## Appendix G

Technical Support Document

Staff Analysis on Emissions and Economic Impact of Proposed Regulation for Small Containers of

Automotive RefrigerantG-i Table of Contents

1. INTRODUCTION

................................................... ..................................................G -1

2. METHODS

................................................... ................................................... ........G-2

2.1 BAU

................................................... ................................................... ........................... G-2

2.1.1 Practices

................................................... ................................................... ............ G-2

2.1.2 Emissions

................................................... ................................................... .......... G-2

2.1.3 Costs

................................................... ................................................... .................. G-3
2.2 Staff Proposal

................................................... ................................................... ......... G-4

2.2.1 Practices

................................................... ................................................... ............ G-4

2.2.2 Emissions

................................................... ................................................... .......... G-5

2.2.3 Costs

................................................... ................................................... .................. G-7

2.2.4 Cost-Effectiveness

................................................... .............................................. G-7 2.3 Can Ban (Original Proposal in AB 32 Early Actio n Report 2007) ................... G-7

2.3.1 Practices

................................................... ................................................... ............ G-7

2.3.2 Emissions

................................................... ................................................... .......... G-8

2.3.3 Costs

................................................... ................................................... ................ G-10

2.3.4 Cost-Effectiveness

................................................... ............................................ G-10

3. SUMMARY OF RESULTS

................................................... .................................G-11

4. DETAILS OF ASSUMPTIONS AND CALCULATION ...........................................G-12
4.1 Independent Parameters

................................................... ...................................... G-12
4.2 Key Assumptions

................................................... ................................................... G-13
4.3 Analysis

................................................... ................................................... .................. G-15

4.3.1 BAU

................................................... ................................................... .................. G-15
4.3.2 Staff Proposal

................................................... ................................................... . G-18

4.3.3 Can Ban

................................................... ................................................... ........... G-21 4.4 Detailed Summary of Results

................................................... .............................. G-25
4.5 Derivation of Key Independent Parameters

................................................... ..... G-26

4.5.1 Y

1
................................................... ................................................... ...................... G-26

4.5.2 P

0
................................................... ................................................... ...................... G-31

4.5.3 P

31 , P 32 , P 33 , and P

34
................................................... ......................................... G-32

4.5.4 F

1 and F

2
................................................... ................................................... .......... G-33

5. REFERENCES

................................................... ................................................... G-35G-ii List of Tables
Table 1: Emissions and Economic Impact of Regulator y Proposals ..........................G-11
Table 2: Independent Parameters ....................

................................................... ......G-12
Table 3: Detailed Emissions and Economic Impact of Regulatory Proposals.............G-25
Table 4: Recharge Interval in ARB El Monte Survey .. ...............................................G-27
Table 5: Recharge Interval in 2008 ARPI DIY Survey. ...............................................G-27
Table 6: Storage Period for People Who would Store Partial Cans ...........................G-29
Table 7: Virtual Storage Period for Those Who would Dispose of Partial Cans .........G-30
Table 8: Overall Storage Period ....................

................................................... .........G-30

Table 9: NPD Data on HFC-134a Units Sold in the U.S . ...........................................G-31
Table 10: Summary of Recharge Interval Estimates... ...............................................G-31

List of Figures
Figure 1. HFC-134a Emissions Associated with DIY Sm all Can Usage in 2006 ..........G-3
Figure 2. Emissions Impact of Proposed Regulation .. .................................................G- 6
Figure 3. Detailed Emissions Impact under Proposed Regulation (95% Return Rate).G-6
Figure 4. Detailed Emissions Impact under Can Ban.. .................................................G- 9
Figure 5. DIY Behavior Change under Can Ban........ ................................................G-3 3G-1



### Staff Analysis on Emissions and Economic Impact of Proposed Regulation for Small Containers of Automotive Refri gerant

1. INTRODUCTION

As required by AB 32, the California Air Resources Board (the ARB, the Board) has developed a list of early action measures (ARB, 2007a). Six of these early action measures are related to Motor Vehicle Air Co nditioning (MVAC). According to the U.S. EPA Vintaging Model, MVAC sys tems are the dominant user of HFC-134a (Thundiyil, 2005). One of the earl y action measures, reduction of HFC-134a emissions from do-it-yourself (DIY) ser vicing of MVAC systems, has been identified as a Discrete Early Action. DIY servicing involves recharging the AC system using small containers (small cans) o f refrigerant typically containing about 12 ounces of refrigerant in weight , but ranging from 2 ounces to 2 pounds in weight. The initial proposal contemplat ed a ban on the sale and use of small cans. A small can industry association, Au tomotive Refrigeration Products Association (ARPI), proposed an alternativ e plan that they claim would achieve similar emission reductions at lower cost. Their proposal included selfsealing valve installed on the can, charging a refu ndable deposit upon sales of the cans, and setting up a can return and recycling program. Concerns about a ban were also expressed by the AB 32 Environmental Justice Advisory Committee (EJAC). The EJAC recommended removing the proposed can ban measure from the Early Action list because the comm ittee believed that the measure seemed unlikely to achieve the goal of dete ction and repair of leaking auto air conditioning systems, and because it would place a large burden on lowincome people (EJAC, 2007).

ARB staff explored the impact of adding firm recycl ing rate targets and a DIY education program to the industry proposal, and is proposing this approach as the Discrete Early Action. This document compares e mission reductions and costs associated with the staff proposal and the al ternative proposal of can ban. The reductions in emissions are calculated in terms of changes from businessas-usual (BAU). The following discussions will firs t provide an overview of the method to calculate emissions and costs, key data, key assumptions, and results. It will be followed by the details of the assumptio ns and calculation.G-2

2. METHODS

2.1 Business-as-usual (BAU)

2.1.1 Practices

DIY practice involves puncturing a one-way can of r efrigerant with a low cost apparatus consisting of a valve and hose, connectin g the apparatus to the low pressure (suction) side of the AC system, and trans ferring refrigerant from one or more small cans to the AC system over the course of many minutes. There are two immediate sources of emissions resulting from t his process. First, some refrigerant escapes from the can and apparatus duri ng the servicing process, which is called servicing losses. Second, some of t he refrigerant typically remains in the small can after the refilling proces s has been completed. This remainder is called the can heel. Because most can s do not include a means to close themselves, the entire can heel is emitted to the atmosphere shortly after the can is disconnected from the recharge apparatus

.

In addition to the immediate emissions there are al so delayed emissions that can be associated with DIY practice. The AC system that receives charge from the DIY small can has leaked, hence the need for rechar ge. Not all DIY service operations are necessarily on systems that leak mor e than properly functioning systems, but some DIY operators recharge their syst ems every few months. The information needed to determine the distribution of leak rates from DIY vehicles is not readily available. But because in most inst ances the DIY operator is not repairing the AC system, but simply re-filling the leaking system, the leak rate is very likely to be higher than properly repaired sys tems. The U.S. EPA Vintaging Model assumes that a properly functioning system sh ould only need to be recharged after about 6 years (Thundiyil, 2008a). T he difference in leak rates between DIY serviced and professionally serviced sy stems is an emission that can be attributed to DIY practice. Professional ser vice technicians are required to fully diagnose the AC system before repairing or re charging it. A large fraction of customers choose to make repairs, even though some choose to simply recharge or top off, and some choose to reject repa irs and forgo air conditioning (see 4.5.3).

2.1.2 Emissions

ARB’s Survey of Consumer Products for 2006 estimate s that California sales of HFC-134a in small containers are 654 metric tons in about 2 million cans (ARB, 2007b). Using a global warming potential (GWP) of 1 300 for HFC-134a (IPCC, 2007), the annual sales correspond to 0.85 million metric ton CO 2 equivalent (MMTCO 2 E) per year. Based on information from a MVAC trade association (Atkinson, 2008a; MACS, 2008), it is estimated that only 5% of small cans sales, or 0.04 MMTCO 2 E per year of HFC-134a, are made to automotive repa ir shops, suggesting that 95%, or 0.81 MMTCO 2 E per year of HFC-134a are used by DIY.G-3

This analysis only considers small can operations p erformed by individual consumers as DIY emissions. We do not include emiss ions associated with small can use by professionals, nor do we include reducti ons of these emissions by the proposed mitigation measures.

The fraction of DIY can use apportioned to servicin g losses, can heels, and system charge is estimated to be 11%, 22%, and 67%, respectively. These figures are based on research commissioned by ARB ( Clodic et al., 2008). The immediate emissions are thus approximately 0.23 MMT CO 2 E per year and the delayed emissions are approximately 0.48 MMTCO 2 E per year. The following figure illustrates the emissions associated with DI Y practice.

Figure 1. HFC-134a Emissions Associated with DIY Sm all Can Usage in 2006

In order to project BAU into the future, several ma jor factors are analyzed. First, the increase of passenger vehicle population and be tter refrigerant containment would likely keep the number of leaky vehicles unch anged. Second, the decrease in AC nominal charge size and better refri gerant containment may keep the recharge frequency unchanged. Furthermore, the amount of refrigerant consumed per recharge will not change due to the ch aracteristics of DIY recharging. Therefore, the annual emissions from DI Y recharging of MVAC are projected to remain roughly constant (at 0.81 MMTCO 2 E per year) through 2020 under BAU. A detailed analysis is presented in 4.3. 1.

2.1.3 Costs

The annual consumer costs associated with BAU are e stimated based on the average retail cost per can. Based on the NPD Autom otive Aftermarket Industry Monitor Data from the total U.S. auto parts chain r etailers sales records (NPD, HFC-134a Sold in Small Cans in CA Currently: 0.85 MMTCO 2 E/yr.

