Document ID: EPA-HQ-RCRA-2000-0054-0706
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2002-07-16T04:00Z

Economic
Analysis
for
Regulatory
Modifications
to
the
Definition
of
Solid
Waste
for
ZincContaining
Hazardous
WasteDerived
Fertilizers,
Notice
of
Final
Rulemaking
Report
U.
S.
Environmental
Protection
Agency
Office
of
Solid
Waste
1200
Pennsylvania
Ave.
N.
W.
Washington,
DC
20460
July
2002
Economic
Analysis
for
Regulatory
Modifications
to
the
Definition
of
Solid
Waste
for
ZincContaining
Hazardous
WasteDerived
Fertilizers,
Notice
of
Final
Rulemaking
Report
July
2002
U.
S.
Environmental
Protection
Agency
1200
Pennsylvania
Ave,
N.
W.
Washington,
DC
20460
iii
CONTENTS
Chapter
Page
1
Introduction
and
Executive
Summary
.....................................
1­
1
1.1
Introduction
...................................................
1­
1
1.2
Summary
of
Findings
.............................................
1­
2
1.3
Organization
of
the
Economic
Analysis
................................
1­
4
2
Profile
of
the
Affected
Industry
..........................................
2­
1
2.1
The
Supply
of
Zinc
Micronutrient
Fertilizers
............................
2­
1
2.1.1
Raw
Materials
............................................
2­
1
2.1.2
Production
Processes
......................................
2­
4
2.1.3
Costs
of
Production
.......................................
2­
4
2.2
The
Demand
for
Zinc
Micronutrient
Fertilizers
..........................
2­
5
2.2.1
Product
Characteristics
.....................................
2­
5
2.2.2
Uses
and
Consumers
.......................................
2­
5
2.3
Industry
Organization
............................................
2­
7
2.3.1
Market
Structure
..........................................
2­
9
2.3.2
Manufacturing
Plants
......................................
2­
11
2.3.3
Firm
Characteristics
......................................
2­
13
2.4
Markets
.....................................................
2­
13
2.4.1
Market
Volumes
.........................................
2­
15
2.4.2
Market
Prices
...........................................
2­
17
3
Methodology
and
Data
Limitations
.......................................
3­
1
3.1
Baseline
Conditions
..............................................
3­
1
3.1.1
Zinc
Fertilizer
Manufacturers
.................................
3­
1
3.1.2
Zinc
Raw
Material
Suppliers
.................................
3­
2
3.2
Analytical
Methodology
...........................................
3­
2
3.3
Data
Sources,
Data
Limitations,
and
Assumptions
.......................
3­
3
4
Final
Rulemaking
....................................................
4­
1
4.1
Current
Regulation
..............................................
4­
1
4.2
Final
Rulemaking
................................................
4­
1
5
Costs
and
Economic
Impacts
...........................................
5­
1
5.1
Cost
Analysis
..................................................
5­
1
5.1.1
Costing
Model
and
Assumptions
..............................
5­
1
5.1.2
Estimated
Costs
and
Cost
Savings
.............................
5­
1
5.1.3
Use
of
Brass
Baghouse
Dust
in
ZSM
Production
..................
5­
4
iv
Chapter
Page
5.2
Economic
Impact
Analysis
........................................
5­
10
5.2.1
Expected
Market
Effects
of
the
Conditional
Exclusion
.............
5­
10
5.2.2
Estimated
Impacts
on
Companies
Owning
Zinc
Micronutrient
Facilities
....................................
5­
11
5.2.3
Impacts
on
Small
Businesses
................................
5­
11
5.3
Conclusions
..................................................
5­
12
6
Benefits
of
the
Final
Rulemaking
.........................................
6­
1
6.1
A
Conceptual
Framework
for
Analyzing
the
Benefits
of
Regulating
Zinc
Micronutrient
Fertilizers
...............................
6­
1
6.2
Identifying
Categories
of
Benefits
....................................
6­
3
6.3
Potential
Exposure
to
Metals
and
Dioxin
from
Zinc
Micronutrient
Fertilizers
...........................................
6­
4
7
Other
Administrative
Requirements
.......................................
7­
1
7.1
Environmental
Justice
............................................
7­
1
7.2
Unfunded
Mandates
Reform
Act
....................................
7­
1
7.3
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks
...................................................
7­
2
8
References
.........................................................
8­
1
Appendices
A
Cost
Algorithms
for
Conversion
to
ZSM
Lines
from
Oxy­
sul
Lines
..............
A­
1
B
Overview
of
Zinc
Market
Model
and
Results
...............................
B­
1
C
(Reserved)
........................................................
C­
1
D
Sensitivity
Analysis
..................................................
D­
1
v
LIST
OF
FIGURES
Number
Page
2­
1
Zinc
Micronutrient
Production
and
Consumption
.............................
2­
2
2­
2
Zinc
Sulfate
Imports
and
Exports,
1992­
1999
(Metric
Tons)
..................
2­
19
2­
3
Imports
of
Chinese
Zinc
Sulfate,
1989­
1999
(Metric
Tons)
....................
2­
19
3­
1
Annual
Domestic
ZSM
Production,
1993–
1999
(standard
tons)
.................
3­
4
3­
2
Annual
Domestic
Oxy­
sul
Production,
1993–
1999
(standard
tons)
...............
3­
4
3­
3
Annual
Domestic
Liquid
Zinc
Sulfate
Production,
1993–
1999
(standard
tons)
.............................................................
3­
5
3­
4
Annual
Domestic
Zinc
Micronutrient
Fertilizer
Production
in
Zinc
Tons,
1993–
1999
(standard
tons)
............................................
3­
5
6­
1
Conceptual
Framework
for
Benefits
Analysis
of
Regulating
Zinc
Micronutrient
Fertilizer
................................................
6­
2
vi
LIST
OF
TABLES
Number
Page
2­
1
Domestic
Zinc­
Bearing
Secondary
Materials
Used
in
Micronutrient
Fertilizer
Production,
1997
or
Most
Current
Year
...................................
2­
3
2­
2
Fertilizer
Forms
and
Zinc
Solubility
.......................................
2­
6
2­
3
Zinc
Application
Rates
(lbs/
acre)
........................................
2­
6
2­
4
Total
Zinc
Micronutrient
Fertilizer
Consumed
in
the
United
States
and
Regions
in
1996
(tons)
................................................
2­
8
2­
5
Domestic
Producers
of
Zinc
Micronutrient
Fertilizer:
1999
.....................
2­
9
2­
6
Parent
Company
Information
for
Potentially
Affected
Companies
...............
2­
14
2­
7
Volumes
and
Prices
of
Zinc
Micronutrient
Fertilizer,
1997
.....................
2­
15
2­
8
Highest
Volume
U.
S.
Trading
Partners,
International
Trade
in
Zinc
Sulfate,
1992­
1999,
in
Metric
Tons
...........................................
2­
18
2­
9
1997
Plant­
and
Product­
Specific
Output
Prices
of
Zinc
......................
2­
21
3­
1
Baseline
Conditions
for
Directly
Affected
Zinc
Fertilizer
Producers
and
Feedstocks
........................................................
3­
2
5­
1
Estimated
Costs
of
Complying
with
the
Conditional
Exclusion
for
Frit
Industries,
Scenario
1:
Shutting
Down
....................................
5­
2
5­
2
Estimated
Costs
of
Complying
with
the
Condition
Exclusion
for
Frit
Industries,
Scenario
2:
Moving
to
Walnut
..........................................
5­
4
5­
3
Estimated
Change
in
Costs
and
Revenues
for
Frit
Industries
from
Substituting
Nonhazardous
Feedstock
....................................
5­
5
5­
4
Typical
Brass
Mill,
Brass
Foundry,
and
Brass
Ingot
Maker
.....................
5­
7
5­
5
Financial
Impacts
on
Brass
Baghouse
Dust
Generators
........................
5­
8
5­
6
ZSM
Producers
Using
or
Projected
to
Use
Brass
Baghouse
Dust
................
5­
8
5­
7
Estimated
Cost
Savings
due
to
the
Rulemaking
for
Big
River,
Sauget,
IL
...........
5­
9
5­
8
Estimated
Revenue
Increases
for
Madison
Industries
and
Tetra,
Fairbury,
NE
......
5­
10
5­
9
Estimated
Company
Impacts
of
the
Conditional
Exclusion
.....................
5­
12
1­
1
CHAPTER
1
INTRODUCTION
AND
EXECUTIVE
SUMMARY
Zinc
is
among
several
micronutrients
required
for
normal
plant
growth
and
development.
Because
of
its
role
in
plant
nutrition,
zinc
is
incorporated
in
some
fertilizers,
especially
those
targeted
at
crops
sensitive
to
lower
soil
zinc
levels
(e.
g.,
corn,
sorghum,
flax,
grapes).
Typically,
zinc
micronutrient
fertilizer
is
sold
to
fertilizer
distributors
who
then
mix
the
micronutrient
into
customized
blends
of
other
required
nutrients,
such
as
potassium
or
nitrogen;
the
relative
amounts
of
each
fertilizer
are
blended
based
on
the
specific
soil
deficiencies
of
the
end­
users'
farm
land.
Farmers
purchase
these
custom
blends
to
apply
to
their
fields.
Zinc
micronutrient
fertilizer
is
produced
in
two
forms:
Oxy­
sul
(a
combination
of
zinc
oxide
and
zinc
sulfate)
and
zinc
sulfate
monohydrate
(ZSM).

1.1
Introduction
A
variety
of
secondary
materials
are
used
in
the
manufacturing
of
zinc­
containing
micronutrient
fertilizers
for
agriculture.
Some
of
these
materials
are
hazardous
wastes
under
Federal
regulations
promulgated
under
the
Resource
Conservation
and
Recovery
Act
(RCRA).
Examples
of
hazardous
secondary
materials
used
to
manufacture
zinc­
containing
micronutrient
fertilizer
include
emission
control
dust
from
electric
arc
furnaces
(EAFs)
in
the
iron
and
steel
industry
(K061,
a
listed
hazardous
waste)
and
tire
ash
(characteristically
hazardous
for
both
lead
and
cadmium
and
designated
as
D006
and
D008).
Brass
fume
dust
is
mostly
used
to
produce
zinc
micronutrient
for
animal
feed
or
sent
for
zinc
reclamation.
It
is
possible
that
zinc
micronutrient
manufacturers
or
zinc
manufacturers
will
use
brass
fume
dust
to
produce
zinc
micronutrient
fertilizer
or
ZSM
in
the
future.
Brass
fume
dust
from
brass
ingot
makers,
brass
mills,
and
brass
and
bronze
foundries
is
usually
characteristically
hazardous
for
both
lead
and
cadmium
and
is
designated
as
D006
and
D008.
Examples
of
nonhazardous
secondary
materials
include
zinc
fines
from
galvanizing
and
zinc
hydroxide
from
electrowinning
of
automobiles
for
rust
prevention.

Currently,
handlers
of
hazardous
wastes
used
in
manufacturing
zinc­
containing
micronutrient
fertilizers
are
subject
to
generator
and
transporter
standards
as
well
as
applicable
standards
for
facilities
that
treat,
store,
or
dispose
of
hazardous
wastes
(see
40
CFR
§§
266.21­
23).
Storage
prior
to
recycling
of
these
wastes
is
subject
to
RCRA
permit
requirements.
The
use
of
zinc­
containing
hazardous
waste­
derived
fertilizers
other
than
K061­
derived
fertilizers
is
conditionally
exempt
from
RCRA
regulation
provided
that
they
meet
the
applicable
treatment
standard
specified
under
Subpart
D
of
Part
268
of
RCRA
regulation
(see
40
CFR
§266.20(
b)).
K061­
derived
fertilizers
are
currently
exempt
from
RCRA
regulation,
although
the
K061
used
to
produce
them
is
fully
regulated
until
the
product
is
made.

In
1998,
the
U.
S.
Environmental
Protection
Agency
(EPA)
promulgated
two
regulations
affecting
the
status
of
hazardous
waste­
derived
fertilizers.
In
May
1998,
EPA
promulgated
the
1­
2
Phase
IV
final
rule
for
toxicity
characteristic
for
metals
(hereafter
TC
metals)
wastes
(63
FR
28556
[May
26,
1998]).
This
rule
revised
the
treatment
standards
for
hazardous
wastes
that
exhibited
the
TC
metals
(hereafter
TC
metals)
to
the
Universal
Treatment
Standards
(UTS)
specified
in
40
CFR
§268.40.
The
rule
did
not
change
the
regulatory
exemption
for
K061­
derived
fertilizers.
The
revised
UTS
standards
for
TC
metal
wastes
are
more
stringent
than
the
previous
treatment
standards.
In
reconsideration
of
the
appropriateness
of
the
UTS
standards
for
zinc­
containing
fertilizer,
the
Agency
in
August
1998
administratively
stayed
the
effect
of
the
treatment
standards
for
zinc­
containing
fertilizers
(63
FR
46631
[August
31,
1998]).

EPA
is
developing
a
notice
of
final
rulemaking
that
°
removes
the
K061
fertilizer
exemption
from
RCRA
regulation,

°
provides
a
conditional
exclusion
from
the
definition
of
solid
waste
for
hazardous
secondary
feedstocks
(e.
g.,
brass
dust,
EAF
dust
from
steel
mills,
and
tire
ash)
used
to
produce
zinc­
containing
fertilizers,
and
°
provides
product
specifications
based
on
ZSM
for
excluding
hazardous
waste­
derived
zinc­
containing
fertilizers.

The
conditions
for
excluding
the
hazardous
secondary
feedstocks
would
include
handling
requirements
for
storage
and
transport
(e.
g.,
no
land
storage),
reporting
requirements,
and
labeling
requirements.
This
report
provides
analytic
support
to
the
Agency's
notice
of
final
rulemaking
effort.

1.2
Summary
of
Findings
EPA
projects
that
one
firm
currently
producing
zinc
micronutrient
fertilizers
using
hazardous
feedstocks
will
have
to
change
its
operations
at
one
facility
to
comply
with
the
conditional
exclusion.
One
raw
material
supplier
may
have
to
change
its
disposal
practices.
These
two
firms
are
the
only
directly
affected
entities.
Also,
EPA
projects
that
two
other
zinc
micronutrient
producers
will
modify
their
output
markets
and
one
zinc
producer
will
change
its
raw
material
supplier.
Some
brass
fume
dust
generators
will
change
their
disposal
practices,
according
to
EPA
estimates.

One
directly
affected
firm,
Frit
Industries,
is
projected
to
shut
down
operations
at
one
of
its
facilities
or
move
the
production
operation
to
another
location.
Given
available
data,
it
appears
that
moving
its
operation
from
Norfolk,
NE,
to
Walnut
Ridge,
AR,
would
be
Frit's
leastcost
method
of
complying
with
the
conditional
exclusion.
Under
this
compliance
scenario,
Frit
is
projected
to
have
an
increase
in
costs
of
approximately
$3.1
million
but
realize
increased
revenues
of
approximately
$3.4
million
as
a
result
of
its
transition
to
a
nonhazardous
feedstock.
The
firm
is
estimated
to
increase
its
revenues,
because
Oxy­
sul
produced
with
a
nonhazardous
feedstock
sells
for
a
higher
price
than
Oxy­
sul
produced
with
a
hazardous
feedstock.
Overall,
this
scenario
is
projected
to
improve
Frit's
profitability
by
$326,000.
The
fact
that
Frit
has
not
chosen
to
make
this
apparently
profit­
enhancing
change
in
the
absence
of
the
regulation
suggests
that
contractual
obligations
or
costs
may
be
associated
with
such
a
move
that
are
not
currently
considered
in
EPA's
analysis.
1
Queneau,
Paul.
Personal
communication
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency,
March
9,
1999.

1­
3
Another
directly
affected
company,
Nucor,
is
expected
to
be
affected
by
the
conditional
exclusion,
because
Frit
is
projected
to
no
longer
purchase
its
EAF
dust.
The
firm
will
thus
incur
the
incremental
costs
of
$1,400,000
of
additional
disposal
costs.

This
scenario
assumes
that
Frit
chooses
to
move
its
operation
to
its
plant
in
Arkansas
and
substitute
a
nonhazardous
feedstock
for
the
K061
that
it
currently
uses.
However,
Frit
may
also
choose
to
shut
down
its
operation
entirely.
This
alternative
would
require
vacating
and
cleaning
up
the
site
of
its
plant
in
Norfolk,
NE,
and,
based
on
the
assumptions
made
by
EPA,
would
result
in
a
net
increase
in
annual
costs
of
approximately
$1.5
million.

Given
the
uncertainty
of
many
of
EPA's
assumptions
in
this
analysis,
the
Agency
has
chosen
to
present
the
two
alternative
scenarios
described
above.
These
two
scenarios,
their
associated
costs,
and
the
assumptions
used
by
the
Agency
to
calculate
these
costs
and
impacts
are
described
in
greater
detail
in
Chapter
5
of
this
report.

Madison
Industries
and
Tetra
Micronutrients,
two
other
zinc
micronutrient
fertilizer
producers,
are
expected
to
change
their
output
markets
as
a
result
of
the
conditional
exclusion.
Madison
Industries
currently
sells
all
of
their
product
to
animal
feed
suppliers,
and
Tetra
Micronutrients
sells
one­
half
of
their
product
to
animal
feed
suppliers.
EPA
predicts
that
both
fertilizer
manufacturers
will
sell
all
of
their
product
to
fertilizer
dealers
in
a
post­
rule
environment.
Fertilizer
demands
a
higher
price
than
animal
feed;
therefore,
both
producers
should
experience
an
increase
in
revenues
1
.
Madison
Industries
is
expected
to
experience
a
cost
savings
of
$500,000,
while
Tetra
Micronutrients
is
expected
to
experience
a
cost
savings
of
$250,000.
Big
River
Zinc,
a
zinc
producer,
is
expected
to
switch
its
raw
material
supplier
as
a
result
of
the
conditional
exclusion.
Currently,
Big
River
Zinc
purchases
zinc
oxide
from
Zinc
Nacional.
EPA
predicts
that
Big
River
Zinc
will
substitute
brass
fume
dust
for
its
raw
material,
resulting
in
feedstock
purchase
savings
of
approximately
$328,000.
Big
River
Zinc
will
incur
additional
disposal
costs,
because
a
sludge
is
produced
when
a
hazardous
material
is
incorporated.
These
disposal
costs
amount
to
about
$209,000;
thus,
Big
River
Zinc's
net
cost
savings
are
expected
to
amount
to
$119,000.
EPA
expects
several
of
the
brass
fume
dust
generators
to
experience
cost
savings
as
a
result
of
the
conditional
exclusion,
since
Big
River
Zinc
will
create
an
increased
demand
for
brass
fume
dust.
These
brass
fume
dust
generators
will
no
longer
pay
disposal
costs
for
their
dust;
instead,
they
will
receive
payment
for
their
dust.
EPA
expects
ten
brass
mills
to
experience
cost
savings
of
$36,300
each
($
363,000
aggregate
savings).
Three
brass
foundries
are
expected
to
realize
cost
savings
of
$29,000
each
($
87,000
aggregate
savings),
and
ten
brass
ingot
makers
are
expected
to
realize
cost
savings
of
$121,000
each
($
1,210,000
aggregate
savings).

One
of
the
directly
affected
firms,
Frit
Industries,
is
a
small
businesses.
In
compliance
with
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(SBREFA),
EPA
examined
the
potential
impacts
of
the
conditional
exclusion
on
these
small
businesses.
For
Frit,
the
costs
of
complying
are
estimated
to
be
substantial;
however,
EPA's
analysis
indicates
that
they
may
experience
increases
in
revenues
that
largely
offset
their
costs.
Taking
all
costs,
cost
savings,
and
estimated
revenue
increases
into
account,
Frit
Industries
may
experience
increased
1­
4
profitability
through
substituting
a
nonhazardous
feedstock.
EPA
estimates
that
the
cost
of
disassembling
its
plant
in
Norfolk,
NE;
cleaning
up
the
site;
moving
its
capital
equipment
to
Walnut
Ridge,
AR;
and
substituting
a
nonhazardous
feedstock
would
be
approximately
$2.9
million.
In
addition,
EPA
estimates
that
Frit
would
incur
costs
of
over
$149,000
to
move
its
plant
to
the
facility
in
Arkansas.
However,
the
Oxy­
sul
made
from
the
nonhazardous
feedstock
would
sell
at
a
higher
price,
increasing
Frit's
revenues
by
an
estimated
$3.4
million.

Because
only
one
small
entity
is
projected
to
be
directly
affected,
and
because
it
may
be
able
to
completely
recover
its
costs,
EPA
certifies
that
the
conditional
exclusion
will
not
have
a
significant
impact
on
a
substantial
number
of
small
entities.

The
benefits
of
the
conditional
exclusion
can
be
expressed
as
the
reduction
in
adverse
health
and
ecosystem
effects
that
will
result
from
the
final
standards.
The
rulemaking
is
expected
to
result
in
human
health
and
ecosystem
benefits,
because
it
will
reduce
releases
of
heavy
metals,
including
lead,
cadmium,
chromium,
and
nickel,
to
the
environment.
Unfortunately,
EPA
has
only
limited
information
on
which
to
evaluate
the
benefits;
thus,
the
Agency
has
conducted
a
qualitative
benefits
assessment.
Nevertheless,
it
is
evident
that
the
conditional
exclusion,
with
its
resulting
reductions
in
releases
of
heavy
metals
and
dioxins,
would
convey
substantial
benefits
to
the
human
population.
Thus,
the
standards
are
projected
to
result
in
human
health
benefits;
in
addition,
improved
materials
handling
practices
at
zinc
micronutrient
manufacturers
are
projected
to
result
in
ecosystem
benefits
due
to
reduced
releases
of
heavy
metals
to
the
environment.

1.3
Organization
of
the
Economic
Analysis
This
report
is
organized
into
seven
chapters.
Chapter
2
provides
an
industry
profile
of
the
zinc
micronutrient
fertilizer
industry;
it
discusses
the
supply
side
and
demand
side
dynamics,
industry
organization,
and
the
market
for
zinc
micronutrient
fertilizers.
Chapter
3
examines
the
methodology
and
data
limitations
of
this
analysis.
The
final
rulemaking
and
current
regulations
are
presented
in
Chapter
4.
Chapter
5
discusses
a
cost
analysis
for
the
final
rulemaking.
The
economic
impacts
of
the
final
regulations
are
also
examined
in
Chapter
5.
Chapter
6
discusses
the
potential
benefits
of
the
final
rulemaking,
while
Chapter
7
considers
other
regulatory
requirements.
Appendix
A
provides
a
more
detailed
description
of
the
costs
used
to
estimate
economic
impacts
in
Chapter
5.
Appendices
B,
and
C
provide
greater
detail
about
how
the
costs
of
the
standards
were
estimated
and
analyzed.
Appendix
D
provides
a
sensitivity
analysis
of
the
economic
impacts,
analyzing
the
impacts
when
the
production
levels
of
zinc
micronutrient
fertilizer
vary.

In
addition
to
the
zinc
micronutrient
fertilizers
made
from
hazardous
secondary
feedstocks,
considered
in
the
body
of
this
report,
EPA
is
considering
regulating
the
practice
of
recycling
wastes
from
extraction
and
beneficiation
to
make
fertilizer
products.
These
wastes
(referred
to
hereafter
as
mining
wastes)
are
currently
exempt
from
hazardous
waste
regulations
according
to
RCRA
section
3001(
b)(
3)(
A)(
ii),
commonly
referred
to
as
the
"Bevill
exemption."
1
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

2­
1
CHAPTER
2
PROFILE
OF
THE
AFFECTED
INDUSTRY
This
chapter
presents
an
industry
profile
of
the
zinc
micronutrient
fertilizer
industry
in
the
United
States.
Section
2.1
considers
the
supply
of
zinc
micronutrient
fertilizers,
and
Section
2.2
covers
the
demand
for
zinc
micronutrient
fertilizers.
The
organization
of
the
zinc
micronutrient
fertilizer
industry
is
addressed
in
Section
2.3.
This
chapter
concludes
with
a
discussion
of
the
markets
involved
in
this
industry.

2.1
The
Supply
of
Zinc
Micronutrient
Fertilizers
This
section
provides
an
overview
of
zinc
micronutrient
fertilizer
production
in
the
United
States.
The
industry
is
small,
relative
to
the
fertilizer
industry
as
a
whole;
the
United
States
has
fewer
than
20
zinc
micronutrient
producers.
This
section
examines
the
raw
materials
used,
the
production
processes
incorporated,
and
the
costs
of
production
and
discusses
production
in
terms
of
"zinc
tons"
rather
than
in
tons
of
input
or
product.

