MEMORANDUM

Date: August 4 , 2011

Subject: Estimated Cost Impact for Wood Furniture Manufacturing Industry to Comply

with Proposed Formaldehyde Limit on Coating Operations

Wood Furniture Manufacturing RTR

RTI Project No. 0212783.013

From: Dave Reeves, RTI International

To: Nick Swanson

OAQPS/SPPD/NRG (D243

- 02)

U.S. Environmental Protection Agency

Research Triangle Park, NC 27711

The purpose of this memorandum is to present the estimated emissions reductions, costs, and cost

effectiveness related to a segment of the wood furniture manufacturing industry for their surface coating

operations to comply with the proposed 400 pounds (lb) per year formaldehyde emission limit

.

I. BACKGROUND

Based on the limited information provided by the wood furniture m anufacturing industry and their

trade associations, we estimate that there are 8 facilities that will be impacted by the proposed 400

lb/yr formaldehyde limit. For estimating cost impacts, we assumed that facilities would comply by

either: 1) continuing to use their existing coatings and installing a rotary adsorption/ regenerative

thermal oxidizer (RTO) on the coating booth (s) exhaust, or 2) switching to a low

- formaldehyde

coating system. (For purposes of this memo, “low

- formaldehyde coating s ystem ” mean s c oatings

containing less than or equal to 0. 05 % formaldehyde by weight.) The use of a new low

formaldehyde coating system would require at least one facility (Kitchen Kompact) to add heat

(e.g., curing/drying ovens) to the ir coating operations to meet the c urrent design require ments on

their high speed production lines. Kitchen Kompact currently has 7 production lines in use (5

cabinet/ base lines and 2 door lines)

– only the door lines have curing ovens. To use an RTO for

compliance is not a probable optio n. To install an RTO requires space for the facility to install the

device and with consideration to Kitchen Kompact’s location it is not likely that they have the

available space. The calculation for cost impact will still follow to show the impacts of

installation,

II. COMPLIANCE OPTION 1

– R OTARY ADSORPOTION/RTO SYSTEM

Coating s pray booths can vary significantly in size, number, and exhaust rates. The cost analysis

for the addition of a combination rotary adsorption/regenerativ e thermal oxidizer (RTO) s ystem i s

provided below

. For the purposes of this analysis, it was estimated that the 8 wood furniture2

manufacturing facilities will utilize their existing coatings and spray booths and the combined

exhaust will be vented to a rotary concentrator, which i s then followed by the RTO. The estimated

costs are based on capital and operating costs provided by vendors and provided in Attachment 1

.

A. Capital Costs

The re is no capital cost for the spray booths s ince we are assuming that all the facilities will

c ontinue to use their existing coatings and s pray booths. The capital costs of a rotary

adsorption/RTO system is based on quotes from Munters and includes capital cost for the

concentrator, filters, process fan, controls, integrated desorption heater, inte grated RTO, and

startup services and is based on a skid mounted system for easy installation. Additional capital

costs to account for interest, taxes, and engineering were based on a 25 percent estimate from the

OAQPS cost manual were included for the spr ay booths and the RTO system

. Table 1 provides

capital costs based on Munters’ estimates (provided in Attachment 1). As shown in Table 1

, operating costs are greater for smaller systems because costs associated with engineering design,

controls, instrume ntation, and startup labor are the same regardless of a system’s size.

Table 1. Capital and Operating costs of rotary adsorption/RTO system

.

Airflow Range (cfm) $/cfm* Range ($)

<10,000 30 < 300K

10,000

– 20,000 25 250K

- 500K

20,000

– 40,000 20 400K

- 800 K

40,000

– 60,000 18 720K

1.08M

60,000

– 80,000 15 900K

- 1.2M

>80,000 13 >1.04M

*Cubic feet per minute (cfm)

B. Operating Costs

Operating costs for a rotary adsorption/RTO system depend on flow rate, VOC load, and desired

efficiency. Mun ters estimated that $2

- $3/cfm would be accurate to use for annual operating costs

(which includes natural gas and electricity). The following costs are not included in the $2

- 3/cfm

estimate: labor, monitoring and recordkeeping, maintenance, and insurance costs.

