NEWS RELEASE                                   JANUARY 2011

District Court MACT Ruling Changes the U.S. Air Pollution Market

Last week a U.S. District Court ruled that EPA would only be granted a one month delay in promulgation of a new rule requiring toxic pollutant removal from industrial boilers and related sources.  This development substantially changes the five-year market forecasts for scrubbers, fabric filters and continuous mass monitors. The net effect will be a $1 billion increase in both the markets for scrubbers, treatment chemicals and fabric filters and a $300 million increase in the market for continuous emissions analyzers (CEMS) over the next five-year period. This is the conclusion reached by the McIlvaine Company and reflected in three online market reports covering each of these technologies.

While on the surface there is only a one year difference between the EPA requested extension and the time granted, the implications relative to the market timing are much greater. The Industrial MACT regulation has been subject to various delays and extensions for over a decade. If a long extension had been granted, then many operators and suppliers would have proceeded on the assumption that there would be no resolution.

There are significant conclusions to be drawn relative to the timing for the Utility MACT. When EPA asked for a one-year extension on the Industrial Boiler MACT, it raised the specter that the Utility Boiler MACT might meet the same fate. The Court ruling reaffirms the basis of the stringency and timing of regulations. The Court said EPA cannot ignore the instructions relative to timing which are in the Clean Air Act.  Furthermore, the previous Court ruling should have acted as adrenalin to accelerate the rule-making process.   

This ruling is justification for raising the forecasts for air pollution control equipment sales to both the industrial and utility sectors.  EPA has indicated that it will make changes in the final rule from what was proposed. They also indicated that even after promulgation there will be a 60 day period where final adjustments may be warranted. In any case, the final version will be in place by June.  It is important to anticipate the nature of changes which will be incorporated into the final rule. 

Three major rules will all have impact in the 2011-15 time period. The Cement MACT rule was promulgated in July 2010 and so will be a year ahead of the Industrial MACT rule and 18 months ahead of the Utility rule.  The market opportunity in each segment depends on the specific limits in the rules.  Since the Cement MACT rules are already promulgated, it is possible to draw conclusions about the final versions of the other two.

Between proposal and final promulgation the HCl limit rose to 3 ppm from 2 ppm. The justification was the difficulty in measurement of low levels.   The proposed Industrial MACT has a more lenient emission limit for existing units and a more stringent one for new units.

Proposed EMISSION LIMITS FOR BOILERS AND PROCESS HEATERS  

                                                            Hydrogen                               Dioxins/Furans

(lb/MMBtu)                Particulate      Chloride         Mercury         (Total TEQ)

Subcategory               Matter (PM)   (HCl)               (Hg)                 (ng/dscm)

Existing -                          0.02                 0.02                 0.000003         0.004

Pulverized Coal

New -                              0.001               0.00006           0.000002         0.002

Pulverized Coal

You can expect the limits for new industrial sources to be raised. Cement particulate emission limits were substantially reduced for both new and existing sources.  Particulate mass monitors will be required. They have not been widely used in the U.S.  So this will create a substantial market for suppliers of continuous emissions monitors.  It is anticipated that regulations relative to CO and dioxins will be less stringent in the final rule than in the proposal.

11,500 of the 13,500 industrial sources already use natural gas and will not have to make changes. The other 2,000 sources will have just three years to purchase and install equipment. They will be competing with utilities and cement manufacturers for the services of equipment suppliers and construction companies.

For more information on the three market reports, click on:

Scrubber/Adsorber/Biofilter World Markets  http://www.mcilvainecompany.com//brochures/air.html#n008        

World Fabric Filter and Element Markethttp://www.mcilvainecompany.com/brochures/air.html#n021

Air Pollution Monitoring and Sampling World Markets http://www.mcilvainecompany.com/brochures/air.html#no31