2.1.1
Raw
Materials
Zinc
micronutrient
fertilizers
are
made
from
a
variety
of
raw
materials,
or
feedstocks.
Figure
2­
1
presents
an
overview
of
zinc
micronutrient
production
and
consumption.
In
1999,
the
amount
of
zinc
tons
of
fertilizer
produced
annually
derived
from
nonhazardous
materials
was
roughly
equivalent
to
the
zinc
tons
produced
annually
derived
from
EAF
dust,
brass
dust,
or
tire
ash,
which
EPA
classifies
as
hazardous
waste.
1
Table
2­
1
presents
the
amount
of
each
type
of
feedstock
used
in
the
production
of
zinc
fertilizer,
as
well
as
its
RCRA
status
and
percentage
of
zinc
content.
The
nonhazardous
materials
have
a
much
higher
concentration
of
zinc.

The
nonhazardous
raw
materials
include
zinc
fines
from
galvanizing,
zinc
hydroxide
from
electrowinning
of
automobiles
for
rust
protection,
and
some
crude
zinc
oxide
from
nonhazardous
sources
or
crude
zinc
oxide
refined
from
a
hazardous
waste
source
such
as
K061,
EAF
dust.
These
materials
do
not
have
the
high
levels
of
heavy
metals
that
are
characteristic
of
the
hazardous
raw
materials
and
are
therefore
not
regulated
by
the
Federal
government.
2­
2
Brass
ingot
makers,
tire
ash
generators,
etc.
EAFs
Electrowinners,
zinc
oxide
manufacturers
Zinc
micronutrient
manufacturing
process
Zinc
micronutrient
manufacturing
process
Zinc
micronutrient
manufacturing
process
Chemical
manufacturers
Animal
feed
manufacturers
Farmers
Nonhazardous
zinc
K061
D006
D008
Fertilizer
dealers
ZSM,
Oxy­
sul
(nonhazardous)

Oxy­
sul
(H)

ZSM
(H)

Figure
2­
1.
Zinc
Micronutrient
Production
and
Consumption
2­
3
Table
2­
1.
Domestic
Zinc­
Bearing
Secondary
Materials
Used
in
Micronutrient
Fertilizer
Production,
1997
or
Most
Current
Year
Material
Annual
generation
(tons)
Annual
amount
used
in
fertilizer
production
(tons)
a
Typically
hazardous
or
nonhazardous
under
RCRA
b
Zinc
content
(%)

Electric
arc
furnace
dust
from
steel
mills
(K061)
d
925,000
10,000
Hazardous
(Pb,
Cr,
Cd)
15­
25
Brass
fume
dust
(D006,
D008)
e
32,200
842
Hazardous
(Pb,
Cd)
40­
60
Zinc
fines
from
galvanizing
Unknown
10,836
Nonhazardous
72
f
Zinc
hydroxide
from
electrowinning
for
rust
protection
Unknown
4,715
Nonhazardous
60­
75
f
a
The
annual
amount
of
K061
destined
for
fertilizer
production
is
estimated
based
on
Oxy­
sul
volume
given
for
Frit
in
Queneau,
Paul,
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste,"
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
The
amount
of
brass
fume
dust
incorporated
into
fertilizer
production
was
estimated
based
on
volumes
given
in
a
handout
entitled,
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis,"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
EPA,
April
14,
1998.

b
Camp,
Richard,
Bay
Zinc,
handout
to
U.
S.
Environmental
Protection
Agency.
1998.

c
Borst,
Paul,
U.
S.
Environmental
Protection
Agency,
personal
communication
with
Ken
Wycherley,
Exeter
Energy
Ltd.
November
19,
1998.

d
Queneau,
Paul,
P.
B.
Queneau
&
Associates,
Inc.,
facsimile
to
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
"EAF
Dust—
U.
S.
A.
1998."
February
10,
1999.

e
Personal
communication
between
Paul
Borst,
U.
S.
Environmental
Protection
Agency
and
Gary
Mosher,
American
Foundrymen's
Society,
November
19,
1998.
Personal
communication
between
Paul
Borst,
U.
S.
Environmental
Protection
Agency
and
George
Obeldobel,
Big
River
Zinc,
July
12,
1999.
Total
generation
of
brass
fume
dust
is
a
total
of
ingotmaker,
brass
foundry,
and
brass
mill
dust
generation.
Total
estimated
brass
fume
production
is
based
on
a
450
ton
per
ingot
maker
times
12
ingot
makers,
32
ton
per
foundry
annual
generation
rate
times
791
nonferrous
foundries,
125
tons
per
brass
mill
times
12
brass
mills.

f
Borst,
Paul,
U.
S.
Environmental
Protection
Agency,
personal
communication
with
Richard
Camp,
Bay
Zinc.
November
18,
1998.

Source:
Unless
otherwise
noted,
volumes
used
in
fertilizer
production
were
derived
from
a
handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
EPA,
April
14,
1998.
Note:
Some
imported
sources
of
zinc­
bearing
secondary
materials
may
also
be
used
in
micronutrient
fertilizer
production.
2
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.
Page
1.

3
Ibid.
Page
1.

4
Obeldobel,
George,
teleconference
with
Lindsay
James,
Research
Triangle
Institute,
May
9,
2001.

5
Borst,
Paul,
U.
S.
Environmental
Protection
Agency,
personal
communication
with
Richard
Camp,
President,
Bay
Zinc.
April
16,
1999.
Page
1.

2­
4
2.1.2
Production
Processes
The
production
processes
vary
according
to
the
type
of
fertilizer
produced.
Oxy­
sul
is
produced
by
adding
sulfuric
acid
(H2SO4)
to
the
raw
material.
Producers
may
or
may
not
add
crude
zinc
oxide
(ZnO)
to
the
raw
material,
depending
on
the
zinc
concentration
in
the
raw
material.
The
sulfuric
acid
granulates
the
raw
material
dust
to
create
a
form
more
appropriate
for
fertilizer
application.
The
addition
of
sulfuric
acid
also
converts
some
of
the
zinc
oxide
into
zinc
sulfate.
Oxy­
sul
is
produced
from
both
hazardous
and
nonhazardous
feedstocks.
This
production
process
does
not
remove
any
of
the
heavy
metals
that
may
be
present
in
the
raw
material.
For
example,
Oxy­
sul
from
EAF
dust
averages
approximately
20
percent
zinc,
6,000
ppm
lead,
and
200
ppm
cadmium.
2
The
production
of
ZSM
involves
more
elaborate
capital
equipment.
This
production
process
removes
heavy
metals
(lead
and
cadmium)
from
hazardous
raw
materials
through
a
twostep
process
involving
filtration.
While
the
production
of
Oxy­
sul
only
partially
converts
the
raw
zinc
oxide
to
zinc
sulfate,
the
ZSM
production
process
completes
the
chemical
reaction,
and
nearly
all
of
the
zinc
oxide
in
the
raw
material
is
converted
to
ZSM.

2.1.3
Costs
of
Production
Production
of
zinc
fertilizer
requires
a
combination
of
variable
inputs
such
as
raw
materials,
labor,
transportation
and
energy,
and
fixed
capital
equipment.
Costs
are
also
associated
with
complying
with
RCRA
regulations
for
those
producers
who
use
hazardous
raw
materials.
This
report
focuses
on
the
costs
of
raw
materials
and
the
change
in
costs
of
complying
with
the
final
regulations.
(Chapter
5
examines
the
regulatory
costs.)

A
major
component
of
the
variable
costs
for
zinc
fertilizer
producers
is
the
cost
of
raw
zinc
materials.
The
price
that
the
zinc
fertilizer
producers
pay
to
the
raw
zinc
suppliers
is
mainly
a
function
of
the
zinc
concentration
in
the
raw
material.
Transportation
costs
are
also
a
factor
in
the
cost
of
zinc
raw
material.
Frit
Industries
pays
$10
per
ton
of
EAF
dust,
or
approximately
$0.025
per
pound
of
zinc.
3
Nonhazardous
zinc
feedstocks
are
more
expensive
and
are
estimated
to
cost
$0.18
per
pound
of
zinc.
4
The
capital
equipment
for
ZSM
production
is
much
more
expensive
than
the
capital
equipment
for
Oxy­
sul
production.
One
fertilizer
producer
recently
purchased
the
ZSM
production
equipment
for
approximately
$4.5
million.
5
6
Green,
Richard,
Martin
Resources,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
19,
1999.
Page
1.

7
Armani,
M.,
D.
G.
Westfall,
and
G.
A.
Peterson.
1997.
"Zinc
Plant
Availability
as
Influenced
by
Zinc
Fertilizer
Sources
and
Zinc
Water
Solubility."
Colorado
Agricultural
Experiment
Station
Technical
Bulletin
TB
97­
4
(pre­
publication
draft).
Page
1.

2­
5
2.2
The
Demand
for
Zinc
Micronutrient
Fertilizers
This
section
characterizes
the
consumption
of
zinc
micronutrient
fertilizers.
It
describes
the
characteristics
of
zinc
fertilizers,
its
uses
and
consumers,
and
the
substitution
possibilities
in
consumption.

2.2.1
Product
Characteristics
As
noted
earlier,
there
are
two
major
types
of
zinc
micronutrient
fertilizer:
Oxy­
sul
and
ZSM.
As
described
above,
Oxy­
sul
consists
of
a
combination
of
zinc
oxide
and
zinc
sulfate,
while
the
zinc
in
ZSM
is
in
the
form
of
zinc
sulfate
monohydrate.
Oxy­
sul
is
always
sold
in
the
granular
form;
ZSM
is
sold
in
either
a
granular
form
or
a
liquid
form
(liquid
ZnSO4
or
L.
ZnSO4),
usually
depending
on
consumer
preference.
Both
types
of
zinc
fertilizer
can
be
produced
from
either
hazardous
or
nonhazardous
raw
material.
Because
the
production
of
ZSM
incorporates
a
filtration
process,
the
product
characteristics
of
ZSM
will
be
the
same
regardless
of
the
raw
material,
and
the
concentration
of
heavy
metals
in
ZSM
is
low.
Oxy­
sul,
however,
will
differ
in
both
zinc
concentration
and
heavy
metal
concentration,
depending
on
the
raw
material.
Oxy­
sul
produced
from
nonhazardous
feedstocks
has
higher
zinc
concentration
and
lower
levels
of
lead
and
cadmium
than
Oxy­
sul
produced
from
hazardous
feedstocks.

Although
most
fertilizer
distributors
perceive
no
difference
between
the
two
types
of
fertilizer,
some
believe
that
ZSM
is
more
readily
available
for
plant
uptake,
because
zinc
sulfate
is
more
soluble
than
zinc
oxide.
6
This
point
is
quite
controversial.
Some
proponents
of
Oxy­
sul
argue
that
many
chemical
reactions
occur
in
the
soil,
and
it
is
possible
that
the
effects
of
microbes,
temperature,
and
sunlight
convert
the
less
soluble
zinc
oxide
to
soluble
zinc
sulfate.
Armani
et
al.
7
recently
concluded
that
ZSM
is
more
effective
as
fertilizer,
because
they
discovered
a
high
correlation
between
water
solubility
of
zinc
in
fertilizer
material
and
measured
plant
parameters.
Table
2­
2
presents
their
findings.
The
researchers
examined
six
different
types
of
Oxy­
sul;
the
grades
of
Oxy­
sul
differ
as
a
result
of
the
different
characteristics
of
the
raw
zinc
used.

2.2.2
Uses
and
Consumers
Zinc
micronutrient
fertilizer
producers
typically
sell
their
product
to
fertilizer
dealers
or
distributors.
These
fertilizer
dealers
blend
many
different
kinds
of
fertilizer
(e.
g.,
nitrogen,
potassium)
and
sell
these
blends
to
farmers.
There
are
two
methods
for
blending
fertilizers.
The
more
expensive
option
is
referred
to
as
precision
agriculture.
This
site­
specific
method
requires
soil
testing
in
grids
of
farmland
every
2
to
5
years.
Based
on
the
soil
tests,
the
fertilizer
dealer
recommends
precise
blends,
and
a
"variable
rate
application
machine"
is
used
to
apply
the
8
Skillen,
Jim,
The
Fertilizer
Institute,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
10,
1999.
Page
1.

9
Fertilizer
Institute.
1999.
"Fertilizer:
From
Plant
to
Plant."
The
Fertilizer
Institute.
<http://
www.
tfi.
org/
brochure.
htm>.
As
obtained
on
March
5,
1999.
Page
13.

2­
6
fertilizer.
This
machine
actually
changes
the
blend
as
it
is
driven
across
the
farmland.
The
other
method
of
blending
is
more
general.
The
dealer
blends
the
fertilizer
at
the
plant,
based
on
the
average
nutrient
needs
for
soil
in
that
area.
8
Farmers
consider
the
zinc
concentration
when
applying
fertilizer,
and
the
amount
of
zinc
applied
is
usually
referred
to
in
zinc
pounds.
The
average
application
rate
for
zinc
fertilizers
is
5
zinc
pounds
per
acre.
Table
2­
3
displays
the
application
rates
for
zinc
fertilizer.
Sometimes
micronutrients
are
applied
directly
to
the
plant
leaves
in
a
technique
called
foliar
fertilization.
9
Table
2­
2.
Fertilizer
Forms
and
Zinc
Solubility
Zinc
source
Zinc
fertilizer
symbol
Total
zinc
(%)
Water
soluble
zinc
(%)

ZnSO4
×
H2O
ZnSO4
35.5
99.9
Zn
Oxy­
sul
Zn20
20.4
98.3
Zn
Oxy­
sul
Zn27
27.3
66.4
Zn
Oxy­
sul
Zn40
39.9
26.5
Zn
Oxy­
sul
ZnOxS
37.7
11.0
Zn
Oxy­
sul
ZnOS
17.5
0.7
Zn
Oxy­
sul
(K061)
ZnK
15.0
1.0
Source:
Armani,
M.,
D.
G.
Westfall,
and
G.
A.
Peterson.
1997.
"Zinc
Plant
Availability
as
Influenced
by
Zinc
Fertilizer
Sources
and
Zinc
Water
Solubility."
Colorado
Agricultural
Experiment
Station
Technical
Bulletin
TB
97­
4
(pre­
publication
draft).
Page
3.

Table
2­
3.
Zinc
Application
Rates
(lbs/
acre)

Average
5
High
10
Maximum
20
Source:
U.
S.
Environmental
Protection
Agency
(EPA).
June
1998.
Background
Report
on
Fertilizer
Use,
Contaminants
and
Regulations.
Washington,
DC:
U.
S.
Environmental
Protection
Agency,
Office
of
Pollution
Prevention
and
Toxics.
EPA
747­
R­
98­
003.
Page
72.
10
ChemExpo.
"Chemical
Profile:
Zinc
Sulfate."
<http://
www.
chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
March
17,
1999.
Page
2.

11
Queneau,
Paul
et
al.
June
27–
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

12
Obeldobel,
George,
Big
River,
teleconference
with
Katherine
Heller
and
Charles
Pringle,
Research
Triangle
Institute.
April
15,
2002.

13
Camp,
Richard,
Bay
Zinc,
Teleconference
with
Charles
Pringle,
Research
Triangle
Institute,
April
30,
2002.

2­
7
A
look
at
the
regional
consumption
patterns
of
zinc
micronutrient
fertilizer
reveals
that
the
West
North
Central
region
(including
KS,
IA,
MN,
MO,
NB,
ND,
SD)
consumes
more
zinc
fertilizer
than
the
rest
of
the
country
(see
Table
2­
4).
Zinc
is
a
required
nutrient
for
corn
production,
so
this
consumption
pattern
is
logical.

ZSM
has
other
uses
beyond
providing
nutrients
for
crops,
although
75
percent
of
ZSM
produced
is
used
for
fertilizer.
Animal
feed
comprises
about
7
percent
of
the
ZSM
market,
and
another
7
percent
of
ZSM
produced
is
used
for
water
treatment.
Approximately
11
percent
of
ZSM
is
used
for
miscellaneous
purposes,
including
chemical
manufacturing
and
froth
flotation.
Zinc
stearate
is
zinc
sulfate's
largest
chemical
use.
10
2.3
Industry
Organization
Zinc
micronutrient
fertilizer
producers
are
part
of
the
zinc
sulfate
industry;
in
addition
to
its
use
in
fertilizers,
zinc
sulfate
is
also
used
in
animal
feed
and
as
a
feedstock
for
various
chemical
production
processes.
In
1999,
approximately
16
plants
produced
micronutrient
fertilizers,
including
both
Oxy­
sul
and
ZSM
technical
grade
zinc
sulfate.
11
Of
these,
one
plant
in
Cheyenne,
WY,
owned
by
Tetra
Micronutrients,
has
since
closed.
The
rest
of
the
companies,
their
plant
locations,
products,
and
zinc
micronutrient
fertilizer
production
volumes
for
1999
are
listed
in
Table
2­
5.
Interview
data
collected
by
the
Agency
indicate
that
Big
River
currently
produces
7,000
tons
of
ZSM
per
year.
12
Bay
Zinc
shut
down
operations
from
April
to
September
2001
but
has
since
resumed
production
and
expects
to
produce
18,000
tons
of
ZSM
in
2002.
13
Although
Oxy­
sul
is
suitable
only
as
a
fertilizer
input,
ZSM
can
be
used
as
an
ingredient
in
animal
feed.
Currently,
one
of
the
zinc
micronutrient
fertilizer
producers
uses
hazardous
feedstocks,
specifically
EAF
dust,
in
animal
feed.
(Other
zinc
sulfate
producers
incorporate
brass
fume
dust
into
the
production
of
animal
feed,
but
because
this
is
not
a
use
constituting
disposal,
the
feedstock
is
not
categorized
as
hazardous.)
Other
manufacturers
of
zinc
sulfates
use
zinc
from
nonharardous
sources,
including
zinc
fines,
zinc
hydroxide,
or
zinc
oxide.
Demand
for
zinc
sulfate
comes
from
fertilizer
dealers,
who
incorporate
the
zinc
micronutrients
into
their
fertilizer
products;
from
animal
feed
manufacturers,
who
incorporate
it
into
animal
feeds;
and
from
chemical
manufacturers.
2­
8
Table
2­
4.
Total
Zinc
Micronutrient
Fertilizer
Consumed
in
the
United
States
and
Regions
in
1996
(tons)

Description
New
England
Middle
Atlantic
South
Atlantic
East
north
central
West
north
central
East
south
central
West
south
central
Mountain
Pacific
Alaska,
Hawaii,
Puerto
Rico
U.
S.
and
Puerto
Rico
Percentage
of
total
Zinc
chelate
2
95
83
3
2,955
61
646
4,989
790
0
9,623
24.67
Zinc
oxide
0
367
120
673
4,849
359
63
243
1,482
0
8,158
20.91
Zinc
oxy
sulfate
0
72
22
331
39
114
0
0
35
0
612
1.57
Zinc
sulfate
20
298
34
206
12,645
186
141
1,526
3,499
15
18,569
47.61
Zinc
sulfate
solution
0
0
0
0
1,883
0
144
17
0
0
2,044
5.24
TOTAL
22
832
259
1,213
22,371
720
994
6,775
5,806
15
39,006
Source:
U.
S.
Environmental
Protection
Agency
(EPA).
June
1998.
Background
Report
on
Fertilizer
Use,
Contaminants
and
Regulations
.
Washington,
DC:
U.
S.

Environmental
Protection
Agency,
Office
of
Pollution
Prevention
and
Toxics.
EPA
747­
R­
98­
003.
Page
12.
14
Ibid.
Page
9.

2­
9
Thirteen
companies
own
the
15
plants
producing
zinc
micronutrients
in
this
country;
at
least
six
Standard
Industrial
Classification
(SIC)
codes
describe
their
primary
businesses.
14
All
of
the
industries
designated
by
those
SIC
codes
(although
not
all
of
the
firms)
produce
many
other
goods
in
addition
to
zinc
micronutrients.
Therefore,
traditional
measures
of
market
concentration
at
the
industry
level
may
not
be
useful
in
this
analysis.
Instead,
this
report
examines
the
markets
for
zinc
micronutrients.

2.3.1
Market
Structure
Several
markets
are
potentially
affected,
either
directly
or
indirectly,
by
the
final
rulemaking.
The
market
for
zinc
micronutrient
fertilizers
is
expected
to
be
directly
affected
by
the
final
rulemaking,
because
the
final
rulemaking
is
expected
to
change
the
costs
of
zinc
micronutrient
fertilizer
manufacturers,
who
in
response
will
change
their
supply
decisions.
This
Table
2­
5.
Domestic
Producers
of
Zinc
Micronutrient
Fertilizer:
1999
Company
Location
Products
Quantity
produced
(zinc
tons/
year)

Agrium
USA
Saginaw,
MI
Oxy­
Sul
850
Bay
Zinc
Moxee
City,
WA
ZSM,
L.
ZnSO4,
Oxy­
Sul
2,650
Big
River
Sauget,
IL
ZSM
2,000
Cameron
Chemical
Suffolk,
VA
Oxy­
Sul
900
Cyprus
Chemical
West
Helena,
AR
Oxy­
Sul
800
Frit
Industries
Norfolk,
NE
Oxy­
Sul
2,400
Frit
Industries
Chesapeake,
VA
Oxy­
Sul
350
Frit
Industries
Walnut
Ridge,
AR
Oxy­
Sul
1,100
Madison
Industries
Oak
Bridge,
NJ
ZSM,
L.
ZnSO4
5,300
Mineral
King
Minerals
Hanford,
CA
Oxy­
Sul,
L.
ZnSO4
2,300
Moore
Ag
Goodlen,
TX
Oxy­
Sul,
L.
ZnSO4,
ZSM
1,400
Scott
G.
Williams
Co.
Conyers,
GA
Oxy­
Sul
850
Sims
Ag
Products
Mt.
Gilead,
OH
Oxy­
Sul
1,100
Tetra
Micronutrients
Fairbury,
NE
ZSM,
L.
ZnSO4
10,300
ZCA
Monaca,
PA
L.
ZnSO4
200
Total
Production
in
1999
32,500
Source:
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
15
Green,
Richard,
Martin
Resources,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
19,
1999.
Page
1.

16
Skillen,
Jim,
The
Fertilizer
Institute,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
10,
1999.
Page
1.

17
U.
S.
International
Trade
Commission
Database.
"U.
S.
Imports
for
Consumption"
and
"U.
S.
Domestic
Exports."
HTS
Code
=
283326.
1989­
2001.

2­
10
response
by
manufacturers
may
change
the
overall
supply
of
zinc
micronutrient
fertilizers
and
will
likely
change
the
market
behavior
of
various
zinc
micronutrient
fertilizer
manufacturers,
depending
on
how
their
operations
are
affected
by
the
final
rulemaking.
Other
markets,
including
the
markets
for
hazardous
and
nonhazardous
zinc­
containing
materials
for
use
as
inputs
into
the
zinc
micronutrient
production
process
and
the
markets
for
the
products
made
with
zinc
micronutrient
fertilizers,
are
expected
to
be
indirectly
affected.
Because
the
final
rulemaking
impacts
the
relative
costs
of
producing
zinc
micronutrient
fertilizers
from
different
zinccontaining
materials,
EPA
expects
the
demand
for
these
inputs
to
increase
or
decrease
(depending
on
whether
the
cost
of
producing
zinc
micronutrient
fertilizers
using
the
material
has
decreased
or
increased).
Similarly,
the
markets
for
outputs
made
from
zinc
micronutrient
fertilizers
may
experience
increases
or
decreases
in
supply
(and
market
price)
depending
on
the
overall
impact
on
the
price
of
zinc
micronutrient
fertilizers.

Fertilizer
dealers
stated
that
the
market
for
zinc
micronutrient
fertilizers
is
regional,
or
possibly
national.
That
is,
zinc
micronutrient
fertilizer
producers
may
serve
customers
located
in
many
different
parts
of
the
country.
Although
the
zinc
sulfate
products
vary
significantly
from
producer
to
producer,
fertilizer
dealers
focus
on
the
zinc
content
of
the
product
and
state
that
the
price
they
pay
is
based
largely
on
the
product's
zinc
content.
Nevertheless,
Oxy­
sul,
L.
ZnSO4,
and
granular
ZnSO4
(ZSM)
have
different
production
costs
and
somewhat
different
uses.
These
differences
are
reflected
in
their
prices,
per
pound
of
zinc.
Oxy­
sul
has
the
lowest
median
price,
liquid
ZnSO4
has
the
next
lowest
median
price,
and
ZSM
has
the
highest
median
price,
where
the
prices
are
defined
in
terms
of
price
per
pound
of
zinc
(see
Section
2.4,
Table
2­
7).
Similarly,
within
each
category,
the
zinc
micronutrients
made
from
hazardous
feedstocks
tend
to
sell
for
a
lower
price
per
pound
of
zinc
than
zinc
micronutrients
made
from
nonhazardous
feedstocks.
Thus,
the
zinc
sulfate
commodities
are
probably
not
perfect
substitutes
for
one
another,
from
the
dealers'
perspective.
The
fertilizer
dealers
also
noted
that
zinc
micronutrient
fertilizer
manufacturers
might
offer
lower
f.
o.
b.
prices
to
customers
who
are
located
farther
from
their
plant
to
account
for
higher
transportation
costs.
15
Because
there
are
fewer
than
20
domestic
suppliers
of
zinc
micronutrients
and
because
their
products
are
somewhat
differentiated,
the
market
for
them
may
not
be
perfectly
competitive.
This
means
that
prices
for
zinc
micronutrient
fertilizers
may
differ
depending
on
quality.
Faced
with
increased
costs,
therefore,
they
may
be
able
to
pass
some
share
of
the
increased
cost
along
to
their
customers
in
the
form
of
higher
prices.