C. A nnualized Cost Estimates

In order to calculate annualized cost estimates per facility, a total (average) airflow of 4 0 ,000 cfm

was used to represent an average facility with multiple (e.g., 2

– 7) spray booth s and the combined

exhaust routed to a single R TO system

. Operating costs of electricity and natural gas (based on

$3/cfm estimate provided by Munters) were not annualized.

Initial Capital Costs

– RTO System (based on Table 1 )

4 0 ,000 cfm x $ 2 0 /cfm = $ 8 00 ,0003

A dditional Capital Costs ( for intere st, taxes, engineering, and shipping/delivery

- based on a 25 %

estimate from the OAQPS cost manual )

RTO System

$ 800 ,000 x 1.25 = $ 1,000 ,000

Annualized Capital Costs (based on 10 year equipment life and 7 % interest rate)

($ 1,000,000 ) x 0.1424 = $ 142,4 00

Operating Costs

– RTO System

4 0 ,00 0 cfm x $3/cfm = $ 12 0 ,000

Total Estimated Annual Costs (Annualized Capital + Operating)

$ 142,4 00 + $ 12 0 ,000 = $ 262

, 4 00

D. Estimated amount of formaldehyde controlled

The control efficiency for the adsorption/R TO system used was 95%. Using the estimated

total formaldehyde emitted from Kitchen Kompact

, 0.808 tpy, the amount of formaldehyde

controlled industry wide would be:

Amount of formaldehyde co ntrolled

0.8285 tpy x 0.95 Control Efficiency = 0.787 tpy

E. Estim ated Cost Effectiveness of Booth equipped with a RTO system

Based on the annualized cost estimate and the estimated amount of HAP controlled

, the cost

effectiveness of the ship enclosure was calculated

. Cost effectiveness for spray booths equipped with RT O system

Cost Effectiveness = Total Annual Costs/Annual HAP controlled

Cost Effectiveness = $ 262,4 00 / 0.787 tons =

$ 333

, 0 00/ ton of formaldehyde reduced

III. COMPLIANCE OPTION 2

- LOW

- FORMALDEHYDE COATING SYSTEM

The cost analysis for switching over t o a low

- formaldehyde coating system assumed that Kitchen

Kompact would incur a 10

– 15% coating material cost increase and the addition of curing ovens

to 5 production lines . Details on the cost analyses are provided below . The estimated costs are

based on capital and operating costs from the EPA OAQPS Cost Manual and “general”

information from coating suppliers and equipment vendor websites

.

A. Capital Costs

The capital cost of the curing ovens, associated installation, and reconfiguration of the extensi ve

conveyer system s within the Kitchen Kompact facility was estimated to be $200,000 for each

production line. Several equipment vendor websites and catalogs were reviewed; however, no real

costs were available since any such installation would have to be customized. Similar sized

conveyer ovens and tunnel ovens were around $100,000 and that cost was doubled to account for4

the installation costs which would include reconfiguration of the conveyer systems associated with

the high speed flat panel lines. Ad ditional capital costs to account for interest, taxes, and

engineering were based on a 25 % estimate from the OAQPS cost manual were included for the

curing oven s and installation costs

.

B. Operating Costs

Kitchen Kompact

- Operating costs for switching ove r to a lower formaldehyde coating system

will involve a 10 to 15% increase in coating material cost which Kitchen Kompact estimated to be

$200,000 to $250,000 per year for his facility. The fuel (energy) cost for running each curing

oven was es timated to be $100 per month which resulted in a total fuel (energy) cost of $500 per

month for the facility

.

C. Annualized Cost Estimates

In order to calculate the annualized cost estimate for the Kitchen Kompact facility, a new curing

oven would be needed for each production line that currently does not have such equipment.

Operating costs of electricity and /or natural gas to run the new curing ovens were not annualized.