Sold to DIYers: 95% 0.81 MMTCO 2 E/yr. Sold to Professional Shops: 5% 0.04 MMTCO 2 E/yr.

Effective Charge: 67% 0.54 MMTCO 2 E/yr. Servicing Loss: 11% 0.09 MMTCO 2 E/yr. Can Heel: 22% 0.18 MMTCO 2 E/yr.

Immediate Emissions Delayed EmissionsG-4

2008), the cost average out to about $13 per can, i ncluding the cost of the transfer apparatus.

To estimate lifetime costs and costs per consumer, it is necessary to estimate vehicle life and the rate at which the vehicle need s service. Based on a study carried out by ARB staff in support of the AB 1493 regulation development (Vincent et al., 2004), the average vehicle lifetim e in California is 16 years. Based on the I-MAC study (I-MAC Team, 2007), the average time for which a new vehicle will not need AC service is about 7 years. This is also consistent with ARB’s study (Vincent et al., 2004). The estimated p ortion of time for which an average vehicle needs servicing is then 9 years. Fo r vehicles receiving DIY servicing, it is assumed that the leaks are not rep aired, and it is estimated that the vehicle is recharged about once per year, prima rily during summer, based on various data sources. This generates 9 DIY servicin g over the 9 years of service need.

To estimate costs per consumer, it is necessary to estimate the number of vehicles needing service. The ARB study data indica tes that the average number of cans used per service is 1.3 (Clodic et al., 200 8). Given that 1.8 million cans per year are used by DIY operators, about 1.4 milli on DIY service operations occur each year. Given a DIY service rate of once p er year per vehicle, the total number of vehicles that have ever been DIY serviced in the whole in-use fleet is 1.4 million. They are referred to as “DIY vehicles” hereafter in this document. It should be noted that these vehicles have a spectrum of leakage rate. Some of them function normally and only need recharge every several years. Some of them have leaking problem and need frequent recharg e, likely more than once per year. So the number of vehicles that actually g et recharged in any year should be significantly less than 1.4 million. At 1 .3 cans per service and about $13 per can, the average costs of one DIY service a re about $17. The costs per vehicle per year are then about $17. The annual cos ts to consumers for 1.8 million cans at about $13 each are about $24 millio n per year. The costs of 9 DIY service operations over the life of the vehicle are about $152.

2.2 Staff Proposal

2.2.1 Practices

ARB staff is now proposing a comprehensive approach as the Discrete Early Action measure to reduce emissions associated with DIY servicing of MVAC using small cans. The emission reductions would be achieved through the use of a self-sealing valve on the can, improved labeling instructions, a recycling program for used cans, and an education program tha t emphasizes best practice techniques for vehicle recharging as well as highli ghts the environmental risks associated with this product. A mandatory return ra te target will be set at 90% for the first two years of the regulation, and 95% for the following years. As an incentive to promote return of the cans, a deposit of $10 (approximatelyG-5

equivalent to the price of a 12-ounce can) will be collected at time of the sales and will be refunded when the consumer returns the cans. If the return rate target is not met by the end of the first two years, the d eposit will be increased by $5. This process would continue until the target recycl e rate is achieved.

Improved usage instructions on the small cans and D IY education program will better inform consumers of the potential risk to th eir AC and damage to the climate system from DIY recharging, thus discourage some of them continuing DIY recharging. However, this cannot be quantified at this point. In this analysis, it is assumed that no consumer would change DIY beh avior due to this regulation.

2.2.2 Emissions

We expect that the consumer education program would increase the number of DIY users motivated to find and repair leaks. Howev er, no data are available to quantify this change in consumer behavior. For purp ose of analysis the delayed emissions of 0.54 MMTCO 2 E per year are assumed to remain the same and will be addressed through other regulatory approaches, s uch as improving professional servicing and identifying and repairin g leaky MVAC systems via the smog check program.

The emissions due to can heels were 0.18 MMTCO 2 E per year under BAU. With the self-sealing valve, the heel will be contained in the can. If the target return rate of 90% is met for the first two years, these e missions will be reduced to 0.02 MMTCO 2 E per year. If the 95% return rate target is met fo r the years to follow, the can heel emissions will be reduced to 0.01 MMTC O 2 E per year.

It is anticipated that with self-sealing valve, imp roved can instructions, and DIY education program, the servicing losses would be re duced to minimal. Thus, the 0.09 MMTCO 2 E of annual emissions due to servicing are eliminat ed.

Therefore, the annual emissions under this proposal would be 0.56 MMTCO 2 E for the first two years, achieving annual emission reductions of 0.25 MMTCO 2 E. For the following years, the emissions would be 0.5 5 MMTCO 2 E per year and emission reductions are thus 0.26 MMTCO 2 E per year (Figure 2). Figure 3 illustrates the detailed breakdown of the emissions impacts of the proposed regulation when the final return rate target of 95% is reached.G-6 Figure 2. Emissions Impact of Proposed Regulation

Figure 3. Detailed Emissions Impact under Proposed Regulation (95% Return Rate)

Servicing Loss: 11% 0.09 MMTCO 2 E/yr. Effective Charge: 67% 0.54 MMTCO 2 E/yr. Total Emissions under BAU: 0.81 MMTCO 2 E/yr.

0.17 MMTCO 2 E/yr. Eliminated Returned: 95%

0.54 MMTCO 2 E/yr. Remaining the Same 0.01 MMTCO 2 E/yr. Remaining the Same Unreturned: 5% Can Heel: 22% 0.18 MMTCO 2 E/yr.

0.09 MMTCO 2 E/yr. Eliminated

Total Emissions under Staff Proposal: 0.55 MMTCO 2 E/yr. Total Emission Reductions: 0.26 MMTCO 2 E/yr. 2006 2010 2012 2020Annual Emissions (MMTCO2E) 0.81

0.56

0.55 BAU

90% Return Rate 95% Return Rate

Year Proposed Regulation Emission ReductionsG-7

2.2.3 Costs

The extra cost of $1 per can due to the self-sealin g valve and recycling program would be passed on to the consumer in the increased price of the can. At 1.8 million cans per year the increased consumer costs are $1.8 million. The extra costs include about $0.25 per can for the valve, an d about $0.75 per can to cover the costs of return shipping for the cans, extracti ng and recycling the can contents, and reporting to ARB.

Given a 95% can return rate and a $10 deposit per c an, the 5% of unclaimed deposits come to $0.9 million per year and will be additional costs to the

consumers.

Total increased costs to the consumer are thus $2.7 million per year.

2.2.4 Cost-Effectiveness

Under this proposal, about 0.26 MMTCO 2 E of emissions would be reduced per year at an increased cost of $2.7 million per year. The cost-effectiveness is then about $11/MTCO 2 E.

2.3 Can Ban (Original Proposal in AB 32 Early Actio n Report 2007)

2.3.1 Practices

The can ban remains as an alternative proposal. Ide ally, there would no longer be any DIY servicing if a can ban is in place. All servicing would be done by professional shops. Some consumers would forgo air conditioning and some would take their vehicle to the professional shops. In practice, some DIY will evade the regulations and acquire HFC-134a for DIY operations. Professional shops in California are required by the California Bureau of Automotive Repair (BAR) to conduct complete diagnostics prior to rech arging an auto AC system. Based on trade association survey data a large frac tion of vehicles brought to a professional shop are repaired before being release d in a recharged state. The repairs conducted by professional shops are expecte d to last 6 years (Thundiyil, 2008a), thus reducing the emission rate for former DIY vehicles to one sixth of its pre-repair value. During professional repair and re charge, a certain amount of refrigerant will be emitted due to servicing losses and cylinder heel emissions. There will also be some professionally serviced veh icles that may need repairs but receive a recharge only or a top off. There wil l also be professional serviced vehicles for which repairs are not effective. For p urpose of analysis these vehicles are considered part of the group of vehicl es that receive a professional recharge service or top off without repair.G-8

2.3.2 Emissions

Under the ban, the treatment of the delayed emissio ns of 0.54 MMTCO 2 E per year from leaking vehicles is divided into categori es based on consumer choices. The emission reductions are different for each cate gory. Based on an ARPI commissioned survey (Frost and Sullivan, 2006), A M ACS survey (Atkinson, 2008b), and an IMR survey (ARPI, 2008a), it is esti mated that 32% of the original DIY consumers would pay for professional repair and recharge, 23% of them would have professional technicians recharge their AC without repair, 7% would choose topping off at professional servicing, 19% w ould continue DIY recharging using small cans obtained from alternative ways, an d the remaining 19% would forgo AC.

The 32% of vehicles that receive professional repai r are assumed to have their original recharge frequency of once per year reduce d to once charge per 6 years. On the other hand, it is estimated that every profe ssional recharge uses 1.6 times as much as the fresh refrigerant used in DIY recharge. Therefore, the delayed emissions of 0.17 MMTCO 2 E per year become 0.27 MMTCO 2 E per 6 years, or 0.045 MMTCO 2 E per year. A U.S. EPA testing study on the heel fr om disposable containers (U.S. EPA, 2007) suggests the average cylinder heels are about 2%. So the heel emissions are about 0.001 MMT CO 2 E per year. It is assumed there is no fresh refrigerant lost in the f orm of servicing losses during professional recharging.