There
is
some
international
trade
in
zinc
by­
products
and
secondary
zinc
sources,
as
well
as
zinc
sulfate.
EAF
dust
is
exported
to
Mexico,
where
it
is
converted
into
crude
zinc
oxide
and
then
imported
into
the
U.
S.
for
use
as
a
feedstock.
16
The
U.
S.
imports
zinc
sulfate
from
several
countries;
the
highest
volume
import
countries
are
China,
Mexico,
and
Germany.
17
Also,
the
U.
S.
18
Ibid.

19
Queneau,
Paul
et
al.
June
27–
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

20
When
hazardous
feedstocks
are
used
to
make
animal
feed,
they
are
presumptively
not
used
in
a
manner
constituting
disposal
and
are
therefore
not
solid
wastes
because
they
are
used
as
ingredients
in
an
industrial
process
to
make
a
product
per
40
CFR
§261.2(
e)(
1)(
i).

21
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.
Page
1.

2­
11
exports
zinc
sulfate
to
several
countries,
mostly
to
Canada,
Mexico,
and
Costa
Rica.
18
China's
imports
have
risen
sharply,
especially
in
2000
and
2001.
Below
there
is
a
more
detailed
discussion
of
ZSM
imports
and
exports.

2.3.2
Manufacturing
Plants
Zinc
micronutrients
(Oxy­
sul
and
ZSM)
are
manufactured
by
15
plants
located
in
12
states.
19
Of
these
15
plants,
three
currently
use
hazardous
waste
as
a
feedstock.
One
of
these
three
uses
the
hazardous
waste
to
produce
zinc
micronutrient
that
is
used
as
a
fertilizer.
The
other
two
plants
use
brass
fume
dust
(a
characteristic
hazardous
waste
when
landfilled
or
used
in
fertilizer
production)
as
a
feedstock,
but
these
plants
state
that
they
produce
zinc
micronutrients
that
are
used
exclusively
for
animal
feed.
20
The
remaining
12
plants
produce
zinc
micronutrients
from
nonhazardous
feedstocks,
such
as
zinc
oxide,
zinc
hydroxide,
or
zinc
fines.
This
rulemaking
will
directly
affect
the
one
producer
making
zinc
micronutrient
fertilizer
using
hazardous
waste
as
a
feedstock.
The
others
will
be
indirectly
affected
because
they
compete
with
the
directly
affected
facility
in
the
markets
for
zinc
micronutrients.
Also
the
suppliers
of
the
hazardous
feedstocks
will
be
affected
by
the
rulemaking.
The
following
sections
describe
in
greater
detail
the
directly
and
indirectly
affected
facilities.

2.3.2.1
Potentially
Affected
Zinc
Micronutrient
Manufacturers
Frit
is
currently
the
only
zinc
micronutrient
fertilizer
producer
incorporating
hazardous
waste
as
a
feedstock;
therefore,
they
are
the
only
zinc
micronutrient
fertilizer
manufacturer
that
will
be
directly
affected
by
the
final
rulemaking.

Frit
owns
and
operates
a
fertilizer
manufacturing
facility
at
Norfolk,
NE,
located
on­
site
at
a
Nucor
Steel
facility.
Frit
processes
Nucor's
EAF
dust
(K061,
a
listed
hazardous
waste)
into
Oxy­
sul,
a
zinc
micronutrient
fertilizer
used
in
agriculture,
principally
corn.
Because
Frit
operates
its
facility
on­
site,
it
incurs
no
hazardous
waste
transportation
cost
and
does
not
require
a
RCRA
storage
permit.
21
Frit
also
owns
two
plants
that
produce
Oxy­
sul
from
zinc
oxide
(a
22
Queneau,
Paul
et
al.
June
27–
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

23
Camp,
Richard,
Bay
Zinc,
teleconference
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
April
16,
1999.

24
Oberlin,
Mike,
I.
Schumann
Inc.,
personal
communications
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
July
14,
1999,
July
27,
2000,
Arnett,
John
E.
Copper
and
Brass
Fabricators
Council,
Inc.
June
2,
2000.

25
Hoover's
Online.
2002.
"Nucor
Corporation."
<www.
hoovers.
com>.
As
obtained
on
April
30,
2002.

2­
12
nonhazardous
feedstock).
These
plants
are
located
in
Walnut
Ridge,
AR,
and
Chesapeake,
VA.
22
Frit
is
a
small
business.

In
addition
to
Frit,
EPA
has
identified
three
other
zinc
micronutrient
manufacturers
that
may
be
indirectly
affected
by
the
rulemaking.
These
are
Tetra's
Fairbury,
NE,
plant,
Madison
Industries,
and
Big
River
Zinc.
Tetra
and
Madison
Industries
currently
use
brass
baghouse
dust
as
an
input
to
their
ZSM
production
but
sell
all
their
brass­
dust­
derived
ZSM
for
animal
feed.
In
addition,
under
the
conditional
exclusion,
Big
River
Zinc,
which
has
used
brass
dust
in
the
past,
is
projected
to
substitute
brass
dust
for
the
nonhazardous
feedstock
they
are
currently
using.

2.3.2.2
Secondary
Material
Suppliers
This
section
provides
information
on
the
suppliers
of
the
hazardous
waste
feedstocks
used
by
zinc
micronutrient
manufacturers.
There
are
generally
three
types
of
hazardous
feedstocks:
EAF
dust
from
steel
mills;
tire
ash;
and
brass
fume
dust
from
brass
ingot
makers,
brass
mills,
and
brass
and
bronze
foundries.
Currently,
only
EAF
dust
is
used
solely
in
the
production
of
zinc
micronutrient
fertilizer.
Brass
fume
dust,
another
hazardous
waste
that
would
be
conditionally
exempt
under
the
final
rulemaking,
is
mostly
incorporated
in
the
production
of
ZSM
for
animal
feed.
EPA
predicts
that
at
least
two
companies
(Madison
Industries
and
Tetra
Micronutrients)
will
use
brass
fume
dust
to
produce
ZSM
for
fertilizer
in
the
future
and
one
company
will
use
brass
fume
dust
to
produce
zinc
(Big
River
Zinc),
because
the
final
conditional
exclusion
could
increase
demand
for
this
material
as
a
feedstock.
The
two
companies
that
currently
market
their
product
as
feed
will
most
likely
switch
to
selling
their
product
as
fertilizer.
23
All
of
the
EAF
dust
feedstock
is
supplied
by
one
steel
company.
In
contrast,
there
are
approximately
6
to
12
brass
ingot
makers,
10
brass
mills,
and
3
or
4
foundries
supplying
brass
fume
dust
for
zinc
animal
feed
production,
or
zinc
reclamation.
24
The
EAF
dust
facility
is
discussed
specifically,
but
the
secondary
brass
ingot
makers
and
brass
foundries
are
discussed
in
aggregate,
because
EPA
does
not
have
individual
facility
data.

Nucor
Steel
is
a
large
company
with
multiple
plants,
using
EAFs
to
produce
a
wide
range
of
steel
products.
Nucor
is
in
SIC
3312,
primary
iron
and
steel
manufacturing,
for
which
the
small
businesses
are
those
with
1,000
or
fewer
employees.
Nucor
is
a
large
company,
with
8,400
employees
in
2001
and
$4.1
billion
in
sales.
25
Nucor
directly
pipes
its
EAF
dust
from
its
Norfolk,
NE,
plant
to
a
storage
silo
at
the
co­
located
Frit
plant.
26
Queneau,
Paul
et
al.
June
27–
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

2­
13
Under
the
conditional
exclusion,
brass
baghouse
dust
generators
are
projected
to
be
able
to
sell
more
of
their
baghouse
dust
to
fertilizer
manufacturers.
At
baseline,
they
are
estimated
to
provide
1,352
tons
of
zinc
to
ZSM
manufacturers,
who
produce
ZSM
for
animal
feed
from
this
brass
dust.
The
rest
of
their
brass
baghouse
dust
is
assumed
to
be
sent
for
reclamation
to
Zinc
Nacional
in
Monterey,
Mexico.
Post­
rule,
ZSM
manufacturers
will
be
able
to
use
brass
baghouse
dust
for
fertilizer
production
and
are
projected
to
increase
the
quantity
of
brass
dust
they
purchase.

2.3.3
Firm
Characteristics
The
15
plants
manufacturing
zinc
micronutrient
fertilizer
are
owned
by
13
parent
companies.
26
The
potentially
affected
fertilizer
manufacturers'
and
raw
material
suppliers'
parent
companies
are
shown
in
Table
2­
6,
together
with
the
location
of
the
potentially
affected
facility,
their
North
American
Industrial
Classification
System
(NAICS)
code
(primary
industry),
their
sales,
their
employment,
the
Small
Business
Administration's
(SBA)
criteria
for
a
small
business
in
that
NAICS
code,
and
whether
the
company
is
a
small
business
according
to
this
criterion.

2.4
Markets
The
final
rulemaking
will
change
the
costs
of
producing
zinc
micronutrient
fertilizers
relative
to
compliance
with
current
standards.
This
change
in
costs,
in
turn,
will
affect
firm
behavior
in
the
markets
in
which
the
companies
buy
inputs
and
sell
their
outputs.
The
markets
directly
affected
are
those
for
zinc
micronutrients
produced
from
hazardous
waste
feedstocks.
Markets
for
zinc
micronutrients
produced
from
nonhazardous
zinc
feedstocks,
and
the
market
for
the
hazardous
and
nonhazardous
feedstocks
themselves,
as
well
as
other
inputs
used
to
produce
the
zinc
micronutrients,
will
be
indirectly
affected
by
market
forces
and
behavioral
changes.
This
section
summarizes
the
market
volumes
and
prices
at
baseline
in
affected
markets.
Table
2­
7
shows
volumes
of
zinc
micronutrient
fertilizer
product
derived
from
hazardous
waste
and
derived
from
nonhazardous
feedstocks.

Table
2­
7
shows
the
volume
of
Oxy­
sul
and
ZSM
manufactured
and
also
reports
the
volumes
made
from
hazardous
and
nonhazardous
zinc
feedstocks
in
1997.
The
volume
of
the
final
product
Oxy­
sul
exceeded
the
volume
of
ZSM
produced
by
14,000
tons.
The
majority
of
the
Oxy­
sul
volume
was
made
from
nonhazardous
feedstocks,
as
was
the
majority
of
the
liquid
ZnSO4.
However,
the
majority
of
ZSM
was
produced
from
hazardous
feedstocks.
2­
14
Table
2­
6.
Parent
Company
Information
for
Potentially
Affected
Companies
Parent
company
Facility
location
Parent
NAICS
code
Parent
sales
($
10
6
2001)
Parent
employment
(2001)
Small
business
size
standard
Small
business?

Frit
Inc.
Norfolk,
NE
325311
$67.5
250
1,000
Yes
Tetra
Micronutrients
Fairbury,
NE
325311
$7.5
35
1,000
Yes
Madison
Industries
Old
Bridge,
NJ
332312
$35.0
175
500
Yes
Big
River
Zinc
Sauget,
IL
331491
$300.0
375
750
Yes
Nucor
Steel
Norfolk,
NE
331111
$4,139.2
8,400
1,000
No
Sources:
Reference
USA.
2002a.
"Frit
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002b.
"Big
River
Zinc."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002c.
"Madison
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002d.
"Tetra
Micronutrients."
<www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Hoover's
Online.
2002.
"Nucor
Corporation."
<www.
hoovers.
com>.
As
obtained
on
April
30,
2002.
27
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.

28
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

29
Queneau,
Paul
B.,
et
al.
June
22–
24,
1999.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

2­
15
Table
2­
7.
Volumes
and
Prices
of
Zinc
Micronutrient
Fertilizer,
1997
Zinc
fertilizer
type
Volume
of
product
(tons)
Volume
of
zinc
(tons)
Median
price
per
pound
zinc
Oxy­
sul
35,336
a
9,772
a
$0.66
From
hazardous
feedstock
16,836
a
3,367
a
$0.59
From
nonhazardous
feedstock
18,500
6,405
$0.69
ZSM
21,500
7,330
$0.87
From
hazardous
feedstock
15,500
5,200
$0.87
From
nonhazardous
feedstock
6,000
2,130
$0.85
Liquid
ZnSO4
24,650
2,913
$0.75
From
hazardous
feedstock
11,000
1,320
$0.75
From
nonhazardous
feedstock
13,650
1,593
$0.75
a
Volumes
for
Frit
were
estimated,
based
on
industry
information.

Source:
Handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
U.
S
.Environmental
Protection
Agency,
April
14,
1998.

2.4.1
Market
Volumes
Zinc
micronutrient
fertilizers
are
produced
from
both
hazardous
and
nonhazardous
feedstocks.
Hazardous
feedstocks
currently
include
EAF
dust
(K061).
At
present,
only
Frit's
Nebraska
facility
uses
K061
to
manufacture
zinc
micronutrient
fertilizers.
27
In
1999,
Frit
accepted
10,000
tons
of
K061
and
manufactured
approximately
12,000
tons
of
Oxy­
sul.
28
Many
other
facilities
produce
Oxy­
sul
as
well,
and
these
facilities
incorporate
nonhazardous
feedstocks
into
their
production.
The
total
volume
of
Oxy­
sul
produced
in
1998
was
nearly
15
percent
less
than
the
volume
produced
in
1997.
29
Despite
increasing
ZSM
production,
Oxy­
sul
production
30
Queneau,
Paul
B.,
et
al.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
June
28­
30,
1994;
June
25­
27,
1996;
June
24­
26,
1997;
June
22­
24,
1999;
June
27­
29,
2000.

Queneau,
Paul
B.
U.
S.
Recycling
of
Industrial
Metals,
Office
of
Solid
Waste,
Hazardous
Waste
Minimization
and
Management
Division.
December
1­
2,
1998.

31
Ibid.

32
Painter,
David,
Martin
Resources,
personal
communication
with
Lindsay
James,
Research
Triangle
Institute,
July
2000.

33
Queneau,
Paul
et
al.
June
22–
24,
1999.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Speical
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

34
Queneau,
Paul
B.,
et
al.
Recycling
Heavy
Metals
in
Solid
Waste.
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
June
28­
30,
1994;
June
25­
27,
1996;
June
24­
26,
1997;
June
22­
24,
1999;
June
27­
29,
2000.

Queneau,
Paul
B.
U.
S.
Recycling
of
Industrial
Metals,
Office
of
Solid
Waste,
Hazardous
Waste
Minimization
and
Management
Division.
December
1­
2,
1998.

35
U.
S.
International
Trade
Commission
Database.
"U.
S.
Imports
for
Consumption"
and
"U.
S.
Domestic
Exports."
HTS
Code
=
283326.
1989­
2001.

2­
16
volumes
have
been
decreasing,
on
average,
since
1993.
30
This
decline
has
been
especially
marked
from
1997
to
1999.
31
Even
in
the
absence
of
government
regulation,
the
trend
of
decreasing
Oxy­
sul
is
apparent.
One
explanation
for
why
the
demand
for
ZSM
exceeds
the
demand
for
Oxy­
sul
is
the
perceived
lack
of
heavy
metals
in
ZSM.
32
The
other
major
category
of
zinc
micronutrient
fertilizer
is
ZSM.
Unlike
Oxy­
sul,
ZSM
volumes
are
increasing
for
the
most
part.
In
1998,
total
ZSM
volume
was
approximately
13
percent
larger
than
the
volume
produced
in
1997.
33
Although
the
trend
from
1993
to
1999
indicates
increasing
levels
of
ZSM,
ZSM
levels
declined
slightly
in
1999.
34
This
decline
in
ZSM
production
is
most
likely
a
result
of
several
factors,
including
decreasing
demand
for
zinc
micronutrient
fertilizer.
The
demand
for
zinc
micronutrient
fertilizer
appears
to
be
cyclical,
possibly
based
on
the
amount
of
zinc
in
the
soil
or
cyclical
cropping
patterns.
This
fluctuating
demand
for
zinc
micronutrient
fertilizer,
mirrored
by
the
volume
of
zinc
sulfate
imports,
seems
to
cycle
every
4
or
5
years.
Import
volumes
of
zinc
sulfate
are
also
cyclical,
although
the
highs
and
lows
of
the
import
cycle
are
offset
from
the
domestic
cycle
by
1
year.
35
EPA
reasons
that
the
imports
absorb
excess
demand
during
the
first
year
of
an
upswing,
before
domestic
producers
have
increased
their
production.
Another
contributing
factor
to
the
recent
decline
of
ZSM
is
the
closing
of
Tetra
Micronutrient's
Salida,
CO,
plant.
Please
refer
to
Appendix
D
for
a
discussion
of
the
potential
economic
impacts
when
the
demand
for
zinc
micronutrient
fertilizer
has
fallen
or
risen.

There
is
some
international
trade
in
zinc
feedstocks
and
zinc
micronutrient
fertilizers,
in
addition
to
zinc
sulfate.
For
example,
K061
is
exported
to
Mexico,
where
it
is
converted
to
crude
36
Green,
Richard,
Martin
Resources,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
19,
1999.
Page
1.

37
ChemExpo.
"Chemical
Profile:
Zinc
Sulfate."
<http://
www.
chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
March
17,
1999.
Page
1.

38
U.
S.
International
Trade
Commission
Database.
"U.
S.
Imports
for
Consumption"
and
"U.
S.
Domestic
Exports."
HTS
Code
=
283326.
1989­
2001.

39
Ibid.

40
ChemExpo.
"Chemical
Profile:
Zinc
Sulfate."
<http://
www.
chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
March
17,
1999.
Page
2.

41
Prices
are
on
a
per­
ton
basis,
powder,
bulk,
f.
o.
b.
works.

2­
17
ZnO
and
imported
back
into
the
United
States
as
a
nonhazardous
feedstock.
36
..
Also,
in
1995
ZSM
exports
were
3,800
tons,
and
ZSM
imports
were
4,900
tons.
37
The
United
States
imported
a
total
of
10,517
metric
tons
of
zinc
sulfate
in
1999
and
exported
about
4,700
metric
tons
the
same
year.
In
2001,
imports
rose
to
almost
16,250
metric
tons,
and
exports
remained
relatively
stable
at
approximately
4800
metric
tons.
38
Historically,
the
United
States
imports
most
extensively
from
China,
Mexico,
and
Germany,
although
imports
from
Germany
have
declined
sharply
since
1999.
Korea
exported
538
tons
of
ZSM
to
the
United
States
in
2001,
but
the
country
has
had
little
history
of
extensive
trading
with
the
United
States
in
this
commodity
prior
to
2001.
The
three
leading
countries
to
whom
the
United
States
exports
zinc
sulfate
are
Canada,
Mexico,
and
Costa
Rica.
39
Table
2­
8
lists
the
import
and
export
volumes
for
these
countries
from
1992
to
2001.
The
most
notable
trend
presented
in
Table
2­
8
is
the
dramatic
rise
in
Chinese
imports
over
the
last
decade.
In
2001,
the
United
States
imported
7,265
metric
tons
of
ZSM
from
China.
This
represents
almost
45
percent
of
all
imports.
Mexico
still
sends
more
ZSM
to
the
United
States
than
any
other
country.
The
United
States
imported
almost
7,800
metric
tons
of
ZSM
from
Mexico
in
2001,
or
48
percent
of
total
imports
for
2001.
Figures
2­
2
and
2­
3
show
historical
trends
in
imports
and
exports
of
zinc
sulfate
and
imports
from
China,
respectively.

2.4.2
Market
Prices
Prices
for
zinc
micronutrient
fertilizer
products,
per
pound
of
zinc,
vary
depending
on
the
type
of
product
and
the
type
of
feedstock
used
to
produce
it.
Thus,
ZSM
is
uniformly
priced
higher
than
Oxy­
sul,
and
Oxy­
sul
made
from
nonhazardous
feedstocks
is
uniformly
priced
higher
than
Oxy­
sul
made
from
hazardous
feedstocks.
This
pattern
confirms
information
received
from
Richard
Green,
a
fertilizer
distributor.
Mr.
Green
says
zinc
micronutrient's
price
varies
primarily
because
of
zinc
content,
but
that
somewhat
lower
prices
would
be
paid
for
micronutrients
with
higher
(nonnutritive)
heavy
metal
content.
According
to
a
chemical
industry
database,
1997
ZSM
prices
range
from
$480
to
$520
per
ton.
40,
41
2­
18
Table
2­
8.
Highest
Volume
U.
S.
Trading
Partners,
International
Trade
in
Zinc
Sulfate,
1992­
2001,
in
Metric
Tons
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Imports
China
22
1,237
2,576
264
74
306
1,971
2,037
5,594
7,265
Mexico
3,379
3,589
3,986
4,361
3,547
6,247
7,684
7,800
7,656
7,798
Germany
154
172
233
237
232
213
188
237
140
107
All
countries
3,828
5,617
7,197
5,399
4,054
7,094
10,366
10,517
13,747
16,248
Exports
Canada
1,734
2,128
2,054
2,461
3,282
2,414
2,563
2,703
3,245
2,467
Mexico
112
40
122
928
617
596
724
732
485
1,090
Costa
Rica
250
1,096
412
251
436
420
518
689
537
649
All
countries
2,826
4,334
4,803
4,206
5,114
4,658
4,289
4,691
5,320
4,782
Source:
U.
S.
International
Trade
Commission
Database.
"U.
S.
Imports
for
Consumption"
and
"U.
S.
Domestic
Exports."
HTS
Code
=
283326.
1989­

2001.
2­
19
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Year
Metric
Tons
Imports
Exports
Figure
2­
2.
Zinc
Sulfate
Imports
and
Exports,
1992­
2001
(Metric
Tons)

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Year
Metric
Tons
Figure
2­
3.
Imports
of
Chinese
Zinc
Sulfate,
1989­
2001
(Metric
Tons)
42
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.
Page
1.

43
ChemExpo.
"Chemical
Profile:
Zinc
Sulfate
7/
3/
2000."
<http://
www.
chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
August
11,
2000
Page
2.

44
Ibid.

45
Obeldobel,
George,
teleconference
with
Lindsay
James,
Research
Triangle
Institute,
May
9,
2001.

2­
20
Plant­
and
product­
specific
output
prices
per
pound
of
zinc
are
shown
in
Table
2­
9
(1997
data).
Although
the
data
in
the
table
indicate
a
price
of
$0.59
per
pound
of
zinc
for
Frit's
Oxy­
sul
product,
Frit
president
Carl
Schauble
indicates
that
their
product
sells
for
approximately
$0.475
per
pound
of
zinc.
42
This
decrease
in
price
may
be
due
to
a
decline
in
market
demand
for
zinc
oxysulfates
because
of
their
heavy
metal
content.
43
Throughout
this
analysis,
EPA
uses
the
prices
listed
in
Table
2­
9.