Initial Capital Costs

– Adding Curing Oven to each Coating Line

$ 200,000 per Coating Line x 5 Coating Lines = $ 1,000,000

A dditional Capital Costs ( for interest, taxes, engineering, and shipping/delivery

- based on a 25 %

estimate from the OAQPS cost manual )

Adding Curing Ovens to 5 Coating Lines at Kitchen Kompact

$ 1,000,000 x 1.25 = $ 1,25 0,000

Annualized Capital Costs (based on 10 year equipment life and 7 % interest rate)

$ 1,250,000 x 0.1424 = $ 178,000

Operating Costs for Kitchen Kompact

a) 10

– 15% increase in coating cost = ~$225,000/yr (per J. Gahm’s estimate)

b) Additional energy cost to run curing ovens = $500/month  $6,000/yr

Total Estimated Annual Costs (Annualized Capital + Operating)

( $ 178,000 + $ 225,000 + $6,000 ) = $ 409,000

D. Estimated amount of formaldehyde reduced

Based on information provided by J. Gahm in his comments to t he proposed amendments, the

Kitchen Kompact facility reported 0.8285 tons of formaldehyde emissions in 2010. The

formaldehyde content of the current coatings is approximately 0.2% by weight. Information

from the coating supplier (Valspar) indicates that a new low

- formaldehyde coating system5

would likely be 0. 05 % by weight formaldehyde. T he amount of formaldehyde reduced would

be:

Amount of formaldehyde reduced

0.8285 tpy x [1

- (0. 05 % by weight / 0.2 % by weight) ] = 0.6214 tpy

E. Estimated Cost Effect iveness of Switching to Low

- Formaldehyde Coating System and

Adding Curing Ovens to Production Lines

Based on the annualized cost estimate and the estimated amount of HAP (formaldehyde)

controlled

, the cost effectiveness of switching to a low

- formaldehyde coating system was

calculated

.

Cost effectiveness for s witching to low

- formaldehyde coating system

Cost Effectiveness = Total Annual Costs/Annual formaldehyde controlled

Cost Effectiveness = $ 409,000 / 0.6214 tons =

$ 658 ,000/ ton of formaldehyde reduce d for Kitchen Kompact

A cost effectiveness calculation also needs to be done for the industry as whole. For this

calculation, we conservatively assume that Kitchen Kompact is the only facility with costs

associated with meeting the 400 pound/year because it is the only facility for which detailed

information has been provided. As shown in the memo to the docket , “ Impacts of Implementing a

Limit on Formaldehyde Usage in the Wood Furniture Manufacturing Operations Source Category ,”

there would be 9.46 tons/y ear of formaldehyde reduced according to 2005 NEI data.

Cost Effectiveness = Total Annual Costs/Annual formaldehyde controlled

Cost Effectiveness = $ 409,000 / 9.46 tons =

$ 43 ,000/ ton of formaldehyde reduced across the industry6 Attachment 1

.

Ema il from Munters containing Cost Estimate Information

----- Original Message

-----

From: < Cheryl.Thibault@munters.com >

To: "Mary

- Jo Caldwell" < mjcaldwell@nc.rr.com >

Sent: Thursday, June 10, 2010 4:39 PM

Subject: Re: Costing rules of thumb

> Hello Mary

- Jo,

>

> Munters Zeol Rotor Concentrators are best suited for high volume/low

> concentration applications. Our technical rules of thumb for determining

> if a partic ular application is a good one are as follows:

>

> 1) Inlet temperature should be less than 100 degrees F.

> 2) Inlet relative humidity should be less than 90%

> 3) Inlet VOC concentration should be less than 500 ppm. (This does depend

> on the types of VOCs so certain VOCs may have a lower limit.)

> 4) VOCs should have boiling points above ambient temperature. Any low

> boiling compounds or gases at ambient temperature will not adsorb well.

>

> For scope, we would propose a zeolite rotor concentrator i ntegrated with an

> RTO for larger ship building/spray painting applications. We used to use

> catalytic oxidizers but have found that paint formulations are constantly

> changing and some VOCs can harm and poison catalyst. An RTO is much more

> fuel eff icient that a catalytic oxidizer and comparable in price anyway.

> They eliminate the need for replacement catalyst. Our systems can be

> designed to meet whatever destruction efficiency is required up to about

> 99%. Typically, customers are required t o meet 95% system efficiency. The

> higher the DRE, the more expensive the system gets. The lower the DRE, the

> smaller the rotor we can use and the smaller the oxidizer for a much more

> cost

- effective system.

