Clean coal company ADA-ES anticipates significant growth due to new EPA rule

Source: ADA Environmental Solutions (ADA-ES)

ADA-ES, Inc. (NASDAQ:ADES) announced that it expects significant growth in markets for its products and services as a result of the proposed Mercury and Air Toxics Standards (the Air Toxics Rule) released by the Environmental Protection Agency March 16. The Air Toxics Rule will require over 1100 existing and new coal-fired electricity generating plants to reduce emissions of mercury and other hazardous air pollutants (HAPs). ADA provides three different control technologies for mercury emissions and also provides emissions control systems for two of the other four groups of HAPs covered by the rule: dioxin/furans and acid gases. The Air Toxics Rule is scheduled to be made final this November, and the power companies will be required to comply within 36 months.

The Air Toxics Rule is expected to create a significant new market for activated carbon injection (ACI) equipment provided by the Company. Activated carbon (AC) is effective for control of emissions of both mercury and dioxins/furans. ADA has been a market leader in providing nearly 50 of the 150 ACI systems sold to date to the power industry to meet mercury limits on new power plants and existing plants in 19 states where regulations are in effect. The Air Toxics Rule could create a demand for up to 500-700 new ACI systems over the next three years, which would be a market of approximately $500 million. These systems will require approximately 800 million to one billion pounds of AC to capture mercury. ADA provides AC for the industry through its joint venture ADA Carbon Solutions (“ACS”). The first ACS production plant started up in the summer of 2010 in Red River, Louisiana and has the capacity to produce 150 million pounds of AC per year. To prepare for the additional demand created by the Air Toxics Rule, ACS has permitted a second 150 million pound per year production line at the Red River plant and is pursuing permits for up to four additional AC production plants.

ADA also provides options for reducing mercury with coal treatment technologies. CyClean is a refined coal technology, provided though ADA’s joint venture, Clean Coal Solutions, LLC (CCS) that has reduced mercury emissions below the proposed limits for plants with cyclone boilers burning Powder River Basin Coal (“PRB”). CyClean also qualifies for IRS Section 45 tax credits of over $6 per ton of coal. A second technology was recently licensed by Arch Coal to modify its PRB coals at the mine resulting in lower mercury emissions. The licensing agreement provides ADA with a royalty of up to $1/ton from the premium Arch receives from sales of the enhanced coal. The proposed Air Toxics Rule could create a market for this product for a significant percentage of the greater than 100 million tons per year of PRB coal mined by Arch.

Dr. Michael Durham, President and CEO of ADA, stated, “We are enthusiastic about the significant opportunities for the Company expected to result from the proposed Air Toxics Rule. We believe that the Company is well positioned to take advantage of these opportunities with a number of low capital cost approaches to emissions reduction. Our goal is to help our customers comply with the challenges of the new regulation while keeping cleaner-burning coal a viable part of the country’s energy mix.”

Dr. Durham continued, “We are also pleased to welcome EPA Regional Administrator, Jim Martin at our Littleton, Colorado offices later this afternoon to discuss the Air Toxics Rule with the media. At that time, I will discuss ADA’s state-of-the-art air pollution control technologies, the markets they address and the economic benefits of the rule.”

ADA-ES is a leader in clean coal technology and the associated specialty chemicals, serving the coal-fueled power plant industry. Our proprietary environmental technologies and specialty chemicals enable power plants to enhance existing air pollution control equipment, minimize mercury, CO2 and other emissions, maximize capacity, and improve operating efficiencies, to meet the challenges of existing and pending emission control regulations.

With respect to mercury emissions: 

• We supply ACI systems, mercury measurement instrumentation, and related services.

• We are also a joint venture participant in ACS, which has commenced operations at its state-of-the-art AC production facility.

• Under an exclusive development and licensing agreement with Arch Coal, we are developing and commercializing an enhanced PRB coal with reduced emissions of mercury and other metals.

• Through our consolidated subsidiary, CCS, we provide our patented refined coal technology, CyClean, to enhance combustion of and reduce emissions from burning PRB coals in cyclone boilers. 

In addition, we are developing CO2 emissions technologies under projects funded by the U.S. Department of Energy and industry participants.

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