The 23% of vehicles that receive professional recha rge without repair would then leak at their pre-servicing rate. Nonetheless, the professional technicians have the equipment and skills to charge AC to their nomi nal charge. The next recharge will not take place until the AC loses 50% of the n ominal charge again. In contrast, DIY on average undercharge their AC. It i s estimated that a professionally recharged AC has 1.4 times as much r efrigerant to lose as that of a DIY recharged AC. Therefore, a professionally rec harged AC has longer interval between two recharges, 1.4 times as long a s that of a DIY recharged AC. On the other hand, the average professional recharg e uses 1.6 times as much as the refrigerant used by DIY. Therefore, the delayed emissions of 0.12 MMTCO 2 E per year are changed to 0.2 MMTCO 2 E per 1.4 years, or 0.14 MMTCO 2 E per year. The heel emissions work out to be about 0.003 MMTCO 2 E per year. No fresh refrigerant will be lost as servicing losses.

The 7% of vehicles that are topped off at professio nal servicing will emit at their original rate. Therefore, the delayed emissions of 0.04 MMTCO 2 E per year emitted by these vehicles remain the same. In addit ion, topping off would incur 0.013 MMTCO 2 E per year in heel emissions and 0.006 MMTCO 2 E per year in servicing losses.

The 19% that remain DIY recharging using small cans obtained from alternative ways will also emit at their original rate. Therefo re, the delayed emissions of 0.1G-9

MMTCO 2 E per year emitted by these vehicles remain the sam e. Another 0.033 MMTCO 2 E per year in heel emissions and 0.016 MMTCO 2 E per year in servicing losses would occur.

The rest 19% of vehicles would forgo AC, thus no lo nger emit refrigerant. Therefore 0.1 MMTCO 2 E of delayed emissions per year are reduced to zero

. Apparently, there are no immediate emissions associ ated with this group of vehicles. Forgoing MVAC has potential consequences for indirect emissions because consumers without AC would likely drive wit h windows rolled down for a large share of vehicle-miles-traveled (VMT). The in creased load due to increased drag force must be balanced against the reduced loa d due to non-operation of the AC compressor. At high speed, indirect emission s might be increased. At low speed, indirect emissions will be reduced. On avera ge, the change in indirect emissions due to non-operation of the MVAC is expec ted to be a net reduction (i.e., forgoing AC would probably reduce indirect e missions). Changes in indirect emissions have not been included in this analysis.

The total annual emissions under can ban are thus 0 .4 MMTCO 2 E. The annual emission reductions are 0.41 MMTCO 2 E. Figure 4 shows the emissions impact of the can ban approach.

Figure 4. Detailed Emissions Impact under Can Ban Total Emission Reductions: 0.41 MMTCO 2 E/yr. Total Emissions under BAU: 0.81 MMTCO 2 E/yr.

Servicing Loss: 11% 0.09 MMTCO 2 E/yr. Effective Charge: 67% 0.54 MMTCO 2 E/yr. Can Heel: 22% 0.18 MMTCO 2 E/yr.

Pro. Repair/Recharge:

32% Pro. Recharge only:

23% Forgo AC:

19% Pro. Top off:

7% Obtain Refrigerant

from Other Means: 19%

0.17 MMTCO 2 E/yr.
Become 0.045 MMTCO 2 E/yr. 0.12 MMTCO 2 E/yr.
Become 0.14 MMTCO 2 E/yr. 0.1 MMTCO 2 E/yr.

Eliminated 0.04 MMTCO 2 E/yr.

Remain the Same 0.1 MMTCO 2 E/yr.

Remain the Same

Effective Charge: 0.14 MMTCO 2 E/yr. Immediate Emissions: 0.07 MMTCO 2 E/yr. Effective Charge: 0.185 MMTCO 2 E/yr. Immediate Emissions: 0.004 MMTCO 2 E/yr.

Total Emissions under Can Ban: 0.40 MMTCO 2 E/yr.G-10

2.3.3 Costs

Under the can ban, consumer costs would be affected mainly by the difference between the cost of professional repairs and the co st of DIY recharges. DIY recharges were estimated to occur at a rate of once per year, at cost of about $17 per year. Professional diagnosis/repairs/recharges are estima ted to cost about $650. This is based on the 2003 MACS Survey w hich shows that a professional repair costs $508 on average in 2003 ( MACS, 2008), which is about $580 in 2007 dollars. We then add a $70 recharge ch arge on top of that. Professional repair/recharge is assumed to occur ev ery 6 years on average for a cost of $108 per year for the 32% of consumers choo sing professional repair. Professional recharge without repair is estimated t o cost about $100 (Clodic et al., 2008) and is assumed to occur every 1.4 years for a cost of $71 per year for the 23% of consumers choosing professional recharge. Pr ofessional topping off is estimated to cost about the same as professional re charge, $100 (Clodic et al., 2008), and to occur once a year on average for a co st of $100 per year for the 7% of consumers choosing to have their system toppe d off. About 19% of consumers would still DIY recharge their vehicles o nce a year using refrigerant that they obtain from alternative ways, at a cost a ssumed to be 50% higher than under BAU, or about $25 per year. For the approxima tely 1.4 million vehicles involved, the total consumer costs increase from $2 4 million to $88 million, an increase of $65 million annually. For individual owners, the vehicle lifetime costs increase from $152 for 9 DIY recharges to $975 for 1.5 professional repair and recharge services, to $643 for 6.4 professional rec harges, to $900 for 9 top offs at professional servicing, or to $228 for 9 DIY rec harges using HFC-134a obtained by alternative means. In addition, about 1 9% of consumers do not pay the increased cost, and therefore have no air condi tioning in their vehicles.

There would be no costs or charges imposed on the s mall can industry to comply with the ban, but there would be complete loss of r evenue from the small can business in California. Annual can sales to DIY own ers are about 1.8 million at an average retail price of about $13 including cost of transfer apparatus. The 0.1 million cans sold to professional AC shops are also assumed to be at $13 per can for purpose of analysis. Therefore, industry w ould lose annual revenues of about $25 million due to the can ban.

Under the can ban, the professional MVAC repair ind ustry would see a revenue increase equal to the amount paid by former DIY ope rators to obtain professional repairs. This amount is estimated to be $82 million per year.

2.3.4 Cost-Effectiveness

The emissions reduction under the can ban is 0.41 M MTCO 2 E per year. The increase in consumer costs is $65 million per year. The cost per metric ton of reduction borne by the consumer is then about $159/ MTCO 2 E.G-11

3. SUMMARY OF RESULTS

DIY recharging of MVAC systems with HFC-134a genera tes emissions of about 0.81 MMTCO 2 E per year.

ARB staff proposes a comprehensive measure that cou ld achieve emission reductions of 0.26 MMTCO 2 E per year even if no DIY consumers change their behavior. The cost-effectiveness works out to be $1 1/MTCO 2 E and industry would likely see no revenue losses.

The alternative can ban approach would eliminate ap proximately 0.41 MMTCO 2 E per year of HFC-134a emissions from DIY recharging of MVAC using small cans at a cost of about $159/MTCO 2 E to the consumer plus $25 million per year in lost revenues to industry.

Table 1: Emissions and Economic Impact of Regulator y Proposals

Scenario Emissions

MMTCO 2 E/yr. Emission

Reductions

MMTCO 2 E/yr. CostEffectiveness

Dollars/MTCO 2 E Lost Revenue

Million Dollars/yr.

BAU 0.81 NA NA NA

Staff Proposal* 0.55 0.26 11 0

Can Ban 0.4 0.41 159 25

* Calculation based on a can return rate target of 95%.G-12

4. DETAILS OF ASSUMPTIONS AND CALCULATION

4.1 Independent Parameters

Table 2: Independent Parameters

Notation Definition Estimate References

S tot Number of small cans sold annually in CA 2 million ARB, 2007b

E tot Amount of HFC-134a sold in small cans annually in CA 0.85 MMTCO 2 E Same as the above

Y Vehicle’s average lifetime 16 years Vincent et al., 2004

Y 0 Average time after which a leaky vehicle’s AC needs its first recharge 7 years I-MAC Team, 2007

Y 1 Average time that a leaky MVAC recharged without repair lasts before it needs another recharge 1 year ARB staff estimate (see 4.5.1)

Y 2 Average time that a leaky MVAC repaired and recharged by a professional shop lasts before it needs another repair and recharge 6 years Thundiyil, 2008a

N C Average number of small cans needed for a DIY recharging event 1.3 cans Clodic et al., 2008

P 0 Percentage of HFC-134a in small cans sold to DIY in CA 95% ARB staff estimate (see 4.5.2)

P 11 Average percentage of can heels during DIY recharging 22% Clodic et al., 2008

P 12 Average percentage of servicing leaks during DIY recharging 11% Same as the above

P 2 Percentage of DIY that return the used cans (under hybrid approach) 90%, 95% Targeted return rates in the mandatory small can return / recycling program

P 31 Percentage of original DIY (under BAU) that would pay for professional diagnosis, repair and recharge in case of a can ban 32% ARB staff estimate (see 4.5.3)

P 32 Percentage of original DIY (under BAU) that would choose to evacuate and recharge at professional shops in case of a can ban 23% Same as the above

P 33 Percentage of original DIY (under BAU) that would choose to top off with small cans at professional shops in case of a can ban 7% Same as the above

P 34 Percentage of original DIY (under BAU) that would choose to continue DIY recharging AC using small cans obtained through alternative ways in case of a can ban 19% Same as the above

P 35 Average percentage of fresh refrigerant lost due to can heels during professional recharge (in relation with total fresh refrigerant usage) 2% U.S. EPA, 2007

P 36 Average percentage of fresh refrigerant lost due to servicing losses during professional recharge (in relation with total fresh refrigerant usage) 0% Most conservative scenario based on Clodic et al., 2008G-13

P 37 Percentage of increase in DIY cost for people seeking alternative ways to obtain small cans in case of a can ban 50% ARB staff estimate

R 1 Average retail price for a small can $13 NPD, 2008

R 21 Price increment for a small can under staff proposal $1 ARPI, 2008b

R 22 Deposit for a small can under staff proposal $10 Specified value to ensure high incentive for return of cans

R 31 Average price for a professional diagnosis, repair and recharge of a leaky MVAC $650 ARB staff estimate based on 2003 MACS Survey (MACS, 2008)

R 32 Average price for a professional recharge of a leaky MVAC $100 Clodic et al., 2008

F 1 Ratio of effective charge to be leaked out before next servicing from professionally recharged MVAC to that from DIY recharged MVAC 1.4 ARB staff estimate (see 4.5.4)

F 2 Ratio of effective charge during professional recharging to that during DIY recharging 1.6 Same as the above

4.2 Key Assumptions

1. The refrigerant charged into a MVAC during the l ast recharge in its useful lifetime is emitted in the same way and amount as t he previous recharges. I.e. the effect of end-of-life emissions is not taken in to account.

