# Regulating Emissions from Under

- fired Charbroilers

May 2012

Jeffrey Bellisario Benjamin Mandel Jason Perkins Yang Ruan
Goldman School of Public Policy University of California, Berkeley

Prepared for U.S. Environmental Protection Agency, Region 9 , Air Quality DivisionRegulating Emissions from Under

- fired Charbroilers | 2



### T ABLE OF 

### C ONTENTS

Executive Summary and Recommendation Overview

................................ ............................. 3 1. Introduction

................................ ................................ ................................ ........................ 4 2. Regulatory History

................................ ................................ ................................ ............. 6 2.1 Regulation of Chain

- driven Charbroilers

................................ ................................ ....................... 6 2.2 Regulation of Under

- fired Charbroilers

................................ ................................ ......................... 6 3. The Ch allenge of Regulating Under

- fired Charbroilers

................................ .................... 9 3.1 Regulatory Challenges: Uncertain Rule Design

................................ ................................ .......... 10 3.2 Coordination Failure: Low Stakeholder Support

................................ ................................ ........ 11 3.3 Technological Challenges: Uncertain Costs and Stalled Innovation

................................ ....... 12 4. Study Objectives

................................ ................................ ................................ ............... 13 5. Cost and Efficacy of Emissions Control Technologies

................................ ................... 14 5.1 Design Constraints

................................ ................................ ................................ .......................... 14 5.2 Changing Meat Cooked

................................ ................................ ................................ .................. 15 5.3 Cooking Equipment Technol ogies

................................ ................................ ............................... 16 5.4 Emi ssions Control Unit Technologie s

................................ ................................ ......................... 18 5.5 Cost Analysis

................................ ................................ ................................ ................................ .... 19 5.6 Impact on Restaurants

................................ ................................ ................................ .................... 21 5.7 Future Prospects

................................ ................................ ................................ .............................. 24 5.8 A dministrative Costs

................................ ................................ ................................ ....................... 25 6. Options for Agency Action

................................ ................................ ............................... 26 6.1 Let Present Trends Continue

................................ ................................ ................................ ........ 26 6.2 Regulating the Cooking Process

................................ ................................ ................................ ... 27 6.3 Regulating Cooking Outputs

................................ ................................ ................................ ......... 30 6.4 Non

- regulatory Options

................................ ................................ ................................ ................. 31 7. Recommendations

................................ ................................ ................................ ............ 33 7.1 Working Group on Restaurant Emissions

................................ ................................ .................. 33 7.2 Implement a Credible Technology

- forcing Standard

................................ ................................ . 34 Conclusion

................................ ................................ ................................ ............................... 36Regulating Emissions from Under

- fired Charbroilers | 3



### E XECUTIVE 

### S UMMARY AND 

### R ECOMMENDATION 

### O VERVIEW

This report assesses the challenges that have prevented regulators from promulgating effective rules to reduce particulate matter (“PM”) emissions from restaurants that use under

- fired charbroilers in California. With lessons learned from regulatory failures over the past two decades, we then outline a proposal for air quality management districts (“AQMDs”) to reduce PM emissions from restaurants throughout California:

 The EPA should convene and lead the Working Group on Restaurant Emission s to tackle issues of coordination and imperfect information among various stakeholder groups

 With input from the Working Group, AQMDs should implement credible technology

forcing standards around emissions control devices for under

- fired charbroilers

Seve ral of the most populous regions in California fall short of federal guidelines for acceptable levels of air pollution. Particulate matter is one of the principal pollutants that these areas must reduce under the direction of local AQMDs. Since commercial cooking is a large source of PM emissions, AQMDs have focused on restaurants in efforts to curb PM emissions in recent decades.

While regulations on chain

- driven charbroilers have been successful throughout California, attempts to regulate under

- fired cha rbroilers, which are more common and more polluting than chain

- driven charbroilers, have been ineffectual. Emissions control technologies, which can filter emissions from under

- fired charbroilers to acceptable levels, have existed for decades, but

restaura nts have been resistant to use them due to the high costs associated with installation and maintenance. This opposition has made it evident that regulating under

- fired charbroilers by instating a technological standard around emissions control devices is n ot a cost

- effective strategy.
In this report, we first assess whether there has been any progress concerning the underlying causes for the failure of under

- fired charbroiler regulations, and find the following:

 There has been no substantial improvement in terms of the cost and efficacy of technological options

 Adopting emissions control technology would represent 10

- 14% of restaurant profits

, which is a much higher share of profits than control devices for chain

- driven charbroilers

 Lack of i nnovation and f ailure to reach economies of scale continue to impede cost reductions for emissions control technology
Our recommendations are geared toward making emissions control devices a more viable option by widening the scope of applicability of a technological sta ndard, which will generate sufficient demand for manufacturers to scale up production and bring down costs. If executed properly, this proposal will significantly reduce PM emissions from restaurants with manageable burdens on the restaurant industry.Regulating Emissions from Under

