Economic Impact Screening Analysis for Regulatory 

Changes to the Listing Status of High-GWP 

Alternatives - Revised

P REPARED FOR :

 Stratospheric Protection Division 

Office of Air and Radiation 

U.S. Environmental Protection Agency 

Washington, D.C. 20460 

P REPARED BY :

ICF International 

1725 Eye Street, NW 

Washington, DC 20006 

JULY 2015
Economic Impact Screening Analysis i

Executive Summary

The Significant New Alternatives Policy (SNAP) Program is the U.S. Environmental Protection Agency's (EPA) 

program to evaluate and regulate substitutes under the Clean Air Act (CAA). In Section 612(c) of the CAA, the 

Agency is authorized to identify and publish lists of acceptable and unacceptable substitutes.

EPA is changing the listing status of certain high-GWP 

alternatives used in aerosols, foams, commercial 

refrigeration, and motor vehicle air conditioning 

(MVAC). The final regulatory changes are summarized 

in Exhibit ES-1. To assist the Agency in satisfying its 

obligations under the Regulatory Flexibility Act (RFA) as 

amended by the Small Business Regulatory 

Enforcement Fairness Act (SBREFA), this report 

provides a screening analysis to assess the potential 

economic impacts on small entities associated with 

these changes. 

Industries potentially affected by these regulatory 

options were primarily identified by North American 

Industry Classification System (NAICS) codes. Small 

businesses in each affected industry were classified as 

such based on size definitions established by the Small 

Business Administration. Economic impacts on affected 

small businesses were calculated using a direct 

compliance cost method. The “sales test” was applied

by estimating annualized compliance costs for affected 

small businesses as a percentage of those businesses’ 

annual sales. 

This screening analysis finds that the rulemaking can be 

presumed to have no significant economic impact on a 

substantial number of small entities (SISNOSE). 

This screening analysis finds that this rulemaking can

be presumed to have no SISNOSE for the following 

reasons:

• About 500,000 small businesses could be 

subject to the rulemaking, although more than 

99% of small businesses subject to this 

rulemaking would be expected to experience 

zero compliance costs.

Exhibit ES-1: Summary of Regulatory Changes Analyzed

• List unacceptable HFC-134a for new MVACs starting in 

model year 2021; narrowed use limits apply for export 

to countries without servicing infrastructure through 

model year 2025.

• List unacceptable HFC-125 for aerosols in 2016, restrict 

use of HFC-134a to certain medical aerosols and 

technical aerosols in 2018 and one year from date of 

publication; restrict use of HFC-227ea and blends of 

HFC-227ea and HFC-134a to metered dose inhalers in 

aerosols one year from date of publication.

• List unacceptable certain HFCs and HFC blends in 1) rigid 

polyurethane appliance foam; 2) flexible polyurethane; 

3) rigid polyurethane: commercial refrigeration and 

sandwich; 4) rigid polyurethane and polyisocyanurate 

laminated boardstock; 5) rigid polyurethane slabstock; 

6) polyurethane integral skin; 7) polystyrene: extruded 

sheet; 8) polystyrene: extruded boardstock and billet; 9) 

polyolefin; 10) PU marine flotation foam and 11) 

phenolic foams in various years from 2017 to 2021 for 

specified end-uses, except for certain military, spaceand aeronautics- related applications. 

Commercial Refrigeration:

• List unacceptable 10 high-GWP HFCs/HFC blends for: 

new supermarket systems in 2017; new remote 

condensing units in 2018.

• List unacceptable 9 high-GWP HFC blends for: retrofitted 

supermarket systems and retrofitted remote condensing 

units one year from date of publication.

• List unacceptable 31 high-GWP HFCs/HFC blends for: 

new stand-alone medium-temperature units with a 

compressor capacity below 2,200 Btu/hr and not 

containing a flooded evaporator in 2019 and all other 

new stand-alone medium-temperature units in 2020.

• List unacceptable 28 high-GWP HFCs/HFC blends for

new stand-alone low-temperature units in 2020.

• List unacceptable R-404A and R-507A for retrofitted 

stand-alone retail food refrigeration equipment one year 

from date of publication.

• List unacceptable 20 high-GWP HFCs/HFC blends for 

new vending machines in 2019.

• List unacceptable R-404A and R-507A for retrofitted 

vending machines one year from date of publication.
Economic Impact Screening Analysis ii

• For about 120 small businesses that are expected to incur compliance costs as a result of this 

rulemaking, their costs are estimated to be less than 1% of annual sales.

• This analysis indicates that fewer than 80 of the nearly 500,000 affected small businesses—or <0.1%—

could incur costs in excess of 1% of annual sales, and that fewer than 60 small businesses could incur 

costs in excess of 3% of annual sales. 

Total annualized compliance costs across affected small businesses are estimated at approximately $4.5-

$7.7 million at a 7% discount rate, or $2.3-$4.7 million at a 3% discount rate. The aggregated economic 

impacts on small businesses and SISNOSE determination are summarized in Table ES-1. Affected small 

businesses are manufacturers of light-duty vehicles and trucks, consumer and some technical and medical 

aerosol products, domestic and commercial refrigerated appliances, polyurethane foams, polystyrene 

foams, polyolefin foams, polyisocyanurate foams, and self-contained retail food equipment and vending 

machines.

Table ES-1: Aggregated Economic Impacts on Small Businesses and SISNOSE Determination

a Represents small entities affected with an economic impact equal to or lesser than 1% but greater than 0%. 

b This category aggregates the number of small entities that would be expected to experience an impact of 1% to 3% with the number of 

small entities that would be expected to experience an impact of 3% or greater.

Economic Impact 

Number of Small Entities Subject to the 

Rule and Experiencing Given Economic 

Impact 

Percent of All Small Entities Subject to the 

Rule That are Experiencing Given 

Economic Impact

Less than 1% for all affected small 

entitiesa 120 0.02%

1% or more for one or more 

affected small entitiesb 74 0.01%

Greater than 3% for one or more 

affected small entities 57 0.01%
Economic Impact Screening Analysis iii

Table of Contents

Executive Summary .....................................................................................................................................................i

List of Tables..............................................................................................................................................................iv

1 Introduction .........................................................................................................................................................1

2 Summary of General Approach and Key Analytical Assumptions .......................................................................3

3 Motor Vehicle Air Conditioning ...........................................................................................................................7

3.1 Estimated Economic Impact on Affected Small Entities ...............................................................................9

4 Aerosols............................................................................................................................................................. 10

4.1 Small Entities Potentially Subject to the Rulemaking..................................................................................10

4.2 Estimated Economic Impact on Affected Small Entities .............................................................................12

5 Foam Sector...................................................................................................................................................... 14

5.1 Small Entities Potentially Subject to the Rulemaking..................................................................................14

5.1.1 Polystyrene Foam Product Manufacturing (NAICS code 326140)........................................................14

5.1.2 Household Refrigerator and Home Freezer Manufacturing (NAICS code 335222)..............................14

5.1.3 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration 

Equipment Manufacturing (NAICS code 333415)..............................................................................................15

5.1.4 Urethane and Other Foam Product (Except Polystyrene) Manufacturing (NAICS code 326150) ........16

5.1.5 Summary of Small Business Impacted in the Foam Sector...................................................................17

5.2 Estimated Economic Impact on Affected Small Entities .............................................................................18

6 Commercial Refrigeration................................................................................................................................. 23

6.1 Small Entities Potentially Subject to the Rulemaking..................................................................................23

6.1.1 Remote Retail Food Equipment (Supermarket Systems and Remote Condensing Units)....................23

6.1.2 Stand-Alone Retail Food Equipment.....................................................................................................25

6.1.3 Vending Machines.................................................................................................................................27

6.2 Estimated Economic Impact on Affected Small Entities .............................................................................28

6.2.1 Remote Retail Food Equipment (Supermarket Systems and Remote Condensing Units)....................28

6.2.2 Stand-Alone Retail Food Equipment.....................................................................................................29

6.2.3 Vending Machines.................................................................................................................................30

7 Conclusion......................................................................................................................................................... 31

7.1 Decision Regarding Significant Economic Impact on a Substantial Number of Small Entities....................31

7.2 Aggregated Small Business Impacts of Regulatory Changes.......................................................................31

References............................................................................................................................................................... 36
Economic Impact Screening Analysis iv

List of Tables

Table 1: Unacceptable Substitutes and Substitutes Subject to Use Restrictions.......................................................1

Table 2: General Steps and Approach for Small Business Impact Analyses...............................................................3

Table 3: Assumptions Concerning Types of HFCs in Use, Alternatives Modeled, and Types of Entities Affected.....6

Table 4: Estimated Number of Small Light-Duty Vehicle Manufacturers Affected a

..................................................8

Table 5: Estimated Economic Impact on Small Entities in the Automobile Manufacturing Industry (Sales Test).....9

Table 6: Estimated Number of Aerosol Small Businesses Affected by the Regulation ........................................... 11

Table 7: Estimated Economic Impact on Small Businesses (Sales Test).................................................................. 13

Table 8: NAICS Codes for Foams.............................................................................................................................. 14

Table 9: Estimated Number of Appliance Small Businesses Affected..................................................................... 15

Table 10. Estimated Number of Commercial Refrigeration Small Businesses Affected ......................................... 16

Table 11: Assumptions about the Percentage of Affected Entities in NAICS Code 326150.................................... 16

Table 12: Estimated Number of Small Businesses Manufacturing Non-Appliance PU Foam Types Affected ........ 17

Table 13: Estimated Number of Small Businesses Affected in the Foam Sector .................................................... 17

Table 14: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry (Sales Test).......... 19

Table 15: NAICS Codes for Affected Retail Food Industries.................................................................................... 23

Table 16: Estimated Number of Retail Food Small Businesses Affected by the Regulation* ................................. 25

Table 17: Estimated Number of Stand-Alone Retail Food Equipment Manufacturing Small Businesses Affected by 

the Regulation ......................................................................................................................................................... 27

Table 18: Estimated Number of Vending Machine Manufacturing Small Businesses Affected by the Regulation 28

Table 19: Estimated Economic Impact on Small Entities with Remote Retail Food Equipment (Sales Test).......... 29

Table 20: Estimated Economic Impact on Small Entities in the Stand-Alone Retail Food Category (Sales Test).... 30

Table 21: Estimated Economic Impact on Small Entities in the Vending Machine End-Use (Sales Test) ............... 30

Table 22: Summary of the Small Business Impact at 7% Discount Rate ................................................................. 31

Table 23: Summary of the Small Business Impact at 3% Discount Rate ................................................................. 33

Table 24: Aggregated Economic Impacts on Small Businesses............................................................................... 35
Economic Impact Screening Analysis 1

1 Introduction

The Significant New Alternatives Policy (SNAP) Program is the U.S. Environmental Protection Agency's (EPA) 

program to evaluate and regulate substitutes under the Clean Air Act (CAA). In CAA Section 612(c), the Agency is 

authorized to identify and publish lists of acceptable and unacceptable substitutes.

EPA is changing the listing status of certain high-GWP alternatives used in aerosols, foams, commercial 

refrigeration, and motor vehicle air conditioning (MVAC). The regulatory changes are shown in Table 1. To assist 

the Agency in satisfying its obligations under the Regulatory Flexibility Act (RFA) as amended by the Small 

Business Regulatory Enforcement Fairness Act (SBREFA),1 this report provides a screening analysis to assess the 

potential economic impacts on small entities associated with these changes. This analysis finds that the final 

rulemaking can be presumed to have no significant economic impact on a substantial number of small entities 

(SISNOSE). 

Table 1: Unacceptable Substitutes and Substitutes Subject to Use Restrictions

Sector Description of Regulatory Change

MVACs List unacceptable HFC-134a for new MVACs starting in model year 2021; narrowed use limits 

apply for export to countries without servicing infrastructure through model year 2025.

Aerosols List unacceptable HFC-125 for aerosols in 2016, restrict use of HFC-134a to certain medical 

aerosols and technical aerosols in 2018 and one year from date of publication; restrict use of 

HFC-227ea and blends to metered dose inhalers in aerosols one year from date of publication.

Foams List unacceptable HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof, Formacel TI, and 

Formacel Z-6 in rigid polyurethane (PU) appliance foam, rigid PU commercial refrigeration and 

sandwich panels, polyolefin, and PU marine floatation foam in 2020.

List unacceptable HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof; Formacel TI, and 

Formacel Z-6 in rigid PU slabstock and other in 2019.

List unacceptable HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof; in rigid PU and 

polyisocyanurate laminated boardstock and in flexible PU in 2017.

List unacceptable HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof; Formacel TI, and 

Formacel Z-6 in integral skin PU and in polystyrene extruded sheet in 2017.

List unacceptable HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof; Formacel B, 

Formacel TI, and Formacel Z-6 in polystyrene extruded boardstock and billet (XPS) in 2021.

List unacceptable HFC-143a, HFC-134a, HFC-245fa, HFC-365mfc, and blends thereof; in 

phenolic insulation board and bunstock in 2017.

Commercial 

Refrigeration

Commercial 

Refrigeration

List unacceptable 10 high-GWP HFCs/HFC blends (R-404A, R-407B, R-421B, R-422A, R-422C, R422D, R-428A, R-434A, R-507A, and HFC-227ea) for new supermarket systems in 2017.