Prices
of
zinc
feedstocks
also
vary.
Hazardous
feedstocks
are
considerably
cheaper
than
nonhazardous
ones.
Frit
pays
$10
per
ton
on
average
for
the
EAF
dust
from
Nucor.
Assuming
the
K061
has
20
percent
zinc
content,
Frit
pays
approximately
$0.025
per
pound
of
zinc.
44
Nonhazardous
zinc
feedstocks
are
more
expensive
and
are
estimated
to
cost
about
$0.18
per
pound
of
zinc.
45
2­
21
Table
2­
9.
1997
Plant­
and
Product­
Specific
Output
Prices
of
Zinc
Manufacturer
Location
Raw
material
Product
%
zinc
in
product
Finished
product
annual
tons
Zinc
tons
Annual
capacity
tons
Sales
price
per
ton
of
product
Sales
price
per
pound
zinc
Comments
Agrium
Reise,
MI
ZnOH/
Var
Oxy­
sul
40
1,500
600
uk
$465
$0.58
Agrium
ZnOH/
Var
Oxy­
sul
27
1,500
405
uk
$375
$0.69
Bay
Zinc
Moxee
City,

WA
Tire
Ash
Oxy­
sul
20
5,000
1,000
12,000
$235
$0.59
Zn
fines
L.
ZnSO
4
10.5
3,000
315
5,000
$155
$0.74
Big
River
Sauget,
Il
Brass
dust
ZSM
31
6,500
2,015
6,500
$475
$0.77
Chem
&
Pigment
Pittsburgh,
CA
Zn
fines
ZSM
35.5
2,000
710
8,000
$620
$0.87
Chem
&
Pigment
Zn
fines
L.
ZnSO
4
12
2,500
300
3,000
$180
$0.75
Frit
Norfolk,
NE
K061
Oxy­
sul
20
15,000
a
3,000
a
Excess
$235
$0.59
Frit
Walnut
Ridge,

AR
ZnO
Oxy­
sul
35.5
9,000
3,240
Excess
$455
$0.63
Madison
Industries
Old
Bridge,
NJ
Zn
fines
and
brass
dust
ZSM
35
2,000
700
uk
$620
$0.69
Product
used
for
animal
feed
Madison
Industries
Zn
fines
and
brass
dust
L.
ZnSO
4
12
8,000
960
uk
$180
$0.75
Product
used
for
animal
feed
Mineral
King
Hanford,
CA
Zn
fines
L.
ZnSO
4
12
7,000
840
10,000
$165
$0.69
Sims
Mt.
Gilead,
OH
ZnOH/
Var
Oxy­
sul
20
500
100
uk
$300
$0.75
Sims
ZnOH/
Var
Oxy­
sul
31
2,000
620
uk
$440
$0.71
Sims
ZnOH/
Var
Oxy­
sul
36
4,000
1,440
uk
$500
$0.69
Tetra
Micronutrients
Fairbury,
NE
Zn
fines
and
brass
dust
ZSM
35.5
7,000
2,495
25,000
$620
$0.87
Product
used
for
animal
feed
(½
total
volume)

Zn
fines
and
brass
dust
L.
ZnSO
4
12
3,000
360
5,000
$180
$0.75
Product
used
for
animal
feed
(½
total
volume)

Note:
Big
River
is
no
longer
using
brass
dust
for
the
production
of
zinc
micronutrient
fertilizer.
Bay
Zinc
closed
in
2001,
but
has
now
resumed
operations
using
a
nonhazardous
zinc
sulfate
solution
feedstock.

uk
=
unknown.

a
The
finished
product
and
zinc
volumes
have
been
estimated
based
on
industry
sources
and
production
process
requirements.

Source:
Handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
U.
S.
Environmental
Protection
Agency,
April
14,
1998.
1
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.
Page
1.

3­
1
CHAPTER
3
METHODOLOGY
AND
DATA
LIMITATIONS
This
chapter
discusses
the
methodology
used
in
the
cost
and
economic
impact
analysis,
as
well
as
the
data
limitations
and
the
assumptions
that
were
used.
This
chapter
begins
with
a
description
of
the
baseline
conditions
and
behaviors
of
the
zinc
micronutrient
fertilizer
producers
and
zinc
raw
material
suppliers.
The
analytical
methodology
used
for
calculating
the
costs
and
economic
impacts
is
covered
later
in
the
chapter.
The
data
sources,
data
limitations,
and
assumptions
of
the
analysis
are
discussed
in
this
chapter
as
well.

3.1
Baseline
Conditions
To
calculate
the
costs
and
economic
impacts
of
the
final
rulemaking,
the
Agency
must
have
an
understanding
of
the
costs
that
the
affected
entities
are
incurring
prior
to
the
rulemaking.
This
set
of
costs
and
behaviors
occurring
in
the
industry
prior
to
the
rulemaking
is
called
the
baseline.

This
section
characterizes
the
baseline
conditions
that
are
incorporated
into
the
cost
and
economic
impact
analysis
described
in
Chapter
5.
These
baseline
conditions
assume
that
all
affected
companies
are
handling
their
hazardous
waste
according
to
current
applicable
RCRA
regulations.

3.1.1
Zinc
Fertilizer
Manufacturers
Under
the
baseline
conditions,
the
Agency
assumes
that
the
zinc
fertilizer
producers
that
are
using
hazardous
waste
are
all
RCRA­
compliant.
This
means
that
every
facility,
with
the
exception
of
Frit,
which
does
not
require
one,
has
a
RCRA
permit
and
handles
the
raw
material
in
such
a
manner
that
it
does
not
touch
the
soil
and
cannot
be
wind
dispersed.
A
description
of
compliance
behavior
for
Frit
Industries
is
given
below.

Table
3­
1
shows
the
zinc
fertilizer
producer
currently
using
hazardous
waste
as
a
feedstock.
Frit
Industries'
plant
in
Norfolk,
NE,
uses
EAF
dust
(K061)
from
Nucor
Steel
as
a
feedstock
for
the
production
of
Oxy­
sul.
Frit
operates
its
facility
on­
site
with
Nucor;
therefore,
it
incurs
no
hazardous
waste
transportation
costs
and
does
not
require
a
RCRA
storage
permit.
1
The
2
Borst,
Paul,
U.
S.
Environmental
Protection
Agency,
e­
mail
message
to
Katherine
Heller,
Research
Triangle
Institute.
March
16,
1999.
Revised
Frit
meeting
notes
and
handling
requirements
for
fertilizer.
Page
1.

3
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

4
K061
volume
estimated
based
on
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

5
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.
Page
1.

3­
2
K061
dust
is
directly
piped
from
Nucor
to
a
Frit­
operated
storage
silo.
2
In
1999,
Frit
produced
12,000
tons
of
Oxy­
sul.
3
3.1.2
Zinc
Raw
Material
Suppliers
Under
these
baseline
conditions,
this
analysis
assumes
the
raw
material
suppliers
are
RCRA­
compliant.
Every
facility
must
handle
the
hazardous
waste
in
a
manner
compliant
with
RCRA,
including
shipping
the
waste
in
a
manifest
fashion.
The
compliance
behaviors
for
the
two
types
of
facilities
are
described
below.

Nucor
Steel
does
not
store
the
K061
for
more
than
90
days;
therefore,
this
facility
does
not
require
a
RCRA
storage
permit.
In
1999,
Nucor
sent
at
least
10,000
tons
of
EAF
dust
through
the
pipeline
to
Frit;
4
in
1999,
Nucor
may
have
transported
as
much
as
12,500
tons
of
EAF
dust
to
Frit.
5
EPA
assumed
Frit
currently
processes
10,000
tons
of
EAF
dust
to
model
the
economic
impacts
in
this
analysis.

3.2
Analytical
Methodology
Under
the
assumption
that
the
affected
entities
are
currently
in
compliance
with
RCRA
regulations,
the
Agency
characterized
the
baseline
operations
of
each
entity.
The
Agency
then
compared
the
facility
operations
in
the
baseline
conditions
to
the
facility
operations
under
the
conditions
of
the
final
rulemaking
and
identified
any
changes
that
might
be
expected.
Based
on
these
expected
changes,
the
Agency
then
estimated
the
costs
or
cost
savings
for
zinc
micronutrient
fertilizer
producers
and
their
raw
material
suppliers.
The
Agency
considered
the
effects
the
changes
in
costs
will
have
on
the
markets
and
derived
the
economic
impacts.
Table
3­
1.
Baseline
Conditions
for
Directly
Affected
Zinc
Fertilizer
Producers
and
Feedstocks
Manufacturer
Location
Zinc
feedstock
Volume
of
feedstock
processed
(tons)
Source
of
zinc
feedstock
Price
paid
per
ton
of
raw
material
Frit
Norfolk,
NE
K061
(EAF
dust)
10,000
Nucor
Steel,
NE
$10
3­
3
3.3
Data
Sources,
Data
Limitations,
and
Assumptions
The
zinc
micronutrient
fertilizer
industry
is
a
small
industry,
with
fewer
than
20
manufacturers.
Because
of
its
size,
publicly
available
information
on
the
zinc
micronutrient
fertilizer
industry
is
scarce.
The
main
sources
of
information
used
for
this
analysis
were
Paul
Queneau's
short
course
documents
and
telephone
conversations
with
industry
representatives,
such
as
fertilizer
dealers,
company
leaders,
and
representatives
from
trade
associations.

Data
limitations
are
present
throughout
this
analysis.
The
exact
amount
of
K061
incorporated
into
Frit's
production
of
Oxy­
sul
was
unknown
and
had
to
be
estimated.
The
sales
and
employment
data
for
each
facility
were
obtained
from
publicly
available
sources.
Some
of
these
data
were
in
the
form
of
ranges.
For
these
data,
the
Agency
chose
the
midpoint
for
the
analysis.
The
risk
information
that
the
Agency
possessed
was
limited;
therefore,
the
benefits
assessment
had
to
be
qualitative
rather
then
quantitative.

The
Agency
made
several
assumptions
throughout
the
analysis.
First
of
all,
the
baseline
incorporated
into
the
cost
analysis
assumed
that
all
affected
entities
were
currently
in
full
compliance
with
RCRA
regulations.
Throughout
the
economic
analysis,
the
Agency
had
to
project
post­
rule
behaviors
for
the
directly
and
indirectly
affected
entities,
and
this
projection
required
several
basic
economic
assumptions.
For
example,
the
Agency
assumed
a
company
would
choose
the
least­
cost
alternative
when
making
a
company
decision.

Throughout
this
analysis,
EPA
uses
price
data
from
1997,
from
a
handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis,"
which
was
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
EPA
on
April
14,
1998.
Volume
data
are
adjusted
to
reflect
1999
quantities,
based
on
data
from
Paul
Queneau's
"Recycling
Heavy
Metals
in
Solid
Waste,"
2000
short
course.
Because
of
the
cyclical
nature
of
zinc
micronutrient
fertilizer
demand,
choosing
a
single
year
as
a
baseline
may
seem
risky.
However,
EPA
has
examined
zinc
micronutrient
fertilizer
volume
data
for
several
years
(1993,
1995,
1996,
1997,
1998,
and
1999),
and
1997
is
indeed
a
representative
year
in
terms
of
zinc
micronutrient
fertilizer
production,
according
to
Paul
Queneau's
data
for
these
years.
(EPA
chose
to
use
the
above­
mentioned
handout
as
a
primary
source
because
this
source
provides
both
price
and
volume
data.
EPA
relied
on
Paul
Queneau's
"Recycling
Heavy
Metals
in
Solid
Waste"
data
for
examining
production
trends,
because
this
data
source
provides
a
time
series.)
When
comparing
1997
volumes
to
the
average
volume
from
these
6
years,
the
1997
volumes
fall
within
one
standard
deviation
of
the
average.
For
ZSM
volumes,
liquid
zinc
sulfate
volumes,
and
volumes
of
contained
zinc,
the
1997
volumes
are
two­
fifths
or
less
of
one
standard
deviation
from
the
average,
indicating
that
1997
is
a
representative
year
for
zinc
micronutrient
fertilizer
production.
Figures
3­
1
through
3­
4
present
these
trends.

EPA
estimates
economic
impacts
on
firms
producing
zinc
fertilizers
and
on
firms
providing
inputs
to
fertilizer
manufacturers
based
on
an
assumption
that
market
prices
do
not
change
from
baseline
conditions.
Because
only
one
producer
and
one
generator
are
directly
3­
4
1993
1995
1996
1997
1998
1999
Year
ZSM
Tons
ZSM
Average
Standard
Dev
High
Standard
Dev
Low
40,000
50,000
60,000
70,000
80,000
Figure
3­
1.
Annual
Domestic
ZSM
Production,
1993–
1999
(standard
tons)

Source:
Queneau,
Paul
et
al.
1994–
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
the
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

40,000
50,000
60,000
70,000
80,000
1993
1995
1996
1997
1998
1999
Year
Oxy­
sul
Tons
Oxy­
sul
Average
Standard
Dev
High
Standard
Dev
Low
Figure
3­
2.
Annual
Domestic
Oxy­
sul
Production,
1993–
1999
(standard
tons)

Source:
Queneau,
Paul
et
al.
1994–
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
the
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
3­
5
30,000
35,000
40,000
45,000
50,000
55,000
60,000
1993
1995
1996
1997
1998
1999
Year
L.
ZSM
Tons
Liquid
Zinc
Sulfate
Average
Standard
Dev
High
Standard
Dev
Low
Figure
3­
3.
Annual
Domestic
Liquid
Zinc
Sulfate
Production,
1993–
1999
(standard
tons)

Source:
Queneau,
Paul
et
al.
1994–
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
the
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

30,000
35,000
40,000
45,000
50,000
1993
1995
1996
1997
1998
1999
Year
Zinc
Tons
Contained
Zinc
Average
Standard
Dev
High
Standard
Dev
Low
Figure
3­
4.
Annual
Domestic
Zinc
Micronutrient
Fertilizer
Production
in
Zinc
Tons,
1993–
1999
(standard
tons)

Source:
Queneau,
Paul
et
al.
1994–
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
the
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
3­
6
affected
by
the
regulation,
EPA
believes
that
their
ability
to
pass
these
costs
along
to
customers
will
be
limited.
Thus
the
"no
cost
pass­
through"
assumption
appears
reasonable.
To
assess
the
possible
distribution
of
impacts
across
directly
affected,
indirectly
affected,
and
unaffected
firms,
EPA
performed
a
market
analysis,
which
is
presented
in
Appendix
B.
4­
1
CHAPTER
4
FINAL
RULEMAKING
EPA's
final
rulemaking
would
°
remove
the
K061
fertilizer
exemption
from
RCRA
regulation,

°
provide
a
conditional
exclusion
from
the
definition
of
solid
waste
for
hazardous
secondary
feedstocks
(e.
g.,
brass
fume
dust,
EAF
dust
from
steel
mills)
used
to
produce
zinc­
containing
fertilizers,
and
°
provide
product
specifications
based
on
ZSM
for
excluding
hazardous
waste­
derived
zinc­
containing
fertilizers.

The
conditions
for
the
exclusion
of
the
hazardous
secondary
feedstocks
would
include
handling
requirements
for
storage
and
transport
(e.
g.,
no
outdoor
storage),
reporting
requirements,
and
labeling
requirements.
The
current
regulation
and
the
final
rulemaking
are
described
in
more
detail
below.

4.1
Current
Regulation
Under
current
RCRA
regulation,
the
following
feedstocks
used
in
zinc
fertilizer
manufacturing
are
typically
characterized
as
solid
wastes
and
hazardous
wastes
because
they
are
used
in
a
manner
constituting
disposal:
EAF
dust
(K061)
and
brass
fume
dust
(D006,
D008)
(40
CFR
§261.2[
c][
1]).
All
of
these
hazardous
wastes
are
currently
fully
regulated
until
the
product
is
made.
This
means
that
hazardous
waste
generator
requirements,
transporter
requirements,
and
storage
requirements
(i.
e.,
must
have
a
permit
at
the
recycling
facility)
are
all
applicable
(see
40
CFR
Part
266
Subpart
B).
The
current
handling
requirements
proscribe
land
storage
and
require
the
prevention
of
wind
dispersal.

Hazardous
waste­
derived
fertilizers,
except
for
K061­
derived
fertilizers,
are
conditionally
exempt
from
regulation.
There
are
two
conditions:
the
fertilizer
must
be
produced
for
the
public's
use,
and
the
fertilizer
must
meet
the
applicable
treatment
standard
listed
under
Subpart
D
of
Part
268.
K061­
derived
fertilizers
are
currently
unconditionally
exempt
from
regulation
(40
CFR
§266.20[
b]).

In
May
1998,
the
Phase
IV
LDR
final
rule
changed
the
treatment
standard
for
hazardous
waste
fertilizers
from
the
Third
Third
treatment
standard
to
the
more
stringent
UTS
levels.
The
Agency
stayed
the
effect
of
the
rule
in
August
1998,
however,
effectively
placing
hazardous
waste­
derived
fertilizers
back
under
the
Third
Third
standard.

4.2
Final
Rulemaking
The
primary
regulatory
difference
in
the
final
rulemaking
is
a
change
in
the
status
of
EAF
dust
and
brass
fume
dust
used
to
produce
fertilizers.
Secondary
feedstocks
currently
classified
as
4­
2
solid
wastes
that
are
also
hazardous
wastes
when
used
to
produce
fertilizer
will
no
longer
be
classified
as
solid
wastes
or
hazardous
wastes,
provided
that
they
meet
the
following
conditions:

°
prior
to
recycling,
such
secondary
materials
are
stored
in
tanks,
containers,
or
buildings
so
that
the
materials
are
not
placed
on
soils
and
that
wind
dispersal
of
the
material
is
prevented;

°
records
of
all
shipments
of
hazardous
secondary
materials
to
the
fertilizer
manufacturer
are
maintained
by
the
manufacturer
for
no
less
than
3
years,
and
these
records
identify
at
a
minimum
the
volume,
source,
and
type
of
material
shipped;
and
°
for
zinc
micronutrient
fertilizer
made
from
hazardous
secondary
materials,
the
fertilizer
meets
the
following
standards
for
Maximum
Allowable
Concentrations
of
Hazardous
Constituents
(milligrams
per
kilogram
of
zinc):

–
Lead:
based
on
ZSM
levels
–
Cadmium:
based
on
ZSM
levels
The
last
provision
of
the
conditional
exemption
will
require
that
all
zinc
fertilizers
have
levels
of
cadmium
and
lead
that
are
as
low
as
the
levels
in
ZSM.
Oxy­
sul
produced
from
hazardous
materials
will
most
likely
not
be
able
to
meet
these
treatment
standards.
Because
the
Agency
is
setting
treatment
standards,
the
final
rulemaking
includes
a
deletion
of
the
provision
that
stayed
the
effectiveness
of
Phase
IV
LDR
for
zinc
fertilizers.

In
addition
to
the
provisions
described
above,
the
rule
requires
some
additional
recordkeeping
and
reporting
activities
for
generators
and
intermediate
handlers
of
secondary
hazardous
materials.

The
rulemaking
also
considers
commercial
fertilizers
(beyond
zinc
fertilizers)
that
contain
recyclable
materials
and
are
produced
for
the
general
public's
use.
These
fertilizers
would
not
be
subject
to
regulation
provided
that
they
meet
the
same
treatment
standards.
5­
1
CHAPTER
5
COSTS
AND
ECONOMIC
IMPACTS
In
this
section,
EPA
examines
possible
responses
to
the
conditional
exclusion;
estimates
the
costs
or
cost
savings
associated
with
those
responses;
and
analyzes
the
impacts
of
these
costs
or
cost
savings
on
affected
facilities,
companies,
and
markets.

5.1
Cost
Analysis
EPA
analyzed
the
cost
of
compliance
by
first
assessing
baseline
regulatory
requirements
and
baseline
performance,
then
determining
what
changes
would
be
required
or
would
be
likely
in
response
to
the
rulemaking.
The
baseline
conditions
are
described
in
Section
2.
This
section
describes
EPA's
analysis
of
possible
facility
choices
in
response
to
the
conditional
exclusion.
EPA
then
compares
performance
that
will
comply
with
the
conditional
RCRA
exclusion
being
considered
to
the
baseline
and
computes
the
incremental
cost
(or
cost
savings)
associated
with
the
conditional
RCRA
exclusion.
In
this
section,
EPA
presents
the
models
used
to
estimate
the
costs
of
the
rulemaking
relative
to
each
baseline
and
discusses
the
estimated
costs
and/
or
cost
savings.

5.1.1
Costing
Model
and
Assumptions
EPA
estimates
that
the
final
rulemaking
will
directly
affect
one
zinc
micronutrient
fertilizer
manufacturer
and
one
raw
material
supplier.
EPA
assumed
that
all
facilities
are
complying
with
all
applicable
RCRA
requirements
at
baseline,
and
that
they
will
choose
to
respond
to
the
conditional
RCRA
exclusion
in
the
manner
that
is
most
profitable
to
them.
Other
facilities
may
be
indirectly
affected
by
the
final
rulemaking.
These
facilities
are
discussed
in
Section
5.1.3.

One
facility,
owned
by
Frit
Industries,
is
currently
producing
Oxy­
sul
fertilizer
from
hazardous
feedstocks.
These
products
are
not
believed
to
meet
the
conditional
exclusion's
treatment
standards.
The
facilities
projected
to
be
directly
affected
by
the
final
conditional
exclusion
therefore
include
°
Frit
Industries'
Norfolk,
NE,
plant,
which
manufactures
Oxy­
sul
from
EAF
dust
it
receives
from
the
Nucor
Industries
steel
plant
with
which
it
is
co­
located,
and
°
Nucor
Steel,
which
sells
its
EAF
dust
to
Frit
as
a
feedstock.

5.1.2
Estimated
Costs
and
Cost
Savings
Frit
Industries'
Norfolk,
NE,
plant
is
located
on
property
owned
by
Nucor
Steel
and
receives
EAF
dust
that
is
piped
directly
from
Nucor's
air
pollution
control
device
to
a
silo
at
1
K061
volume
estimated
based
on
12,000
ton
Oxy­
sul
production
volume
given
in
Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

5­
2
Frit's
plant.
Frit
is
assumed
to
accept
10,000
tons
of
EAF
dust
at
baseline.
1
EPA
examined
two
possible
responses
for
Frit:

°
shutting
down
its
Norfolk,
NE,
plant,
selling
its
equipment
for
salvage,
and
cleaning
up
the
site
and
°
closing
its
Norfolk,
NE,
plant,
cleaning
up
the
site,
and
transporting
the
capital
equipment
to
Frit
Industries'
facility
in
Walnut
Ridge,
AR.

To
evaluate
which
of
the
two
responses
Frit
would
select,
EPA
examined
the
cost
and
revenue
implications
of
each.
Both
options
are
estimated
to
increase
both
Frit's
costs
and
revenues.
The
more
costly
option,
the
closure
of
its
Norfolk
plant
and
salvaging
the
equipment,
is
shown
in
Table
5­
1.

Table
5­
1
shows
the
estimated
changes
in
Frit's
costs
and
revenues
associated
with
complying
by
shutting
down
its
plant
in
Norfolk,
NE.
Frit's
costs
of
shutting
down
its
operation
are
estimated
to
be
$320,000.
This
cost
includes
dismantling
the
plant
and
packing
the
capital
equipment
for
transport
and
the
salvage
value
of
the
capital
equipment.
In
addition
to
these
costs,
Frit
will
lose
profits
equal
to
$1,513,000.
After
annualizing
the
costs
of
shutting
down
over
15
years
at
an
interest
rate
of
7
percent,
the
total
annual
costs
of
closing
the
plant
in
Norfolk,
NE,
are
$1,548,000.
The
costs
of
disassembly
and
site
cleanup
are
based
on
costs
reported
by
Tetra
Micronutrients
for
dismantling
one
of
its
plants.
These
costs
were
then
scaled
to
adjust
for
the
differences
in
the
relative
size
of
operations
between
the
two
plants.
For
a
more
detailed
description
of
these
costs,
see
Appendix
A.

If
Frit
chooses
Scenario
2,
to
close
its
plant
in
Norfolk,
NE,
and
transport
its
operation
to
Walnut
Ridge,
AR,
it
will
likely
substitute
a
nonhazardous
feedstock
and
continue
to
make
Oxy
Table
5­
1.
Estimated
Costs
of
Complying
with
the
Conditional
Exclusion
for
Frit
Industries,
Scenario
1:
Shutting
Down
Cost
($)

Disassembly
$329,000
Site
cleanup
$152,000
Salvage
value
of
equipment
$161,000
Total
cost
of
shutdown
$320,000
Lost
profit
$1,513,000
Total
annual
cost
of
shutdown
$1,548,000
2
Queneau,
Paul,
personal
communication
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
April
16,
1999.
Page
1.

3
Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.

5­
3
sul.
The
company
will
incur
the
increased
cost
of
purchasing
the
nonhazardous
feedstock,
and
it
will
receive
higher
revenues
from
the
sale
of
its
product,
for
two
reasons:

°
The
zinc
content
of
the
nonhazardous
feedstock
is
higher.
Nonhazardous
feedstock
is
approximately
60
percent
zinc,
2
while
K061
is
20
percent
zinc.
3
°
The
Oxy­
sul
made
from
nonhazardous
feedstocks
can
be
sold
for
a
higher
price:
$0.69
per
pound
of
zinc
for
nonhazardous­
derived
Oxy­
sul,
compared
to
$0.59
per
pound
of
zinc
for
K061­
derived
Oxy­
sul.

Nucor
will
be
forced
to
pay
for
the
disposal
of
its
EAF
dust
when
Frit
stops
producing
Oxy­
sul
at
its
plant
in
Norfolk,
NE.
Nucor
will
incur
costs
of
disposal
for
K061
that
total
$1.4
million.
This
represents
an
increase
of
$1.5
million
in
costs
for
Nucor
because
it
was
receiving
$100,000
from
Frit
as
payment
for
its
K061
prior
to
the
rulemaking.

