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Appendix A to Final Project Agreement Work Plan

Project XL - HADCO Corporation

Memorandum Outlining HADCO's XL Proposal

I. Applicability and Scope

A. HADCO Facility Summary

HADCO is a leading manufacturer of printed wiring boards (PWB) and electronic interconnection products. HADCO sales were approximately $350 million in 1996. HADCO operates four (4) facilities in New Hampshire and New York that produce PWB waste water treatment (WWT) sludge. The three (3) New Hampshire facilities are located in Derry, Hudson and Salem. The New York facility is located in Owego. HADCO presently employs approximately 3000 people.

B. Overview of Project

1. Current Waste Management Scenario - Wastewater Treatment Sludge

This project concerns the classification under RCRA Subtitle C of wastewater treatment (WWT) sludge generated from printed wiring board (PWB) manufacturing facilities (SIC 3672). This WWT sludge is presently classified as a listed hazardous waste, having the waste code F006, pursuant to 40 C.F.R. 261.31(a). Because of this hazardous waste designation, HADCO, and others in the PWB industry, must ship this waste to a facility licensed to handle hazardous wastes. HADCO's four (4) facilities participating in this XL project collectively generate approximately 600 tons of PWB WWT sludge per year.

HADCO maintains that its WWT sludge should not be regulated as a hazardous waste because EPA based its listing criterion for PWB WWT sludge on chemistry which the company, and largely the industry, no longer utilizes.

The PWB industry has used a variety of chemical etchants to dissolve copper foil from copper-clad laminate material to produce circuit patterns. These etchants can be acidic or basic. In the 1970s, chromic sulfuric acid (a mixture of chromic and sulfuric acids) was sometimes used as an etchant. Therefore, the sludge at that time often contained cadmium, hexavalent chromium, cyanide (complexed) and nickel. See 40 C.F.R. 261.30(b), Appendix VII.

Because chromic sulfuric acid was toxic (both from a worker safety and environmental perspective), the PWB industry began replacing it with non-chrome etchants.

HADCO replaced chromic sulfuric acid etchant with the less toxic ammonium chloride in the late 1970s. Based upon HADCO's analysis of its WWT sludge using EPA's extraction procedure (EP) and toxicity characteristic leaching procedures (TCLP), HADCO maintains that the use of ammonium chloride etchants in its PWB process results in the generation of a non-hazardous WWT sludge.

The receiving facility that HADCO currently ships its WWT sludge to combines HADCO's sludge with others, to create a blended copper-containing product that is suitable for smelting and metal recovery. This blended sludge is shipped by the receiving facility to a Canadian smelter for copper recovery.

HADCO and its competitors in the industry could directly ship their copper containing WWT sludges to Canadian smelters as a hazardous waste, but this would require concurrence from both the U.S. and Canadian governments, and the completion of paperwork associated with hazardous waste exportation.

HADCO and its competitors in the industry would also face problems in directly shipping their copper-rich WWT sludges to domestic smelters as a RCRA hazardous waste. Pursuant to 40 C.F.R. Part 266, Subpart H, smelting furnaces that reclaim metals are exempted from hazardous waste facility permitting when they co-process hazardous wastes, but there are other regulatory impacts. Slags and slag tailings from primary copper processing are normally excluded from being hazardous wastes under the "Bevill" exclusion. See 40 C.F.R. 261.4(b)(7)(i) and (ix). However, any domestic primary copper smelter which co-processes a listed hazardous waste would be forced to carry out the demonstration requirements of 40 C.F.R. 266.112 in order to avoid losing the "Bevill" exclusion for the slags and slag tailings.

HADCO submitted its Project XL proposal in order to remove the PWB WWT sludge within its facilities from RCRA Subtitle C regulation.

HADCO has not asked for a traditional delisting to remove their WWT sludge from regulation, because this process has historically taken up to 4-6 years to implement.

2. Current Waste Management Scenario - Drilling, Sawing, and Edging Dusts

In addition to WWT sludge, HADCO generates over 200 tons per year of drilling, sawing, and edging dusts, which have a copper content of up to 33%. This is a non-RCRA waste in both NY and NH, and it is currently landfilled.

3. The Proposal

This project seeks to demonstrate that: a) classifying HADCO'S WWT sludge as an F006 waste pursuant to Subtitle C is not necessary to protect human health and the environment; b) the WWT sludge can be safely reclaimed without all of the strict regulatory controls imposed by RCRA Subtitle C; and c) a conditional delisting or a solid waste variance will yield substantial economic and environmental benefits.