List unacceptable 9 high-GWP HFC blends (R-404A, R-407B, R-421B, R-422A, R-422C, R-422D, 

R-428A, R-434A, and R-507A,) for retrofitted supermarket systems one year from date of 

publication.

List unacceptable 10 high-GWP HFCs/HFC blends (R-404A, R-407B, R-421B, R-422A, R-422C, R422D, R-428A, R-434A, R-507A, and HFC-227ea) for new remote condensing units in 2018.

 1 For all rules subject to the RFA, a screening analysis is required to first determine what, if any, impact a rulemaking may 

have on small entities. For rules that pose “a significant economic impact on a substantial number of small entities,” an 

initial and final regulatory flexibility analysis is further required.
Economic Impact Screening Analysis 2

Sector Description of Regulatory Change

List unacceptable 9 high-GWP HFC blends (R-404A, R-407B, R-421B, R-422A, R-422C, R-422D, 

R-428A, R-434A, and R-507A, and R-227ea) for retrofitted remote condensing units one year 

from date of publication.

List unacceptable 20 high-GWP HFCs/HFC blends (FOR12A, FOR12B, HFC-134a, KDD6, R125/290/134a/600a (55/1/42.5/1.5), R-404A, R-407C, R-410A, R-410B, R-417A, R-421A, R422B, R-422C, R-422D, R-426A, R-437A, R-438A, R-507A, RS-24 (2002 formulation), and SP34E) 

for new vending machines in 2019.

List unacceptable R-404A and R-507A for retrofitted vending machines one year from date of 

publication.

List unacceptable 31 high-GWP HFCs/HFC blends (FOR12A, FOR12B, HFC-134a, HFC-227ea, 

KDD6, R-125/290/134a/600a (55/1/42.5/1.5), R-404A, R-407A, R-407B, R-407C, R-407F, R410A, R-410B, R-417A, R-421A, R-421B, R-422A, R-422B, R-422C, R-422D, R-424A, R-426A, R428A, R-434A, R-437A, R-438A, R-507A, RS-24 (2002 formulation), RS-44 (2003 formulation), 

SP34E, and THR-03) for new stand-alone medium-temperature units with a compressor 

capacity below 2,200 Btu/hr and not containing a flooded evaporator in 2019.

List unacceptable 31 high-GWP HFCs/HFC blends (FOR12A, FOR12B, HFC-134a, HFC-227ea, 

KDD6, R-125/290/134a/600a (55/1/42.5/1.5), R-404A, R-407A, R-407B, R-407C, R-407F, R410A, R-410B, R-417A, R-421A, R-421B, R-422A, R-422B, R-422C, R-422D, R-424A, R-426A, R428A, R-434A, R-437A, R-438A, R-507A, RS-24 (2002 formulation), RS-44 (2003 formulation), 

SP34E, and THR-03) for new stand-alone medium-temperature units with a compressor 

capacity equal to or greater than 2,200 Btu/hr and all new stand-alone medium-temperature 

units not containing a flooded evaporator in 2020.

List unacceptable 24 high-GWP HFCs/HFC blends (HFC-227ea, KDD6, R-125/290/134a/600a 

(55/1/42.5/1.5), R-404A, R-407A, R-407B, R-407C, R-407F, R-410A, R-410B, R-417A, R-421A, R421B, R-422A, R-422B, R-422C, R-422D, R-424A, R-428A, R-434A, R-437A, R-438A, R-507A, and 

RS-44 (2003 formulation)) for new stand-alone low-temperature units in 2020. 

List unacceptable R-404A and R-507A for retrofitted stand-alone retail food refrigeration 

equipment one year from date of publication.

The remainder of this report is organized as follows:

• Chapter 2 presents the general approach and assumptions used to ensure consistency across the 

analysis, and also summarizes key assumptions made for each of the four affected industries.

• Chapters 3, 4, 5, and 6 identify the small entities potentially affected by the regulatory changes and 

then estimate the economic impact on those affected entities, for the MVAC, aerosols, foams, and 

commercial refrigeration industries, respectively.

• Chapter 7 summarizes the aggregate small business impacts of the regulatory changes, along with a 

recommendation for certification based on a decision matrix for determining SISNOSE.
Economic Impact Screening Analysis 3

2 Summary of General Approach and Key Analytical Assumptions

To ensure consistency across the analysis, standard analytical steps and approaches were followed for each of 

the affected industries, as shown in Table 2.

Table 2: General Steps and Approach for Small Business Impact Analyses

Step Approach

Identify the types of 

industries expected to 

be directly impacted by 

the regulatory changes

For all sectors, potentially affected industries were identified by North American 

Industry Classification System (NAICS) codes. Economic data about each affected 

industry—including number of firms and establishments2 by employment or 

receipts size—was obtained from the U.S. Census Bureau’s Industry Statistics 

Portal (http://www.census.gov/econ/isp/) and includes data from the 2007 

Economic Census. The economic census profiles U.S. national and local economies 

every five years, and the 2007 data is the latest available at the time of this 

writing.

By change the listing status of certain high-GWP alternatives used in aerosols, 

foams, commercial refrigeration, and MVAC, this rulemaking potentially directly 

impacts small entities associated with these changes. Other entities may 

experience indirect effects as a result of market changes influenced by the rule, 

but these are not to be considered in this analysis. See Cement Kiln Recycling 

Coalition v. EPA, 255 F.3d 855, 869 (D.C. Cir. 2001) (the D.C. Circuit “has 

consistently rejected the contention that the RFA applies to small businesses 

indirectly affected by the regulation of other entities.”). 

This rule’s provisions do not create enforceable requirements for refrigeration and 

air conditioning technicians, but they would indirectly affect technicians servicing 

MVAC systems, retail food refrigeration equipment, and vending machines where 

the technician, rather than the refrigeration or AC equipment owner, purchases 

servicing equipment for different refrigerants. EPA expects these indirect impacts 

on technicians are minimal, because the transitions to different refrigerants 

required by this rule are already occurring due to other regulations (e.g., light duty 

vehicle GHG rule) and corporate social responsibility initiatives (e.g., Consumer 

Goods Forum pledge concerning HFC refrigerants), and because many of the stillacceptable alternatives are already used for these refrigeration or air conditioning 

equipment types. Further, most acceptable HFC refrigerant blends can be 

recovered and serviced using equipment that service technicians already own.

Determine what 

proportion of impacted 

industries are small 

businesses

For all industries, small businesses were identified using the U.S. Small Business 

Administration’s table of small business size standards matched to NAICS codes.

The version employed for this analysis became effective July 22, 2013.

In several industries, the small business threshold was defined as a firm with fewer 

than a certain number of employees, but Census data was only available by 

 2 The U.S. Census Bureau defines an establishment as a single physical location where business is conducted or where 

services or industrial operations are performed; a firm is a business organization consisting of one or more domestic 

establishments in the same state and industry that were specified under common ownership or control. The firm and the 

establishment are the same for single-establishment firms. For each multi-establishment firm, establishments in the same 

industry within a state are counted as one firm, and the firm employment and annual payroll are summed from the 

associated establishments.
Economic Impact Screening Analysis 4

Step Approach

establishment size. In these cases, the threshold was applied to establishment 

sizes. This is considered a conservative proxy, as the number of establishments is 

typically greater than, and can be no lower than, the number of firms by definition.

Determine what 

proportion of small 

businesses could be 

directly impacted

This determination was made on an individual sector and end-use basis, taking 

into consideration whether the HFCs affected by this rulemaking are still—or were 

ever—known to be in use, and what proportion of the market the affected HFCs

are expected to represent at the time that the regulations would come into effect. 

For the purposes of 

quantifying compliance 

costs, make 

assumptions about the 

alternative refrigerants, 

foam blowing agents, 

and aerosols that would 

likely be used in place of 

the HFCs affected by 

this rulemaking

For the purposes of quantifying compliance costs, this analysis has made some 

assumptions regarding which alternatives are implemented in the transition away 

from the HFCs affected by this rulemaking. These assumptions are not intended to 

represent the range of available alternatives, or to imply that other alternatives 

are not available. For a fuller accounting of substitutes, please refer to the lists of 

acceptable substitutes as published under EPA’s SNAP Program

(www.epa.gov/ozone/snap/). For the purposes of this analysis, the assumption 

about the alternative modeled was made on an individual sector or end-use basis, 

relying primarily on assumptions in EPA’s Vintaging Model (EPA 2012), EPA’s 

report on Global Mitigation of Non-CO2 Greenhouse Gases: 2010-2030 (EPA 2013), 

and lists of acceptable substitutes under SNAP.

Quantify the economic 

impact on small 

businesses

This analysis uses the direct compliance cost method to quantify impacts. Direct 

compliance costs include capital, operating, maintenance, and other direct 

compliance costs associated with switching to alternatives as a result of the 

regulatory changes. These costs were annualized to calculate a metric that can be 

compared with annual sales in the next step of the analysis. 3

Consistent with EPA’s Guidelines for Preparing Economic Analysis (2010), capital 

costs were annualized over the expected lifetime of the capital equipment using 

the opportunity cost of capital (discount rate). This screening analysis uses a 3 

percent and 7 percent discount rate, in line with OMB Circular A-94, which 

provides guidelines for discount rates in benefit-cost analyses of federal programs. 

Where applicable, annual non-capital compliance costs—such as ongoing 

operating and maintenance costs—are added to the annualized capital costs to 

yield a total annualized cost of compliance.

All costs and savings values are expressed in constant year 2013 U.S. dollars, 

adjusted using the implicit GDP price deflator published by the U.S. Bureau of 

Economic Analysis.

When available and appropriate, cost assumptions identified in EPA’s report on 

Global Mitigation of Non-CO2 Greenhouse Gases: 2010-2030 (EPA 2013) and 

information from comments or other industry input were employed. For subsectors for which these cost data were not estimated, other available sources were 

sought, as described in the individual sector chapters. It should be noted that all 

cost information reflects the current cost of compliance, and thus likely represents 

a higher-end estimate of the cost of compliance in the years in which the 

 3 In some industries, an upfront capital expenditure is involved with complying with the regulatory actions. As an example, 

some manufacturers of refrigerated vending machines may purchase new equipment costing $100,000 to switch from HFCs 

to carbon dioxide. Annualizing this upfront cost provides a metric that can be compared with annual revenues, and reflects 

an expectation that such upfront capital expenditures might be financed.
Economic Impact Screening Analysis 5

Step Approach

regulatory changes would become effective (i.e., 2016 and beyond). For example, 

the price of alternative refrigerants and blowing agents would likely be expected 

to decrease over time.

Perform the sales test For this analysis, the “sales test” was applied, which calculates annualized 

compliance costs as a percentage of annual sales. For industries for which annual 

sales data was not available through the Economic Census, annual receipts or 

annual value of shipments4 was utilized as a reasonable proxy.

For the purposes of the sales test, annualized compliance costs were calculated 

using a 7% discount rate.

Applying this sales test resulted in several possible outcomes apart from a positive 

percentage (such as 1% or 3%). In some cases, no small entities would be expected 

to be impacted by the rulemaking in a given NAICS code. In these instances, the 

result is shown as Not Applicable (NA). In other cases, the annualized cost of 

compliance was expected to be zero because the cost of using alternative 

refrigerants or blowing agents was negligible (i.e. zero dollars). In these instances, 

the result is shown as 0%. In some other cases, the annualized cost was found to 

be negative (i.e. cost-saving) because the annual cost savings associated with a 

lower-cost alternative outweighed the annualized value of the upfront capital 

expenditure. In these instances, the result is shown as <0%.

Chapters 3, 4, 5, and 6 that follow further describe the specific data and assumptions that enable the estimation 

of the economic impact on small businesses in the industries potentially affected by this rulemaking. Table 3

summarizes some of these key assumptions by industry and end-use —including which HFCs are currently 

assumed to be in use in each end-use, and to which alternatives each end-use is assumed to transition—for the 

purposes of estimating costs. Table 3 also summarizes the types of entities expected to be directly impacted. 

