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Appendix C: Cost Effectiveness Analysis March 30, 2007

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Final Staff Report for Rule 4565

APPENDIX C

COSTS AND COST EFFECTIVENESS ANALYSIS FOR

REVISED PROPOSED NEW RULE 4565 (BIOSOLIDS, ANIMAL 

MANURE, AND POULTRY LITTER OPERATIONS)

MARCH 30, 2007
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I. SUMMARY

Rule 4565 (Biosolids, Animal Manure, and Poultry Litter Operations) would require 

operators who manage these materials to reduce VOC emissions through mitigation 

measures which are a combination of management practices (Class One measures) 

and emission controls systems (Class Two measures). In the case of composting 

operations, small facilities would be required to implement management practices. The 

large facilities would be required to install and operate controlled composting systems 

vented to VOC emission control devices in addition to the management practices. Cost 

effectiveness is the estimated annualized cost of control divided by the estimated 

emission reductions.

Operators who landfill or land-apply biosolids, animal manure, or poultry litter would be 

required to adopt management practices to reduce VOC emissions. For landfill 

operations, District staff expects that no compliance costs will be associated with rule 

provisions, since biosolids are not currently used as alternative daily cover, the only 

landfill operation affected by rule requirements. Operators who land-apply biosolids, 

animal manure, or poultry litter would also have no compliance costs, since 

implementation of the control measures would only require that the operator schedule 

the material to arrive at the facility at an appropriate time or to cover the material if land 

incorporation is delayed.

Composting/co-composting facilities would be required to implement a certain number 

of Class One mitigation measures, with operators at larger facilities required to adopt 

more measures than operators at smaller facilities. Class One mitigation measures are 

management practices that have been shown to promote efficient composting and still 

result in VOC reductions. No additional cost is associated with implementing these 

practices, since they are inherent in good composting practice at a well-managed 

facility.

The largest operations, meaning those with at least 100,000 wet tons per year (tpy) 

throughput, would also be required to implement at least one Class Two mitigation 

measures, in addition to the Class One mitigation measures. Class Two mitigation 

measure limit emissions from composting utilizing controlled composting systems 

(either an aerated static pile or in-vessel composting) along with VOC emission control 

system to collect and destroy the collected VOCs. District staff estimates that the total 

annualized costs to these eight large facilities range from $5.8 million per year to $25 

million per year. Based on 595 tons per year of VOC emission reductions, the cost 

effectiveness for these largest compost facilities ranges from about $10,000 to $41,000 

per ton VOC reduced. 

For composting facilities with a throughput of less than 100,000 wet tons per year, the 

cost effectiveness value ranges from $48,000 to $870,000 as shown in Table 2. 

Therefore, District staff believes that it is not cost effective to require facilities with 

throughputs less than 100,000 wet tons per year to implement Class Two mitigation 
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measures. It should be noted, however, that the rule provides operators of small 

composting facilities with the flexibility to comply by implementing Class One measures 

only or a combination of a specified number of Class One and Class Two measures. 

II. REQUIREMENTS OF COST EFFECTIVENESS ANALYSIS

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

Unified Air Pollution Control District to conduct a cost effectiveness analysis of available 

emission control options before adopting each Best Available Retrofit Control 

Technology (BARCT) rule. The purpose of conducting a cost effectiveness analysis is 

to evaluate the economic reasonableness of the pollution control measure or rule. The 

analysis also serves as a guideline in developing the control requirements listed in a 

rule. Absolute cost effectiveness of a control option is the added annual compliance 

cost in dollars per year divided by the emission reduction achieved in tons VOC 

reduced per year. This report presents the District staff's analysis of the absolute cost 

effectiveness of Rule 4565.

Incremental cost effectiveness is intended to measure the change in costs, in dollars 

per year, and emissions reductions, in tons of VOC reduced per year, between two 

progressively more effective control options or technologies. Incremental cost 

effectiveness compares the differences in costs and the differences in emissions 

reductions of the two candidate control options. Incremental cost effectiveness does 

not reveal the emission reduction potential of the control options, merely the additional 

cost of adding the next most effective control to a given control measure. Unlike the 

absolute cost effective analysis that identifies the control option with the greatest 

emission reduction, incremental cost effectiveness does not present a meaningful 

correlation between emissions reductions and cost effectiveness. Therefore, the 

relative values produced in the incremental cost effectiveness analysis and the absolute 

cost effectiveness values are not comparable and cannot be evaluated using similar 

standards.