>

> In terms of budget costing, you could use a $/cfm but as you may expected

> smaller systems will have a larger $/cfm because much of the cost

> (engineering design, controls, instrumentation, startup labor) are the same

> regardless of the size of the system. So budget pricing would be $30/ cfm

> for flows less than 10,000 cfm, $25/cfm for flows 10,000

- 20,000 cfm,

> $20/cfm for 20,000 cfm

- 40,000 cfm, $18/cfm 40,000

- 60,000 cfm, $15/cfm for

> 60,000

- 80,000cfm and $13/cfm for > 80,000 cfm. These prices would

> include concentrator, filters, p rocess fan, controls, integrated desorption

> heater and integrated RTO and startup services. Munters manufactures

> systems and factory tests them. As long as they are within shipping size

> restrictions, they ship as one piece, skid mounted for easy in stallation.

> Not included in the pricing would be installation, freight, taxes,

> compliance testing, etc. Operating costs are more specific to the7 > project depending on flow rate, VOC load and desired efficiency. I think

> it would be safe to use $ 2

- $3/cfm for annual operating costs (natural gas

> & electricity). See tables below for example operating costs for a 80,000

> cfm system and a 40,000 cfm system. I also provided comparison tables for

> an 80,000 cfm straight RTO and 40,000 cfm RTO. M unters concentrator system

> saves the company about $300,000 per year in operating costs based on

> 80,000 cfm.

>

> As for Northrup in MS, we don't feel comfortable giving out details on VOC

> loading and booth type. The sales person involved with this project is no

> longer with us so we don't have details on spray booth type. I would

> encourage you to go direct to the customer.

>

> However, I will say that we have supplied concentrator/oxidizer abatement

> system for lots of different types of paint ing applications including spray

> painting with manual spray and automatic spray, with dry particulate

> filtration and with water wash filtration systems. We like to treat oven

> exhaust direct in the oxidizer rather than combine it with booth exhaust

> through the concentrator. Typical inlet VOC concentrations are 30

- 150 ppm.

> Typical VOCs are butanol, isopropanol, ethyl acetate, butyl acetate,

> xylene, toluene, naptha, MEK, MIBK, acetone, ethyl benzene, trimethyl

> benzene, PGMEA, propanol. Many ti mes, there are multiple booths tied to

> one abatement system with different flow conditions (ie, one booth on, two

> booths on, etc.) We can operate the concentrators at different flow

> conditions (i.e., 25,000 cfm from one booth or 50,000 cfm from two booths).

>

> I hope this helps for your analysis. If you need anything further, let me

> know.