 4 Total value of shipments includes the received or receivable net selling values of all products shipped (exclusive of freight

and taxes).
Economic Impact Screening Analysis 6

Table 3: Assumptions Concerning Types of HFCs in Use, Alternatives Modeled, and Types of Entities Affected

Sector End Use Primary HFC(s) Assumed to 

be Currently in Use

Alternatives Modeled 

for the Cost Analysis*

Types of Entities Directly 

Affected

MVAC Motor Vehicle Air Conditioning HFC-134a HFO-1234yf Automobile manufacturers 

Aerosols Propellants HFC-134a in tire inflators 

and products for functional 

testing of smoke detectors; 

majority of remaining HFC 

use is in excepted uses; 

Hydrocarbons (HC) and 

HFO-1234ze

Manufacturers of aerosol 

products, including consumer, 

technical, and medical aerosols

Foam Rigid PU: (household) appliance HFC-245fa; HFC-134a HC and Solstice LBA Manufacturers of foam products, 

household refrigerated 

appliances, commercial 

refrigerated appliances, 

furniture, and cars 

Flexible PU: slabstock and moulded None No transition

Rigid PU: commercial refrigeration HFC-245fa; HFC-134a HC and Solstice LBA

Rigid PU: sandwich HFC-245fa; HFC-134a HC

Rigid PU and polyisocyanurate laminated boardstock HFC-245fa HC

Rigid PU: slabstock None No transition

Rigid PU: marine flotation foam HFC-245fa; HFC-134a HC & HFO/H2O Blends

PU integral skin HFC-134a CO2

Polystyrene: extruded sheet HFC-152a No transition

Polystyrene: extruded boardstock and billet foams HFC-134a HC & HFO

Polyolefin None No transition

Phenolic None No transition

Commercial

Refrigeration

Retail Food Refrigeration 

(Supermarket Systems and 

Remote Condensing Units) 

(New) R-404A; R-507A R-407A Supermarkets, warehouse clubs/

superstores, convenience stores, 

drug stores, hotels, cafeterias, 

specialty food stores, 

restaurants, and bars

(Retrofit) R-404A; R-507A; R-422D R-407A

Retail Food Refrigeration 

(Stand-Alone Units) 

(New) R-404A; HFC-134a HC, R-450A Manufacturers of stand-alone 

commercial 

refrigerators/freezers 

(Retrofit) None None None 

Vending Machines (New) R-404A; HFC-134a CO2 Manufacturers of vending 

machines

(Retrofit) None None None 

* As noted previously, for the purposes of quantifying compliance costs, this analysis has made some assumptions regarding which alternatives to model in the transition away from the 

affected HFCs. These assumptions are not intended to represent the entirety of available alternatives, or to imply that other alternatives are not available. For a fuller accounting of 

substitutes, please refer to the lists of acceptable substitutes as published under EPA’s SNAP Program (www.epa.gov/ozone/snap/).
Economic Impact Screening Analysis 7

3 Motor Vehicle Air Conditioning

The EPA has previously examined when automobile manufacturers may be able to transition their fleets to 

lower GWP refrigerants in support of its rules to extend the greenhouse gas and fuel economy standards for 

model year (MY) 2017-2025 light-duty vehicles, herein referred to as the Light-Duty Greenhouse Gas (LD GHG) 

Rule. 77 FR 62624, 62807-810 (October 15, 2012); see also 75 FR 25325, 25431-32 (May 7, 2010) (discussing the 

same issue for MY 2012-2016 light-duty vehicles). 

In support of the LD GHG rule, EPA projected that the industry will make the full transition to lower-GWP 

refrigerants over the period of time spanning between MY 2017 and MY 2021, and the level of the standard in 

each of these model years reflects a projected 20 percent increase in substitution in each model year and 

complete transition by MY 2021 (77 FR 62720/2-3). In support of the assumption of this multi-year transition, 

the LD GHG rule for MYs 2017-2025 includes an extensive discussion of the refrigerant substitute availability and

technical feasibility of transitioning the fleet (77 FR 62720; 62807-810). Factors contributing the transition to 

low-GWP refrigerants in MVAC are discussed in the preamble to the final rule as well as in the LD GHG rule and 

its supporting documents. Because the analysis supporting the LD GHG rulemaking accounted for impacts of a 

full transition by MY 2021 for domestic sales, this analysis considers only export vehicles to estimate costs that 

would be incurred as a result of this rulemaking.

Light-duty vehicle and truck manufacturers purchase MVAC system components from a third party and then 

assemble and install the MVAC systems in-house. As such, this analysis assumes that some light-duty vehicle and 

truck manufacturers directly incur incremental compliance costs associated with modifying MVAC systems to 

accommodate an alternative refrigerant to HFC-134a (i.e., slightly different components and more costly 

refrigerant for first-fill) for a portion of their export market. Other potentially affected industries were 

considered in the preparation of this analysis, including MVAC and other motor vehicle parts manufacturing 

industries, as well as the general automotive repair industry. These industries were either determined to not 

experience direct impacts or assumed to pass on direct costs to automobile manufacturers, as described in 

Exhibit 1 below. 

The light-duty vehicle and truck manufacturing industries are matched to NAICS code 336111, automobile 

manufacturing, and NAICS code 336112, light truck and utility vehicle manufacturing.

5 The small business 

threshold for these industries is defined as a firm with less than 1,000 employees. Applying this definition yields 

an estimate of 198 small businesses in these industries.

6 The total number of companies in these industries—

including those not characterized as small businesses—is 241. Out of a total of twenty-three automobile 

manufacturers selling light-duty vehicles in the United States, ten of those twenty-three represent 85% of the 

light-duty vehicles sold in the United States in MY 2013.7

 5 This industry comprises establishments primarily engaged in manufacturing light trucks and utility vehicles, including lightduty vans, pick-up trucks, minivans, and sport utility vehicles. 6 Because Census data disaggregated by employment size are only available by establishment size, the definition was 

conservatively applied as establishments with less than 1,000 employees. The total number of small businesses (firms) 

potentially impacted by the rulemaking was then estimated by applying a scaling ratio between total firms and 

establishments for this industry (i.e., 174 firms to 188 establishments). 7 EPA-HQ-OAR-2014-0198-0113 and EPA-HQ-OAR-2014-0198-0207
Economic Impact Screening Analysis 8

Although HFC-134a has been the predominant refrigerant used in MVAC systems in the United States since the 

1990s, some manufacturers have recently begun selling cars with HFO-1234yf MVAC systems in the United 

States, including for instance General Motors’ sales of the Cadillac XTS. While these sales currently represent a 

very small percentage of the overall market, further transition of MVACs to alternative refrigerants is expected 

in response to the joint rulemakings by EPA and the National Highway Traffic Safety Administration (NHTSA) to 

reduce GHG emissions and improve fuel economy of light-duty vehicles.8 Adopting MVAC systems with lowGWP refrigerants is one of many strategies to reduce GHG emissions in this sector. The technical support 

document for EPA’s LD GHG final rule estimates that for MY 2017, 20% of the U.S. market will have adopted

alternative MVAC systems, and that in each subsequent year the penetration will increase an additional 20%, 

reaching 100% by MY 2021 (EPA/NHTSA 2012). This analysis adopts these assumptions, with the caveat that 

these penetrations are applied only to a given manufacturer’s vehicle production for domestic sales. This 

analysis conservatively assumes that all manufacturers would continue to produce light-duty vehicles and trucks 

containing HFC-134a for export, but that none of the exporting manufacturers are small businesses.

Table 4 below presents the number of small businesses under the applicable NAICS codes estimated to be 

potentially directly affected by the regulatory changes. EPA assumes that none of the companies that are

manufacturing new light-duty vehicles and trucks for export are small businesses.

Table 4: Estimated Number of Small Light-Duty Vehicle Manufacturers Affected a

Estimated Number of Small Businesses 

Affected

NAICS 336111

Automobile 

Manufacturing

NAICS 336112 Light Truck 

and Utility Vehicle 

Manufacturing

Total

All Production 0 b 0 b 0

Production for Export Only 155b 43b 198

Total 155b 43b 198

Total Number of Small Businesses 155b 43b 198 a Based on analysis using Census Bureau (2007). The total number of companies in these industries—including those not characterized as 

small businesses—is 241. b 0% of small businesses assumed to be affected. 

 8 The EPA/NHTSA Final Rulemaking to Establish 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions 

and Corporate Average Fuel Economy Standards was issued August 28, 2012.
Economic Impact Screening Analysis 9

3.1 Estimated Economic Impact on Affected Small Entities

This section summarizes the annual compliance costs for light-duty vehicle and truck manufacturers, and 

provides a comparison of those costs to average annual sales per firm. For the purposes of this analysis, 

compliance costs were estimated based on the assumption that HFC-134a MVACs would be replaced by HFO1234yf, although other SNAP-approved alternatives also exist. 

Light-duty vehicle and truck manufacturers purchase either MVAC system components or fully-assembled 

MVACs systems which they install in-house. Costs to manufacturers were estimated based on per-system costs 

of alternative systems, as identified in EPA’s report on Global Mitigation of Non-CO2 Greenhouse Gases: 2010-

2030 (EPA 2013), and converted to 2013 dollars. The incremental per-system costs of assembling an alternative 

MVAC system compared to an HFC-134a system is assumed to be about $62/unit. These incremental costs are 

less than 1% relative to the total direct manufacturing cost for a light-duty vehicle or truck.

Because no small businesses are expected to be manufacturing vehicles for export, the annual compliance cost 

as a percentage of average sales per small business (i.e., the sales test) is zero, as shown in Table 6 below.

Table 5: Estimated Economic Impact on Small Entities in the Automobile Manufacturing Industry (Sales Test)

NAICS Industry Name Annual Compliance Cost as a Percentage of 

Average Sales per Small Business Establishment

336111 Automobile manufacturing 0%

336112 Light truck and utility vehicle manufacturing 0%

Exhibit 1: Related Industries Not Directly Affected by the Rulemaking

Other Motor Vehicle Parts Manufacturing (NAICS 336390)—this industry will need to manufacture certain 

modified MVAC system components to develop alternative designs that can deliver comparable performance 

to HFC-134a systems and meet EPA requirements (e.g., modified suction lines, cooling modules, etc.). While 

there may be a minimal cost associated with these modifications, for the purpose of this analysis, any such 

costs are assumed to be passed on to automobile manufacturers. Further, many of these businesses are 

expected to transition to the manufacture of such modified components under the baseline, given current 

industry trends and other regulatory incentives and requirements. 

Automotive Repair Industry (NAICS 811111)—this industry is required to use recovery equipment under 

Section 609 of the Clean Air Act, regardless of the refrigerant. Although the transition to new refrigerant(s) 

may facilitate the purchase of new refrigerant recovery devices to accommodate those new refrigerants—the 

associated costs are considered to be required pursuant to Section 609 rather than resulting from this final 

rule.
Economic Impact Screening Analysis 10

4 Aerosols

The regulatory changes are expected to affect all aerosol products, with some exceptions for certain medical 

and technical aerosols. Manufacturers of aerosol products containing propellants listed as unacceptable or 

those that do not meet the criteria for the exceptions are required to reformulate or redesign products to use 

alternative propellants or alternative delivery systems by the dates specified in the final rule.

4.1 Small Entities Potentially Subject to the Rulemaking

The U.S. aerosol industry is comprised of the following three product categories:

• Consumer Aerosols – A wide variety of personal care products using aerosols, including cosmetics, 

hairspray, body sprays, and deodorants are covered by this category along with a wide variety of other 

products such as: tire inflators and other automotive products (e.g., auto lubricants, brake cleaners); noise 

horns and safety horns; animal repellants; spray paint; spray adhesive with various applications; cleaning 

products; eyeglass and keyboard dusters; room fresheners; food dispensing products; freeze sprays for 

removal of chewing gum, pet excrement, and other wastes; and novelty aerosols (e.g., artificial snow, plastic 

string, noise makers, and cork poppers).

• Technical Aerosols – This grouping represents highly specialized products for certain commercial and 

industrial applications that are not for personal use, which generally include (but are not limited to) those 

products excepted from the Clean Air Act Section 610 nonessential products bans (subpart C of 40 CFR part 

82). Products include: cleaners (e.g., electronic contact cleaners, flux removers, degreasers); pesticides (e.g., 

certain wasp and hornet sprays, aircraft insecticides); mold release agents; certain dusters (e.g., for 

photographic negatives, semiconductor chip manufacture, specimens for observation under electron 

microscope); and spinnerette lubricant/cleaning sprays. Other miscellaneous products such as document 

preservation sprays and products for the functional and sensitivity testing of smoke detectors are also 

considered in this category.

• Medical Aerosols – This grouping includes topical anesthetic sprays, products for removing bandage 

adhesives from skin, and wound care sprays (among excepted products) and liquid bandages, wart removal 

sprays, antifungals, and calamine sprays, among the products that would be restricted from using HFC-134a 

and HFC-227ea. Aerosol propellants are also used in metered dose inhalers (MDIs); however, use of HFC134a and HFC-227ea and blends of these two HFCs in MDIs is excepted from the regulatory restriction. 

The industries directly affected by the regulatory changes were identified using NAICS codes, as shown in Table 

6 below. However, the broader industries represented by these NAICS codes may also manufacture a majority of 

products which are not aerosols, such as creams, polishes, lotions, and other chemicals and equipment. In 

addition to manufacturing many non-aerosol products, these manufacturers are also likely to produce aerosol 

products that are already using non-HFC technologies. 

In fact, while this rulemaking lists HFC-125 as unacceptable and restricts HFC-227ea to metered dose inhalers 

and HFC-134a to certain technical and medical aerosols, HFC-125 and HFC-227ea9 are not currently used as 

aerosol propellants. IPCC (2011) estimates that in developed countries, more than 98% of non-medical aerosols 

 9 HFC-227ea is used as a propellant in MDIs, which is excepted.
Economic Impact Screening Analysis 11

now use non-ozone-depleting, low-GWP propellants (e.g., hydrocarbons, dimethyl ether, CO2, or nitrogen). As 

such, this rulemaking would serve to avoid future use of these HFC propellants.

With regard to HFC-134a, primarily technical aerosol products continue to use this chemical as propellants for 

specific purposes (e.g., specialized product cleaners, aircraft pesticides) due to performance or safety limitations 

(e.g., flammability). The following technical aerosol applications are excepted from restrictions on HFC-134a. 

This list also incorporates those applications that were previously excepted from the nonessential products 

regulations (EPA 2010):

• Certain medical devices including metered dose inhalers;

• Lubricants, coatings, or cleaning fluids for aircraft maintenance;

• Lubricants, coatings, or cleaning fluids for electrical, electronic or photographic equipment;

• Mold release agents;

• Spinnerette lubricant/cleaning sprays

• Document preservation sprays; 

• Pesticides for use near electrical wires or in aircraft; and

• Products for the sensitivity testing of smoke detectors.