Table
5­
2
shows
the
estimated
changes
to
Frit's
costs
if
Frit
chooses
to
move
its
operation
to
Walnut
Ridge,
AR.
These
costs
include
planning,
packing,
site
cleanup,
shipping,
unpacking
and
reassembly,
permitting
revision,
the
relocation
of
three
households,
lost
production,
and
the
construction
of
a
new
storage
facility
at
the
Arkansas
plant.
The
total
costs
of
moving
the
operation
to
Walnut
Ridge,
AR,
are
estimated
to
be
$1,360,000.
This
total,
annualized
over
15
years
at
an
interest
rate
of
7
percent,
is
equal
to
$149,300.
For
a
more
detailed
description
of
the
assumption
underlying
these
costs,
see
Appendix
A.

Both
Frit's
costs
and
revenues
are
estimated
to
increase
significantly
if
it
transports
its
capital
equipment
to
the
Arkansas
plant
and
substitutes
nonhazardous
zinc
feedstock
in
its
Oxysul
operation.
Table
5­
3
describes
the
changes
in
costs
and
revenues
for
Nucor
and
Frit
that
would
result
from
Frit's
move
to
Arkansas
and
substitution
of
a
nonhazardous
zinc
feedstock.
The
table
shows
that
Frit
would
increase
its
revenues
by
$3,386,000
by
substituting
a
nonhazardous
feedstock.
Frit's
costs
will
also
increase
by
$2,910,500
because
of
increased
raw
material
costs
and
by
$149,300
because
of
its
move
to
Arkansas.

Overall,
EPA
estimates
that
Frit
will
realize
a
cost
savings
of
$326,000
if
it
chooses
this
option.
EPA
recognizes
that
the
analysis
may
omit
some
costs
of
substituting
a
nonhazardous
feedstock.
The
analysis
results
suggest
that
this
substitution
would
be
profitable
even
in
the
absence
of
the
regulation.
Additional
costs,
which
are
not
accounted
for
in
the
analysis
may
explain
why
Frit
has
not
already
made
this
move
and
feedstock
substitution.
For
example,
depending
on
the
terms
of
Frit's
contract
with
Nucor,
fees
may
be
associated
with
no
longer
accepting
K061
from
Nucor.
It
appears
that
Frit
may
already
be
substituting
some
nonhazardous
zinc
for
K061,
because
in
2000,
Frit
accepted
only
slightly
more
than
5,000
tons
of
K061
from
4
Miller,
Tomas
A.,
Nucor
Steel.
June
22,
2001.
Electronic
mail
message
to
Ken
Herstowski,
U.
S.
Environmental
Protection
Agency,
Region
7.

5
Madison
Industries'
and
Tetra
Micronutrient's
use
of
brass
dust
comes
from
a
handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry
and
EPA,
April,
14,1998
5­
4
Nucor.
4
Nucor,
which
had
received
$100,000
per
year
for
its
K061
when
Frit
used
it
as
a
feedstock,
would
now
be
required
to
spend
an
estimated
$1.4
million
annually
to
recycle
its
K061.

Based
on
the
analysis
described
in
Tables
5­
1
and
5­
2,
and
the
potential
for
Frit
to
increase
revenues
as
a
result
of
feedstock
substitution,
EPA
projects
that
Frit
would
choose
the
second
option
and
close
its
operation
in
Norfolk,
NE;
clean
up
the
site;
move
its
production
to
its
plant
in
Walnut
Ridge,
AR;
and
substitute
a
nonhazardous
feedstock.
Because
of
the
uncertainties
inherent
in
the
analysis,
EPA
has
chosen
to
present
a
range
of
impacts,
reflecting
both
scenarios.

5.1.3
Use
of
Brass
Baghouse
Dust
in
ZSM
Production
Based
on
available
information,
Madison
Industries
and
Tetra
Micronutrients
are
the
two
zinc
micronutrient
manufacturers
who
are
currently
using
brass
fume
dust
as
a
feedstock.
5
Big
River
Zinc,
a
zinc
producer,
had
used
the
dust
in
1997
but
is
not
using
this
material
now.
The
number
and
type
of
brass
dust
suppliers
(either
an
ingot
maker
or
large
foundry)
to
each
micronutrient
manufacturing
firm
are
unknown.
Tetra
Micronutrients
in
1998
produced
10,000
tons
of
ZSM
containing
2,845
tons
of
zinc.
However,
Tetra
produces
some
of
its
zinc
Table
5­
2.
Estimated
Costs
of
Complying
with
the
Conditional
Exclusion
for
Frit
Industries,
Scenario
2:
Moving
to
Walnut
Cost
($)

Planning
$6,000
Dismantling
and
packing
$329,000
Site
cleanup
$151,600
Shipping
$25,600
Unpacking
$518,100
Permitting
revision
$1,137
Household
relocation—
3
employees
$7,700
Foregone
profit
on
lost
production
$210,000
Build
new
storage
capacity
$112,000
Grand
total
$1,360,000
Annualized
cost
$149,300
6
Tetra
indicates
that
all
zinc
derived
from
hazardous
feedstocks
(brass
dust)
is
used
in
the
feed
industry
and
is
not
used
to
produce
fertilizer
currently.
Personal
communication
between
Paul
Borst,
USEPA,
and
Mike
Deiker,
Tetra
Micronutrients,
July
16,
1999.

7
Personal
communication
between
Paul
A.
Borst,
USEPA,
and
Mike
Oberlin,
I
Schumann
Inc.
(a
brass
ingot
maker),
July
14,
1999.

8
Personal
communication
between
Paul
Borst,
USEPA,
and
George
Obeldobel,
Big
River
Zinc,
July
12,
1999.

5­
5
micronutrients
from
nonhazardous
galvanizing
fines
as
well
as
brass
dust.
Because
the
proportion
of
zinc
made
from
hazardous
feedstocks
is
limited
to
the
feed
market,
6
this
analysis
assumes
that
a
small
proportion
of
20
to
40
percent
of
the
throughput
at
Tetra's
Fairbury,
NE,
facility
is
derived
from
hazardous
brass
dust
sources.
This
analysis
uses
a
value
of
854
tons.
Madison
Industries,
in
1997,
produced
10,000
tons
of
ZSM
containing
1,660
tons
of
zinc.
Again,
EPA
estimates
that
20
to
40
percent
of
the
feedstock
is
derived
from
brass
dust,
so
EPA
estimates
that
Madison
produces
489
tons
of
zinc
from
brass
dust.
In
addition,
Big
River
produces
ZSM
using
nonhazardous
feedstock
at
present.
Producing
their
current
volume
of
ZSM
requires
2,015
tons
of
zinc.
Thus,
if
Big
River
switches
to
brass
dust
as
a
feedstock,
the
total
volume
of
brass
dust­
derived
zinc
used
for
ZSM
production
is
estimated
to
be
3,366
tons.

EPA
used
the
following
assumptions
to
develop
model
facilities
for
brass
dust
generators:

°
There
are
approximately
12
brass
ingot
makers
in
the
United
States.
7
°
A
typical
ingot
maker
may
generate
between
100
and
2,500
tons
of
baghouse
dust
annually.
8
Table
5­
3.
Estimated
Change
in
Costs
and
Revenues
for
Frit
Industries
from
Substituting
Nonhazardous
Feedstock
Frit's
costs
and
revenues
a
Oxy­
sul
derived
from
K061
Oxy­
sul
derived
from
nonhazardous
feedstock
Change
resulting
from
substitution
of
nonhazardous
feedstock
Estimated
revenues
from
sale
of
Oxy­
sul
$2,832,000
$6,218,000
$3,386,000
Estimated
feedstock
costs
$393,500
$3,304,000
$2,910,500
Costs
of
moving
plant
to
Walnut
Ridge,
AR
NA
NA
$149,300
Estimated
profit
$2,440,000
$2,930,000
$326,000
Nucor's
cost
to
dispose
of
K061
–$
100,000
$1,400,000
$1,500,000
a
There
may
be
some
additional
capital
equipment
required
to
use
nonhazardous
feedstock,
for
managing
feedstock
received
from
offsite.
The
cost
of
this
equipment,
if
any,
has
been
omitted
from
this
calculation,
as
well
as
the
possible
costs
of
relocation.
9
Borst
and
Oberlin,
July
14,
1999.

10
Personal
communication
between
Paul
Borst,
USEPA,
and
Allan
Silber,
Recyclers
of
Copper
Alloy
Products.
(RE­
CAP),
July
14,
1999.

11
Letter
from
Collier,
Shannon,
Rill,
and
Scott
on
behalf
of
the
American
Foundrymen's
Society
to
the
EPA
RCRA
Information
Center
commenting
on
the
Phase
IV
LDR
proposed
rulemaking,
November
27,
1995.

12
Personal
communication
between
Paul
Borst,
USEPA,
and
Gary
Mosher,
American
Foundrymen's
Society,
November
19,
1998.

5­
6
°
Brass
ingot
maker
baghouse
dust
averages
60
to
70
percent
zinc.
9
°
A
typical
ingot
maker
may
ship
one
to
two
railroad
cars
of
baghouse
dust
per
month
with
between
75
and
90
tons
of
dust
per
car.
10
°
This
analysis
assumes
an
average
generation
rate
of
450
tons
of
ingot
maker
baghouse
dust
per
year,
with
a
concentration
of
65
percent
zinc.
Because
the
zinc
content
in
the
ingot
maker
baghouse
dust
is
relatively
high
and
there
is
a
comparatively
larger
volume
of
dust
per
facility
than
a
foundry,
this
analysis
assumes
that
ingot
makers
are
the
principal
suppliers
of
this
type
of
material
to
zinc
micronutrient
manufacturers.

°
There
are
approximately
791
brass
and
bronze
or
brass,
bronze,
and
aluminum
foundries
in
the
United
States
that
generate
TC
metal
hazardous
waste.
11
Typically
nonferrous
foundries
generated
32
tons
of
baghouse
dust
per
year.
12
However,
empirically,
larger
brass
foundries
generate
more
dust
and
are
therefore
better
able
to
afford
the
freight
costs
associated
with
shipping
baghouse
dust
longer
distances.
Therefore,
this
analysis
assumes
a
value
of
100
tons
per
nonferrous
foundry
rather
than
the
32­
ton
average
that
characterizes
the
industry
and
assumes
that
three
foundries
supply
baghouse
dust
to
the
fertilizer
producers.

°
There
are
12
brass
mills
in
the
country.
They
are
assumed
to
generate,
on
average,
125
tons
of
baghouse
dust
per
year.
EPA
assumes
that
10
of
the
12
supply
baghouse
dust
to
fertilizer
producers.

The
conditional
exclusion
will
mean
the
brass
fume
dust,
if
recycled
into
ZSM
fertilizer
or
animal
feed,
is
not
solid
waste.
To
analyze
the
impact
of
the
conditional
exclusion
on
brass
fume
dust
generators,
EPA
assumes
that
ten
ingot
makers,
ten
brass
mills,
and
the
three
largest
brass
foundries
generating
brass
fume
dust
sell
their
brass
fume
dust
to
ZSM
manufacturers.
Because
EPA
does
not
know
the
characteristics
of
the
specific
generators,
a
model
facility
approach
is
used
to
characterize
the
generators.
Table
5­
4
depicts
the
characteristics
of
each
typical
brass
fume
generator.

Overall,
the
Agency
expects
brass
baghouse
dust
generators
to
benefit
from
the
regulation.
In
the
absence
of
the
conditional
exclusion,
the
brass
generators
are
assumed
to
sell
only
about
1,350
tons
of
baghouse
dust
to
ZSM
producers;
the
rest
is
assumed
to
be
sent
to
Zinc
Nacional,
Horsehead
Resource
Development,
or
another
zinc
reclaimer
for
reclamation,
at
an
average
cost
13
Arnett,
John
E.
June
2,
2000.
Copper
and
Brass
Fabricators
Council,
Inc.
Brass
Mill
Baghouse
Dust.
Brass
fume
dust
averages
46
percent
zinc;
the
average
cost
for
reclamation
is
$0.15/
lb.

14
Obeldobel,
George,
Big
River,
teleconference
with
Charles
Pringle,
Research
Triangle
Institute.
April
30,
2002.

5­
7
of
$0.15
per
pound.
13
Currently,
the
average
price
of
brass
fume
dust
is
approximately
$0.08
per
pound.
14
Post­
rule,
the
generators
are
assumed
to
sell
approximately
3,500
tons
of
their
brass
baghouse
dust
to
ZSM
manufacturers,
at
an
average
price
of
$0.08
per
pound.
The
actual
cost
for
reclamation
and
price
received
from
the
ZSM
manufacturers
is
assumed
to
reflect
the
variation
in
zinc
content
from
the
different
types
of
brass
baghouse
dust
generators.
Brass
mills
and
brass
foundries
are
assumed
to
generate
brass
baghouse
dust
with
an
average
zinc
concentration
of
35
percent,
while
brass
ingot
makers
are
assumed
to
generate
dust
with
an
average
zinc
concentration
of
65
percent.
Ingot
makers
are
thus
assumed
to
pay
less
for
reclamation
and
earn
more
from
ZSM
makers
for
their
brass
baghouse
dust.
For
all
types
of
generators,
the
rulemaking
is
expected
to
result
in
reduced
cost
and
increased
revenues,
averaging
an
increase
in
revenues
of
$0.22
per
pound
of
brass
dust
sold
to
ZSM
producers.
Table
5­
5
shows
estimated
impacts
on
typical
brass
dust
generators.

The
Agency
also
expects
several
ZSM
manufacturers
to
benefit
from
the
rule's
change
in
the
treatment
of
brass
baghouse
dust.
As
noted
above,
EPA
expects
three
ZSM
manufacturers
to
use
brass
baghouse
dust
to
manufacture
ZSM
for
fertilizer
post­
rule.
Of
the
three,
two
currently
use
brass
baghouse
dust
as
an
input
to
ZSM
manufacturing
but
sell
their
ZSM
made
from
brass
dust
exclusively
for
animal
feed.
The
third
is
not
currently
using
brass
baghouse
dust;
EPA
expects
that,
post­
rule,
this
company
will
substitute
brass
dust
for
the
more
costly
nonhazardous
ZnO
it
is
currently
using
as
a
feedstock.

EPA
expects
differing
impacts
on
these
three
ZSM
manufacturers.
Big
River
Zinc,
which
currently
uses
nonhazardous
ZnO
as
a
feedstock,
is
expected
to
switch
to
using
brass
dust.
This
switch
is
predicted
to
reduce
their
costs
of
production
but
leave
their
revenues
unchanged.
Madison
Industries
and
Tetra
currently
use
at
least
some
brass
dust
as
feedstock
but
produce
only
Table
5­
4.
Typical
Brass
Mill,
Brass
Foundry,
and
Brass
Ingot
Maker
Brass
mill
Brass
foundry
Brass
ingot
maker
Size
(tons/
yr)
125
100
450
Zinc
content
35%
35%
65%

Baseline
management
Send
for
reclamation,
cost:
$0.15/
lb
Send
for
reclamation,
cost:
$0.15/
lb
Send
for
animal
feed,
cost:
$0.12/
lb
Post­
rule
management
Sell
to
ZSM
manufacturer,
$0.071/
lb
Sell
to
ZSM
manufacturer,
$0.071/
lb
Sell
to
ZSM
manufacturer,
$0.091/
lb
Number
of
generators
10
3
10
15
Queneau,
Paul.
Personal
communication
with
Paul
Borst,
U.
S.
EPA.
March
9,
1999.

5­
8
animal
feed
from
the
brass
dust.
These
two
producers
are
projected
to
switch
from
selling
animal
feed
to
selling
fertilizer,
because
fertilizer
commands
a
higher
price,
due
to
its
seasonal
nature.
15
Table
5­
6
shows
the
characteristics
of
the
three
ZSM
manufacturers
that
EPA
expects
will
use
brass
baghouse
dust
as
an
input
for
fertilizer
manufacturing,
as
a
result
of
the
rulemaking.
Table
5­
5.
Financial
Impacts
on
Brass
Baghouse
Dust
Generators
Brass
mill
Brass
foundry
Brass
ingot
maker
Dust
volume
125
100
450
Baseline
cost
of
reclamation
$18,500
$14,800
$38,900
Post­
rule
revenue
from
sales
to
ZSM
$17,800
$14,200
$82,100
Net
revenue
$36,300
$29,000
$121,000
Number
of
generators
10
3
10
National
net
revenue
$362,300
$87,000
$1,209,000
Note:
Values
are
rounded.

Table
5­
6.
ZSM
Producers
Using
or
Projected
to
Use
Brass
Baghouse
Dust
Big
River,
Sauget,
IL
Madison
Industries
Tetra,
Fairbury,
NE
Quantity
of
ZSM
tons/
yr
7,000
2,000
granular,
8,000
liquid
7,000
granular,
3,000
liquid
Baseline
feedstock
ZnO
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Post­
rule
feedstock
Brass
dust
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Baseline
product
Fertilizer
½
feed,
½
fertilizer
½
feed,
½
fertilizer
Post­
rule
product
Fertilizer
Fertilizer
Fertilizer
16
Obeldobel,
George,
Big
River,
teleconference
with
Katherine
Heller
and
Charles
Pringle,
Research
Triangle
Institute.
April
15,
2002.

17
For
example,
Tetra's
Sauget,
IL,
facility
has
indicated
its
capacity
and
interest
in
obtaining
brass
fume
dust
as
an
alternative
feed
material
for
zinc
metal.
The
company
produces
a
ZSM
from
its
process
that
has
been
and
could
be
marketed
for
fertilizer
use.
Personal
communication
between
Paul
Borst,
U.
S.
Environmental
Protection
Agency
and
George
Obeldobel,
Big
River
Zinc,
July
2000.

5­
9
To
assess
the
potential
impact
of
the
rulemaking
on
these
ZSM
manufacturers,
we
first
focus
on
Big
River
Zinc.
At
baseline,
this
company
is
estimated
to
produce
7,000
tons
per
year
of
ZSM.
16
EPA
assumes
this
facility
purchases
zinc
fines,
a
nonhazardous
feedstock,
which
has
a
75
percent
zinc
content,
at
$0.18
per
pound.
Post­
rule,
the
company
will
be
able
to
purchase
brass
dust,
with
an
average
zinc
content
of
46
percent,
at
$0.08
per
pound.
The
facility
will
also
incur
some
additional
costs
as
a
result
of
using
brass
dust.
Specifically,
the
Agency
assumes
the
company
will
incur
the
costs
of
treating
and
transporting
the
sludge
created
as
a
by­
product
from
ZSM
production.
Table
5­
7
shows
projected
cost
savings
for
Big
River
as
a
result
of
the
rulemaking.

Madison
Industries
and
Tetra's
Fairbury,
NE,
plant
are
not
projected
to
change
their
operations,
only
the
market
in
which
they
sell
their
ZSM
as
a
result
of
the
rulemaking.
EPA
thus
projects
no
changes
in
their
costs
as
a
result
of
the
rulemaking,
only
an
increase
in
their
revenues
because
ZSM
for
fertilizer
commands
a
higher
price
than
ZSM
for
feed.
In
fact,
Madison
Industries
and
Tetra
may
choose
to
substitute
brass
dust
for
the
zinc
fines
they
are
currently
using
as
part
of
their
feedstock;
if
they
did
so,
they
might
realize
additional
cost
savings.
But
to
avoid
overstating
the
benefits
of
the
rulemaking
for
these
firms,
EPA
estimates
only
changes
in
revenues
for
them.
Table
5­
8
shows
these
estimated
changes
in
revenues.

Overall,
EPA
projects
that
the
conditional
exclusion
will
benefit
both
brass
baghouse
dust
generators
and
ZSM
manufacturers.
Brass
baghouse
dust
generators
will
find
an
improved
market
for
their
baghouse
dust,
enabling
them
to
sell
it
rather
than
paying
to
have
it
reclaimed.
17
Nationwide,
ten
brass
mills,
ten
ingot
makers,
and
three
foundries
are
projected
to
sell
their
Table
5­
7.
Estimated
Cost
Savings
due
to
the
Rulemaking
for
Big
River
Zinc,
Sauget,
IL
Cost
element
Value
Quantity
of
ZSM
produced
8,000
tons
Baseline
cost
of
Zn
fines
2,485
tons
Zn
×
$.
018/
lb
Zn
×
(2000/.
75)
=
$1,192,800
Post­
rule
cost
of
brass
dust
2,485
tons
Zn
×
$0.08
×
(2000/
0.46)
=
$864,400
Post­
rule
cost
of
treatment
1,195
tons
sludge
×
$175/
ton
transport,
treat,
and
dispose
=
$209,100
Cost
savings
due
to
the
rule
$119,300
Note:
Values
are
rounded.
5­
10
baghouse
dust
to
ZSM
producers,
at
a
net
savings
of
approximately
$1.7
million.
Big
River
Zinc
is
projected
to
substitute
brass
dust
for
the
nonhazardous
feedstock
currently
used,
at
a
cost
savings
of
$119,000.
Madison
Industries
and
Tetra
are
projected
to
be
able
to
sell
all
their
ZSM,
regardless
of
feedstock,
for
fertilizer,
increasing
their
revenues
by
$750,000.

5.2
Economic
Impact
Analysis
As
described
above,
EPA
estimates
that
the
conditional
exclusion
will
result
in
changes
in
the
operations
of
at
least
three
facilities,
which
in
turn
is
estimated
to
change
their
costs
and
revenues.
This
section
describes
the
projected
impacts
on
affected
markets,
facilities,
and
companies.

5.2.1
Expected
Market
Effects
of
the
Conditional
Exclusion
The
conditional
exclusion
is
expected
to
reduce
the
cost
of
using
hazardous
materials
as
feedstocks
in
zinc
fertilizer
manufacturing,
because
materials
managed
in
compliance
with
the
exclusion
will
no
longer
be
subject
to
RCRA
regulatory
requirements.
The
change
in
regulatory
status
of
the
waste­
derived
zinc
feedstocks
will
reduce
the
cost
of
using
them
relative
to
the
cost
of
using
nonhazardous
zinc
feedstocks.
Zinc
micronutrient
producers
may
choose
to
substitute
some
waste­
derived
zinc
feedstocks
for
nonwaste­
derived
feedstocks,
thus
increasing
the
demand
(and
price)
for
the
waste­
derived
zinc
feedstocks
and
decreasing
the
demand
(and
price)
for
the
nonwaste­
derived
zinc
feedstocks.
Overall,
the
costs
of
production
for
zinc
micronutrients
are
expected
to
decrease
somewhat,
resulting
in
an
increased
supply
of
zinc
micronutrients
and
a
decrease
in
the
market
price.

Because
only
a
subset
of
the
suppliers
of
zinc
micronutrients
are
currently
using
hazardous
waste
feedstocks,
and
because
the
cost
changes
for
these
facilities
are
estimated
to
be
fairly
small,
EPA
expects
the
market
impacts
to
be
correspondingly
small.
The
Agency
has
therefore
not
attempted
to
quantify
the
change
in
the
market
price
of
zinc
micronutrients
or
zinc
feedstocks;
the
Table
5­
8.
Estimated
Revenue
Increases
for
Madison
Industries
and
Tetra,
Fairbury,
NE
Revenue
Element
Value
Madison
Industries
All
ZSM
used
for
animal
feed
at
baseline
Current
revenues
8,000
tons
ZnSO4
×
$180
+
2,000
tons
ZSM
×
620
=
$2,680,000
Estimated
post­
rule
revenues
8,000
tons
ZnSO4
×
$230
+
2,000
tons
ZSM
×
670
=
$3,180,000
Estimated
increased
revenues
$3,180,000
–
$2,680,000
=
$500,000
Tetra,
Fairbury,
NE
Half
ZSM
used
for
animal
feed
at
baseline
Current
revenues
3,000
tons
ZnSO4
×
$180
+
7,000
tons
ZSM
×
$620
=
$4,880,000
Estimated
post­
rule
revenues
0.5
×
$4,880,000
+
0.5
×
(3,000
×
$230
+
7,000
×
$670)
=
$5,130,000
Estimated
increased
revenues
$5,130,000
–
$4,880,000
=
$250,000
5­
11
economic
impact
analysis
is
conducted
using
a
"full
cost
absorption"
approach,
based
on
market
prices
that
do
not
change
from
their
baseline
levels.
This
modeling
approach
tends
to
estimate
the
maximum
impacts
on
the
directly
affected
facilities,
and
it
makes
use
of
the
details
of
variations
in
price
between
feedstocks
and
outputs
of
various
qualities
in
various
markets.
Thus,
for
facility­
level
impacts,
EPA
believes
this
to
be
the
most
realistic
approach.
However,
EPA
also
recognizes
that
facilities
that
are
not
affected
by
this
rulemaking
may
also
experience
impacts
(either
positive
or
negative)
due
to
the
rulemaking.
To
illustrate
the
possible
distribution
of
impacts
across
producers,
EPA
presents
a
market
analysis
in
Appendix
B.
The
market
analysis
abstracts
from
some
of
the
quality
premia
realized
by
some
zinc
producers
(for
products
made
from
nonhazardous
feedstocks,
for
example),
and
treats
the
zinc
content
of
various
micronutrient
products
as
perfect
substitutes.
In
spite
of
this
simplification,
EPA
believes
that
the
sign
if
not
the
magnitude
of
impacts
projected
by
the
market
analysis
may
be
meaningful.