2. The owner of a DIY vehicle maintains his / her r epair / recharge preferences unless there are regulatory changes. This may not a lways be the case in reality. For example, a consumer could DIY recharge the MVAC this year but have professional repair it the next year. Another examp le is when vehicle ownership changes, the new owner may make different decisions on the maintenance of the vehicle. But that would make the situation too comp licated for the analysis to be feasible.

3. Each DIY consumer (household) owns one and only one DIY vehicle.

4. MVAC is used throughout a vehicle’s lifetime.

5. A MVAC has to lose 50% of its refrigerant before a recharge takes place. This is based on findings from an ARB sponsored study (C lodic et al., 2008) and is consistent with an assumption made in the U.S. EPA Vintaging Model.

6. Under the staff proposal, no DIY consumer would change his behavior (switching to professional servicing, etc.). This i s because the increased financial burden is mild as long as a consumer returns the us ed cans for a refund of the deposit. The potential risk of DIY recharging MVAC conveyed by the educationG-14

materials might discourage some consumers to contin ue DIY recharging. However, this effect cannot be quantified at this p oint.

7. Under the staff proposal, the effective charge i s the same as under BAU. Having self-sealing valve and improved usage instru ctions would likely change the percentage. But no data are available to quanti fy this effect.

8. Under the staff proposal, servicing leaks can be reduced down to minimal due to better usage instructions to the DIY and having self-sealing valves on the can.

9. Under the staff proposal, the heel in the return ed cans would be completely recovered, thus causing no emissions.

10. Under the staff proposal, unreturned cans would end up being disposed of and the heel would be emitted to the atmosphere eve ntually.

11. Under the staff proposal, the can heel percenta ge is the same as under BAU. Having self-sealing valve and improved usage instru ctions would likely change the percentage. But no data are available to quanti fy this effect.

12. The DIY education components of the staff propo sal incur no additional costs to the consumers. In reality, having the education components might add some costs to the industry, which would probably pass th e costs on to consumers. However, this cannot be quantified.

13. On average, DIY recharging under the staff prop osal uses the same number of cans per recharge as under BAU. Having self-seal ing valve and improved usage instructions would likely reduce the number o f cans used per recharge. However, no data are available to quantify this eff ect.

14. In case of can ban, the behavior changes (switc hing to professional servicing, etc.) of the original DIY consumers are independent of the working conditions of the MVAC. The implication is that every new group o f vehicles formed by the behavior changes of their owners will have the same average leak rate.

15. Topping off of a MVAC by a professional technic ian resembles DIY recharging at all aspects. It is reasonable to spec ulate that professional topping off using small cans or cylinder and manifold produ ces less immediate emissions and more effectively charges refrigerant into AC th an DIY operation. However, no data are available to justify it.

16. In case of can ban, the revenue lost by the sma ll can industry cannot be offset by the potential internet or out-of-state sa les. Although part of the sales may generate revenue to the industry, the sales may depend on a lot of factors which are difficult to quantify.G-15

4.3 Analysis

4.3.1 BAU

According to the ARB Consumer Products Survey for 2 006 (ARB, 2007b), the small cans of HFC-134a sold in California in 2006 a mounted to

cans million 2 tot = S , and E MMTCO 85.0 2 tot = E

.

It is estimated (see 4.5.2) that P 0 = 95% of the cans are sold to DIY and the rest to professional servicing for topping off purposes. Thus, cans used by DIY constitute

E) MMTCO ( 808 .0 85.0 % 95 2

tot 0 BAU

= × = ⋅ = E P E . (4.3.1)

Per Assumption 1 , this equals the annual emissions caused by DIY re charging. For purpose of analysis, we convert the emissions t o the nominal number of cans by assuming 12 oz / can:

cans) (million 826 .1 808 .0 10 261 .2 10 261 .2

MMT E MMTCO 1300 kg MMT 10

oz kg 02835 .0 oz 12

6 BAU 6

2 9 BAU BAU

=

× × = ⋅ × =

× × × =

− E E S . (4.3.2)

This number is used hereafter wherever the number o f cans sold to DIY is needed.

The number of unique DIY vehicles is

vehicles) (million 404 .1 3.1 826 .1 1 C

BAU 1 V

= ×

= ⋅

= N S Y N , (4.3.3)

where Y

1 is the interval between two consecutive recharges, and N C is the number of cans used in each recharge. Note that a v ehicle that gets multiple recharges during its lifetime is counted as one uni que DIY vehicle. According to Assumption 2 , these vehicles will be DIY recharged during their lifetime unless a regulation such as can ban takes effect. Based on A ssumption 3 , this is also the number of unique DIY consumers (households). It is worth noted that quite often a vehicle changes ownership. So the group of DIY ve hicle owners changes over time.G-16

It is assumed a MVAC does not need recharging until after Y 0 = 7 years in its lifetime. So the adjusted lifetime (referred to her eafter as ‘lifetime’) during which recharging happens is

(years) 9 7 16 0 adj

=
− = − = Y Y Y , (4.3.4)

where Y

= 16 years is vehicle’s lifetime and also the life time of MVAC (Assumption 4 ) in California.

The number of recharges in a DIY vehicle’s lifetime is

(times) 9 1 9 1

adj BAU R,

= = = Y

Y N . (4.3.5)

The emissions under BAU can also be expressed by a bottom-up approach. Under BAU, a DIY recharges the AC when its refriger ant level drops to 50% of the nominal charge (Assumption 5 ). Define M DIY (in MMTCO 2 E) as the amount of refrigerant effectively charged into AC. This equal s the amount of refrigerant that the AC needs to lose before another recharge become s necessary. Then over Y 1 years the AC leaks until its charge drops to 50% ag ain. Thus each year the AC leaks by the amount of M DIY / Y 1 . However, these gradual leaks (delayed emissions) are not the only source of emissions cau sed by DIY. Losses during servicing and due to can heels also need to be take n into account. Thus the total annual emissions are

12 11 1 DIY V

BAU 1 P

P Y M N

E

− − ⋅

= , (4.3.6)

where P 11 and P 12 are the fractions of refrigerant lost due to can h eel and during servicing, respectively, during DIY recharging.

The annual costs for a DIY vehicle are

(dollars) 90. 16 1 13 3.1 1 1

C BAU

= ×

= ⋅

= Y R N C , (4.3.7)

where R 1 is the retail price of a can of HFC-134a.G-17

Therefore the annual costs for all DIY vehicles are

dollars) (million 73. 23 13 826 .1 1 BAU BAU V BAU all,

= × = ⋅

= ⋅ = R

S C N C . (4.3.8)

The lifetime costs for a DIY vehicle are

(dollars) 10. 152 90. 16 9 BAU

adj BAU L,

= × = ⋅ = C Y C . (4.3.9)

In order to project BAU into the future, several ma jor factors need to be taken into account. First, the increase of passenger veh icle population and better refrigerant containment in newer MVAC will keep the number of leaky vehicles unchanged. The EMFAC Model 2007 estimates that the population of passenger vehicles in California will increase by around 400, 000 each year through 2020. But newer MVAC systems have improved designs and im proved production controls so that they are tighter and have reduced probability of becoming leaky. The latter cannot be quantified at this point. So a conservative assumption is made that the increased population and decreased pr obability produces a steady multiplication, i.e. the number of leaky MVAC.

Second, the decrease in MVAC nominal charge size an d improvement of refrigerant containment will keep the recharge freq uency unchanged. The average nominal charge size for a new single evapor ator MVAC decreases from 26.9 oz in 2000 to 22.3 oz in 2006 (Atkinson, 2008b ). The trend will likely continue, but with reduced pace over years. On the other hand, the improved refrigerant containment will reduce the leak rate o f a leaky AC. In the absence of data to quantify the containment improvement, it is reasonable to assume that these two factors cancel out the effects from each other, making the recharge frequency unchanged. This is consistent with the a pproach used in the GREENMAC-LCCP Model, which does not differentiate rechar ge frequency for different model year vehicles (Papasavva et al., 2008). As a side note, in the development of AB 1493 regulation, ARB staff estima ted that California’s MVAC emits 55 grams per year on average (ARB, 2004). Th e MVAC refrigerant emissions testing studies conducted by the European Automobile Manufacturers Association (ACEA) and Japan Automobile Manufacture rs Association (JAMA) suggest that newer vehicles leak around 10 grams pe r year and very few vehicles emit significantly more than that (Atkinso n, 2008c; Clodic, 2006). This substantial difference in leak rate may be attribut ed mainly to improved refrigerant containment of newer AC models as well as deterioration of containment over time.