Among consumer products, tire inflators are one significant remaining use of HFC-134a propellant. Some brands 

of tire inflators in the United States, and all those in Europe, use hydrocarbons as the propellant. Products for 

the functional and sensitivity testing of smoke detectors are another remaining use of HFC-134a propellant; 

however, these products are considered to be part of a niche market. Both aerosol tire inflators and products 

for the functional testing of smoke detectors are subject to the regulatory prohibition on use of HFC-134a as a 

propellant.

Table 6 below presents the estimated number of entities expected to be directly affected. A significant portion 

of the aerosol product manufacturing industry has already transitioned out of the HFCs for regulation or is 

excepted. However, two tire inflator manufacturers10 and three smoke detector tester manufacturers11 using

HFC-134a propellant are considered to be small businesses and are expected to be affected by this rulemaking.

Table 6: Estimated Number of Aerosol Small Businesses Affected by the Regulation

NAICS 

Code Industry Name Relevant Aerosol Products Included

Small Business 

Threshold 

(Number of 

Employees)

Percent of 

Industry 

Assumed to 

Use HFCs

Affected by 

Regulatory 

Changes

Estimated 

Number of 

Small 

Businesses

Affected

325620 Perfumes, makeups and 

other toiletries

Aerosol hairsprays, Cologne and 

perfume manufacturing, Deodorants 500 0% 0

 10 The two manufacturers, Radiator Specialty Company and Warren Distribution, Inc. were determined to be small 

businesses based on employee data available from Dun and Bradstreet (2014) and the small business threshold for NAICS 

code 325998 of 500 employees. Other producers of tire sealants containing HFC-134a (e.g., ITW Global Brands, Valvoline 

Co.) exceed the small business size threshold. 

11 The three manufacturers, SDi/detectortesters, CRC Industries, and HIS Fire & Safety Group LLC were determined to be 

small businesses based on discussion with EPA, available employee data, and the small business threshold for NAICS code 

325998 of 500 employees. Another producer of products for functional testing of smoke detectors containing HFC-134a 

(i.e., Interlogix) exceeds the small business size threshold.
Economic Impact Screening Analysis 12

NAICS 

Code Industry Name Relevant Aerosol Products Included

Small Business 

Threshold 

(Number of 

Employees)

Percent of 

Industry 

Assumed to 

Use HFCs

Affected by 

Regulatory 

Changes

Estimated 

Number of 

Small 

Businesses

Affected

325612 Polishes and other 

sanitation goods

Air fresheners, Household cleaning 

products, Specialized dusters, 

Degreasers (household), Deodorants 

(non-personal), Aircraft cleaner

500 E/0%a 0

325520 Adhesive manufacturing Household maintenance adhesives, 

Caulking, Sealants 500 0% 0

324191 Petroleum lubricating oil 

and grease manufacturing Auto products, Lubricants 500 E/0%a 0

325510 Paint and coating 

manufacturing

Dispersions, Paint, Enamel paint, Latex 

paint, Coatings 500 0% 0

325998

All other miscellaneous 

chemical product and 

preparation manufacturing

Degreasers, Defluxers, Freeze sprays, 

Mold release agents, Wasp and 

hornet sprayb, Spinnerette lubricant 

sprays, Document preservation 

sprays, Tire inflators, Products for 

functional testing of smoke detectors

500 E/0%c 5

325412 Pharmaceutical 

preparation manufacturing

Freeze sprays (wart treatment), 

Calamine spray

750 0% 0

325199 All other basic organic 

chemical manufacturing Anti-fungal sprays 1,000 0% 0

339113 Surgical appliance and

supplies manufacturing Liquid bandages 500 0% 0

Note: Bolded items have been identified as products that are likely to use HFC-134a, but are excepted from the regulatory restrictions; “E” represents entities that are found to be excepted from the regulatory restriction. a Some products in this category are excepted from the regulatory restriction. For restricted products, it is expected that all manufacturers 

would already have transitioned out of the HFCs in the regulation, thus 0% are expected to be affected. b Only wasp and hornet spray for use near power lines would qualify for an exception, not household sprays.

c The majority of the products in this category are excepted from the regulatory restriction. For the restricted products, it is expected that 

all manufacturers would already have transitioned out of the HFCs in the regulation. However, aerosol tire inflators containing HFC-134a 

would be subject to the regulatory changes. Two manufacturers that produce tire inflators and three manufacturers of products for 

functional testing of smoke detectors with HFC-134a propellant were identified as small businesses.

4.2 Estimated Economic Impact on Affected Small Entities

Table 7 presents a summary of the annualized compliance costs as a percentage of average annual sales for the 

small businesses affected. As shown, there is no economic impact for small businesses in most covered 

industries, due to the already widespread use of non-HFC-134a aerosol propellants, and exceptions for HFC134a and HFC-227ea in MDIs, and HFC-134a in technical aerosols for specialized uses. In addition, small 

businesses manufacturing tire inflators using HFC-134a propellant are expected to experience cost savings on an 

annualized basis,12 due to the lower cost of hydrocarbon-based propellant. The specific assumptions used to 

calculate annualized compliance costs for tire inflator manufacturers are presented after the table.

 12 This screening assessment assumes facilities produce approximately 1 million aerosol cans annually; however, facilities 

that manufacture as few as 200,000 aerosol cans per year (assuming lower end of up-front costs) can expect to see cost 

savings as a result of compliance with the regulatory changes. If a facility incurs conversion costs on the higher end of the

range, the facility would have to manufacture 670,000 aerosol cans per year to see cost savings as a result of regulatory 

compliance.
Economic Impact Screening Analysis 13

Table 7: Estimated Economic Impact on Small Businesses (Sales Test)

NAICS Industry Name

Annual Compliance Cost as a 

Percentage of Annual Sales per 

Small Business

325620 Perfumes, makeups and other toiletries NA

325612 Polishes and other sanitation goods NA

325520 Adhesive manufacturing NA

324191 Petroleum lubricating oil and grease manufacturing NA

325510 Paint and coating manufacturing NA

325998 All other miscellaneous chemical product and preparation manufacturing <0%*-2.6%

325412 Pharmaceutical preparation manufacturing NA

325199 All other basic organic chemical manufacturing NA

339113 Surgical appliance and supplies manufacturing NA

NA indicates that no small entities are expected to be subject to this rulemaking, and thus compliance costs are zero.

* On an annualized basis, tire inflator manufacturer small businesses are expected to experience some cost savings as a result of 

compliance.

Aerosol Tire Inflators-- For the purposes of quantifying compliance costs for this analysis, it was assumed that 

tire inflator manufacturers still using HFC-134a would transition to a hydrocarbon-based propellant (usually a 

mixture of propane, butane, and isobutane). One-time capital costs for conversion were assumed to range 

between $342,000 and $1.3 million in 2013 dollars, which covers costs to convert a facility to accommodate a 

flammable aerosol propellant (e.g., installing sensors and storage capacity), test and certify equipment to 

Underwriter’s Laboratory (UL) standards, and the potential need to relocate facilities to regions where 

hydrocarbon use is considered safe (EPA 2013). These upfront costs are offset by annual savings of about 

$260,000 per facility associated with a lower-cost hydrocarbon-based propellant. Incremental annual operating 

costs were assumed to be zero, based on the expectation that companies already have fire insurance and other 

fire safety precautions intact (EPA 2013). All costs and savings were developed based on a model facility 

assumed to manufacture 1 million consumer aerosol cans 13 per year and were annualized assuming a lifetime of 

10 years. 

Aerosol Products for Functional and Sensitivity Testing of Smoke Detectors-- For the purposes of quantifying 

compliance costs for this analysis, it was assumed that manufacturers of products for functional and sensitivity 

testing of smoke detectors still using HFC-134a would transition to HFO-1234ze, as the product requires a nonflammable propellant. One-time capital costs for conversion were assumed to be between $105,000 and 

$530,000 in 2013 dollars, depending on the need for bulk storage (EPA 2013). Incremental annual operating 

costs were assumed to be $1,250 per facility associated with the higher cost of HFO-1234ze than other HFC 

propellants (i.e., HFC-134a) (EPA 2013). All costs were developed based on a model facility assumed to 

manufacture 10,000 smoke detector tester aerosol cans14 per year and were annualized assuming an equipment 

lifetime of 10 years. 

 13 Each aerosol can is assumed to contain an HFC-134a aerosol propellant charge of two ounces (EPA 2013). 14 Ibid. 
Economic Impact Screening Analysis 14

5 Foam Sector

The regulatory changes are expected to affect manufacturers of domestic and commercial refrigerated 

appliances, polyurethane foam products, polystyrene foam products, polyolefin foams, polyisocyanurate foams, 

and phenolic foams. 

5.1 Small Entities Potentially Subject to the Rulemaking

The industries directly affected by the regulatory changes in the foam sector were identified using NAICS codes, 

as shown in Table 8. Foam end-uses included under each of the broader industries are also shown. The 

remaining sections analyze the number of small businesses under each NAICS code affected by the regulatory 

changes.

Table 8: NAICS Codes for Foams

NAICS Code Industry Name Relevant Foam End-Uses

326140 Polystyrene foam product manufacturing Polystyrene: extruded boardstock and billet

Polystyrene: extruded sheet

335222 Household refrigerator and home freezer 

manufacturing

Rigid polyurethane:

(household) appliance

333415 Air-conditioning and warm air heating equipment 

and commercial and industrial refrigeration 

equipment manufacturing

Rigid polyurethane: commercial refrigeration

326150 Urethane and other foam product (except 

polystyrene) manufacturing

Flexible polyurethane: slabstock and moulded

Rigid polyurethane: sandwich panels

Rigid polyurethane: slabstock 

Rigid polyurethane: marine flotation foam

Rigid polyurethane and polyisocyanurate laminated 

boardstock

Polyurethane integral skin

Polyolefin

Phenolic

5.1.1 Polystyrene Foam Product Manufacturing (NAICS code 326140)

The extruded polystyrene (XPS) boardstock and billet manufacturing and XPS sheet manufacturing industries fall 

within the broader NAICS code 326140, polystyrene foam product manufacturing. All known companies that 

manufacture extruded polystyrene (XPS) foam in the United States exceed the small business size threshold for 

this NAICS code (defined as a firm with less than 500 employees). Thus, no small businesses are estimated to be 

directly affected by the regulatory changes. 

5.1.2 Household Refrigerator and Home Freezer Manufacturing (NAICS code 335222)

The household appliance foam industry is associated with NAICS code 335222, household refrigerator and home 

freezer manufacturing.

15 By 2020, when the final unacceptability decision for this end-use becomes effective,

some manufacturers are expected to have transitioned out of HFCs. Specifically, among domestically 

 15 In contrast to many other polyurethane foam types, household appliance foam is blown directly into the appliance at 

time of appliance manufacture.
Economic Impact Screening Analysis 15

manufactured appliances on the market in 2020, approximately 5% are assumed to still use HFC-134a-blown 

foam, while 33% use HFC-245fa and the remaining 62% use hydrocarbons (EPA 2012). The regulatory changes 

are therefore assumed to affect 38% of the small businesses in manufacturing appliance foam, since an 

estimated 38% of companies would need to transition away from HFC-134a and HFC-245fa.

The small business threshold for this industry is defined as a firm with fewer than 1,000 employees; however, 

Census data was only available by establishment size. Conservatively applying this threshold to establishments 

yielded the total number of small establishments. To estimate the total number of small businesses (firms) 

affected, a scaling ratio was used between total firms and establishments for this industry (i.e., 19 firms to 25 

establishments). Table 9 below presents the number of small businesses estimated to be directly affected. 

Table 9: Estimated Number of Appliance Small Businesses Affected

NAICS 

Code Industry Name Total Number of Small Businesses

Estimated Number of Small 

Businesses Affected 

335222 Household refrigerator and home 

freezer manufacturing 14a 5

a Based on U.S. Census Bureau (2007). The total number of companies in this industry—including those not characterized as small 

businesses—is 19.

5.1.3 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial 

Refrigeration Equipment Manufacturing (NAICS code 333415)

The commercial refrigeration foam industry is associated with NAICS code 333415, air-conditioning and warm 

air heating equipment and commercial and industrial refrigeration equipment manufacturing.

16 By 2020, when 

the final unacceptability decision for this end-use becomes effective, some manufacturers are expected to have 

transitioned out of HFCs. Specifically, among domestically manufactured commercial refrigeration equipment on 

the market in 2020, approximately 5% are assumed to still use HFC-134a-blown foam, while 44% use HFC-245fa 

and the remaining 51% use hydrocarbons (EPA 2012). As such, the regulatory changes are assumed to affect 

49% of the small businesses manufacturing commercial refrigeration foam, since an estimated 49% of 

companies could need to transition away from HFC-134a and HFC-245fa.

The small business threshold for this industry is defined as a firm with less than 750 employees; however, 

Census data were only available by establishment size. Conservatively applying this threshold to establishments 

yielded the total number of small establishments. To estimate the total number of small businesses (firms) 

affected, a scaling ratio was used between total firms and establishments for this industry (i.e., 730 firms to 902 

establishments). 

Further, because NAICS code 333415 reflects the manufacturing of a wide range of equipment types, including 

those that would not be affected, the relevant subset of the economic sector—NAICS code 3334153 commercial 

refrigerators and related equipment—was used to identify the number of businesses that could be affected. 