>

> Regards,

> Cheryl Thibault

> Munters Corporation

> 79 Monroe St. Amesbury, MA 01913

> work 978

- 241

- 1163

> cell 978

- 660

- 3243

>

>

> Munters Rotor Concentrator | No VOC | 50% VOC | 100% VOC

> System

- treating 80,000 | | 21 lbs/hr | 42 lbs/hr

> cfm | | |

>

------------------------------- +

-------------- +

------------- +

--------------

> Fuel Use (mmBtu/hr) | 1.70 | 1.41 | 1.36

>

---------------------------- --- +

-------------- +

------------- +

--------------

> Fuel Cost (per hour) | $17.04 | $14.07 | $13.65

>

------------------------------- +

-------------- +

------------- +

--------------

> Fuel Cost (annual) | $68,161 | $56,291 | $54,6098 >

------------------------------- +

-------------- +

------------- +

--------------

> | | |

>

------------------------------- +

---- ---------- +

------------- +

--------------

> Electricity Use (kW) | 193 | 193 | 193

>

------------------------------- +

-------------- +

------------- +

--------------

> Electricity Cost (per hour) | $19. 27 | $19.27 | $19.27

>

------------------------------- +

-------------- +

------------- +

--------------

> Electricity Cost (annual) | $77,077 | $77,077 | $77,077

>

------------------------------- +

------------ -- +

------------- +

--------------

> | | |

> Total (per hour) | $36.31 | $33.34 | $32.92

> (annual) | $145,238 | $133,368 | $131,686

>

> Munters Rotor Concentrator | No VOC | 50 % VOC | 100% VOC

> System

- treating 40,000 | | 10.5 | 21 lbs/hr

> cfm | | lbs/hr |

>

-------------------------------- +

-------------- +

--------- --- +

--------------

> Fuel Use (mmBtu/hr) | 0.85 | 0.70 | 0.68

>

-------------------------------- +

-------------- +

------------ +

--------------

> Fuel Cost (per hour) | $8.52 | $7.04 | $6.83

>

-------------------------------- +

-------------- +

------------ +

--------------

> Fuel Cost (annual) | $34,080 | $28,146 | $27,304

>

-------------------------------- +

-------------- +

------------ +

---- ----------

> | | |

>

-------------------------------- +

-------------- +

------------ +

--------------

> Electricity Use (kW) | 96 | 96 | 96

>

-------------------------------- +

-------------- +

------------ +

--------------

> Electricity Cost (per hour) | $9.63 | $9.63 | $9.63

>

-------------------------------- +

-------------- +

------------ +

------------ --

> Electricity Cost (annual) | $38,538 | $38,538 | $38,538

>

-------------------------------- +

-------------- +

------------ +

--------------

> | | |

> Total (per hour) | $18.15 | $16.67 | $16.46

> (annual) | $72,618 | $66,684 | $62,842

>

> Straight | No VOC | 50% VOC | 100% VOC

> RTO | | 21 lbs/hr | 42 lbs/hr

> treating | | |

> 80,000 cfm | | |

>

------------------------------- +

----------------- +

------------ +

--------------

> Fuel Use (mmBtu/hr) | 8.79 | 8.49 | 8.20

>

------------------------------- +

----------------- +

------------ +

--------------

> Fuel Cost (per hour) | $87.92 | $84.90 | $82.00

>

------------------------------- +

----------------- +

------------ +

--------------9 > Fuel Cost (annual) | $351,680 | $339,600 | $328,000

>

------------------------------- +

----------------- +

------------ +

------------- -

> | | |

>

------------------------------- +

----------------- +

------------ +

--------------

> Electricity Use (kW) | 273 | 273 | 273

>

------------------------------- +

----------------- +

------------ +

--------------

> Electricity Cost (per hour) | $27.27 | $27.27 | $27.27

>

------------------------------- +

----------------- +

------------ +

--------- -----

> Electricity Cost (annual) | $109,000 | $109,000 | $109,000

>

------------------------------- +

----------------- +

------------ +

--------------

> | | |

> Total (per hour) | $115.19 | $112.17 | $109.27

> (annual) | $460,760 | $448,680 | $437,080

>

> Straight | No VOC | 50% VOC | 100% VOC

> RTO | | 10.5 | 21 l bs/hr

> treating | | lbs/hr |

> 40,000 cfm | | |

> | | |

>

------------------------------- +

----------------- +

------------ +

-------------

> Fuel Use (mmBtu/hr) | 4.39 | 4.25 | 4.1

>

------------------------------- +

----------------- +

------------ +

-------- -----

> Fuel Cost (per hour) | $43.90 | $42.50 | $41.00

>

------------------------------- +

----------------- +

------------ +

-------------

> Fuel Cost (annual) | $175,600 | $170,000 | $164,0 00

>

------------------------------- +

----------------- +

------------ +

-------------

>

------------------------------- +

----------------- +

------------ +

-------------

> Electricity Use (kW) | 136 | 136 | 136

>

------------------------------- +

----------------- +

------------ +

-------------

> Electricity Cost (per hour) | $13.60 | $13.60 | $13.60

>

------------------------------- +

----------------- +

------------ +

-------------

> Electricity Cost (annual) | $54,400 | $54,400 | $54,400

>

------------------------------- +

----------------- +

------------ +

-------------

> | | |

> Total (per hour) | $57.50 | $56.10 | $54.60

> (annual) | $230,000 | $224,400 | $218,400

>

> > Based on $10.00 per MM Btu, $0.10 per kW, 4,000 hours/year