5.2.2
Estimated
Impacts
on
Companies
Owning
Zinc
Micronutrient
Facilities
EPA
measures
the
impacts
of
the
conditional
exclusion
by
comparing
the
net
costs
of
complying
with
the
conditional
exclusion
(taking
into
account
any
estimated
changes
in
revenues
or
cost
savings)
with
the
companies'
baseline
revenues.
Table
5­
9
shows
the
estimated
net
costs
to
comply
with
the
conditional
exclusion
as
a
share
of
baseline
company
revenues
for
Frit
Industries
and
Nucor.
The
estimated
costs
for
these
companies
range
from
a
cost
savings
of
approximately
$500,000
for
Madison
Industries
to
a
cost
of
$1,500,000
for
Nucor.
Frit's
estimated
cost
savings
are
approximately
0.5
percent
of
their
baseline
revenues.
The
Agency
believes,
based
on
this
analysis,
that
none
of
the
firms
directly
affected
by
the
conditional
exclusion
will
incur
significant
impacts.

In
addition
to
the
specific
companies
listed
above,
several
generators
of
brass
baghouse
dust
are
estimated
to
incur
cost
savings
as
a
result
of
the
conditional
exclusions.
Currently,
they
are
able
to
sell
only
an
estimated
1,350
tons
of
baghouse
dust
to
ZSM
manufacturers.
Under
the
conditional
exclusion,
they
are
projected
to
increase
those
sales
by
more
than
2,000
tons.
As
a
result,
they
will
experience
cost
savings
because
they
will
not
have
to
pay
a
zinc
reclamation
facility
to
accept
their
baghouse
dust
and
will
experience
increased
revenues
because
they
will
be
able
to
sell
the
dust
to
ZSM
manufacturers.
However,
EPA
does
not
have
sufficient
information
about
brass
baghouse
dust
generators
to
identify
individual
generators
that
may
experience
these
cost
savings
and
increased
revenues.

5.2.3
Impacts
on
Small
Businesses
SBREFA
requires
EPA
to
analyze
and
attempt
to
minimize
economic
impacts
on
small
entities,
including
small
businesses,
small
nonprofit
organizations,
and
small
governments.
SBREFA
amended
the
Regulatory
Flexibility
Act
(RFA),
which
requires
that
a
regulatory
flexibility
analysis
be
performed
for
any
rule
that
imposes
a
significant
economic
impact
on
a
substantial
number
of
small
entities.

EPA
has
determined
that
one
small
business,
a
zinc
micronutrient
manufacturer,
will
be
directly
affected
by
the
final
standards.
At
least
three
other
small
businesses
will
be
indirectly
affected.
EPA
conducted
a
screening
analysis,
comparing
the
estimated
costs
of
the
standards
with
this
company's
baseline
sales.
For
the
zinc
micronutrient
manufacturer,
the
final
standards
5­
12
Table
5­
9.
Estimated
Company
Impacts
of
the
Conditional
Exclusion
Company
Baseline
revenues
Net
costs
of
compliance
Costs
as
a
percentage
of
sales
Zinc
Micronutrient
Manufacturers
Frit
Inc.
$67,500,000
–$
326,000
–0.48%

Madison
Industries
$35,000,000
–$
500,000
–1.43%

Tetra
Micronutrients
—
–$
250,000
–3.33%

Big
River
Zinc
$300,000,000
­$
119,306
–0.04%

Feedstock
Suppliers
Nucor
Steel
4,139,200,000
$1,500,000
0.04%

Note:
Negative
net
costs
reflect
EPA's
estimate
that
a
company's
revenues
will
increase
by
more
than
their
costs.
Source:
Reference
USA.
2002a.
"Frit
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.
Reference
USA.
2002b.
"Big
River
Zinc."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.
Reference
USA.
2002c.
"Madison
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.
Reference
USA.
2002d.
"Tetra
Micronutrients."
<www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.
Hoover's
Online.
2002.
"Nucor
Corporation."
<www.
hoovers.
com>.
As
obtained
on
April
30,
2002.

are
projected
to
result
in
cost
savings
or
in
revenue
increases
that
largely
offset
the
increased
costs.
Similarly,
the
small
businesses
indirectly
affected
are
projected
to
experience
increased
revenues
or
cost
savings.

EPA
therefore
certifies
that
the
conditional
exclusion
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities,
because
°
only
one
small
entity
is
directly
affected,

°
the
overall
financial
impacts
of
the
conditional
exclusion
on
this
small
entity
are
expected
to
be
affordable,
and
°
the
small
business
may
be
able
to
recover
its
costs
in
a
post­
rule
environment.

5.3
Conclusions
The
conditional
exclusion
is
expected
to
require
one
zinc
micronutrient
manufacturer
to
modify
its
operations.
Frit
Industries
is
estimated
to
not
only
incur
incremental
costs,
but
also
to
have
a
substantial
increase
in
revenues,
which
may
offset
the
increased
costs.
Its
current
supplier
of
K061,
Nucor
Steel,
is
projected
to
incur
increased
costs
to
recycle
its
K061.

Three
additional
zinc
micronutrient
producers,
Big
River
Zinc,
Madison
Industries,
and
Tetra
Micronutrients,
are
projected
to
experience
either
cost
savings
or
increased
revenues
because
of
the
effect
of
the
conditional
exclusion
on
the
regulatory
status
of
brass
baghouse
dust.
5­
13
The
brass
mills,
brass
foundries,
and
brass
ingot
producers
that
generate
brass
baghouse
dust
are
also
projected
to
experience
cost
savings.

Overall,
therefore,
EPA
estimates
that
few
companies
will
be
directly
affected
by
the
conditional
exclusion,
and
for
those
that
are,
most
will
incur
relatively
small
impacts,
when
estimated
costs,
cost
savings,
and
changes
in
revenue
are
accounted
for.
1
Rogowski,
D.,
G.
Golding,
D.
Bowhay,
and
S.
Singleton.
1999.
Screening
Survey
for
Metals
and
Dioxins
in
Fertilizers,
Soil
Amendments,
and
Soils
in
Washington
State.
Washington
State
Department
of
Ecology,
Olympia,
WA,
Ecology
Publication
No.
99­
309.

2
Freeman,
A.
1993.
The
Measurement
of
Environmental
and
Resource
Values:
Theory
and
Methods.
Washington,
DC:
Resources
for
the
Future.

6­
1
CHAPTER
6
BENEFITS
OF
THE
FINAL
RULEMAKING
Zinc
micronutrient
fertilizers
have
the
potential
to
harm
human
and
environmental
health
through
a
variety
of
environmental
media
and
exposure
pathways.
As
a
result,
the
final
conditional
exclusion
for
zinc
micronutrient
fertilizer,
which
is
designed
to
reduce
the
release
of
hazardous
materials
into
the
environment,
can
improve
human
welfare
by
generating
environmental
services.
This
chapter
identifies
the
primary
linkages
between
zinc
micronutrient
fertilizer
pollution
and
human
welfare,
drawing
on
a
study
by
Rogowski
et
al.
conducted
for
Washington
State
1
.
The
chapter
begins
with
a
conceptual
discussion
of
the
link
between
changes
in
environmental
quality
and
human
welfare
as
characterized
in
a
standard
benefits
analysis.
The
second
section
identifies
potential
categories
for
benefits
from
the
final
rule
limiting
exposure
to
dioxins
and
some
metals.
In
the
final
section,
evidence
is
presented
linking
zinc
micronutrient
fertilizers
to
elevated
levels
of
metals
and
dioxin
exposure.

6.1
A
Conceptual
Framework
for
Analyzing
the
Benefits
of
Regulating
Zinc
Micronutrient
Fertilizers
Following
the
established
procedures
for
benefits
analysis,
2
we
can
use
a
three­
stage
framework,
illustrated
in
Figure
6­
1,
to
conceptualize
the
economic
benefits
of
regulating
zinc
micronutrient
fertilizers.
In
Stage
1
(the
first
arrow),
we
propose
that
the
conditional
exclusion
for
zinc
micronutrient
fertilizer
generates
environmental
services
by
reducing
the
release
of
hazardous
substances.
The
main
task
is
therefore
to
identify
the
primary
environmental
media,
exposure
pathways,
and
reductions
in
chemical
concentration
associated
with
the
rulemaking.

In
Stage
2
(the
second
set
of
arrows)
the
reduction
in
dioxin
exposure
generates
two
main
effects:
human
health
effects
and
ecosystem
effects.
Health
effects
can
be
further
subcategorized
into
mortality
(typically
cancer
related)
and
morbidity
effects.
In
addition,
because
of
altruistic
concerns
society
at
large
may
gain
some
nonuse
benefits
from
knowing
that
others
are
healthy.
Although
there
are
several
ways
to
characterize
and
categorize
the
ecosystem
effects
of
fertilizer
regulation,
EPA
believes
there
are
four
primary
areas:

°
commercial
effects
in
terms
of
productivity
of
agriculture
and
fishing;

°
nonmarket
effects
from
improved
recreational
opportunities
and
aesthetic
qualities
of
nature;
6­
2
°
maintenance
or
improvements
of
natural
ecological
functions
such
as
water
filtration,
nutrient
cycling,
and
habitat
preservation;
and
°
nonuse
effects
to
society
(not
necessarily
individuals)
from
the
knowledge
that
ecosystems
are
healthy.

Nonuse
services
may
also
contribute
to
an
individual's
welfare
through
a
sense
of
stewardship
for
the
environment.
Generate
Health
Effects
a.
Mortality
b.
Morbidity
—
acute,
chronic
c.
Nonuse
Environmental
Policy
Regulate
Zinc
Micronutrient
Fertilizer
Change
Air,
Water,
and
Soil
Quality
and
Provide
Environmental
Services
STAGE
1
Change
Human
Welfare
and
Generate
Benefits
(Values)
Generate
Ecosystem
Effects
a.
Commercial
—
crops,
fish
b.
Nonmarket
—
recreation,
aesthetics
c.
Ecological
functions
d.
Nonuse
STAGE
2
STAGE
3
Figure
6­
1.
Conceptual
Framework
for
Benefits
of
Regulating
Zinc
Micronutrient
Fertilizer
3
Freeman
provides
a
comprehensive
discussion
of
the
nonmarket
valuation
methods.
(Freeman,
A.
1993.
The
Measurement
of
Environmental
and
Resource
Values:
Theory
and
Methods.)
Washington,
DC:
Resources
for
the
Future.

4
U.
S.
EPA
Report
of
RCRA
Compliance
Evaluation
Inspection
at
American
MicroTrace
Corporation,
Fairbury,
NE.
September
19,
1996
and
October
3­
4,
1996.

6­
3
Finally,
in
Stage
3
(the
third
set
of
arrows),
the
health
and
ecosystem
effects
generate
benefits
by
increasing
the
welfare
of
human
beings.
Economists
measure
this
gain
in
terms
of
changes
in
utility
and
translate
them
into
monetary
terms
by
using
a
nonmarket
valuation
method.
The
main
basis
for
these
methods
is
the
relation
between
these
health
and
ecosystem
services
and
other
conventionally
valued
market
goods
that
are
either
substitutes
or
complements
because
people
make
production
and
consumption
tradeoffs
among
market
and
nonmarket
goods.
By
identifying
the
main
economic
tradeoffs,
the
benefits
of
the
conditional
exclusion
can
be
estimated
as
willingness
to
pay
that
is
measured
in
terms
of
market
products.
3
6.2
Identifying
Categories
of
Benefits
To
identify
the
primary
exposure
pathways,
environmental
media,
exposure
reduction,
and
human
welfare
gains
associated
with
regulating
zinc
micronutrient
fertilizers,
this
analysis
draws
from
the
Rogowski
et
al.
study
for
Washington
State
on
metals
and
dioxins
in
fertilizers
and
soils.
The
health
benefits
lie
primarily
in
the
control
of
lead,
cadmium,
chromium,
and
dioxins
pollution.
The
benefits
of
the
final
conditional
exclusion
can
be
expressed
as
the
reduction
in
adverse
health
and
ecosystem
effects
that
will
result
from
the
final
standards.
Potential
benefits
include
°
fewer
cancer
cases
among
the
most
exposed
population
from
reductions
in
dioxin
concentrations
and
additional
reductions
in
cancer
cases
in
the
remaining
90
percent
of
the
population;

°
reduction
in
cancer
cases
associated
with
exposure
to
lead,
chromium,
and
cadmium;

°
reductions
in
kidney
tissue
decay
and
other
morbidity
effects
associated
with
exposure
to
chromium;

°
reductions
in
kidney
damage,
significant
proteinuria,
and
other
morbidity
effects
from
exposure
to
cadmium;
and
°
reductions
in
various
cardiovascular,
developmental,
and
central
nervous
system
effects
due
to
exposure
to
lead.

In
addition
to
the
human
health
risks
avoided
by
reducing
exposures
to
lead
and
dioxins,
the
rulemaking
is
expected
to
yield
ecological
benefits,
because
of
reduced
loadings
of
heavy
metals
to
the
environment.
Improved
material
handling
procedures
would
prevent
contamination
of
soil,
groundwater,
and
surface
water.
For
example,
materials
handling
at
one
zinc
fertilizer
manufacturer
resulted
in
contaminated
storm
water
running
off
into
a
wetland
area
and
creek,
contaminating
them
with
heavy
metals
including
lead
and
cadmium.
4
Another
zinc
micronutrient
fertilizer
manufacturer
was
recently
fined
$35,000
for
spilling
and
improperly
disposing
of
waste
5
Washington
Department
of
Ecology.
September
23,
1999.
Fertilizer
company
fined
for
improper
handling
of
hazardous
waste.
News
Release.
<http://
www.
wa.
gov:
80/
ecology/
pie/
1999news/
99­
186.
html>.

6
As
of
July
1,
1999,
Washington
State
law
(RCW
15.54.820)
requires
a
review
of
fertilizers
that
includes
TCLP
analysis
for
several
metals.
The
TCLP
is
used
to
determine
if
a
solid
waste
is
also
a
dangerous
waste.

6­
4
containing
lead
and
cadmium.
5
The
plant
was
also
ordered
to
immediately
prevent
any
further
releases
of
hazardous
waste
to
the
environment
and
to
develop
a
plan
for
cleaning
up
the
site,
which
has
both
soil
and
groundwater
contamination
resulting
from
its
fertilizer
manufacturing
activities.
Compliance
with
the
terms
of
the
conditional
exclusion
would
reduce
releases
of
heavy
metals
to
the
environment.

It
is
evident
that
the
conditional
exclusion,
with
its
resulting
reductions
in
releases
of
heavy
metals
and
dioxins,
would
convey
benefits
to
the
human
population.

6.3
Potential
Exposure
to
Metals
and
Dioxin
from
Zinc
Micronutrient
Fertilizers
Zinc
micronutrient
fertilizers
have
relatively
high
concentrations
of
metals
compared
to
other
fertilizers
tested,
including
lead,
mercury,
and
silver
(see
Table
1­
1
in
Rogowski
et
al.).
At
the
maximum
application
rates,
zinc
fertilizer
application
results
in
soil
additions
of
less
than
0.1
kg/
hectare
of
all
metals
except
for
lead
(0.884
kg/
ha).
Frit
K061­
derived
fertilizer
also
exceeded
the
Toxic
Characteristic
Leaching
Procedure
(TCLP)
6
limits
for
cadmium.

Dioxin
in
fertilizer
is
also
a
concern.
The
final
regulation
limits
dioxin
in
zinc
fertilizers
to
8
ppt.
The
Rogowski
et
al.
study
for
Washington
State
found
greater
than
140
ppt
of
dioxin
congeners
and
one
exceeded
50
ppt
in
one
hazardous
waste­
derived
fertilizer
and
a
level
of
9
ppt
in
the
other
hazardous
waste­
derived
fertilizer
tested.

Regulating
the
composition
of
hazardous
waste­
derived
fertilizers
would
result
in
lower
amounts
of
metals,
especially
cadmium,
and
dioxin
entering
the
environment.
7­
1
CHAPTER
7
OTHER
ADMINISTRATIVE
REQUIREMENTS
This
chapter
describes
the
Agency's
response
to
other
rulemaking
requirements
established
by
statute
and
executive
order,
within
the
context
of
the
notice
of
final
rulemaking
for
zinc­
containing
hazardous
waste­
derived
fertilizers.

7.1
Environmental
Justice
EPA
is
committed
to
addressing
environmental
justice
concerns
and
is
assuming
a
leadership
role
in
environmental
justice
initiatives
to
enhance
environmental
quality
for
all
residents
of
the
United
States.
The
Agency's
goals
are
to
ensure
that
no
segment
of
the
population,
regardless
of
race,
color,
national
origin,
or
income,
bears
disproportionately
high
and
adverse
human
health
and
environmental
impacts
as
a
result
of
EPA's
policies,
programs,
and
activities,
and
that
all
people
live
in
clean
and
sustainable
communities.
In
response
to
Executive
Order
12898
and
to
concerns
voiced
by
many
groups
outside
the
Agency,
EPA's
Office
of
Solid
Waste
and
Emergency
Response
formed
an
Environmental
Justice
Task
Force
to
analyze
the
array
of
environmental
justice
issues
specific
to
waste
programs
and
to
develop
an
overall
strategy
to
identify
and
address
these
issues
(OSWER
Directive
No.
9200.3­
17).

It
is
not
certain
whether
the
environmental
problems
addressed
by
the
final
conditional
exclusion
from
hazardous
waste
regulation
for
zinc­
containing
hazardous
waste­
derived
fertilizers
could
disproportionately
affect
minority
or
low
income
communities,
due
to
the
widespread
distribution
of
fertilizers
throughout
the
United
States.
As
mentioned
in
Chapter
2,
the
West
North
Central
region—
which
includes
KS,
IA,
MN,
MO,
NE,
ND,
and
SD—
are
the
largest
consumers
of
zinc
fertilizer,
principally
used
in
corn
production.
The
Pacific
and
Mountain
regions
are
second
to
the
North
West
Central
region
in
zinc
fertilizer
consumption.
Because
the
final
rule
removes
the
exclusion
for
K061­
derived
fertilizers,
retains
protective
management
standards
for
hazardous
secondary
fertilizer
feedstocks,
and
establishes
technologybased
protective
product
standards
for
zinc
micronutrient
fertilizers
derived
from
hazardous
feedstocks,
the
Agency
does
not
believe
that
this
rule
will
increase
risks
or
result
in
any
disproportionately
negative
impacts
on
minority
or
low
income
communities
relative
to
affluent
or
nonminority
communities.
As
stated
in
Chapter
6,
EPA
believes
that
this
rule
will
reduce
lead
and
cadmium
loadings
from
zinc
micronutrient
fertilizers
to
the
environment
including
groundwater
and
food
supply.

7.2
Unfunded
Mandates
Reform
Act
Under
Section
202
of
the
Unfunded
Mandates
Reform
Act
of
1995,
signed
into
law
on
March
22,
1995,
EPA
must
prepare
a
statement
to
accompany
any
rule
for
which
the
estimated
costs
to
state,
local,
or
tribal
governments
in
the
aggregate,
or
to
the
private
sector,
will
be
$100
1
An
economically
significant
rule
is
defined
by
Executive
Order
12866
as
any
rulemaking
that
has
an
annual
effect
on
the
economy
of
$100
million
or
more,
or
would
adversely
affect
in
a
material
way
the
economy;
a
sector
of
the
economy;
productivity;
competition;
jobs;
the
environment;
public
health;
or
safety;
or
state,
local,
or
tribal
governments
or
communities.

7­
2
million
or
more
in
any
one
year.
Under
Section
205,
EPA
must
select
the
most
cost­
effective
and
least
burdensome
alternative
that
achieves
the
objective
of
the
rule
and
is
consistent
with
statutory
requirements.
Section
203
requires
EPA
to
establish
a
plan
for
informing
and
advising
any
small
governments
that
may
be
significantly
affected
by
the
rule.

An
analysis
of
the
costs
and
benefits
of
the
final
rule
was
conducted
and
it
was
determined
that
this
rule
does
not
include
a
Federal
mandate
that
may
result
in
estimated
costs
of
$100
million
or
more
to
either
state,
local,
or
tribal
governments
in
the
aggregate.
The
private
sector
also
is
not
expected
to
incur
costs
exceeding
$100
million
per
year
in
this
RIA.

7.3
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks
On
April
21,
1997,
the
President
signed
Executive
Order
13045
entitled,
"Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks."
The
executive
order
requires
all
economically
significant
rules
1
that
concern
an
environmental
health
risk
or
safety
risk
that
may
disproportionately
affect
children
to
comply
with
requirements
of
the
executive
order.
Because
EPA
does
not
consider
today's
final
rule
to
be
economically
significant,
it
is
not
subject
to
Executive
Order
13045.
Because
this
rulemaking
removes
the
exclusion
for
K061­
derived
fertilizers,
retains
protective
management
standards
for
hazardous
secondary
fertilizer
feedstocks,
and
establishes
technology­
based
protective
product
standards
for
zinc
micronutrient
fertilizers
derived
from
hazardous
feedstocks,
EPA
believes
that
this
final
rulemaking
will
not
result
in
increased
exposures
to
children.
EPA
believes
that
removing
the
exemption
for
K061­
derived
fertilizers
and
establishing
the
technology­
based
performance
standard
for
excluded
fertilizers
will
reduce
lead
and
cadmium
loading
to
the
environment,
including
the
food
supply
and
groundwater
over
current
management
practices.
Moreover,
the
prohibition
on
outdoor
storage
of
the
hazardous
secondary
feedstocks
used
to
produce
the
fertilizer
assures
proper
management
of
these
materials.
For
these
reasons,
the
environmental
health
risks
or
safety
risks
addressed
by
this
action
do
not
have
a
disproportionate
effect
on
children.
8­
1
CHAPTER
8
REFERENCES
Armani,
M.,
D.
G.
Westfall,
and
G.
A.
Peterson.
1997.
"Zinc
Plant
Availability
as
Influenced
by
Zinc
Fertilizer
Sources
and
Zinc
Water
Solubility."
Colorado
Agricultural
Experiment
Station
Technical
Bulletin
TB
97­
4
(pre­
publication
draft).

Arnett,
John
E.
June
2,
2000a.
Copper
and
Brass
Fabricators
Council,
Inc.
Facsimile
to
Paul
Borst,
U.
S.
Environmental
Protection
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Brass
fume
dust.

Arnett,
John
E.
June
2,
2000b.
Copper
and
Brass
Fabricators
Council,
Inc.
Facsimile
to
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
Brass
Mill
Baghouse
Dust.

Borst,
Paul,
U.
S.
Environmental
Protection
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personal
communication
with
Richard
Camp,
Bay
Zinc.
November
18,
1998.

Borst,
Paul,
U.
S.
Environmental
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personal
communication
with
Gary
Mosher,
American
Foundrymen's
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November
19,
1998.

Borst,
Paul,
U.
S.
Environmental
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personal
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Ken
Wycherley,
Exeter
Energy
Ltd.
November
19,
1998.

Borst,
Paul,
U.
S.
Environmental
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e­
mail
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to
Katherine
Heller,
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16,
1999.
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meeting
notes
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handling
requirements
for
fertilizer.

Borst,
Paul,
U.
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personal
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Richard
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Bay
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April
16,
1999.

Borst,
Paul,
U.
S.
Environmental
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personal
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George
Obeldobel,
Big
River
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July
12,
1999.

Borst,
Paul,
U.
S.
Environmental
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personal
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Mike
Oberlin,
I
Schumann
Inc.
(a
brass
ingot
maker).
July
14,
1999
Borst,
Paul,
U.
S.
Environmental
Protection
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personal
communication
with
Allan
Silber,
Recyclers
of
Copper
Alloy
Products
(RE­
CAP).
July
14,
1999.

Borst,
Paul,
U.
S.
Environmental
Protection
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personal
communication
with
Mike
Deiker,
Tetra
Micronutrients,
July
16,
1999.

Camp,
Richard,
Bay
Zinc,
handout
to
U.
S.
Environmental
Protection
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1998.

Camp,
Richard,
Bay
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teleconference
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
April
16,
1999.
8­
2
ChemExpo.
"Chemical
Profile:
Zinc
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<http://
www.
chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
March
17,
1999.

ChemExpo.
"Chemical
Profile:
Zinc
Sulfate
7/
3/
2000."
<http://
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chemexpo.
com/
news/
PROFILE970811.
cfm>.
As
obtained
on
August
11,
2000
Page
2.

Collier,
Shannon,
Rill
and
Scott,
American
Foundrymen's
Society,
letter
to
the
U.
S.
Environmental
Protection
Agency,
RCRA
Information
Center
commenting
on
the
Phase
IV
LDR
proposed
rulemaking.
November
27,
1995.

