The U.S. cement industry faces stiffer federal regulation of emissions from its kilns, including mercury, which environmentalists say is overdue but industry advocates believe will put some domestic plants out of business.
The U.S. Environmental Protection Agency (EPA) proposed new emissions rules and increased monitoring of the energy-intensive kilns that make cement two months ago. On Tuesday it held a public hearing on proposals in Los Angeles, with hearings to be held in Dallas on Wednesday and Arlington, Virginia on Thursday.
There are currently no EPA regulations on mercury emissions from the kilns at 104 U.S. plants in 35 states.
Industry advocates say the proposed regulations would go into effect just as a hoped for recovery from a recession increases demand for a primary material to build roads, bridges, homes and other buildings.
The EPA proposal is for no more than 43 pounds per million tons of production, averaged over 30 days. The EPA came to that level by using the performance of the top one-eighth of U.S. kilns now, a method it uses often when proposing new rules.
Andy O'Hare, vice president of the industry group Portland Cement Association, said such a method is unfair because the amount of mercury emitted by each plant is mainly connected to the concentration of the metal in limestone, and some plants easily exceed the proposed limit. Limestone makes up about 80 percent of the raw material used in cement.
Among the health effects of mercury are that it can accumulate in the body and cause birth defects and brain damage in small children.
O'Hare says U.S. plant operators are not against regulation, but the current proposals are too onerous and will shift cement production to foreign plants.
MORE CEMENT IMPORTS?
In 2007, before an economic slowdown lead to a fall in the share of imported cement to meet U.S. demand, 22 percent of cement used in the United States was imported.
China is the world's top producer of cement, followed by India and the United States.
If the EPA's proposed rules were implemented, more than 43 percent of U.S. demand would be met by foreign production, O'Hare said. The new rules could be finalized next spring and if they are, they will be implemented in 2013.
"These rules would be put in place at the time we expect to be in an economic recovery when we will need a lot more cement," said O'Hare of the group that represents the 45 companies that operate U.S. plants in 35 states.
About 80 percent of U.S. cement plants are owned by foreign firms such as Switzerland's Holcim (HOLN.VX), Lafarge (LAFP.PA) of France, Germany's Heidelberg Cement (HEIG.DE), Italcementi (ITAI.MI), Cemex (CX.N) of Mexico and Japan's Taiheiyo Cement (5233.T).
U.S. demand for cement will rise 30 percent by 2020, said O'Hare.
A spokeswoman for the EPA said the agency is in "listening mode" and would consider suggestions from the cement industry.
The EPA estimates that it will cost the cement industry from $222 million to $684 million in the first year the regulations are in place.
It also estimates that the first full year will bring from $4.4 billion to $11 billion in savings, including the value of 620 to 1,600 premature deaths avoided from the new rules.
"It's really important to us to consider the health costs," said Miriam Rotkin-Ellman of the National Resources Defense Council. "Mercury is a very potent neurotoxin. We think the standards as proposed are really strong steps forward in terms of protecting public health from this industry."
In addition to mercury, the EPA seeks new regulations at existing cement kilns for total hydrocarbons, particulate matter and hydrochloric acid. (Reporting by Bernie Woodall; Editing by Dhara Ranasinghe)
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