Evaluating the costs and benefits associated with the reduction in SO2 emissions from industrial activities on the highveld of South Africa

Abstract

Air quality management in South Africa has undergone significant legislative reform in recent years, aimed at improving air quality within South Africa. The National Environmental Management: Air Quality Act 39 was promulgated in 2005 and makes provision for various instruments to improve ambient air quality. One such instrument is minimum emission standards, limiting the emissions from industrial point sources. The standards were first set in 2010, but were subsequently amended in 2013. These standards have been set for various industry sectors and require facilities to comply with one set of emission standards by 2015 and a stricter set of standards by 2020, dependent on the commissioning date of the facility. In setting the standards, the costs of compliance and expected ambient benefit of compliance were only indirectly assessed. Subsequent to the promulgation of the standards, various industries have indicated that not all of the standards were feasible through various applications for the postponement of these standards. The effect of such a postponement will be to delay compliance with the emission standards, resulting in the intended ambient air quality benefits not being realised. The purpose of the investigation was to assess the desirability of implementation of the standards from an environmental as well as economic point of view. Due to the scope of such a study and the variety of industries involved, the investigation was limited to a single set of standards. The research assessed compliance with the Category 1.1 standards (solid fuel combustion installations used primarily for steam raising or electricity generation with a design capacity greater than 50MW) for sulphur dioxide (SO2) emissions as the majority of installations falling into this category have indicated that compliance with the SO2 emission standard will not be achieved within the required timeframe. A review of environmental evaluation techniques was done in order to determine the most appropriate method to assess the economic desirability of the legislation, taking into consideration the expected benefit of implementation as well as the costs and impacts of implementing the required abatement technology to reach the standards. The study used a bottoms-up or impact pathway approach to analyse the impact of emission reduction. The costs and benefits associated with the implementation of an SO2 point source standard of 500 mg/Nm3 for solid fuel combustion installations (Category 1.1 sources) was evaluated to determine the net present value of SO2 regulation on the Mpumalanga Highveld of South Africa. All category 1.1 sources within the study area expected to have a significant impact on ambient SO2 concentrations were included in the study. An evaluation of the likely technology to be implemented to reach the new plant (2020) SO2 emission standard of 500 mg/Nm3 was conducted and the installation of wet flue gas desulfurisation (FGD) was determined to be the technology of choice. In order to conduct the economic valuation, the costs and benefits associated with the installation of FGD was identified and ranked into four categories, based on the expected impact and the availability of information. All costs and benefits that could be quantified and monetized (Category 1 impacts) were included in the evaluation.