- fired Charbroilers | 4



### 1. I N TRODUCTION


### Clean Air Act and Agency Involvement

Under the Clean Air Act Amendments of 1990, the United States Environmental Protection Agency (“EPA”) enforces air quality standards to protect the health and welfare of the American public. Known as the National Ambient Air Quality Standards (“NAAQS”), these guidelines set forth acceptable levels of “criteria pollutants” that are allowed to be present in the air. In California, local air quality management districts are tasked with monitoring and managing stationary sources of air pollution in order to meet NAAQS standards

— known as “attainment.” Unfortunately, many areas of California are classified as “non

- attainment” f or several criteria pollutants

— i ncluding particulate matter, ozone, nitroge n dioxide, a nd carbon monoxide. As a result, local air quality management districts must produce and execute an EPA

- approved plan for reducing the levels of select pollutants in the air under their jurisdiction.
Air quality management districts (“AQMDs”) throughout C alifornia, most notably the highly populated areas overseen by the Bay Area Air Quality Management District (“BAAQMD”), the South Coast Air Quality Management District (“SCAQMD”), and the San Joaquin Valley Air Pollution Control District (“SJVAPCD”) are cu rrently classified as non

- attainment zones for particulate matter (“PM”). They must produce and execute an EPA

- approved plan for r educing the levels of PM in the air under their jurisdiction with required attainment of the standard by 2015.



### Particulate Mat

ter and its Public Health Impacts

PM is categorized by the size of the individual ambient pollution particle, and is often classified as PM 2.5 or PM 10 (depending on the diameter of the particulate in microns). Geographies with low wind speeds and regular e vening thermal inversions (such as the San Joaquin Valley and much of the South Coast Basin in California ) are also more likely to have high ambient PM levels as dispersion of emissions is more limited. 1

The Californ ia Air Resources Board (“CARB”) has ext ensively studied the health effects of exposure to particulate matter emissions (including both PM 2.5 and PM 10 ). A consistent correlation has been found between elevated ambient fine particulate matter levels and an increase in mortality rates, respiratory infections, the number and severity of asthma attacks, and the number of hospital admissions. 2 Studies have also found that exposure to fine particulate air pollution can reduce life expectancy and increase the occurrence of lung cancer. 3 The elderly and children appear to be particularly susceptible to the effects of ambient particulate matter. Air quality data taken from a CARB report in 2000 attributed 5,400 premature deaths and 980,000 lost workdays in the South Coast Air Basin region alone to PM 2.5 . 4Regulating Emissions from Under

- fired Charbroilers | 5



### Restaurant Emissions

The majority of ambient particulate matter comes from non

- stationary sources, such as unpaved road dust and forest fires. Many of these sources are not easily regulated or are already controlled to a certain extent (i.e. electric util ity coal combustion, metals processing, and on

- road vehicles). While restaurants are a relatively small source of the ambient particulate matter inventory nationally (approximately 1%), 5 their contribution to PM emissions in California is much larger. The BAAQMD estimates that restaurants produce 6% of all PM emissions given their high density in the Bay Area , while previous studies have found that restau rant

- produced PM accounts for 14% and
21 % of ambient volatile organic compounds in Fresno and Los Angele s, respectively. 6

The main source of PM emitted from restaurants are charbroilers, a particular type of cooking technology that produce over 80% of all restaurant emissions in California. Generally, PM is produced when the grease from the cooking process is vaporized, thus more fatty meats will produce a greater amount of PM when charbroiled. Specifically, the process of charbroiling beef creates nearly two

- thirds of all charbroiler emissions. 7 The vast majority of emissions from charbroiling activities ar e PM 2 .5 ; in addition to these miniscule particles, charbroiling also produces small amounts of condensable vapor and volatile organic compounds (“VOC”). These emissions are difficult to control with existing ve ntilation technologies given their gaseous nat ure, but they do contribute t o the formation of smog and PM when condensed in the atmosphere.Regulating Emissions from Under

- fired Charbroilers | 6



### 2. R EGULATORY 

### H ISTORY

Each of the previously mentioned AQMDs plans to reduce PM pollution by targeting emissions from restaurants, with up to one

- third of their intended reductions coming from additional restaurant regulation.



### 2.1 Regulation of Chain

- d riven Charbroilers

In a related regulatory effort, t he BAAQMD, SCAQMD, SJVAPCD, and the Ventura County Air Pollution Control District have successfully passed and implemented rules to control emissions from chain

- driven charbroilers, which are used primarily in fast food restaura nts. These rules prohibit restaurants that are deemed sufficiently beef

- intensive from operating chain

- driven charbroilers in the absence of a control device (typically a catalytic oxidizer). Because chain

- driven charbroilers are mainly used in three large resta urant franchises in California

— Burger Ki ng, Carl’s, Jr., and Red Robin

—

AQMDs have largely been able to fit ch ain

- driven charbroiler rules to an identifiable set of impacted restaurants based on throughput

. These rules apply to approximately 80% of al l chain

- driven charbroilers operated within the regulating AQMDs, thus making them effective in controlling the bulk of chain

- driven PM emissions. The existence of a readily

- available control device technology has also facilitated these rules, as catalytic oxidizers offer fair and reasonable upfront costs to restaurants, easy installation atop existing chain

- driven charbroilers, and energy conservation by utilizing exhaust heat from the broilers to power vents.