Data on the number of establishments at the disaggregated NAICS code 3334153 level, however, are not 

available; as a proxy, Census data on the value of product shipments of NAICS code 3334153 relative to the 

broader NAICS code 333415 were used (U.S. Census 2007, 2014). Based on these data, it was estimated that 

 16 In contrast to many other polyurethane foam types, commercial refrigeration foam is blown directly into commercial 

appliances at time of manufacture.
Economic Impact Screening Analysis 16

13.5% of the small businesses in NAICS code 333415 manufacture commercial refrigeration equipment and 

could be affected. Table 10 below presents the number of small businesses estimated to be directly affected. 

Table 10. Estimated Number of Commercial Refrigeration Small Businesses Affected

NAICS 

Code Industry Name Total Number of Small Businesses

Estimated Number of 

Small Businesses Affected 

333415

Air-conditioning and warm air heating equipment and 

commercial and industrial refrigeration equipment 

manufacturing

95a 47

a Based on U.S. Census Bureau (2007). The total number of firms manufacturing commercial refrigeration equipment—including those 

not characterized as small businesses—is estimated to be 99. 

5.1.4 Urethane and Other Foam Product (Except Polystyrene) Manufacturing (NAICS code 

326150)

The remaining foam types affected by the regulatory changes—flexible PU slabstock/moulded, marine flotation 

foam, sandwich panels, integral skin foams, rigid PU slabstock, rigid PU/PIR laminated boardstock, polyolefin, 

and phenolic foams—all fall under NAICS code 326150, urethane and other foam product (except polystyrene) 

manufacturing.

Within this broader NAICS code industry, only a portion of companies would be expected to manufacture PU 

foam products with HFC-134a, or other HFCs/HFC blended blowing agents—namely HFC-365mfc and HFC-245fa. 

The proportion for each of the foam types was estimated using a two-step process and data from EPA’s 

Vintaging Model (EPA 2012):

1. First, the amount of blowing agent (all types) used specifically for each of the foam types was compared 

to the total in the NAICS code. This yielded a proxy for the percentage of companies assumed to be 

manufacturing each foam type within this NAICS code. 

2. Second, the amounts of (a) HFC-134a blowing agent and (b) HFC blowing agents other than HFC-152a 

were calculated for each foam type and compared to the total amount of blowing agent used for each 

foam type (EPA 2012). This yielded a proxy for the percentage of companies in each foam type that are 

using HFC blowing agents listed as unacceptable. 

The combined result of these two steps yields for each PU foam type the percent of companies assumed to be 

manufacturing covered foam products with certain HFCs that could be subject to the regulatory changes. These 

percentages are summarized in Table 11. 

Table 11: Assumptions about the Percentage of Affected Entities in NAICS Code 326150

Relevant Foam Types % of Entities Assumed to be 

Affected

Flexible polyurethane: slabstock and moulded 0%a

Rigid polyurethane: sandwich 1.0%

Rigid polyurethane: slabstock 0%

Rigid polyurethane: marine flotation foam 2.2%b

Rigid polyurethane and polyisocyanurate laminated boardstock 9.5%

Polyurethane integral skin 0.2%

Polyolefin 0%

Phenolic 0%a

a Because the HFCs listed as unacceptable are not currently in use, 0% of small businesses are assumed to be affected. b Assumed to be 15% of the entire rigid polyurethane: spray foam market.
Economic Impact Screening Analysis 17

The small business threshold for this industry is defined as a firm with less than 500 employees; however, while 

the Census Bureau provides the total number of firms and establishments in the industry, it only provides 

disaggregated data by employee size for establishments. To estimate the total number of small businesses (i.e., 

firms with less than 500 employees) affected by the regulatory changes, a scaling ratio between total number of 

firms and establishments for this industry (i.e., 482 firms to 685 establishments) was applied to the number of 

establishments with less than 500 employees. Table 12 below presents the number of small businesses 

estimated to be directly affected. 

Table 12: Estimated Number of Small Businesses Manufacturing Non-Appliance PU Foam Types Affected

NAICS 

Code Industry Name

Total Number 

of Small 

Businesses

Foam Type

Estimated Number 

of Small Businesses 

Affected 

326150

Urethane and 

other foam 

product (except 

polystyrene) 

manufacturing

481a

Flexible polyurethane: slabstock and moulded 0

Rigid polyurethane: sandwich 5

Rigid polyurethane: slabstock 0

Rigid polyurethane: marine flotation foam 11

Rigid polyurethane and polyisocyanurate 

laminated boardstock 46

Polyurethane integral skin 1

Polyolefin 0

Phenolic 0

Total 61 a Based on U.S. Census Bureau (2007). Includes total number of small business establishments for all urethane foam types, including 

those not listed in table. The total number of companies in this industry—including those not characterized as small businesses—is 482.

5.1.5 Summary of Small Business Impacted in the Foam Sector

Table 13 below summarizes the number of small businesses estimated to be impacted in each NAICS code and 

foam type.

Table 13: Estimated Number of Small Businesses Affected in the Foam Sector

NAICS 

Code Industry Name Relevant Foam End-Uses Estimated Number of Small Businesses Affected 

326140 Polystyrene foam product 

manufacturing

Polystyrene: extruded boardstock and billet 0

Polystyrene: extruded sheet 0

335222 Household refrigerator and 

home freezer manufacturing Rigid polyurethane (household) appliance 5

333415

Air-conditioning and warm air 

heating equipment and 

commercial and industrial 

refrigeration equipment 

manufacturing

Rigid polyurethane: commercial refrigeration 47

326150

Urethane and other foam 

product (except polystyrene) 

manufacturing

Flexible polyurethane: slabstock and moulded 0

Rigid polyurethane: sandwich 5

Rigid polyurethane: slabstock 0

Rigid polyurethane: marine flotation foam 11

Rigid polyurethane and polyisocyanurate 

laminated boardstock 46

Polyurethane integral skin 1

Polyolefin 0
Economic Impact Screening Analysis 18

NAICS 

Code Industry Name Relevant Foam End-Uses Estimated Number of Small Businesses Affected 

Phenolic 0

Total 114

Note: Totals may not sum due to independent rounding.

5.2 Estimated Economic Impact on Affected Small Entities

This section summarizes the annual compliance costs for polyurethane, polystyrene, and appliance foam 

manufacturers, and provides a comparison of those costs to average annual sales per establishment. All costs 

and savings are expressed in 2013 U.S. dollars. Where available and appropriate, compliance costs were 

estimated based on EPA’s report on Global Mitigation of Non-CO2 Greenhouse Gases: 2010-2030 (EPA 2013). 

Because EPA (2013) costs are based on typical U.S. facility sizes, in some cases, they were considered to 

overestimate incremental compliance costs for a small business, which is likely to have fewer production lines 

(and/or lower run-times) and lower annual blowing agent consumption. For those foam types for which EPA 

(2013) cost estimates were not appropriate or available, incremental capital and operating costs were estimated 

based on industry input, as available, and costs reported in project proposals submitted to the Multilateral Fund 

(MLF) of the Montreal Protocol, and scaled according to actual project funds approved by the Executive 

Committee of the MLF. Among foam sector projects submitted to the MLF, selections were based on analysis of 

which project provided the most reasonable proxy for U.S. small businesses; considerations included facility size 

(i.e., annual blowing agent use) and alternative used. In consideration of the uncertainty inherent in these cost 

estimates, capital costs for each of the end-uses were increased by 20% to explore the sensitivity of the results 

to these costs and develop a higher and lower range of the potential compliance costs.

Used as a proxy for U.S. small business compliance costs, these MLF project costs are subject to several 

limitations, including: funding requested and approved by the Executive Committee of the MLF is based on 

myriad complex considerations such as cost-effectiveness thresholds for specific foam project types, foreign 

ownership stakes in domestic companies, assumptions about company counterpart contributions to conversion 

costs, and so on, which may affect the accuracy of the cost estimates when transferred to the U.S. context; MLF 

costs are based on those estimated or reported for developing countries, which may not be the same as those 

experienced in the United States; and MLF costs are based on facility conversions from HCFC-141b blowing 

agent, rather than HFCs.

Table 14 presents a summary of the annualized compliance costs as a percentage of the average annual sales for 

each foam type. Average annual sales per establishment were calculated by dividing total value of shipments (as 

a proxy for sales) by the number of establishments, for each small business establishment size (e.g., 0-4 

employees, 5-9 employees, 10-19 employees, etc.). Because average annual sales were calculated by 

establishment size, a range is provided for annual compliance costs as a percentage of annual sales. In general, 

annual compliance costs represent a higher percentage of annual sales for smaller establishments. The specific 

assumptions used for each foam type to estimate annualized compliance costs are presented after the table.
Economic Impact Screening Analysis 19

Table 14: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry (Sales Test)

NAICS

Code Industry Name Foam Type

Annual Compliance 

Cost as a Percentage of 

Average Sales per 

Establishment

326140 Polystyrene foam product 

manufacturing

Polystyrene: extruded boardstock and billet 0%a

Polystyrene: extruded sheet 0%b

335222 Household refrigerator and 

home freezer manufacturing Rigid polyurethane: (household) appliance <0%c

–2.4%

333415

Air-conditioning and warm air 

heating equipment and 

commercial and industrial 

refrigeration equipment 

manufacturing

Rigid polyurethane: commercial refrigeration <0%c–3.9%

326150

Urethane and other foam 

product (except polystyrene) 

manufacturing

Flexible polyurethane: slabstock and moulded 0%b

Rigid polyurethane: sandwich <0.1%–6.5%

Polyurethane integral skin <0.1%–6.6%

Rigid polyurethane: slabstock 0%

Rigid polyurethane: marine flotation foam <0.1%–48.0%

Rigid polyurethane and polyisocyanurate 

laminated boardstock <0.1%–15.5%

Polyolefin 0%

Phenolic 0%b

a All of the manufacturers in this end-use are large businesses (i.e., those with more than 499 employees). b Because the HFCs listed as unacceptable are not currently in use, annual compliance costs are assumed to be zero. c On an annualized basis, the largest-sized small businesses (i.e., those with 500 to 999 employees) are expected to experience some cost 

savings as a result of compliance with this regulatory change.

5.2.1.1 Polystyrene Foam Product Manufacturing

• XPS Sheet and Boardstock and Billet – All known XPS manufacturers of boardstock and billet are larger 

businesses (i.e., having more than 499 employees) and therefore do not qualify as small businesses for 

the purposes of this analysis. XPS sheet is manufactured using alternatives other than the HFCs listed as 

unacceptable, and this analysis assumes the rule will not result in costs for this end-use.

5.2.1.2 Household Refrigerator and Home Freezer Manufacturing 

• Rigid Polyurethane: (Household) Appliance— Manufacturers using HFC-245fa and HFC-134a would be 

impacted by the regulatory changes. For the purposes of quantifying compliance costs for this analysis, 

it was assumed that companies still using HFC-245fa and HFC-134a would transition to either 

hydrocarbons or Solstice LBA. Hydrocarbons may be a more cost-effective option, but Solstice LBA is 

conservatively assumed to be adopted to help achieve energy efficiency standards and/or to avoid 

incurring upfront capital costs. Specifically, establishments with zero to nine employees are assumed to 

transition fully to Solstice LBA, while establishments with 10 to 999 employees are assumed to transition 

50% to Solstice LBA and 50% to hydrocarbons. 

The range of facility transition costs were based on the costs to transition from HFC-245fa, as reported 

in EPA (2013). Capital facility costs to convert to hydrocarbons were assumed to be between $5.1 million 

and $6.1 million per facility, but these costs are offset by annual savings of up to $1.4 million per facility 

due to lower blowing agent costs; these savings are varied depending on facility size (i.e., number of 
Economic Impact Screening Analysis 20

units produced). The short-term impact of the initial capital expenditures would be expected to depend 

in part on how small businesses are able to finance their upfront costs. 

Conversely, no capital costs were assumed to convert to Solstice LBA (since this option is considered to 

be a near drop-in replacement for HFC-245fa), but annual costs per facility were estimated to be 

between $2,000 and $900,000 per facility,17 due to higher blowing agent costs. Annual costs/savings 

associated with blowing agent costs were scaled by the number of appliances manufactured per facility, 

which was estimated based on reported value of shipments and an assumed value of $1,500 per 

appliance. All costs were annualized assuming a facility lifetime of 25 years. 

5.2.1.3 Commercial and Industrial Refrigeration Equipment Manufacturing

• Rigid Polyurethane: Commercial Refrigeration—Manufacturers using HFC-245fa and HFC-134a would 

be impacted. For the purposes of quantifying compliance costs for this analysis, it was assumed that 

companies still using HFC-245fa and HFC-134a would transition to hydrocarbons or Solstice LBA. 

Facility transition costs were based on the costs to transition from HFC-245fa, as reported in EPA (2013). 

Capital costs to transition to hydrocarbons were assumed to be approximately between $1.3 million and 

$1.6 million per facility, while net annual savings are estimated to be up to $992,000 per facility, due to 

lower blowing agent costs. The short-term impact of the initial capital expenditures would be expected 

to depend in part on how small businesses are able to finance their upfront costs. 

No capital costs were assumed to convert to Solstice LBA (since this option is considered to be a near 

drop-in replacement for HFC-245fa), but annual costs per facility were estimated to be between $500 

and $268,000 per facility,18 due to higher blowing agent costs. Annual costs/savings associated with 

blowing agent costs were scaled by the number of appliances manufactured per facility, which was 

estimated based on reported value of shipments and an assumed value of $2,000 per equipment. All 

costs were annualized assuming a facility lifetime of 25 years. 

