The U. S. cement industry has seen enormous growth in the number and complexity of environmental issues it is facing. Ten years ago, the typical cement plant did not have a full-time environmental professional on staff. Today, most cement plants have at least one environmental engineer or manager, and some have several. Cement plants have added substantial environmental testing, monitoring, and recordkeeping costs to their budgets. Several plants have begun installing state-of-the-art pollution controls and spent millions of dollars on environmental cleanups. What's changed?

Environmental laws have started to catch up. The cement industry has been noticed. Now that environmental agencies have cut their teeth on major utilities and chemical producers, it's our turn. Cement plants consume huge amounts of fuel and electric power. Therefore, when it comes to emissions of greenhouse gases, our industry is in the same league with major utilities and vehicles. Moreover, cement plants annually report emissions of millions of pounds of toxic chemicals. In several states, cement plants rank at the top of environmental groups' state-wide lists of polluters.

The cement industry is now seeing significant new plant construction, much of which replaces older, inefficient equipment with state-of-the-art technologies. Most of these major projects involve very public environmental permitting processes. As a result, new cement plants and major upgrades are facing mounting pressure from regulators and neighboring communities to install the latest, most expensive pollution controls.

At the same time, rules that implement many of the historic environmental laws are finally addressing activities specific to cement plants. Cement kiln dust (CKD) standards are about to be upgraded by new federal rules. Emissions of nitrogen oxides (NOx) by utilities and heavy industries are being ratcheted down in the northeast. In the last five years, all cement plants have applied for and begun negotiating new air operating permits.

What follows is a list of eight issues that cement companies will focus increased attention on in the new millennium.

1. Mandatory reductions in air emissions National Ambient Air Quality Standards In 1997, EPA announced more stringent national ambient air quality standards (NAAQS) for ozone and particulate matter that all states will be required to attain. In 1999, the U.S. Court of Appeals in Washington, D.C. rejected the standards. EPA has appealed the case to the U.S. Supreme Court. If the High Court sides with EPA, EPA will begin to re-evaluate many areas of the United States to determine which ones do not comply with the new standards. Many regions of the country may be in violation of the new ozone standard, the new particulate matter standard, or both.

Unless Congress reigns in EPA or the new NAAQS are challenged successfully in court, many states will be required to impose more stringent requirements on businesses located in these newly non-compliant locations or face penalties such as the loss of federal highway funds and other sanctions.

New Reductions in NOx Emissions Will be Imposed on Eastern and Midwestern States EPA has issued new requirements for Midwestern and Eastern states to reduce NOx emissions that allegedly contribute to ozone problems in the Northeastern states. The 22 affected states(Footnote: The affected states are Alabama, Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin.) challenged the new federal requirements in court.

In March 2000, the U.S. Court of Appeals in Washington, D.C. decided that, except for Wisconsin, the EPA action was legal. Many of the affected states have already published new emissions rules in compliance with the federal requirement. New state rules are typically requiring NOx emissions reductions of 30%. In most cases, the rules specifically target cement plant emissions along with utilities. Among the controls being considered by cement plants to reduce NOx emissions are scrubbers and alternative fuels, including mid-kiln injection of whole tires.

Increasing Pressure on Major Plant Projects to Include Scrubbers When the Clean Air Act was first enacted in the 1970s, Congress required major plant expansions and new construction to install the Best Available Control Technology (BACT) to control emissions. In the '70s, scrubbers for sulfur dioxide (SO2), NOx, and other pollutants were unheard of in the cement industry. Until recently, the U.S. cement industry was able to effectively emphasize the lack of "available" technology.

Under federal BACT requirements, until a technology is demonstrated to be cost effective, regulators cannot require its use. For a control technology to be "demonstrated" usually means that a cement plant somewhere is successfully using the technology. In the midst of this latest round of plant upgrades, a few cement plants are installing wet scrubbers for SO2 and thermal oxidizers for hydrocarbons. Pressure is increasing for plants to install scrubbers for NOx as well. Once these installations are proven effective, few major plant construction projects will be able to avoid installing these new controls.