EPA believes that a conditional delisting (conditioned upon the receipt of the material at a smelter for reclamation of copper content) is more appropriate than a traditional delisting. A traditional delisting relies heavily on the projected effect of the hazardous waste on groundwater receptors, and we do not believe that this type of analysis is necessary or appropriate in the situation where the ultimate fate of the WWT is receipt by a reclamation facility.

In lieu of a conditional delisting, it is possible that HADCO's waste may qualify for a solid waste variance. The variance that EPA and the State Parties see as potentially applicable is that specified in 40 CFR 260.30(c) where a waste has undergone partial reclamation. Drying of the WWT sludge using on-site driers may qualify as partial reclamation.

It is critical that EPA and State Parties have sufficient data from HADCO to determine which of these two regulatory relief mechanisms may be warranted, if any. Therefore, the Final Project Agreement sets forth extensive testing requirements so that the EPA and State Parties may receive adequate data to review.

If HADCO meets the requisite conditions for the conditional delisting, or in the alternative, solid waste variance, the cost savings enjoyed by HADCO may be directed towards the installation of sludge driers and will be directed towards the reclamation of the non-RCRA copper dust from the drilling, sawing, and edging processes, to the maximum extent of savings realized.

HADCO's successful implementation of this project may yield a more simplified delisting process for other PWB manufacturers that generate sludges of similar composition.

II. Project XL Criteria

A. Environmental Results

This project supports the RCRA goals of waste minimization, pollution prevention, and reduced use of natural resources. More specifically, the project provides the following potential environmental benefits:

By eliminating cost and regulatory barriers to recycling, other PWB manufacturers that now send their WWT sludge and copper bearing dusts to landfills after treatment will have an incentive to recycle this resource instead of burying it.

The direct recycling of this metal-rich material will decrease the need to obtain the metals through the mining of virgin material or other means. Natural ore has a copper content of approximately 1%, while the PWB WWT sludge has a copper content of up to 25%; the recycled material is thus commodity-like.

The revenue stream caused by the direct recycling of WWT sludge may allow similarly situated PWB manufacturers to economically recycle other non-RCRA waste streams that are also copper rich (e.g., drilling, sawing, and edging dust). HADCO produces over 200 tons per year of this dust, which has a copper content of up to 33%. These waste streams are currently landfilled by the New Hampshire and New York facilities and many of their competitors in the industry. Assuming that a conditional delisting or a solid waste variance is granted, resulting in overall cost savings, HADCO will apply these savings to reduce the amount of drilling, sawing, and edging dusts it sends to landfill, by implementing an acceptable recycling or pollution prevention program, or both. EPA anticipates that the primary superior environmental benefit associated with this project will be HADCO's reinvestment of the cost savings realized from the direct shipment of WWT sludges as non-RCRA waste into the reclamation of non regulated copper containing dusts.

With regard to landfilling, this project would also produce derivative benefits for the smelters who accept these materials for processing. Because the wastes produced by the PWB industry are rich in copper, relative to virgin copper-bearing ores, to the extent that smelters process such secondary materials in place of virgin ores, the smelters would generate less slags and other wastes to be disposed of because of the reduced concentration of non-recoverable materials.

There may be substantial reductions in air pollutant emissions from transportation of this WWT sludge. Currently, some F006 from New England and other east coast generators is transported to a facility in Pennsylvania. This sludge is then shipped to Canadian smelters or other reclamation facilities, after blending. Under this Project, the sludge will be shipped directly to the smelters or other reclamation facilities.

Further, by converting this material from a waste to a commodity, the sludge can generate revenue (or at least be disposed of at a reduced cost). Thus, HADCO and other generators may be able to justify the installation of on-site sludge driers. Direct shipping may reduce transport miles by up to 50%. Use of sludge driers may reduce this figure by another 25%, due to reduction of volume. Mobile source air emissions associated with the disposal/recycling of this material may then be reduced by 75%. HADCO approximates that this would produce an annual savings of about 3,000 gal/year of diesel fuel.

Additionally, the Pennsylvania facility currently dries a portion of the F006 waste it accepts. The sludge has to contain a specific range of moisture to be acceptable to the smelters. Part of HADCO's proposal included drying the sludge at the generation facility in order to reduce shipping costs and meet smelter specifications.