### 2.2 Regulation of Under

- fired Charbroilers

Ho wever, a different cooking technology, under

- fired charbroilers, is used at a larger and more diverse set of restaurants in California. More than one

- third of all California restaurants use under

- fired charbroilers; in comparison, chain

- driven charbroilers are employed in only 8% of all restaurants in California. 8 Additionally, it has been shown that under

- fired charbroilers emit approximately six times more PM than comparable chain

- driven charbroilers. 9 Regulating under

fired charbroilers therefore has the potential to significantly reduce emissions from California’s restaurants beyond the reductions already achieved by chain

- driven charbroiler regulations. Under

fired charbroilers are a significant source of PM 2.5 emissions (73.5% of all charbroiling emiss ions in the U.S.) 10 ; however, regulating them has proven more challenging than the prior regulations of chain

- driven charbroilers, as exemplifie d by the attempts of the BAAQMD, SJVAPCD, and SCAQMD illustrated below.


### Bay Area Air Quality Management District Rule 11

In November 2007, BAAQMD passed a rule requiring controls for under

- fired charbroilers. Its “Regulation 6: Particulate Matter, Rule 2: Commercial Cooking Equipment” required restaurants with at least 10 square feet of total grill surface area, that cook at least 800 pounds of beef weekly, and that purchase at least 1,000 pounds of beef weekly to outfit any new under

- fired charbroilers with certified control devices beginning in 2010. BAAQMD specified that a control device mustRegulating Emissions from Under

- fired Charbroilers | 7

limit emissions to one pound of PM 10 per 1,000 pounds of beef cooked in order to be certified. However, no control technologies have been certified since the rule has been in effect, no r have any new charbroilers been purchased and installed in Bay Area restaurants that meet the size and purchasing requirements. The rule will extend to existing under

- fired charbroilers in 2013, but the lack of sanctioned control devices and uncertainty surrounding the rule’s appli cability to restaurants paint a murky picture of the outlook for implementation.


### San Joaquin Valley Air Pollution Control District Proposal 12

In June 2009, SJVAPCD set out to amend “Rule 4692: Commercial Charbroiling,” which had covered only chain

- driven c harbroiling, as part of its commitment to reach attainment status. In order to expand the universe of regulated charbroilers, district staff originally proposed that the rule be extend ed to under

- fired charbroilers

— i n addition to adding further controls on restaurants using chain

- driven charbroilers. The proposed rule impacted restaurants that cooked more than 800 pounds of meat weekly and required them to reduce emissions by 90%. In public hearings regarding this proposal, concerns regarding the financial health of restaurant stakeholders and questions about control costs and practicability arose. Based on vendor interviews, SJVAPCD staff responded by increasing cost estimates relative to the original cost estimates that were taken from the BAAQMD analysis. With much higher total capital costs and unverified effectiveness estimates (given that few technologies were installed in the field), SJVAPCD decided to remove all regulation of under

- fired charbroilers from its amendment. District staff did include a ch arbroiler incentive pilot program for restaurants to voluntarily install under

- fired technologies and also vowed to revisit the issue in 2011.


### South Coast Air Quality Management District Proposal 13

In August 2009, the SCAQMD proposed its own rule to regula te emissions from under

- fired charbroilers. The regulation would apply to restaurants that cook more than 1,250 pounds of beef per week, and would require an 85% reduction in PM emissions. Unlike the other AQMDs, the proposed SCAQMD efficiency standard app lied to both filterable and condensable emissions. In setting an 85% threshold, the proposed rule would have limited restaurants to only one qualifying technological option. Consequently, this proposal received considerable opposition from both the

restaur ant and air ventilation industries and did not proceed further.Regulating Emissions from Under

- fired Charbroilers | 8

Table 1 | California A QMD proposals for rules related to under

- fired charbroilers

Wh ile each of the AQMDs cited above in Table 1 went as far as proposing new regulations based on extensive research , only the BAAQMD rule was m oved into the regulatory code. The SCAQMD and SJVAPCD proposals were dropped mainly in response to significant concerns from restaurant industry stakeholders.
There are few other examples of attempte d under

- fired charbroiler regulations from across the country. AQMDs in Hawai’i and New Jersey have studied potential regulations, but have not successfully implemented a rule. A charbroiling rule in Pitkin County, Colorado is often cited as the only charb roiler regulation to have impacted under

- fired charbroiling outside of California.