2. Cleaning polluted waters Not be outdone by the Clean Air Act, the folks that administer rules under the Clean Water Act have been busily finding ways to ratchet-down emissions of water-borne pollutants. Most cement plants and quarrying operations operate under water discharge permits called "NPDES" permits. Under the federal NPDES program, regulators may impose limitations on the amounts of pollutants that may be discharged. After nearly 27 years of regulating water pollution, regulators have found new ways of identifying and reducing pollutants in discharges.

Although the quality of some lakes and streams in the United States has improved markedly in recent years, some water bodies have not improved enough. To focus on this problem, EPA is strengthening rules that require states to identify troubled waters and develop programs to clean them up.

Borrowing lessons from the Clean Air Act, which seeks to improve overall air quality, the new federal initiative requires states to examine the sources of pollutants entering the identified lakes and streams and impose limitations on the daily amounts of identified problem pollutants discharged by all permit holders. Cement plants renewing their NPDES permits will be sharing responsibility for water quality in those waters with other polluters.

States are establishing "total maximum daily loads" of pollutants that may enter each watershed from all sources without exceeding the states' water-quality standards. The states must determine the total amount of each pollutant entering a water body from all sources. These totals are expected to eventually result in even tougher restrictions on pollution discharges into watersheds that do not meet current standards. The end result will be restrictions on each NPDES permit, reducing the amounts of pollutants discharged.

3. Cement kiln dust (CKD) In August 1999, EPA proposed new rules concerning CKD management. The proposal forces cement plants to meet new, tough CKD disposal standards to protect groundwater and air. Some cement plants could be required to close old CKD disposal sites and construct new landfills with liners and groundwater monitors if the existing sites cannot meet the new requirements. Failure to comply with the new rule would render the mismanaged CKD a hazardous waste.

Cement plants forced to construct new landfills could incur costs of several million dollars each for design, construction, and state approval. EPA received heavy industry comment on the proposed rule. The industry will very likely challenge the rule in court if EPA finalizes it as proposed. A final rule could be promulgated as soon as 2001.

4. Global warming On Dec. 11, 1997, in Kyoto, Japan, representatives from 161 nations adopted a global warming agreement. The United States, the European Union, Japan, and other industrialized nations adopted binding targets and timetables that required them to collectively reduce greenhouse gas emissions, resulting primarily from the combustion of fossil fuels, by 2012.

Reducing energy consumption is currently envisioned as the primary means of reducing greenhouse gas emissions. Although the Clinton administration has endorsed the agreement, it still must be ratified by the Senate, where opposition has been stiff.

The cement industry is a major greenhouse gas emitter, putting about 1 ton of carbon dioxide into the atmosphere per ton of clinker. Many of Kyoto's participating nations have already initiated programs to control greenhouse gas emissions:

* Germany imposed an energy tax affecting electric power output;

* France has imposed a carbon tax, taxing industrial energy users approximately $20 to $30 per ton of carbon dioxide emitted starting in 2001 and increasing through 2010;

* Britain has enacted a new "energy levy," a tax to encourage energy efficiency taking effect in 2001;

* Canada has established a National Climate Change Secretariat to study various options for meeting Kyoto's aggressive goals. Canada is actively involving potentially affected industries in a national dialog to find an equitable approach. Extensive discussion has centered on emissions trading and credit for early reductions by industry.

Until now, the U.S. Congress has not supported ratifying the Kyoto agreement. However, as much of the industrialized world begins earnest efforts to cut greenhouse gas emissions, pressure will mount on the United States to take aggressive steps to follow suit. In the states, EPA and the Department of Energy have established the Climate Wise Program to seek voluntary reductions by industry. Because many of the measures to reduce greenhouse gas emissions involve improved energy efficiency, U.S. companies have signed on with Climate Wise to document historical carbon dioxide emissions and implement action plans for reductions.

