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February 20, 2014

MEMORANDUM

SUBJECT: Economic Impact Analysis for the Section 111(b) Review of the Kraft 

Pulp Mills New Source Performance Standards Subpart BB

FROM: Alexander Macpherson, Air Economics Group 

Health and Environmental Impacts Division, OAQPS (C439-02)

TO: Kelley Spence, Natural Resources Group

Sector Policies and Programs Division, OAQPS (E143-03)

The U.S. Environmental Protection Agency (EPA) performed a review of the 

New Source Performance Standards (NSPS) for kraft pulp mills in the pulp and paper 

industry. The NSPS (Subpart BB) regulate emissions of particulate matter (PM) from 

new, modified, and reconstructed recovery furnaces, smelt dissolving tanks, and lime 

kilns at kraft pulp mills. The NSPS also regulate emissions of total reduced sulfur (TRS) 

compounds from new, modified, and reconstructed digesters, brown stock washers, 

multiple-effect evaporators, condensate strippers, recovery furnaces, smelt dissolving 

tanks, and lime kilns at kraft pulp mills. 

Under the final revisions (included in a new subpart BBa), affected pulp and 

paper facilities would be required to implement additional testing, monitoring, reporting,

and recordkeeping requirements. As part of the regulatory process, EPA is required to 

develop an economic impact analysis (EIA) and small entity impacts analysis for the 

potentially affected industries. This memorandum serves as this EIA. Readers interested 

in a general discussion of the pulp and paper industry are referred to the Industry Profile 

section of the Economic Impact Analysis Final Revisions to the National Emission 

Standards for Hazardous Air Pollutants Subpart S (MACT I and MACT III) for the Pulp 

and Paper Industry.

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This memorandum presents summary information from other, more detailed 

technical analyses. The first analysis projects the number of new, modified, and 

reconstructed emission units that may trigger NSPS in the 5-year period following the 

applicability date for the NSPS review.2 The second analysis (1) estimates current 

emissions of PM and TRS; (2) estimates incremental emissions reductions and costs 

 

1 U.S. Environmental Protection Agency. 2012. Economic Impact Analysis Final Revisions to the National 

Emission Standards for Hazardous Air Pollutants Subpart S (MACT I and MACT III) for the Pulp and 

Paper Industry. < http://www.epa.gov/ttnecas1/regdata/EIAs/pulp_and_paper_final_EIA.pdf>.

2 Hanks, K., Holloway, T., and Gooden, C. RTI International. “Projections of the Number of New, 

Modified, and Reconstructed Emission Units for the Kraft Pulp Mill NSPS Review.” Memorandum to U.S. 

Environmental Protection Agency, February 4, 2013.
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associated with the NSPS review based on the emission units projected for construction, 

modification, or reconstruction; and (3) estimates incremental secondary environmental 

and energy impacts associated with the NSPS review.3

Costs Impacts

Total capital and annualized engineering costs measure the costs incurred by 

affected industries. A total of 10 mills are projected to be impacted by the revised NSPS 

during the 5-year period following the applicability date for the NSPS review for which 

impacts are considered. The nationwide incremental capital and annualized engineering

costs (in 2012 dollars) associated with the NSPS review were estimated at $580,000 and 

$390,000, respectively.

In comparison, EPA recently finalized Risk and Technology Review (RTR) that 

focused on the National Emission Standards for Hazardous Air Pollutants (NESHAP) 

Subpart S for the pulp and paper industry. The annualized engineering costs associated 

with the finalized Subpart S revisions were estimated at $2.1 million. The EIA 

accompanying the finalized Subpart S revisions estimated that paper and paperboard 

product prices would increase less than 0.01% on average, while production levels would 

also decrease less than 0.01% on average as a result of imposing additional regulatory 

compliance costs. With these results in mind, this final action is not expected to induce 

measurable changes in the average national price and production of pulp and paper 

products. 

Emissions Impacts

Because the maximum achievable control technology (MACT) standards for 

existing sources are the same or more stringent that the current NSPS standards, emission 

sources are already required to be compliant with the PM emission limits in Subpart BB,

even if the emission unit has not triggered NSPS. For new units (which have no actual 

performance data), the emission limits associated with Subpart BB or existing source 

MACT (whichever is more stringent) were used to calculate baseline emissions. 

For the final revisions (included in a new subpart BBa), no incremental emissions 

reductions would be obtained, because the final revisions are the same as the current 

MACT limits for PM and are equal baseline (for PM and TRS). No changes are finalized

for the subpart BB TRS concentration limits. Additionally, no emissions changes are 

anticipated from the finalized changes to testing, monitoring, reporting, and 

recordkeeping requirements.

 

3 Holloway, T., K. Hanks, RTI International. “Emissions Inventory for Kraft Pulp Mills and Costs/Impacts 

of the Section 111(b) Review of the Kraft Pulp Mills NSPS.” Memorandum to U.S. Environmental 

Protection Agency. February 4, 2013.
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Because the final revisions to testing, monitoring, reporting, and recordkeeping 

requirements, we expect minimal secondary energy or emissions impacts. We also 

expect no incremental solid waste and wastewater impacts at pulp mills.

Small Entity Impacts

Two of the 10 mills projected to be impacted are small businesses. Because small 

entities may be affected, EPA performed an analysis for impacts on small businesses by 

comparing estimated annualized engineering compliance costs at the company level to 

company sales. The screening analysis found that the ratio of compliance cost to 

company revenue is less than 0.1% for the two small companies that are likely to be 

affected by the final NSPS revisions. Based upon this analysis, we conclude there is no 

significant economic impact on a substantial number of small entities (SISNOSE) arising 

from the final NSPS revisions.