### Aspen, CO Experience 14

Pitkin County, Colorado and the Ci ty of Aspen passed a regulation in the 1980s to reduce emissions by at least 90% from all types of charbroilers. The rule was promulgated in hopes of phasing out open

- flame charbroilers of all types. Given a high le vel of restaurant industry push back, waivers were issued to those rest aurants that moved to lower fat

- content beef. New restaurants have also been reluctant to install solid surface grills, claiming that the taste of their food would be compromised. The Pitkin County Environmental Health Department has found that many of the new restaurants have installed controls, but they hav e not maintained them properly

— th us rendering them useless in reducing emissions. While the shift to reduced fat

- content beef has lowered PM emissions (achieving the ultimate goal of the regulation), the hoped

- for adoption of cleaner grilling practices did not materialize. Additionally, a lack of timely and strict enforcement mechanisms following installation allows many restaurants to avoid the regulation altogether.Regulating Emissions from Under

- fired Charbroilers | 9



### 3. T HE 

### C HALLENGE OF 

### R EGULATING 

### U NDER



### - FIRED 

### C HARBROILERS

The regulatory approaches described a bove in California are intended to be technology

forcing in nature (see inset box below)

. Given that the technologies to reduce the requisite amount of PM did not exist at the time the BAAQMD rule was written, it was meant to compel manufacturers to develop new technologies by creating a market for improved (and potentially less costly) controls.



### Technology

- forcing Standards Defined 15

Regulators utilize technology

- forcing standards in order to quicken the time

- to

- market for innovative technological solutions and to internalize the exte rnal costs associated with the production and/or use of the technology. M any technology

- forcing standards have succeeded in creating new products or eliminating detrimental ones . For example, removing lead additives from gasoline, usage of catalytic conver ters, and innovation in hybrid and fuel cell vehicles were all driven by technology

- forcing regulations. T hese types of standards can also easily fail by requiring a “leap of faith” from manufacturers. For example, regulations requiring the installation of airbags in automobiles took more than 20 year to become compulsory. Automakers fought back on the unproven new technological fixes and refused to make research and product development decisions in an u ncertain regulatory environment. While airbags did eventually become required in all automobiles, their uptake was largely market

- driven and not forced by regulation.



### Diagnosing the Technology

-

Forcing Rule Design Problem: BAAQMD Regulation 6, Rule 2

Whi le the BAAQMD is the only jurisdiction to have created a rule regulating under

- fired charbroilers, its implementation has largely been deemed a failure as no controlled charbroilers have been registered under the rule. Figure 1 below outlines the major que stions that the technology

forcing regulatory process has attempted to answer thus far in reducing emissions from restaurant charbroilers. In essence, instead of attempting to tax or limit the quantity of PM emissions from restaurants directly, the BAAQMD rulemaking regarding charbroilers attempts to regulate the operations of certain members of the restaurant industry. Specifically, this rule mandates the installation of emissions control technologies at certain restaurants. Although this effort clearly

es tablishes what processes should be regulated and what responses are desired from the restaurant industry, it remains unclear exactly who should be subject to the rule and who pay s the cost of regulatory compliance

. Without clarity in this aspect, the rulem aking process has created multiple areas of uncertainty that have rendered it ineffective . Imperfect information, doubts about technological possibilities, and a lack of buy

- in from numerous stakeholders have resulted in a regulation that has little hope o f engendering compliance.Regulating Emissions from Under

- fired Charbroilers | 10

Figure 1 | The technology

- based regulatory approach: BAAQMD Regulation 6, Rule 2

These areas of uncertainty can be summarized in three general categories: rule design

, stakeholder coordination failure , and technological doubt s . The following section describes in more detail how a lack of certainty in these respects has undermined efforts to facilitate and encourage the adoption of emissions control technology for under

- fired charbroilers

.


### 3.1 Regulatory Challenges: Uncertain Rule Design

Difficulties in Setting Appropriate Thresholds

Effective rules must clearly and firmly delineate between groups subject to regulation and those that are not. In this respect, the BAAQMD rule has two primary flaws:

(1) Applicability thresholds were set too high , thus creating a very small or even non

existent regulatory universe; and

(2) The rule was specified in a manner that enables would

- be impacted restaurants to evade regulation by downsizing grills below threshold limits

. The BAAQMD staff thought it had created a rule that would incentivize innovation in the ventilation control manufacturing industry essentially creating a new market for under

- fired charbroiler control technologies. However, the ventilation industry believed the rule would likely not impac t many restaurants

— either they would grill less beef or switch to a different cooking technology. With no expected market for their products, the control manufacturers did not even submit existing products for certification . Q ualifying tec hnologies have not emerged in advance of the 2013 requirements for exis ting under

- fired charbroilers. Without certified technologies in place and without any newly built restaurants meeting the thresholds for the rule, the regulation has failed to force th e restaurant industry to address their under

- fired charbroiler emissions.Regulating Emissions from Under

- fired Charbroilers | 11



### Regulatory Hurdles: Coordination, Information, and Administration

In addition to proposing rules that have failed to create a regulated universe of sufficient scale, the regulatory attempts in California also suffer from a lack of coordination among all stakeholders. Without a greater amount of information from the restaurant industry, manufacturers, and installers, AQMDs are forced to make uninformed estimates and to set nearly arbi trary thresholds that can be easily evaded. This lack of information makes it difficult for the AQMDs to write rule s that target high emitters who can afford to install the required technology . Additionally, in order for an AQMD to enforce a charbroiler re gulation, it must be able to effectively track the amount of PM that restaurants emit (both before and after a control is installed), as well as perform inspections to ensure that the control is being operated correctly.



