P2 Tech Aqueous Cleaning Economics

Even if a company finds that a change to an aqueous cleaning system will be technically feasible, a change will not be adopted without a strong understanding of the costs and benefits. Unfortunately, it is impossible to generalize about the overall economics of converting to an aqueous cleaning system because the values and methods that go into making such an analysis are very company specific. Factors such as choice of discount rate, tax rate, depreciation method, and vendor-selection method are among those that will effect the results of an economic assessment.

Nonetheless, it is possible to identify which factors save money and which ones generate new costs. In addition, a review of the literature reveals a number of specific cases where the economics associated with aqueous-cleaning technology were compared with solvent cleaning. (Ref.7- 9, 15, 16, 20, 26) In many cases, aqueous cleaning faired quite favorably. Some of these reports also examined the difference between using traditional cost estimating and total cost assessment or other more comprehensive cost estimating approaches on the results of the economic analysis. These methods try to take into account a wider range of costs than those traditionally used to make an assessment, sometimes even including intangibles such as future liability. Generally, the investment in aqueous cleaning became more economically beneficial as the cost assessment methodology became more comprehensive. This trend is an indicator that this type of change may be more beneficial than many companies realize. The benefits of converting to an aqueous-cleaning system will only become more favorable if costs for solvents and disposal of associated wastes continue to increase.

Of the studies that evaluated economics, several were especially extensive and made use of the financial data of manufacturers that had recently converted from solvent to aqueous cleaning. Kennedy used the total cost assessment method to evaluate the economics of conversion for eight projects at manufacturers and found that operational costs were reduced by 75 percent in three cases and more than 95 percent in five cases. (Ref.26) All the cases resulted in a positive net present value. Kennedy identified the single largest cost savings to be reduced chemical costs due to no longer purchasing the solvent. The high cost of chlorinated solvents and chlorofluorocarbons was largely attributed to the taxes assessed on them. Kennedy also found that labor for maintenance generally increased for the aqueous system, although this contradicts with the findings of some other industry case studies (such as the case study reported by Menke et al. (Ref.9) below) in which it was reported that less labor time was spent maintaining the aqueous-cleaning system versus a vapor degreaser.

Menke, et al. economically analyzed the conversion to an aqueous-cleaning system from a TCA vapor degreaser within an automotive radiator manufacturing line and found the payback to be 2.4 years when using a “hybrid” cost analysis (similar to total cost assessment). (Ref.9) In this analysis labor costs for daily maintenance were $87,500 on an annual basis for the vapor degreaser versus $5,400 for the aqueous system. For the same process change, the payback value increased to 11.6 years when using a traditional cost analysis that ignored many of the less obvious costs related to both the old and new process. This example highlights the large difference that can be seen when using different cost accounting methods and reinforces the concept that aqueous cleaner investments will often appear more favorable as the economic analysis becomes more detailed.

Gavaskar’s economic evaluation comparing automated aqueous rotary washing with perchloroethylene (PCE) vapor degreasing for steel caplets showed a payback of seven years, much too long to be considered a favorable investment for most manufacturers. (Ref.8) However, an examination of the analysis shows a chemical cost comparison of $1,795 for vapor degreasing versus $2,711 for aqueous cleaning on an annual basis. The vapor degreasing chemical cost figure may be based on currently outdated lower costs for PCE, which brings forward another limitation of economic analyses reported in the literature.

Because costs can vary greatly both over time and between geographical areas, the transferability of the analyses is very limited. This is in addition to the already mentioned limitations for transferability of the results based on differences in methodology and choice of key cost analysis parameters between companies. The greatest values in the economic analyses appear to be verifying that there have been a number of cases where aqueous cleaning has been economically viable, and using the analyses as examples to help set up an economic analysis.

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