Lastly, the amount of refrigerant consumed per rech arge will not change due to the characteristics of DIY recharging. A DIY has n o means to know the remaining refrigerant level in an MVAC or to determ ine the proper amount of refrigerant to be charged. A DIY terminates chargi ng based on empirical orG-18

arbitrary criteria, such as the outflow air tempera ture, depletion of a can, and pressure gauge reading falling into a range specifi ed in charging kit instructions. None of these criteria presents solid ground for ch arging the proper amount of refrigerant (Clodic et al., 2008). DIY on average undercharge the current MVAC systems. With AC nominal charge decreased, DIY may charge close to the correct amount or overcharge. But the number of sm all cans used per recharge is not dependent on the nominal charge size.

Therefore, the BAU emissions from DIY recharging ar e projected to remain roughly constant at 0.81 MMTCO 2 E per year through 2020. ARPI had projected a 1-2% annual sales growth under BAU, likely based on national sales trend (ARPI, 2006). It may not reflect with precision Ca lifornia’s unique usage patterns and the various trends discussed above. The uncert ainties carried with the assumptions in the staff analysis to support this d ocument may overshadow a 1- 2% annual change. Therefore, no attempt has been m ade to empirically adjust the BAU trend to match ARPI’s projection.

Note that this BAU projection does not account for the potential climate impact from other Early Action measures, such as “Addition of AC leak test and repair requirement to smog check”, “Requirement of low-GWP refrigerants for new MVAC”, and “Reductions of HFC-134a emissions from p rofessional servicing of MVAC”.

4.3.2 Staff Proposal

ARB staff now proposes a comprehensive approach to reducing the emissions from DIY recharging of MVAC. This approach incorpor ates some of the key elements that were proposed by the small can indust ry association, ARPI, and also reflects staff’s modifications.

Per Assumption 6 , all the original DIY consumers would continue DIY recharging their MVAC. They would charge the same amount of re frigerant as under BAU (Assumption 7 ). Based on Assumption 8 , there are no servicing losses due to improved usage instructions and effects of self-sea ling valves. Because of the mandatory return requirement for the cans and the d eposit / refund mechanism, most of the DIY consumers ( P 3 ) are anticipated to return the used cans, thus causing no emissions from can heels (Assumption 9 ). Those who do not return the can will incur heel emissions (Assumption 10 ) at the same percentage as under BAU (Assumption 11 ). Since the effective charge and leak rate are the same as under BAU, the recharging frequency is stil l once every Y 1 years. The annual emissions are then

11 1 DIY V 2

1 DIY V 2 prop 1 ) 1(

P Y

M N P

Y M N P E

− ⋅ ⋅ −

+

⋅ ⋅ = . (4.3.10)G-19

Thus,

E) (MMTCO 549 .0 808 .0 %) 11 % 22 1( ) % 22 1 % 95 1 % 95( )

1( ) 1 1 (

2 BAU 12 11 11 2 2 prop

= ×

− − ×

− − + = ⋅ − − ⋅

− − + = E P P P P P E . (4.3.11)

The annual emission reductions are

E) (MMTCO 259 .0 549 .0 808 .0 2

prop BAU prop

=
− = − = E E ER . (4.3.12)

Having self-sealing valve installed on the cans, ma naging the can return / recycling, and handling the deposit would cause add itional costs, which would most probably be passed on to consumers in the form of price increase of R 31 per can. Those who do not return the cans would los e the deposit of R 32 per can. Per Assumption 12 , no additional costs to the consumers would occur as a result of the education components.

The number of DIY recharging is the same as under B AU ( N R,BAU ).

(times) 9 1 9 1

adj

prop R,

= = = Y

Y N . (4.3.13)

The annual costs for a vehicle whose owner returns the used cans are

(dollars) 20. 18 1 )1 13( 3.1 )

(

1 21 1 C
prop 1,

= + ×

= +

⋅

= Y R R N C . (4.3.14)

Note that every recharge uses the same number of ca ns as under BAU (Assumption 13 ).

The lifetime costs for such a vehicle are

(dollars) 80. 163 20. 18 9 prop

1, adj prop L, 1,

= × = ⋅ = C Y C . (4.3.15)G-20

The annual costs for a vehicle whose owner does not return the used cans are

(dollars) 20. 31 1 ) 10 1 13( 3.1 )

(

1 22

21 1 C
prop 2,

=

+ + ×

= +

+

⋅

= Y R

R R N C . (4.3.16)

The lifetime costs for such a vehicle are

(dollars) 80. 280 20. 31 9 prop

2, adj prop L, 2,

= × = ⋅ = C Y C . (4.3.17)

Then the annual costs for all DIY vehicles are

dollars) (million 47. 26 20. 31 404 .1 %) 95 1( 20. 18 404 .1 % 95 ) 1( prop

,2 V 2 prop ,1 V 2 prop all,

= × ×

− + × × = ⋅ ⋅ − +

⋅ ⋅ = C N P C N P C . (4.3.18)

The annual extra costs for all DIY vehicles are

dollars) (million 74.2 73. 23 47. 26 BAU all, prop all, prop all,

=
− = − = C C EC . (4.3.19)

The cost-effectiveness to consumers is

E) TCO (dollars/M 58. 10 259 .0 74.2

2

prop prop all,

prop cons,

= = = ER

EC CE . (4.3.20)

The annual revenue losses by small can industry are

0 prop = RL . (4.3.21)G-21

4.3.3 Can Ban

If a can ban is in place, a portion of the original DIY consumers would change their behavior based on costs, convenience and othe r personal preferences, but not the MVAC’s working conditions (Assumption 14 ). A fraction ( P 31 ) of the same leaky vehicles would be brought into professional s hops for diagnosis, repair and recharge by M

Pro (in MMTCO 2 E) of fresh refrigerant. They originally would lose 50% of their nominal charge over Y 1 years (Assumption 14 ) if DIY recharged. But now they would leak at reduced rates during Y 2 years until they lose 50% of their nominal charge again. A second part ( P 32 ) of the leaky vehicles would be taken to professional shops for recharge without repair. The serviced AC will then leak at the same rate as DIY (Assumption 14 ), but during a modified (prolonged) period. This is because DIY generally undercharge A C due to lack of equipment and skills to know the proper amount of effective c harge. On the contrary, professional technician can charge AC to its nomina l level. Defining F 1 as the ratio of charge to be leaked out before next servic ing from a professionally recharged AC to that from a DIY recharged AC, a pro fessionally recharged AC needs another recharging after a period of F 1 · Y 1 . Another fraction ( P 33 ) of the leaky vehicles would be taken to professional shops for topping off using small cans or cylinder and manifold. According to Assumpt ion 15 , they will be charged by M DIY and the charge will leak out during Y 1 years, essentially the same as DIY. A fourth portion ( P 34 ) of the vehicles would still be DIY recharged with refrigerant obtained from alternative ways, resulting in exactl y the same emissions as under BAU (Assumption 14 ). The rest of the leaky vehicles would not get rep air and recharge and hence would eventually go without AC, generating no refrigerant emissions. The total annual emissions should includ e not only the amount of fresh refrigerant effectively charged into the AC, but also the fresh refrigerant lost during servicing (DIY or professional) and due to c ontainer (can or cylinder) heels.

12 11 1

DIY V 34 1 DIY V 33

36 35 1

1 Pro V 32 2 Pro V 31

ban 1

1 P P Y

M N P Y M N P

P P Y

F M N P Y M N P

E

− − ⋅ ⋅ +

⋅ ⋅

+

− − ⋅

⋅ ⋅ +

⋅ ⋅

= , (4.3.22)

where P

35 and P

36 are the fractions of fresh refrigerant lost due to can heel and during servicing, respectively, during professional recharging. Note that P 36 is assumed to be negligible in this analysis.

Define

2 DIY Pro F M M

=

.G-22

Then

E) (MMTCO 402 .0 808 .0 %)] 19 % 7 ) 4.1 % 23 % 32 6 1 ( 6.1 % 0 % 2 1 % 11 % 22 1 [ )] ) ( 1 1 [

2 BAU 34 33 1 32 31 2 1 2 36 35 12 11 ban

= × + + + × × ×

− − − −

= ⋅ + + +

⋅ ⋅ ⋅

− − − −

= E P P F P P Y Y F P P P P E . (4.3.23)

The derivation of P 31 , P 32 , P 33 , P 34 , F 1 , and F

2 can be found in 4.5.3 and 4.5.4.

The annual emission reductions are

E) (MMTCO 405 .0 402 .0 808 .0 2

ban BAU ban

=
− = − = E E ER . (4.3.24)

The number of professional servicing that involves repair in a vehicle’s lifetime is

(times) 5.1 6 9 2

adj

rep R,

= = = Y Y N . (4.3.25)

The annual costs for such a vehicle are

(dollars) 33. 108 6 650 2

31 ban 1,

= = = Y R C . (4.3.26)

The lifetime costs for such a vehicle are

(dollars) 975 33. 108 9 ban

1, adj ban L, 1,

= × = ⋅ = C Y C . (4.3.27)

The number of professional recharging that does not involves repairs in a vehicle’s lifetime is

(times) 4.6 1 4.1 9 1 1 adj

rec R,

= × = ⋅ = Y F Y N . (4.3.28)G-23

The annual costs for such a vehicle are

(dollars) 43. 71 1 4.1 100 1

1 32 ban 2,

= × = ⋅ = Y F R C . (4.3.29)

The lifetime costs for such a vehicle are

(dollars) 86. 642 43. 71 9 ban

2, adj ban L, 2,

= × = ⋅ = C Y C . (4.3.30)

The number of professional topping off in a vehicle ’s lifetime is the same as under BAU ( N

R,BAU ).