Rule 4565 would provide compost facility operators with the flexibility to comply with the 

VOC control requirements by choosing the listed controls or developing mitigation 

measures of their own not specified in the rule, provided they could demonstrate that 

such measures could achieve specified VOC emission reductions. Since operators 

have the flexibility to develop their own methods of achieving the required reductions, 

operators will choose the option with the best cost-effectiveness for their particular 

operation. As a result, only the absolute cost effectiveness is presented in this 

analysis. 
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III. SOURCES OF COST DATA

Costs for composting facilities were taken from three sources. 

• The first is a United States Environmental Protection Agency (EPA) Office of 

Water document titled “Biosolids Technology Fact Sheet” (EPA 832-F-02-024). 

The fact sheet compares three composting methods and has estimates of cost 

for aerated static piles and in-vessel composting. 

• The second document is a final report titled “Knox County Co-Composting Pilot 

Study” dated December 2001. This document was used to determine the cost of 

a windrow composting facility relative to aerated static pile composting. 

• The final document is an article by Jim Boswell from Chemical Engineering 

Progress dated December 2002, titled “Understand the Capabilities of BioOxidation.” The author compared biofilters and regenerative thermal oxidizers, 

showing capital costs, operational costs, and estimated emission reductions from 

each technology.

IV. COSTS AND COST EFFECTIVENESS ESTIMATES

Proposed VOC control requirements would require operators to implement various 

mitigation measures, based on the operation type and facility size. Operators who 

landfill or land-apply biosolids, animal manure, or poultry litter would be required to 

adopt management practices to reduce VOC emissions. If the biosolids, animal 

manure, or poultry litter is sent to the landfill for disposal, the material is typically 

covered with other wastes or moved and compacted within a short amount of time. 

Even the very last truckload of material received on a given day would be covered 

within a short amount of time, since, under California Code of Regulations for solid 

waste management, the landfill operator is required to cover all landfilled material at the 

end of each operating day. For landfill operations, District staff expects that no 

compliance costs will be associated with rule provisions, since biosolids are not 

currently used as alternative daily cover by any landfill within the District, the only landfill 

operation affected by rule requirements. Operators who land-apply biosolids, animal 

manure, or poultry litter would also have no compliance costs, since implementation of 

the control measures would only require that the operator schedule the material to 

arrive at the facility at an appropriate time or to cover the material if land incorporation is

delayed.

Composting/co-composting facilities would be required to implement a certain number 

of Class One mitigation measures, with operators at larger facilities required to adopt 

more measures than operators at smaller facilities. Class One mitigation measures are 

management practices that have been shown to allow efficient composting. No cost is 

associated with implementing these practices, since they are inherent in good 
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composting practice. The Class One mitigation measures have already been 

implemented by 50% of the facilities with throughputs less than 100,000 wet tons per 

year (tpy). 

The largest operations, meaning those with at least 100,000 wet tpy throughput, would 

also be required to implement at least one Class Two mitigation measures, in addition 

to the Class One mitigation measures. Class Two mitigation measures limit emissions 

from composting by utilizing controlled composting systems (either an aerated static 

pile or in-vessel composting) along with VOC emission control system to collect and 

destroy the collected VOCs. It is most likely that operators will install aerated static 

piles with biofilters to meet this provision of the rule. This was deemed Best Available 

Control Technology (BACT) for the last two facilities that were proposed in the District. 

This report presents the expected additional costs for existing facilities to implement 

Class Two mitigation measures. 

Table 1 summarizes the estimated annualized costs for a large composting facility. As 

noted in Section III above, the costs were taken from published sources. District staff 

assumed a 250 dry tons per day composting facility as the model facility. This equates 

to a throughput of about 200,000 wet tpy. The annualized cost for construction and 

maintenance of an un-aerated windrow composting facility was subtracted from the 

ASP or in-vessel costs, since operators would have built such a facility in the absence 

of the proposed rule provisions and the District’s Rule 2201 (New and Modified 

Stationary Source Review Rule). 