Many companies have caught on to the idea that, by acting now when times are good for the U.S. economy, they may capitalize on early reductions before possibly inevitable mandatory controls are imposed. Among the companies voluntarily preparing and documenting their action plans and greenhouse gas reductions, are several cement companies, including Ash Grove, Caliveras, California Portland, Capital Aggregates, Dragon Products, Essroc, Holnam, Lafarge, Lehigh Portland, National (California), Phoenix, RC, RMC Lonestar, Southdown, and TXI.

5. Short timetable to comply with new cement standards In June 1999, a new rule governing toxic emissions from cement plants went into effect. Called the National Emission Standard for Hazardous Air Pollutants (NESHAP), the new federal rule imposes emissions limits on all aspects of cement manufacturing from raw materials storage to loading cement trucks for shipping product out the door.

Besides cement kilns, among the process equipment regulated by the new NESHAP, are bypasses, clinker coolers, raw mills, finish mills, raw material dryers, storage bins, transfer points, cement bagging systems, and bulk loading operations. NESHAP requires periodic emissions testing and implementation of operating and maintenance plans to correct emissions problems. Extensive recordkeeping and reporting is also required under the new rule.

Existing cement plants have until 2002 to comply with all of the rule's provisions, but certain requirements are in effect now. Plants must test their emissions by the end of 2002 to demonstrate compliance, and then run regular compliance tests to maintain compliance. Significant lead times will be required for some plants to identify and resolve any inability to meet the new emissions standards. New cement plants must be in compliance on start-up. New cement plants that have not yet begun construction must obtain pre-construction approval prior to beginning construction.

Although most cement plants are expected to be able to comply with NESHAP's particulate emissions limits, the rule imposes limits on emissions of dioxins and furans (D/F) from kiln stacks and bypass stacks. Of greater concern is the rule's imposition of limits on kiln operating conditions based on EPA's belief that control of these conditions will control D/F emissions.

Many cement plants have never tested for D/F emissions and have no idea of whether they can comply with the new limitations. Most cement plants that have tested D/F emissions still do not know whether they can comply because the tests were not conducted under conditions required by the NESHAP.

In addition, many plants may not currently have the ability to adequately meet the operating limitations without making capital improvements or significant raw materials changes.

Several cement companies have recently developed aggressive programs to investigate D/F emissions from all of their kilns to determine whether major modifications will be required to comply with the new NESHAP. By early 2002, cement plants should complete any needed process changes so that the end of the year performance tests will successfully demonstrate compliance.

6. New air-operating permits are being negotiated As of 1990, most cement plants and other manufacturing plants did not have operating permits that imposed emissions or operating limits. In 1990, Congress passed Clean Air Act Amendments that require all manufacturing facilities that emit significant quantities of pollutants to obtain operating permits. By 1996, most cement plants had applied for these permits under state air regulations that comply with the federal program. Now, most cement plants are in the midst of negotiating their operating permits with state regulators.

Among the features of the new operating permits are regular monitoring and reporting of emissions, including installation of emissions and process monitoring devices on equipment, as well as daily visible emissions measurements in many cases, establishment of compliance plans, and certifications of compliance. Severe penalties, including criminal charges, may be imposed for false certifications or material omissions from certifications.

7. Enforcement initiatives Occasionally, EPA selects certain environmental laws or rules on which to focus its enforcement resources. These enforcement initiatives often are announced in some fashion, and sometimes result when EPA perceives that many companies are not complying with certain environmental laws. The enforcement-related initiatives affecting the cement industry have recently received attention.

EPA considers major maintenance projects or certain minor upgrades to require permits. In November 1999, the U.S. Department of Justice, on behalf of EPA, sued seven electric utility companies, alleging that they violated the Clean Air Act at 17 plants. EPA is seeking millions of dollars in penalties plus installation of new pollution controls that, EPA contends, should have been installed when upgrades were made. Here's what precipitated this new aggressiveness:

Most manufacturing facilities have, over the years, replaced older equipment with newer, more efficient machinery. EPA's rules under the Clean Air Act require that any upgrades that may cause significant increases in emissions first obtain permits, and sometimes install BACT. However, some upgrades are not usually thought of by manufacturers as creating environmental problems. EPA may disagree with these manufacturers.