### 3.2 Coordination Failure: Low Stak eholder Support

Restaurant Opposition to Proposed Rules

In analyzing the failure of the proposals from the SJVAPCD and SCAQMD, c ost was the major factor in the restaurant industry’s opposition to the under

- fired charbroiler regulations

. The restaurant ind ustry is represented by the California Restaurant Association (“CRA”), which has been involved in the rule

- making processes within each of the three districts. While it stands in opposition to any new costly regulations, it does have a cooperative relation ship with the AQMDs and a voice in creating rules that are fair to its members.
Not only have the AQMDs produced widely varying cost estimates for each potential control technology, but the CRA has also presented significantly higher estimates of average t otal costs to its affected members. 16 AQMDs have compiled estimates based on initial capital outlays, installation costs, and maintenance expenses, while the CRA has countered with the addit ion of costs related to remodel ing for existing restaurants, permitting, and lost revenues due to temporary shutdown of the businesses.
Part of the reason that cost estimates have diverged stems from the fact that the manufacturers, regulators, installers, and users/maintainers of the equipment are different partie s with little coordination. All four have different definitions of the total cost of the control system, thus obscuring the total cost of technology adoption.

Restaurants have also voiced concerns related to record

- keeping requirements that would force es tablishments to register their charbroilers and closely track their usage of beef and maintenance of the control system. Additionally, the large and diverse set of restaurants that use under

- fired charbroilers, including small businesses, has raised concer ns that widely

- cast regulations may have a disparate impact on operators with smaller scale, especially as it relates to potential installation and remodeling costs.Regulating Emissions from Under

- fired Charbroilers | 1 2



### 3.3 Technological Challenges: Uncertain Costs and Stalled Innovation

Regulatory barriers h ave also stymied technological innovation relating to under

- fired charbroilers. Regulators are dependent on the manufacturers of control technologies to produce controls that meet the standards set in the regulatory code. Controls that meet the efficiency thresholds are then certified for use in restaurants. As opposed to the regulations passed for chain

driven charbroilers, the un der

- fired controls are more costly and difficult to install.

T he size of the under

- fired charbroiler control market acts as a s econd barrier to innovation. The large, national and multi

- national ventilation companies have little incentive to develop a product that only serves a single AQMD. This lack of achievable scale also impacts the smaller manufacturers of controls, as they a re unable to gain the economies of scale necessary to produce a

more cost

- competitive product.
Additionally, g

iven that there is a lack of a streamlined testing and certifica tion process that coordinates the efficiency requirements of the various AQMDs, l arge manufacturers have become frustrated with changing benchmarks and have opted out of the process in the past. The lack of coordination among the AQMDs presents confusion and redundancy problems for the manufacturers, also lowering the credibility of th e AQMDs.Regulating Emissions from Under

- fired Charbroilers | 13



### 4. S TUDY 

### O BJECTIVES

The primary task of this report is to provide recommendations regarding under

- fired charbroiler regulations that can be implemented by California AQMD s. As articulated by U.S. EPA,

t wo central questions drive this analysis:

(1) In the universe of currently available technologies , what are the financial implications of requiring restaurants to install emissions controls?

(2) What steps should local air quality management districts take to reduce PM 2.5 emissions, especially with respect to control technology implementation?
In answering these questions, we identify two key dimensions of under

- fired charbroiler regulation:

(1) Analyzing the cost and efficacy of emissions control technology in the restaur ant

context and

, (2) Exploring potential strategies for agency action given the state of current technology

. Judging from the successes and challenges of previous efforts to curtail restaurant PM emissions, any successful regulatory strategy must a ddress three principal concerns:


### Achieving Emissions Reductions

Any regulation must significantly reduce PM emissions from under

- fired charbroi lers. Drawing upon past analyses performed by several AQMDs , we judge the effectiveness of e missions reduction technolo gies by absolute measure s of control efficiency (% of PM removed), as well as by the cost

- effectiveness of reductions, in dollars per ton of parti culate matter abated ($/ton PM ).


### Minimizing Cost of Compliance

All viable regulatory strategies must achieve t argeted emissions reductions while also ensuring that the costs of compliance for the restaurants lie within industry

- acceptable ranges. Because regulatory action must not stifle restaurant industry profitability, we consider the cost of various emissions

- control options in the context of the financial impacts on affected restaurants.


### Enabling Administrative Feasibility

Given the difficulties faced by AQMDs in instituting controls for under

- fired charbroilers, this study recognizes that successful under

- fired charbroiler regulations must be practicable

, not just for the restaurant industry but also for agencies themselves. Previous attempts to reduce charbroiler emissions have struggled to achieve wide impact due to information al asymmetries, politi cal opposition, limited AQMD resources, and the ability of restaurants to evade enforcement.Regulating Emissions from Under

- fired Charbroilers | 14



### 5. C OST AND 

### E FFICACY OF 

### E MISSIONS 

### C ONTROL 

### T ECHNOLOGIES

There are three ways restaur ants can reduce their emissions: cook ing foods that emit less
PM
, switch ing from using under

- fired charbroilers to cleaner

- burning cooking equipment , or install ing emissions control technologies to their present kitchens

. For each option, t here are a variety of technological options that merit consideration

.