(times) 9 1 9 1

adj top R,

= = = Y Y N . (4.3.31)

The annual costs for such a vehicle are

(dollars) 100 1 100 1

32 ban 3,

= = = Y R C . (4.3.32)

The lifetime costs for such a vehicle are

(dollars) 900 100 9 ban

3, adj ban L, 3,

= × = ⋅ = C Y C . (4.3.33)

The number of DIY recharging using refrigerant obta ined through alternative ways is the same as under BAU ( N R,BAU ).

(times) 9 1 9 1

adj
alt R,

= = = Y Y N . (4.3.34)G-24

The annual costs for such a vehicle are

(dollars) 35. 25 1 13 %) 50 1( 3.1 )

1(

1 1 37 C ban 4,

=

× + ×

= ⋅

+

⋅

= Y R

P N C , (4.3.35)

where P

37 is the percentage of cost increase for those who s eek alternative ways of obtaining refrigerant.

The lifetime costs for such a vehicle are

(dollars) 15. 228 35. 25 9 ban

4, adj ban L, 4,

= × = ⋅ = C Y C . (4.3.36)

Note that the owners for the rest of the original D IY vehicles would choose to forgo AC under can ban, thus incur no costs. The annual costs for all original DIY vehicles are

dollars) (million 36. 88 ) 35. 25 % 19 100 % 7 43. 71 % 23 33. 108 % 32( 404 .1 ) ( ban 4, 34 ban 3, 33 ban 2, 32 ban 1, 31 V ban 4, V 34 ban 3, V 33 ban 2, V 32 ban 1, V 31 ban all,

= × + × + × + × × = ⋅ +

⋅ +

⋅ +

⋅ ⋅ = ⋅ ⋅ +

⋅ ⋅ +

⋅ ⋅ +

⋅ ⋅ =

C P C P C P C P N C N P C N P C N P C N P C .(4.3.37)

The annual extra costs for all original DIY vehicle s are

dollars) (million 62. 64 73. 23 33. 88 BAU all, ban all, ban all,

=
− = − = C C EC . (4.3.38)

The cost-effectiveness to consumers is

E) TCO (dollars/M 85. 157 405 .0 62. 64

2

ban ban all, ban cons,

= = = ER

EC CE . (4.3.39)

The annual revenue losses by small can industry are

dollars) (million 98. 24 13 % 95 826 .1 1

0 BAU ban

= × = ⋅ = R P S RL . (4.3.40)

Note that the above equation accounts for the reven ue from the can sales to professional servicing that would be lost in case o f can ban. Also note that theG-25

potential revenue increase through sales via intern et or from out-of-state is not included per Assumption 16

.

4.4 Detailed Summary of Results

Table 3: Detailed Emissions and Economic Impact of Regulatory Proposals

BAU Staff Proposal* Can

Ban

Annual Can Sales to DIY (million cans) 1.8 1.8 NA Annual Emissions (MMTCO 2 E) 0.81 0.55 0.40 Annual Emission Reductions (MMTCO 2 E) NA 0.26 0.41 Annual Costs for All Original DIY Vehicles (million dollars) 23.73 26.47 88.36 Annual Extra Costs for All Original DIY Vehicles (m illion dollars) NA 2.7 64.6 Cost-effectiveness to Consumers (dollars/MTCO 2 E) NA 11 159 Annual Revenue Loss (million dollars) NA 0 25 * Calculation based on a can return rate target of 95%G-26

4.5 Derivation of Key Independent Parameters

4.5.1 Y

1

Definition

The average interval between two DIY recharging is estimated by several approaches and data sources in this document. In mo st cases, it is calculated based on responses from surveyed individuals about their recharge intervals. It needs to be noted that the average recharge interva l should not be defined as the straight mean of the recharge intervals from al l the samples because this does not make physical sense. Rather, it should be defined as the reciprocal of the average leak rate and the average leak rate is the mean of the leak rate for all responses. In other words, it is the harmonic m ean of the recharge intervals of all the samples:



## ∑

= = N

Y N Y 1

i i 1 1 1 . (4.5.1)

This is because, by definition, the average delayed emissions per vehicle are the arithmetic mean of the delayed emissions of all the vehicles under consideration:



## ∑

= = N E N E

1

i i 1 , (4.5.2)

where

i

i Y M E = , (4.5.3)

and

Y

M E = , (5.5.4)

where M is the effective charge that is to be emitted over the period of Y i , which will incur the next recharge. Equations (4.5.2) thr ough (4.5.4) lead to Equation (4.5.1).

In case the intervals are accompanied with percenta ges of DIY, the mean becomes weighted mean:



## ∑

= ⋅ = N

Y P Y 1 i i i 1 1 . (4.5.5)G-27

ARB El Monte Survey

During the ongoing study on non-professional servic ing of MVAC sponsored by ARB, Denis Clodic’s team interviewed 16 people who participated in the study. 10 out of them provided relevant responses. Out of these 10, 3 responded with an ambiguous answer, “long time ago”. The vintage o f their vehicles was as early as 1996 and as late as 2003. These 3 responses are hence deemed invalid and excluded from the analysis. The valid responses are compiled in Table 4.

Table 4: Recharge Interval in ARB El Monte Survey

Vintage Time of last recharge Recharge interval (months) 1999 5 months ago 5 1994 4 months ago 4 1997 10 years ago 120
1994 1994 156 2001 4 years ago 48 2004 3 years ago 36 1997 1 year ago 12

Using Equation (4.5.1), the average recharge interv al is 11.7 months.

2008 ARPI DIY Survey

ARPI conducted a survey in May, 2008 in California to characterize DIY consumer profiles. 200 survey were handed out in pa rticipating Autozone stores in Southern California and 20 responses were receiv ed (ARPI, 2008c). Two of the questions are related to estimating recharge in tervals. The relevant results are compiled in Table 5.

Table 5: Recharge Interval in 2008 ARPI DIY Survey

Time of last recharge Recharge interval

(months) Percentage Combined Percentage Normalized

Percentage

< 3 months 3 5% 5% 5.4% 3 months to 1 year 7.5 20% 20% 21.6% 1 to 2 years 18 30% 30% 32.4% >2 years 72 15% 37.5% 40.5%
never 30%

Time of owning the vehicle Percentage Percentage: never recharged <1 yr. 25% 7.5% 1 to 2 yrs. 35% 10.5% 2 to 3 yrs. 15% 4.5% 3 to 4 yrs. 5% 1.5% > 4 yrs. 20% 6.0% Own for >1yr.; never recharged 22.5%G-28

Although 30% of the respondents said that they neve r recharged their AC before, it is noticeable that most of the survey participan ts have not own their cars for very long. As the second part of the table shows, 8 0% of these people have their cars for less than 4 years. Therefore, having never charged does not necessarily mean the recharge interval would be very long (long er than 4 years). Assuming the vehicle ownership profile holds true for those who never charged their AC, 7.5% own their vehicle for less than one year and n ever charged the AC, and 22.5% own their vehicle for more than one year and never charged the AC. To be conservative, add the 22.5% to the 15% that had their last recharge more than 2 years ago, and assign a 6-year recharge inte rval for the total 37.5%. Exclude the 7.5% that have owned their vehicle for less than a year and never recharged the AC, and normalize the rest of the pop ulation. Using Equation (4.5.5), the average recharge interval is 14.2 mont hs.

Frost and Sullivan Study

Commissioned by the ARPI, the Frost and Sullivan Co . conducted an online survey to investigate consumer purchase and usage b ehavior of small cans (Frost and Sullivan, 2006). Its California sample i ncludes 400 respondents. The questionnaire did not explicitly ask about the rech arging intervals. However, this information can be derived from the response to som e other questions when making a few assumptions.

According to the study, out of the 400 respondents, 38% or 152 of them generally would not use the full can of HFC-134a. Since wheth er a full can is used is a natural outcome of the recharging process, instead of an arbitrary decision, any other aspects of the can usage of these 152 people should be representative of the California respondents as a whole. So we only n eed analyze these 152 samples. Among them, 62% or 95 would store the part ial can, and the rest 38% or 57 would dispose of it. Of the 95 people that st ored the partial cans, 22% of them said that they had not tried to re-use them. T his can be conservatively interpreted as the fraction of people that had only recharged once.

The study provides the storage period for those who would store the partial cans. This information is included in the first and third columns of Table 6. Each storage period range is assigned a storage period a s the middle value of the range in the second column, where storage period of longer than 18 months is conservatively assigned the value of 72 months. Som e of them are first time DIY and we need to exclude them when estimating the rec harge intervals. However, 12% of the people stored the cans for over a year a nd they are certainly not the first time DIY. This is because the survey responde nts all had recharged AC in the past 12 months. If they are the first time user s, the recharge events happening within the 12 months were their only expe rience and their storage periods are definitely less than 12 months. We have shown that 22% of the people had only charged once. This translates into 25% out of the 88% whose storage periods were less than a year (25% = 22% ÷ 88%). Evenly allocatingG-29

25% to all these 88% people, we get the percentage of the first time DIY in column 4, totaling 22% as expected. Only the rest 7 8% are the non-first time DIY, which is tabulated in column 5 and normalized in co lumn 6. Finally, we use 62% to adjust the normalized percentages since 62% of a ll DIY consumers would store the cans.

