Transcript Making the Business Case for Conversion

Making the Business Case for
Conversion
Peter Maxson, Director
Concorde East/West Sprl
UNEP Global Mercury Chlor-alkali Partnership
Expert Group Meeting to Identify Barriers and Opportunities
Vienna, Austria
28-29 June 2016
Overview
Economic and regulatory aspects of conversion
• Factors to consider
• Highlights from “Cost of Conversion”
• Regulatory requirements
• Disposition of mercury stocks
Objective
• Convince firms to convert? Or show the best
way to convert?
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Factors to consider regarding conversion
Economic, regulatory
• Domestic regulatory requirements
• International agreements and obligations
• The marketplace, present and future
• Availability and sources of financing (domestic,
international development funding, etc.)
• Internal company or external financing
• Energy costs and trends
• Cost of clean-up
• Allowance for uncertainties
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Factors to consider regarding conversion
Social
• Corporate social responsibility, relations with
stakeholders
• Human health risks (workers, general public)
Environmental
• Environmental impacts (emissions, releases)
• Hazardous materials management, records
• Hazardous waste disposal issues
Technical
• [To be dealt with during other sessions]
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Highlights from “Cost of Conversion” (1)
Conversion to membrane brings benefits:
• lower O&M costs (energy, personnel, maintenance,
etc.)
• high-quality caustic (and no mercury contamination)
• no costs of handling, storing, reporting on mercury and
mercury wastes (spills, sludges, accumulations...)
• reduced cell footprint > increased capacity
• overall lower cost per unit production of chlorine and
caustic
• non-economic benefits = environment, social, health
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Highlights from “Cost of Conversion” (2)
Conversion to membrane incurs costs:
• Planning
• Decommissioning and demolition
• Downtime
• Construction and process modifications
• Site clean-up
• Higher purity brine required
• Lower chlorine quality
• Likely concentration of caustic needed
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Making the business case
• historically low interest rates
• bilateral and multilateral funding opportunities
• chance to expand capacity, modernize process
flow and adapt to new market realities
• from “Cost of Conversion,” depending on a great
number of assumptions:
– Up to 15 years payback time in a high-cost, highly
regulated environment (e.g., EU)
– As little as 5 years payback time in a lower-cost, more
flexible environment (e.g., India)
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Current and future regulatory drivers
• International agreements and obligations
(Minamata Convention)
• Federal regulations
• State/local regulations
• releases to water (Water Framework Directive)
• Best Available Technology related regulations
• mercury stocks monitoring and reporting
• carbon pricing
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Disposition of mercury stocks
• Virgin mercury
– Storage cost
– Sale or disposal cost
• Recovered and excess mercury
– Storage cost
– Cost of cleanup before sale
– Disposal cost
• Three markets for mercury (US, EU, RoW)
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