In this section

, each str ategy is described and evaluated based on its cost per unit of pollution reduced (measured in “$/ton PM”) , its impact on restaurant operations , and the administrative burden its adoption poses for AQMDs

. For all strategies, technological development has be en slow because the market for low emissions cooking equipment and emissions control units is small

. Demand is typically driven by public complaints about odor or grease, resulting in municipal building code and zoning regulations.

The analysis shows that switching food cooked and cooking equipment have much lower capital costs and installation costs than emissions control units. However, they are less acceptable strategies to restaurants because they require more operational changes. For example, the rest aurant may have to alter the menu and change the business. All strategies can be difficult for government agencies to enforce. Emissions control units are particularly burdensome because they can be easily disabled after installation by restaurants seeking to avoid maintenance costs.



### 5. 1 Design Constraints

Three design constraints limit the realm of technological possibilities in reducing emissions from under

- fired charbroiling. The first is the way that emissions are produced from under

- fired charbroilin g and the resulting profile of the emissions. The second encompasses the restaurants’ operational and business needs. The third is that agencies have limited resources to monitor and enforce emissions reductions from restaurants.


### Emissions from Charbroil

ing 17

Emissions from under

- fired charbroilers are generated when fat, marinade from meat, or oil fall onto the heat source. The high temperature of the heat source causes the food to combust and become smoke, particulate matter, condensable vapor, and volat ile organic compounds (VOCs) 18

. Some meats and oils emit more than others for a given amount cooked. Different cooking technologies can also reduce the amount of PM emitted by interfering with the way the emissions are generated.

These emissions interfere with restaurant operations and are exhausted into the atmosphere by a ventilation system known as the hood that usually covers all the cooking equipment. Grease filters in the hood capture particles larger than 10 μ m in diameter. Otherwise, they would colle ct in the ductwork of the ventilation system, which is a major fire hazard. The remaining particles and vapors are released into the atmosphere.Regulating Emissions from Under

- fired Charbroilers | 15

The majority of the remaining particle emissions are smaller than 2.5μm in diameter, also known a s PM 2.5 . The graph below shows the distribution of particle sizes from cooking a hamburger on an under

- fired charbroiler. In fact, the vast majority of the PM is less than 1μm in diameter, peaking at .17μm 19

. Furthermore, up to one

- third of the emissions may be in the form of condensable vapors 24

. This vapor condenses and becomes PM when it exits the restaurant and hits the colder air outside.



### Restaurant Needs

In order to be acceptable to the restaurant industry, any strategy must be affordable, easy and quick to maintain, and have a small financial and operational impact. Restaurants prefer to offer a consistent menu, and thus are typically averse to changing the types and v olumes of food they cook

. Alternative cooking technologies must preserve the flavor and visual effect of food

. 20

As mentioned previously, emissions inside the restaurant interfere with restaurant operations and so are exhausted into the atmosphere. Larger particles are filtered because they are a fire hazard. The rest of the PM is sometimes required to be removed because of odor and nuisance complaints from the public. Municipal zoning requirements often apply to mixed

- use buildings such as hotels, airports , and stadiums or to restaurants in densely populated areas. Otherwise, the restaurant itself does not have a need to reduce or filter emissions. In fact, they have a preference to emit PM because the smell of the food serves as a kind of advertising

. 21

Th e emissions control units must not impede the functionality of the ventilation system, and they must be appropriately sized for the restaurants. It is also important that the technology does not increase the risk of a fire. Strict maintenance may be requir ed to control potential fire hazards

. 

### Agency Resources

AQMDs are public sector a gencies with limited resources to enforce regulations for under

fired charbroilers. Because it is not easy to measure and monitor restaurant emissions directly, agencies must have other ways to determine the level of emissions and emissions reductions.
The BAAQMD regulation use s the type and amounts of meat cooked to identify which restaurants actually have high emissions. This may not be very accurate and it is also hard to verify. The agency must also be able to ensure that restaurants actually reduce emissions. In particular, emissions control units that are not properly maintained are not effective, and so agencies need a way to make sure restaurants are keeping their inst alled units maintained and operational.