Table 6: Storage Period for People Who would Store Partial Cans

Storage Period Range Storage

Period (months) Percent of

DIY First Time

DIY Non-first

Time DIY Normalized

Non-first Time DIY Non-first

Time DIY Multiplied by 62%

0-3 mon 3 27% 7% 20% 26.0% 12.6%
3-6 mon 4.5 19% 5% 14% 18.3% 8.8%
6-9 mon 7.5 25% 6% 19% 24.0% 11.6%
9-12 mon 10.5 17% 4% 13% 16.4% 7.9%

12-18 mon 15 6% 0% 6% 7.7% 3.7%
>18 mon 72 6% 0% 6% 7.7% 3.7%

Total of First 4 Lines 88% 22%

Total of First 4 Lines Divided by 22% 25%

On the other hand, of all the California respondent s (348 valid responses), 42% had only recharged their present and past vehicles once. As an approximation, we assume all the recharges happen to their present vehicles. This percentage should hold true for the 152 people that would not use up the full cans. Therefore,

% 42 % 38 % 62 % 22 disp =

× + × P
,

where P

disp is the percentage of the first time DIY out of tho se who would dispose of the can. And

P disp = 75%.

It indicates that most people disposing of partial cans are first time users. This is consistent with intuition since experienced consume rs would know that once the vehicle starts needing recharge, it is likely that it has some leaking problem and may need repeated recharge within a certain time fr ame.

Assuming disposing of or store partial cans is more related to personal preference than recharging practices, we can apply the same apportionment as in Table 6 for those who choose to dispose of parti al cans by “virtual storage period”. This is the period that they would store c ans should they choose to store the cans. This is shown in Table 7.G-30

Table 7: Virtual Storage Period for Those Who would Dispose of Partial Cans

Storage Period Range Storage Period

(months) Percent

of DIY First Time

DIY Non-first

Time DIY Normalized

Non-first Time DIY Non-first

Time DIY Multiplied by 38%

0-3 mon 3 27% 23% 4% 16.0% 1.5%
3-6 mon 4.5 19% 16% 3% 11.2% 1.1%
6-9 mon 7.5 25% 21% 4% 14.8% 1.4%
9-12 mon 10.5 17% 14% 3% 10.0% 1.0%

12-18 mon 15 6% 0% 6% 24.0% 2.3%
>18 mon 72 6% 0% 6% 24.0% 2.3%

Total of First 4 Lines 88% 75%

Total of First 4 Lines Divided by 75% 85%

Adding the last columns of the above two tables, we obtain the storage period for the overall California samples (Table 8). It is imp ortant to note that this study restrict the survey panel to those who had charged their MVAC during the last 12 months. Thus, the survey panel members with recharg e intervals of less than 12 months are not filtered. But for those with recharg e intervals of more than 12 months, only a fraction will be able to participate in the survey. For example, for the group that has recharge intervals of 6 years, a pproximately 1/6 of them would have performed recharging during the last 12 months and would have been captured by the survey. Their percentages in the fo llowing table should then be multiplied by 6 to account for that. This is also t rue for the group with recharge interval of 15 months. After this adjustment and th en normalization, around half of the samples have a recharge interval of more tha n a year. Using Equation (4.5.5), the average recharge interval is 8.5 month s.

Table 8: Overall Storage Period

Storage Period Range Storage

Period (months) Combined

Non-first Time DIY Adjusted

Combined Non-first Time DIY Normalized

Non-first Time DIY

0-3 mon 3 14.1% 14.1% 15.8%
3-6 mon 4.5 9.9% 9.9% 11.1%
6-9 mon 7.5 13.0% 13.0% 14.6%
9-12 mon 10.5 8.9% 8.9% 9.9%
12-18 mon 15 6.0% 7.5% 8.4%
>18 mon 72 6.0% 36.0% 40.3%G-31

NPD Sales Data

The NPD Automotive Aftermarket Industry Monitor pro vides cashier transaction information from the U.S. auto parts chain retailer s (NPD, 2008). The data come from nine participants including Advance, AutoZone, CSK/Murrays, PepBoys, O'Reilly’s, CarQuest, NAPA, Strauss Auto and Parts Alliance. As shown in Table 9, in 2006 and 2007, average annual sales of HFC-13 4a units without charging kits were 14 million. Given that every recharging u ses about 1.3 cans on average, this suggests 11 million DIY recharging operations each year. The Average annual sales of charging kits were just over 1 mill ion. Assuming a vehicle’s “effective lifetime” during which it needs rechargi ng is 9 years and every DIY user only purchase one charging kit and use it throughou t his vehicle’s lifetime, the number of DIY vehicles should be equal to the total sales of charging kits in 9 years, which is about 10 million. Thus, on average, a DIY vehicle gets 1.1 recharging per year and the recharge interval is 10 .8 months.

Table 9: NPD Data on HFC-134a Units Sold in the U.S

. 2006 & 2007 Total Total HFC-134a Units without Charging Kits 14,079,3 86 AC Charging Kits 1,086,872
DIY Recharge Operations per Year 10,830,297 AC Charging Kits Sold in 9 Years 9,781,848
DIY Vehicles 9,781,848 Recharges per Vehicle per Year 1.1

Summary

The recharge interval estimates range from less tha n three quarters to slightly over 14 months (Table 10). Therefore, it is reasona ble to assume a recharge interval Y

1 = 1 year.

Table 10: Summary of Recharge Interval Estimates

Data Source(s) Sample Size Recharge Interval Estimate (months) ARB El Monte Survey 7 11.7 2008 ARPI DIY Survey 20 14.2 Frost and Sullivan Study 152 8.5 NPD Survey 10.8

4.5.2 P

0

SAE supplied data that indicate that of all the HFC -134a used in MVAC nationwide in 2003, factory fill, 30-lb cylinders a nd small cans share 30%, 39% and 31%, respectively (Atkinson, 2008a). 30-lb cyli nders are apparently exclusively used by professional servicing. But som e professional technicians also use small cans, which is about 3.5% of the tot al usage by professionalG-32

shops (MACS, 2008). Thus, out of all the HFC-134a u sed in MVAC, the percentage of HFC-134a in small cans used by profes sional shops is

% 4.1 % 39 % 5.3 1 % 5.3

= ×

− .

So the percentage of small cans used by professiona l servicing in relation with the total small can usage is

% 6.4 % 31 % 4.1

=

.

Therefore, 96.4% of small cans are sold to DIY. Rou nding it off, we have P 0 = 95%.

4.5.3 P

31 , P 32 , P 33 , and P

34

A study of small can consumers commissioned by the ARPI estimates that 12% of former DIY owners would opt to have no air condi tioning rather than go to a professional shop, 49% would go to the professional shop, and 39% would look for other options of obtaining refrigerant (Frost a nd Sullivan, 2006). The 39% of consumers seeking alternative options will contribu te to illegal internet or out of state sales, but given the inconvenience of doing t hat, it is unlikely that all of them will have the perseverance to circumvent the c an ban. The true rate of DIY circumventing the ban will probably be somewhere be tween 0% and 39%. In the absence of further data on which to assign a fracti on, we take the midpoint of this range, or 19%, to maximize the probability of being close to reality. We assume that the remainder of those looking for alternative sources of HFC-134a will choose one of the legitimate options which are: obt ain professional repairs, obtain professional recharge without repair, obtain professional top off, forgo air conditioning, or go to professional servicing witho ut deciding on actions. We assign the rest half (20% of total) of the former D IY equally among those five legitimate options: 4% forgo air conditioning; 4% g o to the shop for repair and recharge; 4% go to the shop for recharge without re pair; 4% go to the shop for topping off; and 4% go to the shop undecidedly. The percentages in each category become: forgo air conditioning 12% + 4% = 16%; go to the shop undecidedly 49% + 4% = 53%; go to the shop with the specific objective of repair 4%; go to the shop specifically for recharge withou t repair 4%; go to the shop specifically for topping off 4%; and obtain HFC-134 a by alternative means 19%.

A 2005 MACS study showed the choices of customers w ho currently visit professional shops for diagnosis and repair (Atkins on, 2008b). The study surveyed 7 service facilities located in Pennsylvan ia, Ohio, Arizona, California and Florida and included over 1,400 repair orders. In that study, among those with refrigeration circuit problems, 88% chose to h ave their system repaired or recharged, 7% chose to simply be topped off, and th e other 5% choose to rejectG-33

recharges and forgo air conditioning. The first two categories, adding up to 95%, represent all the operations that involve adding re frigerant. An IMR Continuing Consumer Auto Maintenance Survey (CCAMS) data suppl ied by ARPI (ARPI, 2008a) suggest that of all professional servicing t hat involve adding refrigerant, only 56% involves repair. This translates into 53% in context of the 95%, whereas the other 42% of the 95% are either topping off (7%) or recharge without repair (42% - 7% = 35%).

Assuming the 53% of consumers described in the firs t paragraph who go to professional shops without deciding on actions woul d behave the same way as normal customers at professional shops, they are re apportioned into categories as described in the preceding paragraph: 28% of for mer DIY consumers have AC repaired; 19% get recharge without repair; 3% recei ve topping off; and another 3% forgo AC. Recombining them with those who alread y have specific goals, P 31 = 32% get professional repair, P 32 = 23% receive professional recharge, P 33 = 7% top off at professional servicing, P 34 = 19% continue DIY recharging AC using refrigerant obtained through alternative means, and the other 19% forgo AC. The figure below shows how the various fractions were a pportioned and combined, with the final values on the right.