Table 1 – Summary of Per-Facility Annualized Costs for 

Facility Processing 250 dry tons per day

Lowest Cost Scenario: ASP & Biofilter

Total Capital Cost $7,775,000

Total annualized capital cost 

(10% - 10 years) $1,265,345

Total Annual O & M Cost $124,305

Total Annualized Cost - ASP & Biofilter $1,389,650

Windrow Annualized Cost -$660,798

Net Low-End Annual Costs ($/yr/facility) $728,852

Highest Cost Scenario: In-Vessel and RTO

Total Capital Cost $21,185,000

Total annualized capital cost 

(10% - 10 years) $3,447,761

Total Annual O & M Cost $285,910

Total Annualized Cost - In-Vessel & RTO $3,733,671

Windrow Annualized Cost -$660,798

Net High-End Annual Costs ($/yr/facility) $3,072,873
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Table 2 summarizes the cost effectiveness for all size composting facilities. For the 

large composting facilities, the cost effectiveness ranges from about $9,800 to $41,000 

per ton VOCs removed. Since it is much less costly to install and operate an ASP with 

biofilter compared to other control options, it is most likely that operators will use the 

ASP/biofilter combination to meet rule requirements and, therefore, the actual cost 

effectiveness is best characterized by the lower end of this range. Based on this 

analysis, it is cost effective for the large composting facilities to implement Class Two 

mitigation measures.

The same capital cost and operating cost assumptions were made for the small and 

medium composting facilities as for the large composting facilities. Small and medium 

composting facilities were modeled as a five dry ton per day and a 30 dry ton per day 

facilities, respectively. Cost effectiveness for implementing Class Two mitigation 

measures at facilities with throughput less than 20,000 wet tpy ranged from $400,000 to 

$850,000 per ton VOC removed. For composting facilities of 20,000 to 100,000 wet 

tpy, the cost effectiveness is estimated at $48,000 to $150,000 tons per year. 

District staff believes that the capital costs and operating costs are understated for 

small and medium composting facilities. EPA did their study on relatively large facilities 

– the model was 250 dry tons per day or about 200,000 wet tpy. The actual capital 

costs and annual operating costs for the small and medium composting facilities would 

be higher than calculated since small and medium facilities could not take advantage of 

economies of scale for building and operations created by large composting facilities. 

This would push the cost effectiveness to even higher numbers for facilities with 

throughputs less than 100,000 wet tpy. Therefore, implementing Class Two mitigation 

measures is not cost effective for composting facilities with throughputs less than 

100,000 wet tpy. These smaller facilities may choose to implement controlled 

composting systems for reasons unrelated to air quality or the rule. For smaller 

facilities that do employ Class Two mitigation measures, the rule allows the operator to 

put fewer Class One mitigation measures into place.

Table 2 – Cost Effectiveness Analysis 

Number 

Facilities

Annualized Cost of 

Compliance ($/year)

Estimated 

VOC 

Reductions 

(tpy)

Estimated Cost 

Effectiveness 

($/ton VOC reduced)

Low End High End Low End High End

Composting Facilities

100 - 20,000 tpy 12 $1,727,429 $3,829,169 4.4 $392,597 $870,266

20,000 - 100,000 

tpy 9 $1,853,275 $5,771,966 38.4 $48,262 $150,312

At least 100,000 

tpy 8 $5,830,818 $24,582,988 595.2 $9,796 $41,301
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V. REFERENCES

1. Boswell, Jim, Understand the Capabilities of Bio-Oxidation, Chemical 

Engineering Progress, December 2002.

2. California Integrated Waste Management Board – Board Meeting Agenda Item 

4; April 13-14, 2004

3. Compost and Technology Solutions, Inc. Final Report: Knox County (TN) CoComposting Pilot Study. December 2001.

4. Iowa State University and The University of Iowa Study Group, “Concentrated 

Animal Feeding Operations Air Quality Study,” February 2002; available on-line 

at http://www.public-health.uiowa.edu/ehsrc/CAFOstudy.htm

5. United States Environmental Protection Agency, “Biosolids Technology Fact 

Sheet: Use of Composting for Biosolids Management” EPA 832-F-02-024, 

September 2002.
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