Fertilizer
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1999.
"Fertilizer:
From
Plant
to
Plant."
The
Fertilizer
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<http://
www.
tfi.
org/
brochure.
htm>.
As
obtained
on
March
5,
1999.

Freeman,
A.
1993.
The
Measurement
of
Environmental
and
Resource
Values:
Theory
and
Methods.
Washington,
DC:
Resources
for
the
Future.

Green,
Richard,
Martin
Resources,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
19,
1999.

Hoover's
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"Nucor
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<http://
www.
hoovers.
com>.
As
obtained
on
April
30,
2002.

Miller,
Tomas
A.,
Nucor
Steel.
June
22,
2001.
Electronic
mail
message
to
Ken
Herstowski,
U.
S.
Environmental
Protection
Agency,
Region
7.

Obeldobel,
George,
teleconference
with
Lindsay
James,
Research
Triangle
Institute,
May
9,
2001.

Obeldobel,
George,
Big
River,
teleconference
with
Katherine
Heller
and
Charles
Pringle,
Research
Triangle
Institute.
April
15,
2002.

Obeldobel,
George,
Big
River,
teleconference
with
Charles
Pringle,
Research
Triangle
Institute.
April
30,
2002.

Oberlin,
Mike,
I.
Schumann
Inc.,
personal
communications
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency.
July
14,
1999,
July
27,
2000.

Painter,
David,
Martin
Resources,
personal
communication
with
Lindsay
James,
Research
Triangle
Institute,
July
2000.

Queneau,
Paul
B.
U.
S.
Recycling
of
Industrial
Metals,
Office
of
Solid
Waste,
Hazardous
Waste
Minimization
and
Management
Division.
December
1­
2,
1998.

Queneau,
Paul,
P.
B.
Queneau
&
Associates,
Inc.,
facsimile
to
Paul
Borst,
U.
S.
EPA.
"EAF
Dust—
U.
S.
A.
1998."
February
10,
1999.

Queneau,
Paul,
B.
Personal
communication
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency,
March
9,
1999.

Queneau,
Paul,
B.
Personal
communication
with
Paul
Borst,
U.
S.
Environmental
Protection
Agency,
April
16,
1999.
8­
3
Queneau,
Paul
B.,
et
al.
June
22–
24,
1999.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

Queneau,
Paul
et
al.
"Recycling
Heavy
Metals
in
Solid
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.
June
28­
30,
1994;
June
25­
27,
1996;
June
24­
26,
1997;
June
22­
24,
1999;
June
27­
29,
2000.

Queneau,
Paul
et
al.
June
27­
29,
2000.
"Recycling
Metals
from
Industrial
Waste."
Sponsored
by
Office
of
Special
Programs
and
Continuing
Education,
Colorado
School
of
Mines.

Reference
USA.
2002a.
"Frit
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002b.
"Big
River
Zinc."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002c.
"Madison
Industries."
<http://
www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Reference
USA.
2002d.
"Tetra
Micronutrients."
<www.
referenceusa.
com>.
As
obtained
on
May
1,
2002.

Rogowski,
D.,
G.
Golding,
D.
Bowhay,
and
S.
Singleton.
1999.
Screening
Survey
for
Metals
and
Dioxins
in
Fertilizers,
Soil
Amendments,
and
Soils
in
Washington
State.
Washington
State
Department
of
Ecology,
Olympia,
WA,
Ecology
Publication
No.
99­
309.

Schauble,
Carl,
Frit
Industries,
teleconference
with
Paul
Borst,
David
Fagan,
Mitch
Kidwell,
Matt
Hale,
Caroline
Ahearn,
and
Steve
Silverman,
U.
S.
Environmental
Protection
Agency.
February
24,
1999.

Skillen,
Jim,
The
Fertilizer
Institute,
teleconference
with
Katherine
Heller
and
Lindsay
James,
Research
Triangle
Institute.
March
10,
1999.

Slade,
M.
E.
1996.
"Uniform
Compliance
Costs
for
Mineral
Commodities:
Who
Gains
and
Who
Losses?"
Land
Economics
72(
1).

U.
S.
Environmental
Protection
Agency
(EPA).
Report
of
RCRA
Compliance
Evaluation
Inspection
at
American
MicroTrace
Corporation,
Fairbury,
NE.
September
19,
1996
and
October
3­
4,
1996.

U.
S.
Environmental
Protection
Agency
(EPA).
June
1998.
Background
Report
on
Fertilizer
Use,
Contaminants
and
Regulations.
Washington,
DC:
U.
S.
Environmental
Protection
Agency,
Office
of
Pollution
Prevention
and
Toxics.
EPA
747­
R­
98­
003.

U.
S.
Environmental
Protection
Agency.
April
14,
1998.
Handout
entitled
"Zinc
Micronutrient
Fertilizer/
Estimated
Market
Share
Analysis"
given
to
EPA
during
a
meeting
between
representatives
of
the
zinc
micronutrient
fertilizer
industry.

U.
S.
International
Trade
Commission
Database.
"U.
S.
Imports
for
Consumption."
HTS
code
=
283326.
1989­
2001a.
8­
4
U.
S.
International
Trade
Commission
Database.
"U.
S.
Domestic
Exports."
HTS
code
=
283326.
1989­
2001b.

Washington
Department
of
Ecology.
September
23,
1999.
Fertilizer
company
fined
for
improper
handling
of
hazardous
waste.
News
Release.
<http://
www.
wa.
gov:
80/
ecology/
pie/
1999news/
99­
186.
html>.
A­
1
APPENDIX
A
COST
ALGORITHMS
FOR
RELOCATION
OF
FRIT
TO
ARKANSAS
AND
FOR
CLOSURE
OF
FRIT'S
NEBRASKA
OPERATIONS
WITHOUT
RELOCATION
EPA
evaluated
two
possible
scenarios
for
Frit's
response
to
the
final
conditional
exclusion.
First,
Frit
may
choose
to
close
down
their
Nebraska
operations,
clean
up
the
site,
and
relocate
the
operation
to
their
Arkansas
plant.
Second,
they
may
choose
simply
to
close
the
Nebraska
operation
and
forego
the
production
that
plant
represents.

A.
1
Relocation
of
the
Frit
Plant
to
Arkansas
Relocation
of
the
Frit
plant
to
Arkansas
requires
planning,
packing,
site
cleanup,
shipping,
unpacking,
permitting
revisions
in
Arkansas,
household
relocation
(estimated
for
three
people),
the
value
of
lost
production,
and
an
estimated
requirement
for
added
storage
space
at
the
Arkansas
plant.
These
estimated
costs
are
shown
in
Table
A­
1,
including
the
annualized
cost
for
total
capital
required
to
make
the
move.
A
description
of
the
table
rows
follows.

1.
Gives
the
subtotal
of
planning
costs,
based
on
estimated
hours
for
management,
technical,
and
clerical
personnel.

2.
Packing,
including
disassembly,
crating,
and
loading
is
estimated
from
costs
reported
by
Tetra
for
dismantling
one
of
its
plants.
Frit's
production
is
12,000
tpy
vs.
Tetra's
4,000
tpy.
Costs
for
Frit
were
taken
as
the
ratio
of
the
two
sizes
to
the
0.6
power
x
$200,000
(Tetra's
dismantling
cost)
=
$387,000.
This
cost
was
then
allocated
85
percent
to
dismantling
and
packing
and
15
percent
to
cleanup.
The
85
percent
for
dismantling
and
packing
=
$329,000.

3­
4
Site
cleanup
costs
include
basic
cleanup
as
incurred
by
Tetra
(15
percent
of
$387,000
or
$58,000)
plus
items
for
hazardous
wastes
that
were
not
applicable
to
Tetra.
Soil
treatment
and
disposal
requires
an
additional
$82,100,
based
on
335
$/
ton
(escalated)
for
stabilization
and
landfill
disposal
of
soil
(estimated
at
20
x
40
x
5
ft
3
)
x
85
lb/
ft
3
soil
density
/
2000
lb/
ton
+
transportation
costs
of
$2.52/
truck­
mile
(escalated)
x
15
tons/
truck)
x
600
miles
to
Colorado
treatment
and
disposal
site.
The
unit
costs
are
taken
from
Regulatory
Impact
Analysis
of
the
Final
Rule
for
180­
day
Accumulation
Time
for
F006
Wastewater
Treatment
Sludges,
EPA/
DPRA,
January
14,
2000,
pp.
19
(treatment
and
disposal)
and
51
(transportation).
Estimated
distance
is
600
miles
to
a
Colorado
treatment
and
disposal
site.
A­
2
Table
A­
1.
Frit's
Costs
of
Moving
to
Arkansas
Hrs
Item
cost,
$
Cost,
$

1
Planning
$6,000
2
Packing
Disasembly
Crating
Loading
Subtotal,
dismantling
and
packing
$329,000
Site
cleanup
3
Basic
cleanup
$58,000
4
Soil
treatment
and
disposal
$82,100
5
Building
cleanup
$6,500
Waste
disposal
6
Initial
monitoring
$5,000
7
Subtotal,
site
cleanup
$151,600
8
Shipping
$25,600
Unpacking
and
reassembly
9
Unloading,
uncrating,
assembly
$503,000
Uncrating
Assembly
10
Testing
$15,100
11
Subtotal,
reassembly
and
testing
$518,100
12
Permitting
revision
$1,137
13
Household
relocation—
3
employees
$7,700
14
Foregone
profit
on
lost
production
$210,000
15
Build
new
storage
capacity
$112,000
16
Grand
total
$1,360,000
17
Annualized
cost,
7%,
15
years
$149,300
A­
3
5.
Building
cleanup
requires
an
additional
sum
for
washing
the
building
walls
and
floor,
then
treating
and
disposing
of
the
resulting
hazardous
sludge.
These
costs
are
based
on
the
same
unit
costs
as
in
item
6,
but
for
10.4
tons
of
water
from
cleanup
(100­
x
100­
ft
building
with
170
tons/
15­
ft
ceilings;
1/
4­
in.
water
film
for
cleaning
=
333
ft
3
of
water
with
a
density
of
62.4
lb/
ft
3
=
20,800
lb
=
10.4
tons.
The
quantity
of
solids
in
the
water
is
estimated
at
4
tons.

6.
Initial
monitoring
costs
for
the
site
are
estimated
at
$5,000
for
soil
sampling,
building
sampling,
and
associated
analyses.

7.
The
subtotal
for
site
cleanup
is
the
sum
of
the
costs
in
items
3
through
6
=
$151,600.

8.
Shipping
costs
for
the
plant
equipment
and
furniture
are
estimated
from
an
average
of
rates
given
by
agents
at
Mayflower
and
DeHavens
moving
companies
(industrial
transport)
of
$0.935/
ton
mile
x
685
miles
from
Norfolk,
NE,
to
Walnut
Ridge,
AR.
Equipment
weight
is
estimated
at
40
tons
for
granulating,
drying,
screening,
blending,
milling,
packaging,
and
peripherals.

9­
11
Unpacking
and
reassembly
of
the
equipment
in
Arkansas
is
estimated
as
equivalent
to
the
dismantling
cost
plus
a
30­
percent
premium
for
the
additional
care
required
to
install,
plumb,
and
wire
the
equipment
at
a
new
site
(1.3
x
$387,000
=
$503,000).
An
additional
cost
is
incurred
for
testing
the
equipment
train
before
going
into
production.
This
cost
is
estimated
at
3
percent
of
the
installation
costs
=
$503,000
x
0.03
=
$15,100,
for
a
total
cost
of
$518,100.

12.
Revisions
to
the
Arkansas
plant
permit
are
estimated
at
$1,137.

13.
Three
of
the
Nebraska
employees
are
assumed
to
be
transferred
to
the
Arkansas
site.
Moving
costs
are
estimated
from
$0.935/
ton
mile
x
685
miles
x
8,000
lbs/
household
=
$7,700.

14.
The
company
is
estimated
to
be
out
of
production
for
1.7
months.
During
that
time,
lost
income
is
1.7/
12
x
$1.483
million
estimated
annual
income
=
$210,000.

15.
The
Arkansas
site
is
estimated
to
have
sufficient
space
for
installing
the
Walnut
Ridge
equipment
but
to
require
additional
storage
space
for
raw
materials
and
product
awaiting
shipment.
The
space
is
assumed
to
be
an
enclosed
storage
building,
40
x
80
ft,
costing
$35/
ft
2
,
based
on
R.
S.
Means
Building
Construction
Cost
Data,
57
Ed.,
1999.
p.
479.
The
cost
of
the
structure
is
40
x
80
x
35
=
$112,000.

16.
The
grand
total
for
all
items
is
$1,360,000.

17.
The
annualized
cost
based
on
7
percent
interest
(i)
and
a
15­
year
(n)
capital
cost
is
$1,360,000
x
0.1098
=
$149,300/
y.
The
factor
0.1098
is
for
capital
recovery
(RF)
based
on
the
equation
RF
=
i(
1+
i)
n
/((
1+
i)
n
­1).
A­
4
A.
2
Closure
of
Frit's
Nebraska
Operations
Without
Relocation
Frit
may
also
choose
to
close
their
Nebraska
plant
and
sell
the
equipment
for
salvage.
The
costs
of
closure
are
shown
in
Table
A­
2.
EPA
assumed
that
dismantling
the
Nebraska
plant,
as
shown
in
Section
A.
1,
would
total
$329,000.
Site
cleanup
involves
the
same
procedures
and
costs
as
described
in
Section
A.
1
and
totals
$151,600.
The
sum
of
these
two
cost
items
is
approximately
$480,000
and
is
partially
offset
by
selling
the
equipment
for
salvage.

Salvage
value
of
the
Frit
equipment
is
estimated
at
7
percent
of
the
original
purchase
cost.
The
equipment
includes
one
or
more
granulators,
driers,
screens,
blenders,
hammer
mills,
packaging
equipment,
storage
and
mixing
tanks,
pumps,
and
piping.
The
equipment
is
estimated
to
be
sized
for
producing
about
50
tons/
day
and
to
have
cost
approximately
$2.3
million.
At
7
percent,
the
salvage
value
is
$161,000.

Thus,
the
lump
sum
cost
of
shutting
down
operations
in
Nebraska
is
$319,000.
Annualizing
this
amount
over
15
years
at
7
percent
yields
an
annual
cost
of
$35,000.

The
major
estimated
element
of
costs
associated
with
shutting
down
the
Nebraska
operations
is
the
foregone
profits
from
the
operations.
To
estimate
these
foregone
profits,
EPA
estimated
the
sales
of
Frit's
Oxy­
Sul
($
2,832,000)
and
subtracted
estimated
K061
costs
($
393,500)
and
estimated
labor
costs
($
925,100).
This
estimate
is
$1,513,000.
Clearly,
there
are
many
elements
of
cost
for
which
EPA
has
not
accounted;
therefore,
this
estimate
overstates
baseline
profits.

Thus,
EPA's
estimates
of
the
costs
to
Frit
of
closing
their
Nebraska
operations
without
relocating
them
is
$1,548,000
per
year.
EPA
recognizes
that,
because
it
overstimates
Frit's
baseline
profits,
it
is
overestimating
the
opportunity
cost
of
shutting
down
the
Nebraska
operations.
Table
A­
2.
Frit's
Costs
to
Shut
Down
Operations
in
Nebraska
Cost
Disassembly
$329,000
Site
cleanup
$152,000
Salvage
value
of
equipment
$161,000
Total
cost
of
shutdown
$320,000
Lost
profit
$1,513,000
Total
annualized
cost
of
shutdown
$1,548,000
B­
1
(B.
1)
APPENDIX
B
OVERVIEW
OF
ZINC
MARKET
MODEL
AND
RESULTS
To
develop
estimates
of
the
economic
impacts
on
society
resulting
from
the
regulation,
the
Agency
developed
a
computational
model
using
a
framework
that
is
consistent
with
economic
analyses
performed
for
other
rules.
This
approach
employs
standard
microeconomic
concepts
to
model
behavioral
responses
expected
to
occur
with
regulation.
This
appendix
describes
the
spreadsheet
model
in
detail
and
discusses
how
the
Agency
C
characterized
the
supply
and
demand
of
a
single
zinc
commodity.
The
model
treats
the
zinc
in
the
various
fertilizer
products
as
homogenous
product
with
a
single
price.

C
introduced
a
policy
"shock"
into
the
model
by
using
control
cost­
induced
shifts
in
the
supply
functions
of
affected
zinc
producers,
and
C
used
a
solution
algorithm
to
determine
a
new
with­
regulation
equilibrium
for
the
zinc
market.

B.
1
Baseline
Data
Set
EPA
collected
the
following
market
information
to
characterize
the
baseline
year,
1999:

C
Plant­
level
quantities—
Plant­
level
production
quantities
were
obtained
from
Queneau
1999
and
2000.

C
Market
price—
The
Agency
computed
an
average
price
for
zinc
($
1,432
per
ton)
using
data
provided
by
representatives
of
the
zinc
micronutrient
fertilizer
industry
(EPA,
1998).

C
Supply
and
demand
elasticities—
Slade
(1996)
reports
empirical
estimates
of
zinc
elasticities
that
are
used
in
the
analysis
(see
Table
B­
1).

B.
2
Market
for
Zinc
B.
2.1
Market
Supply
Market
supply
for
zinc
can
be
expressed
as
the
sum
of
plant­
level
supply
B­
2
(B.
2)

(B.
3)
where
=
zinc
supply
from
plant
j,

n
=
the
number
of
domestic
plants.

B.
2.1.1Domestic
Plant­
Level
Supply
EPA
used
a
simple
constant
elasticity
supply
function
for
each
plant
expressed
as
follows:

where
=
the
supply
of
zinc
from
plant
(j),

A
=
a
parameter
that
calibrates
the
supply
equation
to
replicate
the
estimated
1999
level
of
zinc
production,

P
=
the
1999
average
market
price
for
zinc,
and
=
the
domestic
supply
elasticity
(empirical
estimate
=0.08).

Regulatory
Induced
Shifts
in
the
Supply
Function
(ci
).
The
upward
shift
in
the
supply
function
is
calculated
by
taking
the
annual
compliance
cost
estimate
and
dividing
it
by
baseline
output.
Computing
the
supply
shift
in
this
manner
treats
the
compliance
costs
as
the
conceptual
equivalent
of
a
unit­
tax
on
output.

cj
=
the
annual
per­
unit
control
costs
for
plant
(j).
Table
B­
1.
Supply
and
Demand
Elasticities
for
Zinc
Used
in
the
Market
Model
Market
Supply
Demand
Zinc
0.08
–0.47
Source:
Slade,
M.
E.
1996.
"Uniform
Compliance
Costs
for
Mineral
Commodities:
Who
Gains
and
Who
Losses?"
Land
Economics
72(
1).
B­
3
(B.
4)
B.
2.2
Market
Demand
Market
demand
was
expressed
as
follows:

where
=
domestic
demand
for
zinc,

B
=
a
parameter
that
calibrates
the
demand
equation
to
replicate
the
1999
level
of
domestic
demand,

P
=
the
1999
average
market
price
for
zinc,
and
=
the
domestic
demand
elasticity
(empirical
estimate
=
–0.47).

B.
3
With
Regulation
Market
Equilibrium
Producer
responses
and
market
adjustments
can
be
conceptualized
as
an
interactive
feedback
process.
The
plant
facing
increased
production
costs
due
to
compliance
are
willing
to
supply
smaller
quantities
at
the
baseline
price.
This
reduction
in
market
supply
leads
to
an
increase
in
the
market
price
that
all
producers
and
consumers
face,
which
leads
to
further
responses
by
producers
and
consumers
and
thus
new
market
prices,
and
so
on.
The
new
with­
regulation
equilibrium
is
the
result
of
a
series
of
iterations
in
which
price
is
adjusted
and
producers
and
consumers
respond,
until
a
set
of
stable
market
prices
arises
where
total
market
supply
equals
market
demand
(i.
e.,
Qs
=
QD)
in
each
market.
Market
price
adjustment
takes
place
based
on
a
price
revision
rule
that
adjusts
price
upward
(downward)
by
a
given
percentage
in
response
to
excess
demand
(excess
supply).

The
algorithm
for
determining
with­
regulation
equilibria
can
be
summarized
by
five
recursive
steps:

1.
Impose
the
control
costs
on
affected
plants,
thereby
affecting
their
supply
decisions.

2.
Recalculate
the
market
supply.

3.
Determine
the
new
price
via
the
price
revision
rule.

4.
Recalculate
the
supply
functions
with
the
new
price,
resulting
in
a
new
market
supply.
Compute
market
demand
at
the
new
prices.

5.
Go
to
Step
3,
resulting
in
a
new
price.
Repeat
until
equilibrium
conditions
are
satisfied
(i.
e.,
the
ratio
of
supply
to
demand
is
arbitrarily
close
to
one).
B­
4
B.
4
Market
Model
Results
The
conditional
exclusion
will
increase
the
costs
of
one
micronutrient
manufacturer
and
decrease
the
costs
of
another.
Overall,
supply
of
zinc
micronutrients
will
decline
slightly,
resulting
in
a
small
decrease
in
the
quantity
of
zinc
embodied
in
micronutrients,
and
a
small
increase
in
its
price.
Because
the
costs
incurred
by
Frit
are
lower
in
Alternative
II,
the
substitution
scenario,
the
impacts
are
also
smaller.
As
shown
in
Table
B­
4,
only
one
zinc
micronutrient
manufacturing
facility
is
projected
to
lose
as
a
result
of
the
regulation,
while
all
others
are
projected
to
benefit
from
the
higher
prices
for
zinc
in
micronutrient
compounds.
Although
this
analysis
abstracts
from
some
of
the
differences
in
zinc
micronutrient
products
(ZSM
vs.
OxySul,
for
example,
or
OxySul
made
from
hazardous
vs.
nonhazardous
feedstocks),
it
indicates
the
sign
if
not
the
magnitude
of
impacts
projected
for
manufacturers
as
a
result
of
the
conditional
exclusion.

Table
B­
2.
Market­
Level
Impacts:
1999
Absolute
Change
Relative
Change
Baseline
Alternative
I
Alternative
II
Alternative
I
Alternative
II
Zinc
—
—
—
—
—
Price
($/
ton)
$1,432
$19.39
$4.97
1.35%
0.35%

Quantity
(tons)
40,075
–253
–65
–0.63%
–0.16%

Table
B­
3.
Industry­
Level
Impacts:
1999
Absolute
Change
Relative
Change
Baseline
Alternative
I
Alternative
II
Alternative
I
Alternative
II
Total
Revenue
($
10
6
/yr)
$57.4
$0.41
$0.11
0.72%
0.18%

Total
Cost
($
10
6
/yr)
$54.6
$1.72
$0.71
3.15%
1.31%

Control
$0.0
$1.82
$0.76
NA
NA
Production
$54.6
–$
0.10
–$
0.05
–0.19%
–0.09%

Pre­
Tax
Earnings
($
10
6
/yr)
$2.8
–$
1.31
–$
0.61
–46.53%
–21.65%

Facilities
(#)
21
0
0
0.00%
0.00%
B­
5
Table
B­
5.
Distribution
of
Social
Costs
($):
1999
Value
($
10
6
/yr)

Alternative
I
Alternative
II
Consumer
Surplus
–$
0.8
–$
0.2
Producer
Surplus
–$
1.3
–$
0.6
Total
Social
Cost
–$
2.1
–$
0.8
Table
B­
4.
Distributional
Impacts
Across
Facilities:
1999
Pre­
Tax
Earnings
Loss
Gain
Total
Alternative
I
Alternative
II
Alternative
I
Alternative
II
Alternative
I
Alternative
II
Facilities
(#)
1
1
19
19
20
20
Baseline
Production
Total
(tons)
2,400
2,400
37,675
37,675
40,075
40,075
Average
(tons/
facility)
2,400
2,400
1,983
1,983
2,004
2,004
Baseline
Compliance
Costs
Total
($
10
6
/yr)
$2.9
$1.5
$0.0
$0.0
$2.9
$1.5
Average
($/
unit)
$2.9
$1.5
$0.0
$0.0
$0.1
$0.1
Change
in
Pre­
Tax
Earnings
($
10
6
/yr)
–$
2.7
–$
1.5
$1.4
$0.9
–$
1.3
–$
0.6
Table
B­
6.
Small
Business
Impacts:
1999
Absolute
Change
Relative
Change
Baseline
Alternative
I
Alternative
II
Alternative
I
Alternative
II
Total
Revenue
($
10
6
/yr)
$16.3
–$
0.2
–$
0.1
–1.49%
–0.61%

Total
Cost
($
10
6
/yr)
$15.5
$2.3
$1.4
15.07%
8.78%

Control
$0.0
$2.5
$1.5
NA
NA
Production
$15.5
–$
0.2
–$
0.1
–1.33%
–0.75%

Pre­
Tax
Earnings
($
10
6
/yr)
$0.8
–$
2.6
–$
1.5
–322.80%
–182.86%

Facilities
(#)
4
0
0
0.00%
0.00%
B­
6
C­
1
APPENDIX
C
Reserved
1
EPA
uses
1997
production
levels
throughout
the
analysis,
with
the
exception
of
Frit
production
volumes.
These
were
derived
or
chosen
based
on
additional
industry
information.
In
the
case
of
Frit,
the
production
volume
is
a
1999
estimate.