B. Cost Savings and Paperwork Reduction

1. Cost Savings

HADCO currently pays $200-400 per ton for the recycling of its WWT sludge. HADCO's New York and New Hampshire facilities generate more than 600 tons per year of WWT sludge, and HADCO pays more than $200,000 per year for its management. Direct shipment to copper smelters or other copper reclamation facilities will hopefully result in positive revenue (this may be a marginal revenue, or at a minimum, a significant reduction in the cost). The resulting savings can then be used to justify recycling of non-RCRA copper containing dusts and potentially sludge drying. HADCO has not yet determined the exact cost savings associated with conditional delisting.

After FPA approval, HADCO will determine the cost savings, and the resulting pollution prevention/recycling steps that can be implemented. Alternative drying approaches will be evaluated. The cost of this project should be relatively low, and HADCO Corporation has the financial capability to carry it out.

2. Paperwork

If the conditional delisting or a solid waste variance is implemented, HADCO will not be required to file and submit hazardous waste shipment manifests, thereby reducing the amount of paperwork generated. Further, shipments to Canada will not require formal preapproval and notification required for the shipment of RCRA Subtitle C wastes, and filing of RCRA annual export reports.

In addition, HADCO intends this project to be a pilot for the PWB industry. HADCO believes that this pilot will confirm that non-chromic WWT sludge does not meet the hazardous waste characteristics under RCRA subtitle C. A conditional delisting could then apply to this type of waste throughout the PWB industry (subject to certain demonstrations by individual companies), and would avoid the cost and paperwork (and resources needed to review the paperwork) associated with numerous individual delisting applications. There are approximately 750 PWB manufacturers in the United States. Removal of PWB WWT sludge from RCRA jurisdiction may produce significant savings to the industry.

C. Stakeholder Support

Stakeholder committees were formed in New Hampshire in March, 1996 and in New York in April, 1996. Meetings were conducted in New Hampshire on 3/18/96, 4/17/96, 6/19/96 and 7/18/96. Meetings were conducted in NY on 4/16/96, 6/19/96 and 7/18/96, with the last two meetings conducted via video conference with New Hampshire stakeholders. The purpose of the meetings was to inform all interested citizens concerning the development and implementation of HADCO's proposal under EPA's XL Program and to seek public comment and input on the proposal.

Stakeholders to the development of the FPA include the Merrimack River Watershed Council, Town of Hudson (NH) Health Office, Audubon Society of NH, Sierra Club (NH Chapter), Teradyne, M/A-COM, Inc, Lockheed Martin Loral Federal Systems, World Resources Corp. (the facility presently handling HADCO's WWT sludge), Atlantic States Legal Foundation, local citizens from Owego, NY, and the IPC (the PWB industry association).

Other interested parties include Wastecap of NH, NY PIRG, and the Towns of Derry and Salem,NH and the Town of Owego, NY.

D. Innovation/Multi-Media Pollution Prevention

This proposal achieves solid waste minimization and recycling; results in the reduced use of virgin resources; and reduces mobile air emissions (the largest source of volatile organic compounds (VOCs) and nitrogen oxides (NOX) in most states). Furthermore, the improved economics of recycling may permit the recycling of a solid (non-RCRA) waste which is presently landfilled and may also permit the drying of the sludge to reduce the volume of sludge transported.

Further, a conditional delisting promotes improved regulatory flexibility. The project may assist the Agencies in developing a more streamlined conditional delisting process for certain other waste streams.

E. Transferability

The United States PWB industry as a whole produces approximately 20,000 tons per year of WWT sludge. Less than 50% of this sludge is sent for reclamation of metals, according to EPA's Biennial Reports System.

As discussed previously in Subsections II. A and B of this Memorandum, the proposal may be transferable to other PWB manufacturers not using chrome-based etchants. If HADCO confirms the non-RCRA nature of its WWT sludge, then similar PWB manufacturers may be able to benefit from a conditional delisting procedure for F006 sludge.

F. Feasibility

HADCO can accomplish the necessary analysis and administration of a pilot project to demonstrate that its sludge should be conditionally delisted. A sludge drier has already been been installed in the Owego, NY facility.

The recycling of copper dusts still requires additional research and analyses; nevertheless, HADCO has committed itself to researching an innovative solution.

G. Monitoring, Reporting and Evaluation

The Agreement incorporates representative sampling and analysis, consistent with the requirements of SW-846, or ASTM test methods. It also includes the submission of an annual report to summarize the relative success of the project in terms of environmental benefits, cost savings, and other criteria.

H. Shifting of Risk Burden

This proposal is consistent with the goals of protecting worker safety and ensuring that human health and the environment are protected to an equal or greater extent than they were under the original regulatory scheme. No group shall be subject to unjust or disproportionate environmental impacts attributable to this Project.


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