5.2.1.4 Urethane and Other Foam Product (Except Polystyrene) Manufacturing

• Flexible Polyurethane—As previously mentioned, this foam type is currently manufactured in the 

United States using only hydrocarbons. Therefore, prohibiting the use of HFCs in this end-use would not 

be expected to impact small businesses. The regulatory changes would serve to avoid use of HFCs. 

• Rigid Polyurethane: Sandwich Panels—The regulatory changes would be expected to impact 

manufacturers producing sandwich panel foam using HFC-134a and HFC-245fa blowing agent. For the 

purposes of quantifying compliance costs for this analysis, it was assumed that companies still using 

HFC-134a or HFC-245fa would transition to hydrocarbons. One time-capital costs for conversion were 

assumed to be between $183,000 and $220,000 for a typical firm; this is assumed to cover retrofitting or 

replacement of foam dispensers, purchase of a pre-mixing system, retrofitting of jigs, purchase of safety 

related equipment, and conducting trials, training, testing and certification (UNEP 2012, UNEP 2013a).

 17 Depending on the number of appliances assumed to be manufactured per facility and the cost of Solstice LBA (which was 

assumed to range from $14 to $17 per kilogram).

18 Depending on the number of equipment assumed to be manufactured per facility and the cost of Solstice LBA (which was 

assumed to range from $14 to $17 per kilogram).
Economic Impact Screening Analysis 21

Incremental annual operating costs were assumed to be zero; while an increase in operating costs may 

be experienced associated with the use of hydrocarbons—due to the need for raw materials for fire 

retardants—these costs are not expected to outweigh the annual savings associated with the lower 

incremental blowing agent cost. Indeed, this assumption is conservative given the significant annual cost 

savings assumed in EPA (2013) for other foam types transitioning to hydrocarbons. Costs were 

annualized over an assumed facility lifetime of 25 years. 

• Rigid Polyurethane: Marine Flotation Foam— Foam is used in boat manufacturing for both structural 

and flotation purposes. Polyurethane foams for flotation purposes are available in blocks, or sheets, but 

the most significant application is closed-cell polyurethane injection foams, or pour-in-place application. 

Reformulation costs would be borne by polyol and isocyanate manufacturers and systems houses. 

System houses typically develop appropriate formulations through an experimental process making 

improvements incrementally until the ideal end-use properties are developed. Thus, the regulatory 

changes would be expected to impact marine flotation foam manufacturers (i.e., Urethane and Other 

Foam Product (Except Polystyrene) Manufacturing) using HFC-134a and HFC-245fa, not boat 

manufacturers.

19 Depending on the complexity of and time required for this development process, 

incremental costs may or may not be passed on to end-users.

It was assumed that companies still using HFC-134a and HFC-245fa would transition to hydrocarbons 

(e.g., pentane) and HFO/water blends. Transitioning to these blowing agent substitutes are expected to 

result in a 10% increase in raw material costs for boat manufacturers associated with slightly more foam 

needed on a volume basis (ICF estimate). This cost would likely be passed on to the consumer (i.e., boat 

manufacturers would add the incremental cost of the foam, a very small cost compared to other boat 

costs, to the final price of the fabricated boat). For the purposes of quantifying compliance costs for this 

analysis, the smaller marine flotation foam manufacturers (i.e., those with less than 10 employees) are 

expected to transition to HFO/water systems. Of the remaining entities, 50% would be expected to 

transition to pentane blowing agents and the remaining 50% to HFO/water systems.

Capital costs for transitioning to HFO/water systems were assumed to be between $210,000 and 

$253,000 per facility, covering the cost of formulation development and compliance testing. Incremental 

annual operating costs were conservatively estimated to be between $97,000 and $116,000 per facility, 

due to higher blowing agent costs (EPA 2013)20; actual costs may be lower given potential efficiency 

savings. Actual compliance costs may vary based on the size of each manufacturing facility. Costs were 

annualized over the facility lifetime, assumed to be 25 years.

Capital costs for transitioning to pentane blowing agents were assumed to be between $210,000 and 

$632,000 per facility, associated with hydrocarbon storage systems, replacement or retrofit of existing 

foaming dispenser including jigs and fixtures, installation of safety related equipment, trials, and 

certification (UNEP 2010c). Incremental annual operating costs were assumed to be zero; while an 

increase in operating costs may be experienced associated with the use of hydrocarbons—due to the 

 19 The boat manufacturing industry, which can be characterized by the North American Industry Classification System 

(NAICS) code 336612: Boat Building, is primarily comprised of small businesses (i.e., having less than 500 employees).

20 Assuming Solstice LBA costs between $14 and $17 per kilogram.
Economic Impact Screening Analysis 22

need for raw materials for fire retardants—these costs are not expected to outweigh the annual savings 

associated with the lower blowing agent cost.

• Polyurethane Integral Skin—The regulatory changes would be expected to impact integral skin 

manufacturers using HFC-134a, as no other HFCs are assumed to be in use in this application (EPA 2012). 

It was assumed that companies still using HFC-134a would transition to CO2. Capital costs were assumed 

to be between $184,000 and $220,000 for a typical firm; this is assumed to cover the purchase or 

retrofit of foam dispensers, purchase of cooling equipment, purchase of a pre-mixing tank, and trials 

(UNEP 2012, UNEP 2013a). Incremental annual operating costs were assumed to be zero; while an 

increase in operating costs may be experienced associated with the use of CO2,these costs are not 

expected to outweigh the annual savings associated with the lower incremental blowing agent cost. 

Indeed, this assumption is conservative given the significant annual cost savings assumed in EPA (2013) 

for other foam types transitioning to CO2. Costs were annualized over an assumed 25 year facility 

lifetime.

• PU/PIR Laminated Boardstock— Manufacturers of this foam type rely on HFC-134a, as well as HFC245fa and hydrocarbons. For the purposes of quantifying compliance costs for this analysis, it was 

assumed that companies using HFC-134a or HFC-245fa would transition to hydrocarbons. Capital costs 

for a facility to transition to hydrocarbons were estimated to be approximately between $432,000 and 

$959,000 for one production line that produces 25 MT of blowing agent per year (UNEP 2009, 2011a, 

2010c). The capital costs associated with the conversion to hydrocarbons include hydrocarbon storage 

systems, replacement or retrofit of existing foaming dispenser including jigs and fixtures, installation of 

safety related equipment, trials, and certification (UNEP 2010c). Incremental annual operating costs 

were assumed to be zero; while an increase in operating costs may be experienced associated with the 

use of hydrocarbons—due to the need for raw materials for fire retardants—these costs are not 

expected to outweigh the annual savings associated with the lower blowing agent cost. This assumption 

is conservative given the significant annual cost savings assumed in EPA (2013) for other foam types 

transitioning to hydrocarbons. Costs were annualized over an assumed facility lifetime of 25 years. 

Although the smallest facilities (i.e., those with less than 20 employees) may face significant annualized 

compliance costs representing up to about 15% of annual sales for the high capital cost estimate, for the 

majority of small businesses (38 of 46), compliance costs are estimated at 2% or less of annual sales.

• Polyolefin—Previous analysis assumed this foam type to be manufactured in the United States using 

only hydrocarbons. All known companies that manufacture polyolefin foam using HFC-134a in the 

United States exceed the small business size threshold for this NAICS code (defined as a firm with less 

than 500 employees). Thus, no small businesses are estimated to be directly affected by the regulatory 

changes. 

• Phenolic—This foam type is assumed to be manufactured in the United States using only hydrocarbons. 

Therefore, prohibiting the use of HFCs in this end-use would not be expected to impact small 

businesses.
Economic Impact Screening Analysis 23

6 Commercial Refrigeration

The regulatory changes are expected to affect the retail food refrigeration end-use, including new and 

retrofitted supermarket systems, remote condensing unit systems, and stand-alone units. The regulatory 

changes are also expected to affect new and retrofitted vending machines. 

6.1 Small Entities Potentially Subject to the Rulemaking

6.1.1 Remote Retail Food Equipment (Supermarket Systems and Remote Condensing Units) 

Supermarkets and other retail food establishments that use remote refrigeration systems (i.e., rack systems and 

remote condensing units) to cool food, beverages, and other refrigerated or frozen products prior to sale are

required to use alternative refrigerants to the ones listed as unacceptable by the regulation in new and 

retrofitted equipment beginning in 2016, 2017, or 2018 (depending on the end-use and application).

Remote refrigeration systems are generally defined as systems that consist of various components linked 

through a refrigerant piping network. Rack systems, which are most commonly used in supermarkets as well as 

warehouse clubs and superstores, consist of racks of multiple compressors and other components that are 

connected to a remote condenser and linked to display cases, reach-ins, and walk-ins through a piping network. 

Remote condensing units, which are more commonly used in convenience stores and other medium-sized retail 

food establishments, consist of one or two compressors, one condenser, and one receiver assembled into a 

condensing unit system, which is then linked to display cases, reach-ins, or walk-ins through a piping network. 

Since new remote refrigeration systems are typically installed and charged onsite, and existing systems are also 

retrofitted onsite, the economic impact of complying with this regulation is expected to be most directly 

incurred by the end-users of the equipment. 

6.1.1.1 Affected Industries

End-users of remote retail food equipment include supermarkets, warehouse clubs/superstores, convenience 

stores, drug stores, hotels, cafeterias, specialty food stores, restaurants, and bars. Table 15 below presents the 

industries that are expected to be affected (by NAICS code), the total number of firms represented by each 

industry, the small business threshold for each industry, and the resulting number of small businesses. 

Table 15: NAICS Codes for Affected Retail Food Industries

NAICS 

Code Industry Name

Total 

Number of 

Firms in Each 

Industry*

Small Business 

Threshold: 

Annual Sales 

per Firm

Total Number 

of Small

Businesses in 

Each Industry

44511 Supermarkets and other grocery (except convenience) stores 34,009 $30 million 33,332

44512 Convenience stores 16,944 $27 million 16,918

44521 Specialty food stores – meat markets 4,628 $7 million 4,532

44522 Specialty food stores – fish and seafood markets 1,591 $7 million 1,547

44523 Specialty food stores – fruit and vegetable markets 2,082 $7 million 1,983

445291 Specialty food stores – baked goods stores 2,229 $7 million 2,220

445292 Specialty food stores – confectionary and nut stores 1,619 $7 million 1,600

445299 All other specialty food stores 3,182 $7 million 3,162

4453 Beer, wine, and liquor stores 23,206 $7 million 22,697
Economic Impact Screening Analysis 24

NAICS 

Code Industry Name

Total 

Number of 

Firms in Each 

Industry*

Small Business 

Threshold: 

Annual Sales 

per Firm

Total Number 

of Small

Businesses in 

Each Industry

453110 Florist 16,031 $7 million 16,001

44711 Gasoline stations with convenience stores 44,565 $27 million 43,724

44719 Other gasoline stations 13,195 $14 million 12,161

446110 Pharmacies and drug stores 17,217 $25.5 million 17,069

452910 Warehouse clubs and superstores 11 $27 million 0

452990 All other general merchandise stores 6,946 $30 million 6,880

72111 Hotels (except casino hotels) and motels 31,649 $30 million 30,706

72112 Casino hotels 177 $30 million 20

72211 Full-service Restaurants 148,269 $7 million 142,096

722211 Limited-service restaurants 107,017 $10 million 103,478

722212 Cafeterias, buffets, and grill buffets 4,146 $25.5 million 4,105

722213 Snack and nonalcoholic beverage bars 24,850 $7 million 24,449

72241 Drinking places 37,531 $7 million 37,037

* Includes all firms in this industry, including firms that are and are not categorized as small businesses. Only firms that have been in 

operation for the entire year are considered as part of this analysis.

Source: U.S. Census Bureau (2007).

6.1.1.2 Affected Small Businesses

Some movement out of high-GWP refrigerants (e.g., R-404A and R-507A) has already been observed in the retail 

food industry, and industry pledges, such as those made by the Consumer Goods Forum and its members to 

phase out HFC refrigerants in newly purchased equipment by the end of 2015, may serve to accelerate the 

transition out of HFC refrigerants.21 Assuming that the industry is operating under business as usual conditions, 

this analysis estimates that in the absence of this rulemaking 70% of firms would continue to use R-404A or R507A in new supermarket systems in 2017 and 70% of firms would continue to use R-404A or R-507A in new 

remote condensing units in 2018; therefore, these firms will be affected by this regulation. In addition, this 

analysis estimates that 25% of firms will have CFC-12, R-502, or HCFC-22 supermarket systems in operation in 

2016 and 25% of firms will have CFC-12, R-502, or HCFC-22 remote condensing units in operation in 2016 that 

will be available for retrofitting. With R-404A, R-507A, or R-422D being the preferred retrofit refrigerant, firms 

that have CFC-12, R-502, or HCFC-22 systems in operation would thus also be affected by the regulation. 