Figure 5. DIY Behavior Change under Can Ban

4.5.4 F

1 and F

2

The average nominal charge size of passenger vehicl es in the U.S. is 824 grams (Thundiyil, 2008b). It assumed the AC average to 50 % empty when brought in to the professional servicing facility for recharge (A ssumption 5 ), which indicates that 412 grams of refrigerant remains in the AC.

Every DIY recharge uses 445 grams of refrigerant (a ll fresh), with 98 grams (22%), 49 grams (11%), and 298 grams (67%) as can h eel, servicing loss, and effective charge, respectively. Apparently DIY on a verage recharge AC at 86% (412 grams remaining refrigerant + 298 grams fresh refrigerant) of nominal level. A DIY recharged AC has 298 grams of refrigerant to lose before the next recharge is needed. Original Apportioned Combined Reapportioned Recombined 28% pro repair 19% pro recharge 4% pro shop 3% pro top off 4% pro repair 3% forgo AC 4% pro recharge 4% pro repair 4% pro repair 4% pro top off 4% pro recharge 4% pro recharge 4% forgo AC 4% pro top off 4% pro top off 19% leakage 19% leakage 19% leakage 19% leakage 12% forgo AC 12% forgo AC 16% forgo AC 16% forgo AC 19% forgo AC 39% alternative

ways 49% pro shop 49% pro shop 32% pro repair

23% pro recharge

7% pro top off 53% pro shopG-34

In comparison, a professional technician has the eq uipment and skills to restore AC charge to its nominal level, rendering more refr igerant (412 grams) in the systems to be emitted before the next servicing is needed. When no repair is conducted, the recharged AC will leak at the same r ate as a DIY recharged AC, but at a prolonged period. The recharge interval fo r a professionally recharged AC to that for a DIY recharged AC is

4.1 298 412

1 = = F

.

It should be noted that during professional servici ng (with or without repair), the amount of fresh refrigerant effectively charged int o AC is not 412 grams because the remaining refrigerant needs first to be recover ed and stored in a cylinder. Then it will be recharged back into the AC. These o perations will incur losses due to servicing losses and cylinder heels. The refrige rant lost during incomplete recovery is by far the main source of servicing los ses. For purpose of analysis, we assume the refrigerant recovery rate by professi onal servicing using the current prevailing equipment and practices is 85%. Thus, 62 grams (15% of 412 grams) will be lost due to incomplete recovery. A n ew SAE standard for refrigerant recovery and recharge, J2788, has taken into effect, to replace the old SAE J2210 standard. Using the equipment and practic es compliant with the new standard, the recovery rate will be increased to at least 95% (about 21 grams of servicing loss). However, there is no requirement f or the professional servicing to replace their current recovery machines, and the ph ase-in of the new machines will likely be slow. The recovered 350 grams will b e stored in cylinder for future use. Not all of them will be effectively charged in to AC during the next servicing due to cylinder heels. The U.S. EPA Disposable Cont ainer Heel Testing Study found that the cylinder heel in professional servic ing is about 1.8% (U.S. EPA, 2007). This translates into about 7 grams loss in c ylinder heel out of the recovered 350 grams. The rest of 343 grams will be effectively charged into AC during the next recharge. To add up to the nominal charge of 824 grams, another 481 grams of fresh refrigerant needs to be effectiv ely charged into the AC, which will cause another 10 grams of losses in cylinder h eel. Therefore, the ratio of fresh refrigerant effectively charged into AC durin g professional recharging to that during DIY recharging is

6.1 298 481

2 = = F

.G-35

5. REFERENCES

40 CFR §82.154. Code for Federal Regulations, 7-1-0 5 Edition. http://edocket.access.gpo.gov/cfr_2005/julqtr/pdf/4 0cfr82.154.pdf

ARB, 2004. Initial Statement of Reasons for Propose d Rulemaking, Public Hearing to Consider Adoption of Regulations to Cont rol Greenhouse Gas Emissions from Motor Vehicles, Staff Report, August 6, 2004. http://www.arb.ca.gov/regact/grnhsgas/isor.pdf

ARB, 2005. Relating to Public Hearing to Consider A doption of Regulations to Control Greenhouse Gas Emissions from Motor Vehicle s, Executive Order G05-061. http://www.arb.ca.gov/regact/grnhsgas/eo.pdf

ARB, 2007a. Expanded List of Early Action Measures to Reduce Greenhouse Gas Emissions in California Recommended for Board C onsideration, AB 32 Early Actions Final Report, October 2007. http://www.arb.ca.gov/cc/ccea/meetings/ea_final_rep ort.pdf

ARB, 2007b. ARB Consumer Products Survey for 2006.

ARPI, 2006. Personal Communication during ARPI’s Wo rking Presentation to ARB, December 13, 2006.

ARPI, 2008a. Additional Updates and California Brea kouts of IMR Research Data, Document to ARB 3 rd Working Group Meeting, June 9, 2008.

ARPI, 2008b. Reducing Global Warming Emissions... whi le still Enabling Motorists to Work on Their Car’s Air Conditioner, W orking Presentation to ARB, January 8, 2008.

ARPI, 2008c. 23-June-2008 Follow-up to 16-June-2008 Request from ARB Research Staff, Submission of Selected Final or Nea r Final “Small Can” Data, June 23, 2008.

Atkinson, 2008a. Refrigerant Use in the Mobile A/C Service Industry, Presentation to ARB Public Workshop, February 5, 20 08. http://www.arb.ca.gov/cc/hfc-mac/meetings/workshop_ 02052008/SAE.pdf

Atkinson, 2008b. State of the Industry, Presentatio n to the MACS Worldwide Tradeshow, February 2, 2008. http://refrigerants.dupont.com/Suva/en_US/pdf/Smart AutoAC/2008_MACS_At kinson_State_of_Industry.pdfG-36

Atkinson, 2008c. Presentation to 2008 MAC Summit, J une 13, 2008. http://www.epa.gov/cppd/mac/Atkinson%202008%20MAC%2 0summit.pdf

Clodic et al., 2008. Evaluation of the Potential Im pact of Emissions of HFC-134a from Nonprofessional Servicing of Motor Vehicle Air Conditioning Systems, ARB Research Contract Draft Final Report, July, 200 8.http://www.arb.ca.gov/cc/hfcmac/documents/arb_smallcan_draftfinalreport_2008080 4.pdf

Clodic, 2006. Refrigerant MAC Leakage – New Evidenc es from the Armines / ACEA Study, Presentation to the IEA Workshop “Cooli ng Car with Less Fuel”, October 23 – 24, 2006. http://www.iea.org/Textbase/work/2006/car_cooling/S ession3/3b%20Clodic% 20New%20evidence%20on%20leakage.pdf

EJAC, 2007. Recommendations Regarding Currently Pro posed Early Action Measures, Environmental Justice Advisory Committee, 2007. http://www.arb.ca.gov/cc/ejac/ghg_eams_finalcommitt eerec.pdf

Frost and Sullivan, 2006. U.S. Consumer Buying Beha viors of R-134a Refrigerant for Light Vehicle Applications, Septemb er, 2006. http://www.arb.ca.gov/cc/hfc-mac/documents/ARPI_Rep ort_121106.pdf

I-MAC Team, 2007. Reducing Refrigerant Emissions at Service and Vehicle End of Life, Working Group 4: Develop HFC-134a Mass Bal ance for U.S. Mobile A/C Market, 2007. http://www.epa.gov/cppd/mac/Service%20Team%20Final% 20Report.pdf

IPCC, 2007. Climate Change 2007: The Physical Scien ce Basis, IPCC Working Group 1 Fourth Assessment Report, 2007. http://ipcc-wg1.ucar.edu/wg1/wg1- report.html

MACS, 2008. From Montreal to Kyoto: Two Decades of Change in Mobile AC Industry, Mobile Air Conditioning Society Worldwide , 2008.

NPD, 2008. NPD Automotive Aftermarket Industry Moni tor - Total U.S. Auto Parts Chain Retailers, Refrigerant Category – Topli ne Summary #2.

Papasavva et al., 2008. GREEN-MAC-LCCP, the Metric for MAC Environmental Superiority, Presentation to 2008 MAC Leadership Su mmit, June 13, 2008. http://www.epa.gov/cppd/mac/STELLA%20PAPASAVVA%20&% 20ANDERS EN.ppt

Thundiyil, 2005. Mobile Air Conditioning Aftermarke t Parts and Service Equipment Partnership (MACAPSEP), Presentation to t he 2005 Mobile AirG-37

Conditioning Summit, Sacramento, California, March 15-16, 2005. ftp://ftp.arb.ca.gov/carbis/research/macs2005/pres1 9.pdf

Thundiyil, 2008a. Personal Communication, 2008.

Thundiyil, 2008b. Personal Communication, 2008.

U.S. EPA, 2007. Disposable Container Heel Testing S tudy Report, U.S. EPA, March 21, 2007, Contract No. EP-W-06-010. http://www.epa.gov/Ozone/title6/downloads/Disposabl e_Containers_Report.p df

Vincent et al., 2004. Emissions of HFC-134a from Li ght-Duty Vehicles in California, SAE Technical Paper, 2004-01-2256. http://www.sae.org/technical/papers/2004-01-2256