### 5. 2 Changing Meat Cooked 22

Some foods have higher emissions than others per pound of food cooked for a given cooking method. They can be compared by measuring their e missions f actor , a figure representing the pounds of emissions produced per 1
, 000 pounds of meat cooked :Regulating Emissions from Under

- fired Charbroilers | 16 Emissions Factor =

Meat emits more than vegetables. Of the meats studied, beef h as the highest emissions factor , followed by chick en, pork, and seafood. Hamburger beef has the highest emissions factor ( 32 ) , while the emissions factor for steak is roughly half as large ( 17 )

. Figure 2 | Emissions f

actors of c harbroiled m eat

Sources: SCAQMD
Beef is also by far the most common meat cooked in restau rants, presumably because it is the most popular meat for consumers. As a competitive industry, restaurants are only inclined to alter their menus according to consumer demand. Directly regulating the type and amounts of meat cooked interfe res too much with the business itself. However, all of the previous regulatory attempts use the amount of beef purchased and cooked as a threshold to identify restaurants that are required to install emissions control units. Regulators can also educate res taurants and consumers about the emissions factors of the different meats.



### 5. 3 Cooking Equipment Technologies

For a given meat, different cooking technologies have lower emissions factors 23

. In general, deep fat frying, baking, and broiling all have lower e missions factors while woks have higher emissions factors 24

. Chain

- driven charbroilers with emissions control units, clamshell griddles, and smokeless broilers are the three closest direct substitutes for under

- fired charbroilers.

 Chain

- driven charbroilers with emissions control units cook hamburgers in bulk and are typically used in fast

- food restaurant chains such as Burger King and Carl’s Jr

. The emissions are reduced because the food is cooked in an enclosed unit and the higher temperature 0 5 10 15 20 25 30 35 40

Hamburger Steak Chicken Fish

solid and condensable PM VOCRegulating Emissions from Under

- fired Charbroilers | 17

causes more complete combustion. This also made it possible to control the emissions with a catalytic oxidizer, which required minimal installation, maintenance, and is also low cost. Chain

- driven charbroilers have been successfully regulated i n certain California AQMDs so that they have an emissions factor of 1.3 with the control technology installed. 25

 Clamshell g riddles use two grooved metal plates that close in on each other with the food inserted in the midd le. Griddles emit less PM because the grease from the meat does not come in contact with an open flame and the clamshell griddle emissions are further reduced because of the lower cooking time , resulting in an emissions factor of 2.2. While some

restaurants such as McDonald’s util ize clamshell griddles, they are not a drop

- in replacement for an under

- fired charbroiler. 26

, 27

 Smokeless broilers are a type of under

- fired charbroiler with water that washes away the fat

. However, it does not leave char m arks on the meat and because of th is visual effect, the restaurant industry has rejected including this as an emissions reduction alternative. The Center for Environmental Research and Technology (CE

- CERT) at UC Riverside did a taste test and found that the taste is indistinguishable from the under

- fired charbroiler, but so far the restaurant industry still opposes it. 28

Figure 3 | Emissions f

actors for burgers by type of c ooking e quipment

Sources: CE

- CERT, University of Minnesota
Although all these options cook similar foods to under

- fired charbroilers, the results are not exactly the same and changes in restaurant operations would be necessary. The chefs may not have expertise with using alternative cooking equipment. Restaurant owners or chefs often have strong preferences agai nst them based on nuanced differences in the flavor, texture, or visual effect. Again, the decisions tend to be based on meeting consumer demand. As a result, even though the prices are comparable to under

- fired charbroilers, the restaurant industry is gen erally averse to regulating cooking equipment since they are not perfect substitut es for under

- fired charbroilers

. At the same time, regulators can educate restaurants and consumers about the emissions factors of the different

0 5 10 15 20 25 30 35

Under-fired Clamshell Griddle Smokeless Broiler Chain-Driven w/ Controls

solid and condensable PMRegulating Emissions from Under

- fired Charbroilers | 18

cooking technologies.



### 5. 4 Em issions Control Unit Technologies 29

, 30
, 31
, 32
, 33

Most proposals for regulating under

- fired charbroilers focus on emissions control units b ecause it does not impact the food or cooking process at all. They only impact restaurant operations through required maintenance procedures, and they only impact the business through
monetary costs. Emissions control units are installed inside the ventilation system (the hood ). The three most popular and effective technologies are ESP s, HEPA filters, and wet scrubber s :

 ESP s, or electrostatic precipitators , charge particles using high DC voltage , causing them to collect on metal plates. Particles are then washed off with water. They are a fire hazard if they are not properly maintained because grease builds up on the met al plates.

 H igh

- Efficiency Particulate Arresting ( “ H EPA ” ) filters are fiber

- based filters. HEPA filters must remove 99.97% o f all particles greater than .3μ m to meet a standard set by the DOE. However, most restaurant emissions are smaller than .3 μ m, so the actual effectiveness of HEPA filters is less than the stated effectiveness by the manufacturer.