Applying these assumptions, Table 16 below presents the estimated number of small businesses expected to be 

directly affected by the regulatory decisions applicable to remote retail food refrigeration systems. Not all of 

these small businesses will be affected in the first year in which the regulation goes into effect; instead, a 

proportion of these businesses are expected to be affected in each of the approximately 15-20 years after 2017 

or 2018, as existing supermarket systems and remote condensing units, respectively, reach end-of-life and are 

 21 The Consumer Goods Forum is a global industry network consisting of retailers, manufacturers, service providers, and 

other stakeholders. In 2010, the Forum agreed to “begin phasing-out hydrofluorocarbon (HFC) refrigerants as of 2015 and 

replace them with non-HFC refrigerants (natural refrigerant alternatives) where these are legally allowed and available for 

new purchases of point-of-sale units and large refrigeration installations” (CGF 2010). 
Economic Impact Screening Analysis 25

replaced with new systems. Likewise a proportion of these business are expected to be affected in the years 

after 2016, as existing supermarket systems and remote condensing units are retrofitted.

Table 16: Estimated Number of Retail Food Small Businesses Affected by the Regulation*

NAICS 

Code Industry Name

Estimated Number of Small Businesses Affected

New Systems Retrofit Total**

44511 Supermarkets and other grocery (except 

convenience) stores 23,332 8,333 31,665

44512 Convenience stores 11,842 4,229 16,072

44521 Specialty food stores – meat markets 3,172 1,133 4,305

44522 Specialty food stores – fish and seafood markets 1,083 387 1,470

44523 Specialty food stores – fruit and vegetable markets 1,388 496 1,884

445291 Specialty food stores – baked goods stores 1,554 555 2,109

445292 Specialty food stores – confectionary and nut stores 1,120 400 1,520

445299 All other specialty food stores 2,214 791 3,004

4453 Beer, wine, and liquor stores 15,888 5,674 21,562

453110 Florist 11,201 4,000 15,201

44711 Gasoline stations with convenience stores 30,607 10,931 41,538

44719 Other gasoline stations 8,513 3,040 11,553

446110 Pharmacies and drug stores 11,948 4,267 16,216

452910 Warehouse clubs and superstores 0 0 0

452990 All other general merchandise stores 4,816 1,720 6,536

72111 Hotels (except casino hotels) and motels 21,494 7,676 29,170

72112 Casino hotels 14 5 19

72211 Full-service Restaurants 99,467 35,524 134,992

722211 Limited-service restaurants 72,435 25,870 98,304

722212 Cafeterias, buffets, and grill buffets 2,874 1,026 3,900

722213 Snack and nonalcoholic beverage bars 17,114 6,112 23,226

72241 Drinking places 25,926 9,259 35,185

TOTAL 368,001 131,429 499,430

* Based on U.S. Census Bureau (2007); only firms that have been in operation for the entire year are considered as part of this analysis.

** The total number of firms affected is a conservative estimate given that there is likely overlap in the firms who are assumed to be 

affected by the regulatory decisions concerning new systems and the regulatory decisions concerning refrigerant retrofits.

6.1.2 Stand-Alone Retail Food Equipment 

Stand-alone retail food refrigerators and freezers are commonly located in supermarkets, warehouse 

clubs/superstores, convenience stores, restaurants, bars, cafeterias, hotels, schools, hospitals. These systems 

integrate all components within their structure, and can be further characterized by their operating temperature 

(e.g., medium vs. low), door type (e.g., transparent, solid, without), and orientation (e.g., horizontal, 

semivertical, vertical). These units are distinct from other commercial refrigeration equipment designed to 

make or process cold food and beverages that are dispensed via a nozzle, including soft-serve ice cream 

machines, “slushy” iced beverage dispensers, and soft-drink dispensers.
Economic Impact Screening Analysis 26

6.1.2.1 Affected Industries

Manufacturers of new stand-alone equipment using an alternative refrigerant to the ones listed by this 

regulation as unacceptable are assumed to incur costs associated with that alternative. With regard to 

retrofitting, 3% of stand-alone equipment is assumed to have CFC-12, R-502, or HCFC-22 in operation by 2016 

that would be available for retrofitting (based on EPA’s Vintaging Model). However, it is assumed that end-users 

do not and would not retrofit this equipment, even in the absence of the rulemaking, due to the high costs of 

retrofitting equipment relative to the cost of purchasing a new unit. As a result, only manufacturers (and no 

end-users) of stand-alone equipment are identified as being affected by this regulation.

Manufacturers of stand-alone units have been identified by the Department of Energy (DOE) in support of 

rulemakings for the Appliance and Equipment Standards Program. Based on the DOE’s assessment, there are a 

total of 33 commercial refrigeration equipment manufacturers (DOE 2013). Industry data for commercial 

refrigeration equipment is matched to NAICS code 333415, air-conditioning and warm air heating equipment 

and commercial and industrial refrigeration equipment manufacturing. The small business threshold for this 

industry is defined as enterprises with 750 employees or fewer. Based on this, DOE identified a total of 30 

commercial refrigeration equipment manufacturers that are small businesses. 

6.1.2.2 Affected Small Businesses

Like the remote retail food equipment subsector, developments in the stand-alone retail food equipment 

industry suggest that some companies are already planning to transition out of HFCs. Recent SNAP approvals for 

alternative refrigerants used in stand-alone retail food systems (e.g., propane, carbon dioxide, and R-450A, 

found acceptable or acceptable subject to use conditions in 2011, 2009, and 2014 respectively) give companies 

additional options for transition. In addition, industry pledges to phase out HFCs (e.g., the Consumer Goods 

Forum’s pledge to phase out HFC refrigerants in newly purchased equipment by the end of 2015) may create 

momentum in the transition away from HFCs. 

However, due to the higher cost estimate of transitioning to an alternative (as discussed further below), for the 

purposes of this analysis, it is conservatively assumed that no small businesses will make this transition in the 

absence of the regulation. As a result, in the absence of the regulation it is assumed that all small businesses 

would continue to use R-404A or HFC-134a in new stand-alone equipment, and thus will be affected by the 

regulation. 

Table 17 below summarizes the estimated number of small businesses expected to be directly affected by the 

regulatory decision applicable to new stand-alone equipment. As previously noted, no end-users of stand-alone 

units are expected to be affected by this regulation.
Economic Impact Screening Analysis 27

Table 17: Estimated Number of Stand-Alone Retail Food Equipment Manufacturing Small Businesses Affected 

by the Regulation

NAICS 

Code Industry Name Estimated Number of Small Businesses Affected 

333415

Air-conditioning and warm air heating equipment and commercial and 

industrial refrigeration equipment manufacturing

30

6.1.3 Vending Machines 

Vending machines are commonly located in offices, public locations, and factories. Similar to stand-alone 

systems, vending machines can be further characterized by their operating temperature (e.g., medium vs. low), 

machine use designation (e.g., indoor vs. indoor/outdoor), and front type (e.g., glassfront vs. solid-door).

6.1.3.1 Affected Industries

Manufacturers of new vending machines using an alternative refrigerant to the ones listed by this regulation as 

unacceptable are expected to incur costs associated with that alternative. With regard to retrofitting, based on

the lifetime of the equipment and the direct transition from CFCs to HFCs in this end-use before 1996, the 

analysis assumes that no vending machines will have CFC-12, R-502, or HCFC-22 systems in operation in 2016

that would be available for retrofitting. As a result, only manufacturers (and no end-users) of vending machines 

are identified as being affected by this regulation.

Manufacturers of vending machines have been identified by the Department of Energy (DOE) in support of 

rulemakings for the Appliance and Equipment Standards Program. Based on the DOE’s assessment, there are a 

total of 10 manufacturers of beverage vending machines (DOE 2008). No data are available on the number of 

manufacturers of other (non-beverage) refrigerated vending machines, although reports suggest that beverage 

vending machines represent the majority of the refrigerated vending machine market (DOE 2009). Industry data 

for vending machine is matched to NAICS code 333311, automatic vending machine manufacturing. The small 

business threshold defines small business manufacturing enterprises for automatic vending machine 

manufacturing as those having 500 employees or fewer. Based on this, DOE (2008) identified a total of six 

beverage vending machine manufacturers that are small businesses. Applying the conservative assumption that 

beverage vending machines represent half of the total refrigerated vending machine market, it is assumed that 

12 small-business refrigerated vending machine manufacturers could be affected by the rulemaking.22

6.1.3.2 Affected Small Businesses

Similar industry trends to those already noted for retail food—i.e., the approval of carbon dioxide by SNAP for 

use in vending machines in 2012 and voluntary industry efforts by companies such as Coca-Cola and Pepsi Co to 

transition away from HFCs in vending machines (CGF 2010)—may serve to accelerate the transition out of HFC 

refrigerants. Assuming that the industry is operating under business as usual conditions, in the absence of the 

regulation it is assumed that 40% of the market would already have transitioned to an alternative refrigerant in 

 22 DOE (2009) indicates that beverage vending machines represent 50-90% of the refrigerated vending machine market. For 

the purposes of this analysis, it is assumed that the number of small business beverage vending machine manufacturers is 

proportional to the market share of beverage vending machines. Therefore, it is estimated that the total number of small 

business refrigerated vending machine manufacturers could range from seven to 12 small businesses.
Economic Impact Screening Analysis 28

new equipment by 2018. As a result, it is estimated that 60% of the small businesses identified by DOE (2009) 

(equivalent to seven small businesses) will be affected by this regulation. 

Table 18 below summarizes the estimated number of small businesses expected to be directly affected by the 

regulatory decision applicable to new vending machines. As already stated, no end-users of vending machines 

are expected to be affected by this regulation.

Table 18: Estimated Number of Vending Machine Manufacturing Small Businesses Affected by the Regulation 

NAICS 

Code Industry Name Estimated Number of Small Businesses Affected 

333311 Automatic vending machine manufacturing 7

6.2 Estimated Economic Impact on Affected Small Entities

For each end use, the potential economic impact on small businesses was calculated by comparing the 

estimated annualized compliance cost to average annual sales per firm (i.e., sales test). 

6.2.1 Remote Retail Food Equipment (Supermarket Systems and Remote Condensing Units)

For modeling purposes, compliance costs were based on the assumption that end-users would use R-407A in 

new and retrofitted systems in place of R-404A and R-507A. The incremental cost of using this alternative is 

assumed to be negligible (i.e., zero dollars) based on cost assumptions identified in EPA’s report on Global 

Mitigation of Non-CO2 Greenhouse Gases: 2010-2030 (EPA 2013). As presented in Table 19, since annualized 

compliance costs of using alternative refrigerants are assumed to be negligible, annual compliance costs as a 

percentage of average annual sales per firm are assumed to be zero.23

 23 EPA (2013) assumes that there is a one-time conversion cost associated with performing a refrigerant retrofit on a 

remote retail food system. However, since the rulemaking does not require end-users to retrofit their equipment, but 

rather only prohibits the use of certain refrigerants to be used as a retrofit, the labor costs associated with performing the 

retrofit itself are not associated with the rulemaking and therefore not included in this analysis.
Economic Impact Screening Analysis 29

Table 19: Estimated Economic Impact on Small Entities with Remote Retail Food Equipment (Sales Test)

NAICS

Code Industry Name Annual Compliance Cost as a Percentage 

of Average Annual Sales per Firm

44511 Supermarkets and other grocery (except convenience) stores 0%

44512 Convenience stores 0%

44521 Specialty food stores – meat markets 0%

44522 Specialty food stores – fish and seafood markets 0%

44523 Specialty food stores – fruit and vegetable markets 0%

445291 Specialty food stores – baked goods stores 0%

445292 Specialty food stores – confectionary and nut stores 0%

445299 All other specialty food stores 0%

4453 Beer, wine, and liquor stores 0%

453110 Florist 0%

44711 Gasoline stations with convenience stores 0%

44719 Other gasoline stations 0%

446110 Pharmacies and drug stores 0%

452910 Warehouse clubs and superstores 0%

452990 All other general merchandise stores 0%

72111 Hotels (except casino hotels) and motels 0%

72112 Casino hotels 0%

72211 Full-service Restaurants 0%

722211 Limited-service restaurants 0%

722212 Cafeterias, buffets, and grill buffets 0%

722213 Snack and nonalcoholic beverage bars 0%

72241 Drinking places 0%

6.2.2 Stand-Alone Retail Food Equipment 

For the regulatory decisions that affect stand-alone retail food equipment, the potential economic impact on 

small businesses was calculated based on the assumption that all manufacturers of stand-alone equipment 

would use hydrocarbons (R-290) or a non-flammable low-GWP refrigerant blend (e.g., R-450A) in place of HFC 

refrigerants in new equipment.

Specifically, for manufacturers of self-contained refrigerators/freezers, it is assumed that there is a one-time 

investment of $150,000 to $500,000 associated with using R-290 or a non-flammable alternative in place of an 

HFC refrigerant. This estimate is based on industry input, which assumes the need for manufacturers to (a) 

purchase new charging equipment, (b) test and certify their equipment to UL standards, and (c) convert their 

facility to accommodate a flammable refrigerant, if applicable (e.g., installing sensors and storage capacity). No 

incremental manufacturing costs are assumed given that the cost to consumers of R-290 self-contained systems 

is on par with the cost of systems that contain an HFC (EPA 2013). Systems that use R-450A—a refrigerant 

blend of HFC-134a and HFO-1234ze(E)—are also expected to have similar costs to HFC-134a and R-404A 

systems.

