Rohm and Haas Environmental Cost Model

Source:

S.T. Thomas, V. Weber (RUST Environment and Infrastructure), S.A. Berger, I.L Klawiter (Rohm and Haas company). April 1994. "Estimate the Environmental Cost of New Processes in R&D." Prepared for Presentation: AlChE Spring National Meeting, Atlanta, GA.

Objective:

Presentation of a model for estimating present and future costs for process environmental issues at all phases of process development. The model is meant to serve as a research and development tool.

Summary of methodology

The authors recognize the logistical difficulties associated with total waste cost accounting. The model uses quantitative and qualitative data andassumes conservative default values for data that are unavailable. The following steps are involved in the estimation process:

• Generating a process material balance using a process simulator, spreadsheet, or manual methods.
  
• Establishing two levels of detail for process information:

  Level I is the base level for the model and is to be used when limited or no process-specific data are available.
  

  Level II is more detailed and is used when the material balance and process flow diagram development stage is complete.
  

• Estimating environmental costs by the model, based on EPA's four tiers of costs. Costs are estimated based on four types of input:

  chemical-specific data
  

  process-specific data
  

  operational data
  

  project overview information
  

If new processes are generally implemented as minor installations or expansions, only incremental costs need to be calculated. Significant expansions may necessitate including cost equations and additional cost information.

Cost outputs are produced for total capital costs, total operating costs, and total liability costs by using the following summation approach:

Total Capital Cost ($)=		Equipment cost (Tier 0)+ First time permit cost (Tier 1)
Total Operating Cost($/yr) =		Equipment operating costs (Tier 0) + Compliance and disposal costs (Tier 1) + Remedial costs associated with accidental releases and spills (Tier 2) + Relationship costs (Tier 3)
Total Liability Cost ($): =		One time remediation costs associated with project shut-down (Tier 3)

Levels I and II include different levels of detail for the four tiers of costs. For example, for Tier 0 costs for solid waste disposal, Level I costs are based on the single worst-case per drum disposal costs, and Level II costs are refined by considering the hazard nature of the waste stream.

The model is structured around a relational database, and the paper includes a description of the organization and relationships. The cost parameters can be changed and updated as required, and MSDS information can be downloaded into the model. Users can access either Levels I or II, and the model can be expanded to include additional levels as well. It also includes on-line help screens. P2 notes can be pasted onto input screens. The paper includes a brief example of three processes that can be compared using the model.

Life-cycle stages covered

Raw material acquisition	---
Manufacturing stage
Use/reuse/maintenance
Recycle/waste management

Type of costs considered

Conventional
Potentially hidden
Contingent
External	---

The costs identified are as follows:

• Tier 0: Usual costs associated with environmental control equipment, installation, and engineering
  
• Tier 1: Hidden costs associated with environmental compliance and waste disposal
  
• Tier 2: Liability costs associated with penalties, fines, future remediation, and mitigation of accidents and spills
  
• Tier 3: External costs associated with employee, customer, and regulatory agency relationships
  

The definition of external costs is different from the one in this guide, in that social costs are not included. This guide defines image/relationship costs as hidden (internal) costs.

Conclusions

The tool is designed to present a realistic appraisal of present and future environmental and waste disposal costs for a project when it reaches commercialization. It can facilitate design and process changes early in the project and allow a more accurate estimation of project costs. As the project progresses, the model identifies cost reduction opportunities. It also does financial analysis of projects that include environmental risk factors.

Less-tangible social or external costs are not taken into account. Thus, the methodology has an internal corporate focus and does not take external life-cycle costs into account. The model is a proprietary tool and is not available as a commercial product.

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