Total 38,375,213 18,273 2,100

Average 19,187,607 9,137 2,073

Table 5-15 Employment Impacts

Employment Impacts

Policy Run Change in Employee Hours Change in Employment

NSPS 930 0

NESHAP 2,510,377 1,180-1,211

NSPS and NESHAP 3,308,137 1,555-1,596

5.4.1.8 Total Social Cost

In ISIS, total social cost is the cost to comply with the policy under analysis. This cost includes 

installation of controls and monitoring requirements as well as the cost to society due to the changes in 

supply, demand, employment and price effects. Table 5-16 shows the change in surplus for each policy 

analyzed in ISIS. As shown in Table 5-16 the surplus for the cement industry may fall by $33 million 

under the NSPS; by $408 million under the NESHAP and by $451 million under the combination of the 

NSPS and NESHAP policies.

Table 5-16 Total Social Cost

Surplus Loss (Million Dollars)

Policy Run Reference Case Policy Case Change in Surplus % Change

NSPS 10,027 9,994 33 -0.33

NESHAP 9,343 8,936 408 -4.37

NSPS and NESHAP 9,341 8,891 451 -4.82

5.4.1.9 Emissions

Table 5-17 shows the estimated emission changes in 2013 for Hg, THC, PM, HCl, SO2 and NOx for each 

policy analyzed. 
5-9

Table 5-17 Emissions

Emissions (tpy)

Policy Run Pollutant Reference 

Case Policy Case Change in Emissions

Percent 

Change

NSPS

PM 7,645 7,561 83 1.09

Hg 5.78 5.32 0.46 7.94

THC 12,207 12,185 22 0.18

HCl 4,611 3,925 686 14.88

NOx 126,751 116,043 10,708 8.45

SO2 122,825 114,481 8,344 6.79

NESHAP

PM 6,439 615 5,823 90.44

Hg 6.22 0.90 5.32 85.55

THC 11,894 1,081 10,813 90.91

HCl 4,502 126 4,376 97.20

NOx 122,857 109,324 13,533 11.02

SO2 115,163 34,919 80,245 69.68

NSPS and 

NESHAP

PM 6,351 620 5,731 90.24

Hg 6.22 0.81 5.41 86.99

THC 11,894 968 10,926 91.86

HCl 4,502 135 4,367 97.00

NOx 122,857 95,799 27,058 22.02

SO2 115,164 35,775 79,389 68.94
5-10

References for Chapter 5

EPA (2010). August 6, 2010. "Summary of Environmental and Cost Impacts for Final Portland Cement 

NESHAP and NSPS" Memorandum prepared for Keith Barnett by RTI. US Environmental Protection 

Agency.

PCA. December 2005. U.S. and Canadian Labor-Energy Input Survey 2005. Skokie, IL: PCA’s 

Economic Research Department. Portland Cement Association

PCA. December 2008. U.S. and Canadian Labor-Energy Input Survey 2008. Skokie, IL: PCA’s 

Economic Research Department. Portland Cement Association

PCA. 2009. Forecast Report: Long-Term Cement Consumption Outlook. By Ed Sullivan. October 28, 

2009. Portland Cement Association

PCA. 2010. Forecast Report: Capacity Update. By Ed Sullivan. April 28, 2010. Portland Cement 

Association
5-11

Disclaimer

Reference herein to any specific commercial products, process, or service by trade name, trademark, 

manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or 

favoring by the United States Government. The views and opinions of authors expressed herein do not 

necessarily state or reflect those of the United States Government, and shall not be used for advertising or 

product endorsement purposes.
A-1

Appendix A

Andover Technology Partners and RTI International Memos

Andover Technology Partners

May 7, 2010 Electrical Load for Wet Scrubbers

February 26, 2010 Wet Scrubber Cost Algorithms

July 10, 2009 GHG Mitigation Methods for Cement

March 10, 2009 Costs and Performance of Controls – revised from comments

March 10, 2009 NOx, SO2 and CO2 Emissions from Cement Kilns (Emissions Memo) – revised 

from comments

RTI

March 31, 2010 ISIS Cement Production Costs

August 31, 2007 Draft: Documentation for Portland Cement Kiln Cost Functions (2005)