For manufacturers of stand-alone units affected by this regulation, average annual sales per establishment were 

calculated by dividing total value of shipments (as a proxy for sales) by the number of establishments, for each 
Economic Impact Screening Analysis 30

small business establishment size (e.g., 0-4 employees, 5-9 employees, 10-19 employees, etc.). Because average 

annual sales were calculated by establishment size, a range is provided for annual compliance costs as a 

percentage of annual sales. In general, annual compliance costs represent a higher percentage of annual sales 

for smaller establishments. Table 20 below presents the estimated economic impact of this regulation on small 

businesses in the stand-alone retail food refrigeration category.

Table 20: Estimated Economic Impact on Small Entities in the Stand-Alone Retail Food Category (Sales Test)

NAICS

Code Industry Name Annual Compliance Cost as a Percentage of Average Annual Sales per Firm

333415 Air-conditioning and warm air heating equipment and commercial 

and industrial refrigeration equipment manufacturing <0.1%–11.5%

6.2.3 Vending Machines

For the regulatory decisions that affect vending machines, the potential economic impact on small businesses 

was calculated based on the assumption that all manufacturers of vending machines would use carbon dioxide 

in place of HFC refrigerants in new equipment. Specifically, for vending machine manufacturers, it is assumed 

that there is a one-time investment cost of $100,000 to $250,000 associated with using carbon dioxide in place 

of HFC refrigerants. This cost is assumed to be required for the purchase of new equipment to support the 

testing, certification, and manufacture of vending machines that contain carbon dioxide.24 

For manufacturers of vending machines affected by this regulation, average annual sales per establishment 

were calculated by dividing total value of shipments (as a proxy for sales) by the number of establishments, for 

each small business establishment size (e.g., 0-4 employees, 5-9 employees, 10-19 employees, etc.). Because 

average annual sales were calculated by establishment size, a range is provided for annual compliance costs as a 

percentage of annual sales. In general, annual compliance costs represent a higher percentage of annual sales 

for smaller establishments. Table 21 below presents the estimated economic impact of this regulation on small 

businesses in the vending machine end-use.

Table 21: Estimated Economic Impact on Small Entities in the Vending Machine End-Use (Sales Test)

NAICS Code Industry Name Annual Compliance Cost as a Percentage 

of Average Annual Sales per Firm

333311 Automatic vending machine manufacturing <0.1%–9.1%

 24 These costs may be partially offset by cost pass-through to the consumer. One report indicated that vending machines 

that are charged with carbon dioxide cost 2-3%, or roughly $100, more than vending machines that are charged with HFCs 

(DOE 2009).
Economic Impact Screening Analysis 31

7 Conclusion

This screening analysis finds that the final rulemaking can be presumed to have no significant economic impact 

on a substantial number of small entities (SISNOSE), as described below. The discussion below describes the 

decision matrix used to make this determination, as well as the aggregated small business impacts.

7.1 Decision Regarding Significant Economic Impact on a Substantial Number 

of Small Entities 

Using economic threshold levels set conservatively at 1% and 3% of sales, consistent with similar analyses on 

other Title VI rules, this screening analysis finds that the rulemaking can be presumed to have no SISNOSE. 

These thresholds are set conservatively because the rulemaking affects small businesses in a range of different 

industries, which may have significantly different profit margins and abilities to pass compliance costs along to 

customers.

7.2 Aggregated Small Business Impacts of Regulatory Changes

Table 22 summarizes the total number of small businesses that are expected to be subject to the regulation, 

as well as the total economic impact on those small businesses using a 7% discount rate.

Table 23 summarizes the total number of small businesses that are expected to be subject to the regulation, as 

well as the total economic impact on those small businesses using a 3% discount rate. 

As shown, an estimated 500,000 small businesses may be subject to the regulatory actions, the vast majority of 

which are not expected to experience adverse economic impacts. Nearly all of the small businesses are in the 

commercial refrigeration sector. The foam sector is expected to account for nearly all of total annualized 

compliance costs experienced by small businesses; although these costs would be borne by about 120 small 

businesses, the average sales per small business are relatively high in this industry, keeping costs for the 

majority of those foam manufacturers below 1% of annual sales.

Table 22: Summary of the Small Business Impact at 7% Discount Rate

Sector NAICS Industry

Estimated 

Number of 

Small 

Businesses 

Affected by 

the Rule

Total Annualized Economic 

Impact on Small Businesses

Lower Higher

MVACs 336111 Automobile Manufacturing 0 $0 $0

336112 Light truck and utility vehicle manufacturing 0 $0 $0

Aerosols 325620 Perfumes, Makeups and Other Toiletries - $0 $0

325612 Polishes and Other Sanitation Goods - $0 $0

325520 Adhesive manufacturing - $0 $0

324191 Petroleum lubricating oil and grease 

manufacturing - $0 $0

325510 Paint and Coating Manufacturing - $0 $0

325998 All Other Miscellaneous Chemical Product and 

Preparation Manufacturing 5 -$360,000 $90,000
Economic Impact Screening Analysis 32

325412 Pharmaceutical Preparation Manufacturing - $0 $0

325199 All Other Basic Organic Chemical Manufacturing - $0 $0

339113 Surgical Appliance & Supplies Manufacturing - $0 $0

Foams 326140 Polystyrene foam product manufacturing - $0 $0

335222 Household refrigerator and home freezer 

manufacturing 5 $590,000 $910,000

333415

Air-conditioning and warm air heating equipment 

and commercial and industrial refrigeration 

equipment manufacturing 47 -$70,000 $510,000

326150 Urethane and other foam product (except 

polystyrene) manufacturing 61 $3,840,000 $4,620,000

Retail Food 44511 Supermarkets and Other Grocery (Except 

Convenience) Stores 31,665 $0 $0

44512 Convenience Stores 16,072 $0 $0

44521 Specialty Food Stores – Meat Markets 4,305 $0 $0

44522 Specialty Food Stores – Fish & Seafood Markets 1,470 $0 $0

44523 Specialty Food Stores – Fruit & Vegetable Markets 1,884 $0 $0

445291 Specialty Food Stores – Baked Goods Stores 2,109 $0 $0

445292 Specialty Food Stores – Confectionary & Nut Stores 1,520 $0 $0

445299 All Other Specialty Food Stores 3,004 $0 $0

4453 Beer, Wine, & Liquor Stores 21,562 $0 $0

453110 Florist 15,201 $0 $0

44711 Gasoline Stations with Convenience Stores 41,538 $0 $0

44719 Other Gasoline Stations 11,553 $0 $0

446110 Pharmacies and Drug Stores 16,216 $0 $0

452910 Warehouse Clubs and Superstores - $0 $0

452990 All Other General Merchandise Stores 6,536 $0 $0

72111 Hotels (Except Casino Hotels) & Motels 29,170 $0 $0

72112 Casino Hotels 19 $0 $0

72211 Full-Service Restaurants 134,992 $0 $0

722211 Limited-Service restaurants 98,304 $0 $0

722212 Cafeterias, Buffets, & Grill Buffets 3,900 $0 $0

722213 Snack & Nonalcoholic Beverage Bars 23,226 $0 $0

72241 Drinking Places 35,185 $0 $0

333415

Air-Conditioning and Warm Air Heating Equipment 

and Commercial and Industrial Refrigeration 

Equipment Manufacturing

30 

$420,000 $1,420,000

333311 Automatic Vending Machine Manufacturing 7 $70,000 $170,000

TOTAL* 499,784 $4,490,000 $7,720,000

*Total may not sum due to rounding.
Economic Impact Screening Analysis 33

Table 23: Summary of the Small Business Impact at 3% Discount Rate

Sector NAICS Industry

Estimated 

Number of 

Small 

Businesses 

Affected by 

the Rule

Total Annualized Economic 

Impact on Small Businesses

Lower Higher

MVACs 336111 Automobile Manufacturing 0 $0 $0

336112 Light truck and utility vehicle manufacturing 0 $0 $0

Aerosols 325620 Perfumes, Makeups and Other Toiletries - $0 $0

325612 Polishes and Other Sanitation Goods - $0 $0

325520 Adhesive manufacturing - $0 $0

324191 Petroleum lubricating oil and grease 

manufacturing - $0 $0

325510 Paint and Coating Manufacturing - $0 $0

325998 All Other Miscellaneous Chemical Product and 

Preparation Manufacturing 5 -$390,000 -$20,000

325412 Pharmaceutical Preparation Manufacturing - $0 $0

325199 All Other Basic Organic Chemical Manufacturing - $0 $0

339113 Surgical Appliance & Supplies Manufacturing - $0 $0

Foams 326140 Polystyrene foam product manufacturing - $0 $0

335222 Household refrigerator and home freezer 

manufacturing 5 $240,000 $490,000

333415

Air-conditioning and warm air heating equipment 

and commercial and industrial refrigeration 

equipment manufacturing 47 -$800,000 -$370,000

326150 Urethane and other foam product (except 

polystyrene) manufacturing 61 $2,870,000 $3,460,000

Retail Food 44511 Supermarkets and Other Grocery (Except 

Convenience) Stores 31,665 $0 $0

44512 Convenience Stores 16,072 $0 $0

44521 Specialty Food Stores – Meat Markets 4,305 $0 $0

44522 Specialty Food Stores – Fish & Seafood Markets 1,470 $0 $0

44523 Specialty Food Stores – Fruit & Vegetable Markets 1,884 $0 $0

445291 Specialty Food Stores – Baked Goods Stores 2,109 $0 $0

445292 Specialty Food Stores – Confectionary & Nut Stores 1,520 $0 $0

445299 All Other Specialty Food Stores 3,004 $0 $0

4453 Beer, Wine, & Liquor Stores 21,562 $0 $0

453110 Florist 15,201 $0 $0

44711 Gasoline Stations with Convenience Stores 41,538 $0 $0

44719 Other Gasoline Stations 11,553 $0 $0

446110 Pharmacies and Drug Stores 16,216 $0 $0

452910 Warehouse Clubs and Superstores - $0 $0
Economic Impact Screening Analysis 34

452990 All Other General Merchandise Stores 6,536 $0 $0

72111 Hotels (Except Casino Hotels) & Motels 29,170 $0 $0

72112 Casino Hotels 19 $0 $0

72211 Full-Service Restaurants 134,992 $0 $0

722211 Limited-Service restaurants 98,304 $0 $0

722212 Cafeterias, Buffets, & Grill Buffets 3,900 $0 $0

722213 Snack & Nonalcoholic Beverage Bars 23,226 $0 $0

72241 Drinking Places 35,185 $0 $0

333415

Air-Conditioning and Warm Air Heating Equipment 

and Commercial and Industrial Refrigeration 

Equipment Manufacturing

30 

$300,000 $1,010,000

333311 Automatic Vending Machine Manufacturing 7 $50,000 $120,000

TOTAL* 499,784 $2,280,000 $4,700,000

*Total may not sum due to rounding.

Table 24 aggregates the estimated economic impacts on small businesses, according to the categories set out in 

the SISNOSE decision matrix. For the most conservative assessment, Table 24 reflects the higher cost ranges for 

each end-use and a 7% discount rate. Using the decision criteria established in this screening analysis suggests 

that this rulemaking can be presumed to have no SISNOSE for the following reasons:

• More than 99% of small businesses subject to this rulemaking would be expected to experience zero 

compliance costs.

• For about 120 small businesses that are expected to incur compliance costs as a result of this 

rulemaking, their costs are estimated to be less than 1% of annual sales.

• This analysis indicates that fewer than 80 of the nearly 500,000 affected small businesses—or <0.1%—

could incur costs in excess of 1% of annual sales, and that fewer than 60 small businesses could incur 

costs in excess of 3% of annual sales. These estimates are below the thresholds for a substantial number 

determination (i.e., fewer than 100 businesses, and less than 20% of affected entities).
Economic Impact Screening Analysis 35

Table 24: Aggregated Economic Impacts on Small Businesses

Economic 

Impact Industry Impacted

Number of 

Small Entities 

Subject to the 

Rule and 

Experiencing 

Given 

Economic 

Impact 

Percent of All 

Small Entities 

Subject to the 

Rule That are 

Experiencing 

Given 

Economic 

Impact

Less than 1% 

for all affected 

small entitiesa

335222 Household refrigerator and home freezer manufacturing 5 

0.02%

326150 Urethane and other foam product (except polystyrene) 

manufacturing 36 

333415

Air-conditioning and warm air heating equipment and 

commercial and industrial refrigeration equipment 

manufacturing 71 

333311 Automatic Vending Machine Manufacturing 7 

Total 120 

1% or more for 

one or more 

affected small 

entitiesb

325998 All Other Miscellaneous Chemical Product and

Preparation Manufacturing 3 

0.01%

326150 Urethane and other foam product (except polystyrene) 

manufacturing 26 

333415

Air-Conditioning and Warm Air Heating Equipment and 

Commercial and Industrial Refrigeration Equipment 

Manufacturing 38 

333311 Automatic Vending Machine Manufacturing 7 

Total 74 

Greater than 

3% for one or 

more affected 

small entities

326150 Urethane and other foam product (except polystyrene) 

manufacturing 17 

0.01%

333415

Air-Conditioning and Warm Air Heating Equipment and 

Commercial and Industrial Refrigeration Equipment 

Manufacturing 33 

333311 Automatic Vending Machine Manufacturing 7 

Total 57 

Totals may not sum due to independent rounding.

a Represents small entities affected with an economic impact equal to or lesser than 1% but greater than 0%. 

b This category aggregates the number of small entities that would be expected to experience an impact of 1% to 3% with the number of 

small entities that would be expected to experience an impact of 3% or greater.
Economic Impact Screening Analysis 36

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