05 Jan 3 more carbon black producers settle on Clean Air Act with the US EPA
Good news for tire pyrolysis companies . . .
The US carbon black market is of particular interest because it is not only forecasted to grow in volume (thanks to new greenfield tyre production), but also in value thanks to carbon black price increases necessary to recover EPA air emissions compliance cost.
The US EPA started to investigate carbon black makers in 2007 in order to reduce air pollution from the “largest sources”, with a special focus on SO2, NOx and particulate matter (“PM”).
Cabot is the 2nd largest carbon black producer in the USA and was the first to settle with the EPA in 2013. Continental Carbon followed in 2015. And on December 22nd 2017, the rest of the US carbon black producers, Sid Richardson (the largest US producer), Orion Engineered Carbons and Columbian Chemicals also settled with the EPA.
The settlement requires carbon black makers to install wet/dry gas scrubbers, selective catalytic reduction technology and vacuum systems with high efficiency cartridge filters and to switch to low sulphur feedstocks.
The programme aims to reduce SO2 of the 5 carbon black producers by 40,592 metric tonnes per year and NOx by 6,057 metric tonnes per year. No quantification was given for the reduction of particulate matter emissions.
The investment cost for each producer is around 100m $ over 4 years while civil penalties including environmental mitigation projects for each producer are close to 1m $. Together, all 5 producers will invest more than 476m $ and pay 4.1m $ in civil penalties, 2.39m$ of which will be for local mitigation projects.
How much will the virgin carbon black price increase? That is the “million $” question!