D­
2
APPENDIX
D
SENSITIVITY
ANALYSIS
In
the
interest
of
estimating
a
complete
range
of
potential
impacts
to
the
fertilizer
industry
from
the
final
rulemaking,
EPA
presents
a
sensitivity
analysis
as
an
appendix
to
the
economic
analysis.
Throughout
the
economic
analysis,
EPA
based
the
impact
calculations
on
price
and
production
data
from
1997
1
(see
the
discussion
in
Section
3.3
of
this
report
for
the
basis
of
this
choice).
Since
1997
is
an
average
year
in
terms
of
U.
S.
zinc
micronutrient
production,
EPA
examined
the
potential
impacts
of
the
final
rule
on
the
fertilizer
industry
during
years
of
low
production
and
years
of
high
production.
For
the
sensitivity
analysis,
the
Agency
estimated
the
impacts
on
fertilizer
manufacturers
and
raw
material
producers
for
two
scenarios:
a
20
percent
decrease
in
baseline
fertilizer
production
and
a
20
percent
increase
in
baseline
fertilizer
production.

D.
1
Low
Zinc
Micronutrient
Fertilizer
Production
and
the
Economic
Impacts
of
the
Final
Rulemaking
To
provide
a
thorough
analysis
of
the
impacts
of
the
final
rulemaking
on
the
zinc
micronutrient
fertilizer
industry,
EPA
examined
the
impacts
of
the
rule
when
the
demand
for
zinc
fertilizer
has
decreased
dramatically.
To
do
this,
EPA
measured
the
impacts
for
each
generator
and
the
raw
material
suppliers
when
fertilizer
production
has
decreased
by
20
percent
from
1997
levels.
The
following
sections
describe
the
estimated
impacts
in
detail.

D.
1.1
Frit
Industries
Under
the
baseline
scenario,
Frit
produces
12,000
tons
of
Oxy­
sul.
Under
a
20
percent
decline
in
production,
Frit
would
produce
9,600
tons
of
Oxy­
sul
pre­
rule.
EPA
followed
the
same
methods
of
analysis
as
used
in
the
main
analysis
when
modeling
the
costs
and
revenues
for
these
decreased
production
levels
in
a
post­
rule
(i.
e.,
ZSM
production)
scenario.
(Appendix
B
describes
the
methodology
in
detail.)
Frit's
estimated
costs
and
revenues
under
the
20
percent
decline
in
production
scenario
(post­
rule)
are
presented
in
Table
D­
1.
Under
this
scenario,
the
Agency
predicts
that
Frit
would
still
realize
a
cost
savings
of
approximately
$231,000
by
moving
to
Arkansas
and
substituting
a
nonhazardous
feedstock.
These
cost
savings
are
less
than
the
cost
savings
predicted
in
Chapter
5,
under
baseline
production
levels.
D­
3
The
economic
impacts
to
Nucor
Steel,
the
K061
raw
material
supplier
to
Frit,
would
vary
only
slightly
under
the
scenario
of
a
20
percent
decline
in
Frit's
production
levels.
In
this
case,
Nucor
would
be
responsible
for
disposing
of
approximately
8000
tons
of
EAF
dust
that
would
have
been
used
as
an
input
in
Frit's
production
as
opposed
to
the
10,000
tons
it
would
have
disposed
of
under
baseline
production
levels.
Nucor
would
pay
approximately
$1,120,000
annually
for
transporting,
treating,
and
disposing
of
8,000
tons
of
waste.
In
addition
it
would
forego
$80,000
of
revenue
that
it
would
have
received
from
Frit
as
payment
for
its
K061.
Thus,
under
a
decreased
production
scenario,
Nucor
would
realize
a
cost
of
$1.2
million.

D.
1.3
Big
River
Zinc,
Madison
Industries,
and
Tetra
Technologies
Under
the
baseline
(pre­
rule)
production
scenario,
Madison
Industries
and
Tetra
are
the
two
zinc
micronutrient
producers
that
are
currently
incorporating
brass
fume
dust
as
a
feedstock.
Both
of
these
companies
are
assumed
to
be
using
brass
fume
dust
as
roughly
30
percent
of
their
total
feedstock.
Big
River
Zinc
is
not
currently
using
brass
fume
dust
as
a
feedstock.
In
this
prerule
environment,
Madison
Industries
sells
its
product
in
the
animal
feed
market,
and
Tetra
sells
one­
half
of
its
product
in
the
animal
feed
market
and
the
other
half
to
fertilizer
distributors.
Big
River
sells
all
of
its
product
to
fertilizer
distributors.
EPA
predicts
that
all
three
companies
(Madison
Industries,
Tetra,
and
Big
River)
will
sell
100
percent
of
their
product
to
fertilizer
distributors
in
a
post­
rule
scenario.
Also,
EPA
predicts
that
Madison
Industries
and
Tetra
will
maintain
the
same
ratio
of
feedstock
materials
(30
percent
brass
fume
dust,
70
percent
zinc
fines)
in
a
post­
rule
environment,
while
Big
River
will
substitute
100
percent
of
their
nonhazardous
feedstock
with
brass
fume
dust
post­
rule.
EPA
maintains
these
assumptions
and
predictions
for
the
sensitivity
analysis.

Under
the
baseline
production
levels,
Madison
Industries
produces
8,000
tons
of
liquid
ZSM
and
2,000
tons
of
granular
ZSM.
With
a
20
percent
decrease
of
production
levels,
Madison
Industries
would
produce
6,400
tons
of
liquid
ZSM
and
1,600
tons
of
granular
ZSM.
Under
the
baseline
production
levels,
Tetra
produces
3,000
tons
of
liquid
ZSM
and
7,000
tons
of
granular
ZSM.
Tetra's
production
levels
would
decline
to
2,400
tons
of
liquid
ZSM
and
5,600
tons
of
Table
D­
1.
Estimated
Costs
of
Complying
with
the
Conditional
Exclusion
for
Frit
Industries,
20
Percent
Decline
in
Production
Levels
Cost
or
cost
savings?
Amount
($)

Cost
of
moving
operations
to
Arkansas
Cost
$149,300
Increased
raw
material
costs
Cost
$2,330,000
Estimated
incremental
costs
Cost
$2,479,300
Estimated
change
in
Frit's
revenue
Cost
savings
–$
2,709,000
Total
net
costs
(including
increased
revenues)
Cost
savings
–$
231,000
D­
4
granular
ZSM
under
a
20
percent
production
downturn
scenario.
Big
River,
under
baseline
production
levels,
produces
7,000
tons
of
ZSM.
If
production
levels
decreased
by
20
percent,
Big
River
would
produce
5,600
tons
of
ZSM.
The
quantities
and
assumptions
EPA
used
for
the
20
percent
production
decrease
scenario
are
presented
in
Table
D­
2.

Again,
EPA
followed
the
same
methods
of
analysis
when
modeling
the
costs
and
revenues
for
these
decreased
production
levels
in
a
post­
rule
scenario
for
these
three
companies.
(See
Chapter
5
for
a
detailed
description
of
the
methodology.)
Big
River's
estimated
costs
and
revenues
under
the
20
percent
decline
in
production
scenario
(post­
rule)
are
presented
in
Table
D­
3,
and
Madison
Industries's
and
Tetra's
estimated
costs
and
revenues
are
presented
in
Table
D­
4.

Although
less
than
the
cost
savings
realized
under
normal
production
levels,
all
three
companies
are
still
expected
to
realize
cost
savings
when
production
levels
have
declined
20
percent
in
a
post­
rule
environment.
Table
D­
2.
ZSM
Producers
Using
or
Projected
to
Use
Brass
Baghouse
Dust,
20
Percent
Decline
in
Production
Levels
Big
River
Zinc
Madison
Industries
Tetra,
Fairbury
NE
Quantity
of
ZSM
tons/
yr
5,600
1,600
granular,
6,400
liquid
5,600
granular,
2,400
liquid
Baseline
feedstock
ZnO
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Post­
rule
feedstock
Brass
dust
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Baseline
product
Fertilizer
Feed
½
Feed,
½
Fertilizer
Post­
rule
product
Fertilizer
Fertilizer
Fertilizer
Table
D­
3.
Estimated
Cost
Savings
due
to
the
Rulemaking
for
Big
River
Zinc,
20
Percent
Decline
in
Production
Levels
Cost
element
Value
Quantity
of
ZSM
produced
5,600
tons
Baseline
cost
of
ZnO
1,988
tons
Zn
×
$.
18/
lb
Zn
×
(2000/.
75)
=
$954,240
Post­
rule
cost
of
brass
dust
1,988
tons
Zn
×
$0.08
×
(2000/
0.46)
=
$691,478
Post­
rule
cost
of
treatment
956
tons
slag
×
($
175/
ton
disposal)
=
$167,317
Cost
savings
due
to
the
rule
$95,445
D­
5
A
representative
from
Big
River
Zinc
indicated
to
EPA
that
Big
River
Zinc
would
buy
any
excess
brass
fume
dust
on
the
market
to
use
in
their
zinc
metal
production
process,
even
in
the
event
of
a
20
percent
decline
in
zinc
micronutrient
fertilizer
production.
Therefore,
the
brass
fume
dust
generators
will
be
subject
to
approximately
the
same
level
of
impacts,
with
or
without
the
20
percent
decline
in
production
levels,
since
Big
River
Zinc
will
absorb
any
excess
brass
fume
dust
on
the
market.
The
impacts
will
vary
slightly,
based
on
EPA's
estimation
of
the
baseline
costs
of
disposal
to
the
brass
fume
dust
generators,
which
depend
on
the
pre­
rule
amounts
of
brass
fume
dust
incorporated
by
Madison
Industries
and
Tetra.
Under
the
20
percent
decrease
in
production
scenario,
the
amount
of
brass
fume
dust
incorporated
by
Madison
Industries
and
Tetra
decreases;
thus,
the
baseline
disposal
costs
are
increased
for
brass
fume
dust
generators
in
a
pre­
rule,
20
percent
production
decrease
scenario
(which
is
equivalent
to
an
increase
in
post­
rule
cost
savings).
The
estimated
financial
impacts
are
presented
in
Table
D­
5.
D­
6
D.
2
High
Zinc
Micronutrient
Fertilizer
Production
and
the
Economic
Impacts
of
the
Final
Rulemaking
To
provide
a
thorough
analysis
of
the
impacts
of
the
final
rulemaking
on
the
zinc
micronutrient
fertilizer
industry,
EPA
is
examining
the
impacts
of
the
rule
when
the
demand
for
zinc
fertilizer
has
increased
dramatically.
To
do
this,
EPA
measured
the
impacts
for
each
generator
and
the
raw
material
suppliers
when
fertilizer
production
has
increased
by
20
percent
from
1997
levels.
The
following
sections
describe
the
estimated
impacts
in
detail.

Table
D­
5.
Financial
Impacts
on
Brass
Baghouse
Dust
Generators,
20
Percent
Decrease
in
Zinc
Micronutrient
Fertilizer
Production
Levels
Brass
mill
Brass
foundry
Brass
ingot
maker
Dust
volume
125
100
450
Baseline
cost
of
reclamation
$23,240
$18,952
$54,786
Post­
rule
revenue
from
sales
to
ZSM
$17,800
$14,240
$82,080
Net
revenue
$41,040
$32,832
$136,866
Number
of
generators
10
3
10
National
net
revenue
$410,400
$92,495
$1,368,660
Table
D­
4.
Estimated
Revenue
Increases
for
Madison
Industries
and
Tetra,
Fairbury,
NE,
20
Percent
Decline
in
Production
Levels
Revenue
element
Value
Madison
Industries
Current
revenues
6,400
tons
L.
ZSM
×
$180
+
1,600
tons
ZSM
×
$620=$
2,144,000
Estimated
post­
rule
revenues
6,400
tons
L.
ZSM
×
$230
+
1,600
tons
ZSM
×
$670=$
2,544,000
Estimated
increased
revenues
$2,544,000
–
$2,144,000
=
$400,000
Tetra,
Fairbury,
NE
Current
revenues
(.
5
×
(2,400
tons
L.
ZSM
×
$180
+
5,600
tons
ZSM
×
$620))
+(
0.5
×
(2,400
×
$230
+
5,600
×
$670))
=
$4,104,000
Estimated
post­
rule
revenues
(2,400
×
$230
+
5,600
×
$670)
=
$4,304,000
Estimated
increased
revenues
$4,304,000
–
$4,104,000
=
$200,000
D­
7
D.
2.1
Frit
Industries
Under
the
baseline
scenario,
Frit
produces
12,000
tons
of
Oxy­
sul.
Under
a
20
percent
increase
in
production,
Frit
would
produce
14,400
tons
of
Oxy­
sul
pre­
rule.
EPA
followed
the
same
methods
of
analysis
when
modeling
the
costs
and
revenues
for
these
increased
production
levels
in
a
post­
rule
(i.
e.,
ZSM
production)
scenario.
(Appendix
B
describes
the
methodology
in
detail.)
Frit's
estimated
costs
and
revenues
under
the
20
percent
increase
in
production
scenario
(post­
rule)
are
presented
in
Table
D­
6.

Under
a
20
percent
increase
in
production,
Frit
would
realize
a
net
cost
savings
of
approximately
$421,000
post­
rule
by
moving
to
Arkansas
and
substituting
a
nonhazardous
feedstock.
These
cost
savings
are
greater
than
the
cost
savings
predicted
in
Chapter
5
under
baseline
production
levels.

The
economic
impacts
to
Nucor
Steel,
the
K061
raw
material
supplier
to
Frit,
would
vary
only
slightly
under
the
scenario
of
a
20
percent
increase
in
Frit's
production
levels.
In
this
case,
Nucor
would
be
responsible
for
disposing
of
approximately
12,000
tons
of
EAF
dust
that
would
have
been
used
as
an
input
in
Frit's
production
as
opposed
to
the
10,000
tons
it
would
have
disposed
of
under
baseline
production
levels.
Nucor
would
pay
approximately
$1,680,000
annually
for
transporting,
treating,
and
disposing
of
12,000
tons
of
waste.
In
addition
it
would
forego
$120,000
of
revenue
that
it
would
have
received
from
Frit
as
payment
for
its
K061.
Thus,
under
a
decreased
production
scenario,
Nucor
would
realize
a
cost
of
$1.8
million.

D.
2.3
Big
River
Zinc,
Madison
Industries,
and
Tetra
Technologies
Under
the
baseline
(pre­
rule)
production
scenario,
Madison
Industries
and
Tetra
are
the
two
zinc
micronutrient
producers
that
are
currently
incorporating
brass
fume
dust
as
a
feedstock.
Both
of
these
companies
are
assumed
to
be
using
brass
fume
dust
as
roughly
30
percent
of
their
total
feedstock.
Big
River
Zinc
is
not
currently
using
brass
fume
dust
as
a
feedstock.
In
this
prerule
environment,
Madison
Industries
sells
its
product
in
the
animal
feed
market,
and
Tetra
sells
one­
half
of
its
product
in
the
animal
feed
market
and
the
other
half
to
fertilizer
distributors.
Big
River
sells
all
of
its
product
to
fertilizer
distributors.
EPA
predicts
that
all
three
companies
Table
D­
6.
Estimated
Costs
of
Complying
with
the
Conditional
Exclusion
for
Frit
Industries,
20
Percent
Increase
in
Production
Levels
Cost
or
Cost
Savings?
First
Year
of
Compliance
Cost
for
moving
operations
to
Arkansas
Cost
$149,300
Increased
raw
materials
costs
Cost
$3,493,100
Estimated
incremental
costs
$3,642,300
Estimated
change
in
Frit's
revenue
Cost
savings
–$
4,063,500
Total
net
costs
(including
increased
revenues)
Cost
savings
–$
421,100
D­
8
(Madison
Industries,
Tetra,
and
Big
River)
will
sell
100
percent
of
their
product
to
fertilizer
distributors
in
a
post­
rule
scenario.
Also,
EPA
predicts
that
Madison
Industries
and
Tetra
will
maintain
the
same
ratio
of
feedstock
materials
(30
percent
brass
fume
dust,
70
percent
zinc
fines)
in
a
post­
rule
environment,
while
Big
River
will
substitute
100
percent
of
its
nonhazardous
feedstock
with
brass
fume
dust
post­
rule.
EPA
maintains
these
assumptions
and
predictions
for
the
sensitivity
analysis.

Under
the
baseline
production
levels,
Madison
Industries
produces
8,000
tons
of
liquid
ZSM
and
2,000
tons
of
granular
ZSM.
With
a
20
percent
increase
of
production
levels,
Madison
Industries
would
produce
9,600
tons
of
liquid
ZSM
and
2,400
tons
of
granular
ZSM.
Under
the
baseline
production
levels,
Tetra
produces
3,000
tons
of
liquid
ZSM
and
7,000
tons
of
granular
ZSM.
Tetra's
production
levels
would
increase
to
3,600
tons
of
liquid
ZSM
and
8,400
tons
of
granular
ZSM
under
a
20
percent
growth
in
production
scenario.
Big
River,
under
baseline
production
levels,
produces
7,000
tons
of
ZSM.
If
production
levels
increased
by
20
percent,
Big
River
would
produce
8,400
tons
of
ZSM.
The
quantities
and
assumptions
EPA
used
for
the
20
percent
production
increase
scenario
are
presented
in
Table
D­
7.

Again,
EPA
followed
the
same
methods
of
analysis
when
modeling
the
costs
and
revenues
for
these
increased
production
levels
in
a
post­
rule
scenario
for
these
three
companies.
(See
Chapter
5
for
a
detailed
description
of
the
methodology.)
Big
River's
estimated
costs
and
revenues
under
the
20
percent
growth
in
production
scenario
(post­
rule)
are
presented
in
Table
D­
8,
and
Madison
Industries's
and
Tetra's
estimated
costs
and
revenues
are
presented
in
Table
D­
9.
Table
D­
7.
ZSM
Producers
Using
or
Projected
to
Use
Brass
Baghouse
Dust,
20
Percent
Increase
in
Production
Levels
Big
River
Zinc
Madison
Industries
Tetra,
Fairbury,
NE
Quantity
of
ZSM
tons/
yr
8,400
2,400
granular,
9,600
liquid
8,400
granular,
3,600
liquid
Baseline
feedstock
ZnO
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Post­
rule
feedstock
Brass
dust
Zinc
fines,
brass
dust
Zinc
fines,
brass
dust
Baseline
product
Fertilizer
Feed
½
Feed,
½
Fertilizer
Post­
rule
product
Fertilizer
Fertilizer
Fertilizer
D­
9
All
three
companies
are
still
expected
to
realize
cost
savings
when
production
levels
have
increased
20
percent
in
a
post­
rule
environment.
These
cost
savings
are
greater
than
the
cost
savings
realized
under
normal
production
levels.

In
the
scenario
of
a
20
percent
increase
in
domestic
micronutrient
zinc
fertilizer
production,
the
amount
of
brass
fume
dust
demanded
by
Big
River
Zinc,
Madison
Industries,
and
Tetra
will
increase.
EPA
modeled
the
impacts
of
this
increased
demand
on
the
brass
fume
dust
generators.
Based
on
EPA's
knowledge
of
the
brass
fume
dust
generator
industry,
it
seems
most
likely
that
the
brass
ingot
makers
will
be
able
to
supply
the
additional
brass
fume
dust.
EPA
increased
the
number
of
ingot
makers
supplying
brass
fume
dust
from
ten
in
the
baseline
level
of
production
scenario
to
12
in
the
increased
production
scenario.
Because
of
this
increase
in
the
Table
D­
8.
Estimated
Cost
Savings
due
to
the
Rulemaking
for
Big
River
Zinc,
20
Percent
Increase
in
Production
Levels
Cost
Element
Value
Quantity
of
ZSM
produced
8,400
tons
Baseline
cost
of
ZnO
2,982
tons
Zn
×
$.
18/
lb
Zn
×
(2000/.
75)
=
$1,431,360
Post­
rule
cost
of
brass
dust
2,982
tons
Zn
×
$0.08
×
(2000/
0.46)
=
$1,037,217
Post­
rule
cost
of
treatment
1,434
tons
slag
×
($
175/
ton
disposal)
=
$250,976
Cost
savings
due
to
the
rule
$143,167
Table
D­
9.
Estimated
Revenue
Increases
for
Madison
Industries
and
Tetra,
Fairbury,
NE,
20
Percent
Increase
in
Production
Levels
Revenue
Element
Value
Madison
Industries
Current
revenues
9,600
tons
L.
ZSM
×
$180
+
2,400
tons
ZSM
×
$620=$
3,216,000
Estimated
post­
rule
revenues
9,600
tons
L.
ZSM
×
$230
+
2,400
tons
ZSM
×
$670=$
3,816,000
Estimated
increased
revenues
$3,816,000
–
$3,216,000
=
$600,000
Tetra,
Fairbury,
NE
Current
revenues
(.
5
×
(3,600
tons
L.
ZSM
×
$180
+
8,400
tons
ZSM
×
$620))
+(
0.5
×
(3,600
×
$230
+
8,400
×
$670))
=
$6,156,000
Estimated
post­
rule
revenues
3,600
×
$230
+
8,400
×
$670
=
$6,156,000
Estimated
increased
revenues
$6,456,000
–
$6,156,000
=
$300,000
D­
10
number
of
suppliers,
EPA
expects
the
financial
benefits
for
ingot
makers
to
increase
as
a
result
of
the
growth
in
demand
for
brass
fume
dust.
However,
the
baseline
disposal
costs
for
the
generators
will
change
as
the
pre­
rule
levels
of
brass
dust
consumed
are
adjusted,
slightly
lowering
the
financial
gains
for
brass
mills
and
foundries.
Table
D­
10
presents
the
estimated
financial
impacts
to
brass
fume
dust
generators
under
a
20
percent
growth
in
zinc
micronutrient
fertilizer
production
scenario.

D.
3
Conclusions
EPA
concludes
that
the
economic
impacts
to
the
zinc
micronutrient
fertilizer
manufacturers
and
raw
material
suppliers
resulting
from
the
conditional
exclusion
remain
mostly
as
cost
savings,
with
the
exception
of
Nucor
Steel.
In
the
instance
of
Nucor
Steel,
the
costs
are
minimal
when
compared
to
Nucor's
company
sales.

The
net
costs
of
compliance
for
each
of
the
three
production
level
scenarios
(20
percent
decrease,
baseline,
and
20
percent
increase)
are
shown
in
Tables
D­
11
through
D­
12
for
each
of
the
affected
entities.
Throughout
these
tables,
negative
values
indicate
expected
cost
savings.
Table
D­
10.
Financial
Impacts
on
Brass
Baghouse
Dust
Generators,
20
Percent
Increase
in
Zinc
Micronutrient
Fertilizer
Production
Levels
Brass
mill
Brass
foundry
Brass
ingot
maker
Dust
volume
125
100
450
Baseline
cost
of
reclamation
$18,028
$14,422
$37,405
Post­
rule
revenue
from
sales
to
ZSM
$17,800
$14,240
$82,080
Net
revenue
$35,828
$28,662
$119,485
Number
of
generators
10
3
12
National
net
revenue
$358,280
$85,987
$1,433,821
D­
1
Table
D­
11.
Estimated
Post­
Rule
Costs
(or
Cost
Savings)
to
Frit
Industries
and
Nucor
Steel
for
Various
Production
Levels
20
percent
decrease
Baseline
20
percent
increase
Frit
Industries
(annual
costs
for
first
year)
–$
231,000
–$
326,000
–$
421,000
Nucor
Steel
$1,200,000
$1,500,000
$1,800,000
Table
D­
12.
Estimated
Post­
Rule
Costs
(or
Cost
savings)
to
Big
River
Zinc.
Madison
Industries,
Tetra
Micronutrients,
and
Brass
Fume
Dust
Generators
for
Various
Production
Levels
20
percent
decrease
Baseline
20
percent
increase
Big
River
Zinc
–
$95,400
–$
119,300
–$
143,200
Madison
Industries
Industries
–$
400,000
–$
500,000
–$
600,000
Tetra
Technologies
–$
200,000
–$
250,000
–$
300,000
Brass
Mills
(National)
–$
410,400
–$
362,600
–$
358,300
Brass
Foundries
(National)
–$
98,500
–$
87,000
–$
86,000
Brass
Ingot
Makers
(National)
–$
1,368,700
–$
1,209,400
–$
1,433,800