A case in point is process debottlenecking. For example, many cement kiln systems were built with ID fans that are now obstacles to increased production. As minor improvements in the cement kiln process have pushed production capacity upward, cement plants have increased ID fan capacity to keep up with the gradual changes. EPA may consider this modification a significant increase and fault a manufacturer for failing to determine whether there will be a significant emissions increase.

Similarly, some wet-process cement plants have completely redesigned and replaced their chain systems to gain increases in production. Again, a step in the design process for these kinds of changes that has been omitted by many manufacturers has been estimating changes in potential emissions. EPA is now investigating these changes.

Recently, EPA noticed that industry has spent billions of dollars on capital improvements since the Clean Air Act was enacted, and wondered, "Why have there been hardly any permit applications?" To find the answer, EPA served many manufacturers, including cement plants, with daunting information requests. Plants have been asked to produce maintenance and capital improvement records going back at least five years. Literally thousands of pages of records have been shipped off to EPA's regional offices where enforcement staffs pore over every equipment change to determine whether the law was violated.

Now that the assault on utilities has borne fruit, EPA has announced an initiative for 2000 to investigate the petroleum and pulp and paper industries. The cement industry will not remain on the back burner for long.

Reporting of Releases. As if the amount of environmental reporting required of cement manufacturers is not enough, EPA has noticed that certain emissions reports required under Section 103 of the Emergency Planning and Community Right to Know Act (EPCRA) are not being made. How does EPA know the EPCRA reports are not being made? They simply look at the similar reports made under another section of the same law, Section 313. Section 313 requires an annual report, the Toxic Release Inventory (TRI) based on annual emissions. Section 103 requires a notification of emissions in excess of a daily "reportable quantity" of certain chemicals.

Manufacturers that have become well versed in TRI reporting are well aware that TRI reports are posted by EPA and accessed by environmental groups on the internet. Many manufacturers have forgotten that dividing the annual releases by 365 gives an estimate of daily emissions. EPA and the environmentalist community haven't forgotten. They can simply check the information posted by EPA on the internet and then cross-check public records to determine if daily reports were filed.

The cement industry needs to shake the trees for these low-hanging fruit so that EPA doesn't get there first. Many manufacturers, including cement plants have already been caught by surprise on this issue.

8. Environmental justice Many facilities that release pollutants into the environment are located near low-income communities. Environmental and civil rights advocates argue that residents of these communities have been exposed disproportionately to the negative environmental impacts associated with such facilities.

In 1994, President Clinton signed an Executive Order requiring that each federal agency make achievement of environmental justice part of its mission and, in 1998, EPA issued a policy to require all state agencies that receive EPA funding to consider environmental justice issues when making decisions on environmental permits. Several states also enacted statutes or adopted rules promoting environmental justice andseveral lawsuits involving this issue have been filed in both state and federal courts.

Bolstered by developing federal and state environmental justice policies, manufacturers have been challenged to address these concerns in permits to build or modify facilities. In some instances, environmental groups have challenged major projects in court. In other cases, regulatory agencies have been skittish about issuing permits unless local concerns are addressed from the start.

Since cement plants are major sources of emissions, major projects that involve local communities in the planning phases may encounter less overall resistance than projects that are sprung on the neighbors when a proposed permit is published in the local new media.

Conclusion Given the amount of attention that cement manufacturers have been receiving from regulators in recent years, cement companies have become much more attuned to changes in the regulatory climate on both the federal and state level. No matter what pro-industry politicians have promised, environmental regulation is becoming more stringent for cement producers. The challenge for cement makers is to stay informed and beat the regulators to the punch with continual renewal of environmental compliance efforts.