 Wet s crubbers have the emissions pass through an atomized stream of water mixed with detergent to capture the grease particles. Wet scrubber systems usually also have HEPA filters. This system is able to remove VOC as well as PM because the water cools the emissions and causes the grease vapors to condense. The lower temperature also reduces fire hazard. 34

The development of emissions control technolog y has been slow because of low demand. In fact, ESPs and HEPA filters were first invented over 50 years ago for other applications. Wet scrubber systems were invented about 10 years ago and are more effective, but are not significantly cheaper. This is par tially due to the fact that ESP s and HEPA filter s are made by ventilation system manufacturer s, which sometimes offer discounts for the emissions control units when sold together with the hood s

. Furthermore, without a rule, restaurants have no need for a m ore effective unit. Hood manufacturers make most of their revenue from the hood business and the emissions control market is not big enough to warrant large investments into research and development for emissions control. As a result, costs for emissions c ontrol units have remained high, and they have not become much more effective at removing particles from exhaust air

.Regulating Emissions from Under

- fired Charbroilers | 19

Table 2 | Summary of e missions c ontrol u nit t echnologies



### 5.5 Cost Analysis

The total cost of an emissions control unit includes the capital costs, cost of installation, and cost of maintenance. The costs for the units vary depending on the sizes of the hoods. The hood sizes are indicated by the amount of air flow in cfm (cubic feet per minute). In general hoods are sized according to th e amount of food cooked, with larger restaurants need ing larger hoods.

As seen in Figure 4 below, particularly for ESP’s, t he installation costs of retrofitting the units for existing restaurants can be much higher than installing the units when the resta urants are first being constructed 35

. This is because significant renovations may be required in order for the emissions control unit to fit and be compatible with the hood. There may also be plumbing and electrical wiring needs 36

. The installation costs are extremely variable since they depend on the particular situation of each restaurant. That is why different technologies may cost much less for different restaurants. At the same time, the costs for all the technologies may be very high for some

restaurant s. In contrast
, new restaurants can have these requirements incorporated in the original design so they cannot be considered additional costs. Technology Manufacturers % PM Filtered Pros Cons

ESP Halton

Gaylord Smoghog 47% Off the shelf Only filters solid PM
Generates ozone Fire hazard Water and detergent usage

HEPA Captive Air e 52% Off the shelf Only filters solid PM

More affordable installation High maintenance

Wet Scrubber CAST Inc

Molitron 85% No fire hazard Water and detergent usage Made to order Moderate maintenance

costs Effective for VOCs and condensable vapor More affordable installationRegulating Emissions from Under

- fired Charbroilers | 20

Figure 4 | Maximum r etrofit c osts vs

. n ew c onstruction c osts for e missions c ontrol u nits

The cost per ton of emissions abated can be calculated to compare the effectiveness of the different emissions control unit technologies :

Cost effectiveness =

These calculations a ssume that each unit has about a 10

- year lifetime and the real intere st rate is 7%

. 37

Hood sizes are roughly proportional to the amount of beef that is cooked per week. Since the hood covers other kitchen equipment besides the under

- fired charbroiler, these sizes are larger than what the under

- fired charbroiler actually req uires. 38 If half the beef cooked is hamburger meat and the other half steak, then hood size is proportional to the tons of PM emitted annually. This should be an underestimate of the amount of PM emitted since the hood covers other cooking technologies

. 39 Assuming installation and operating costs do not decrease proportionally with the capital cost, larger units are much more cost

- effective than smaller units.

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000 $17,000 $18,000 $19,000 $20,000

1000 2000 3000 4000 5000 6000 7000 8000 9000

Air Flow of the Hood (cubic foot per minute)

Wet Scrubber Max Retrofit Wet Scrubber New

HEPA Max Retrofit HEPA New

ESP Max Retrofit ESP NewRegulating Emissions from Under

- fired Charbroilers | 21

Figure 5 | Cost per ton of PM r emoved for e missions c ontrol u nits

The three emissions control t echnologies are comparable in price for any given hood size. Costs of retrofitting are much higher than costs of initial construction because of highly variable installation costs. The wet scrubber is the most cost effective, removing more emissions per do llar because it is able to remove condensable vapor. The average cost

- effectiveness of a regulation depends on the distribution of restaurants that install which control technologies.
Compared to the cost

- effectiveness of reducing PM from other sources fr om other regulations, the cost

- effectiveness of emissions control units for new restaurants are in the mid

range , whereas retrofits are among the more expensive ways to reduce PM. 40

Table 3 | Cost

- e ffectiveness of o ther m ethods for r educing PM e missions

Regulated Activity Avg. Cost/Ton PM Rule Cited
Street S weeping $1,200 SC1186
Road P aving $6,000 SC1186

Compos t ing $8,700 SC1133
SC1133.2
Wood

- burning D evices $14 ,000

- $27,000 SC445 Source : SC AQ MD



### 5.6 Impact on Restaurants

Given their non

- trivial capital and maintenance costs, it is important to understand how adopting emissions control technologies would impact the profitability of affected restaurants. In $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000

1,000 3,000 5,000 7,000 9,000 Air Flow of the Hood (cubic feet per minute)

Wet Scrubber HEPA ESPRegulating Emissions from Under

- fired Charbroilers | 22

general, the restaurant industry is highly competitive market of dif ferentiated small businesses. Nationally, 93% of all restaurants employ less than 50 people, and with 62,000 in the State of California alone, restaurants compete to offer a diverse array of cuisine, ambiance and dining experiences for potential customers. 41 As a very competitive industry, restaurants move aggressively to contain costs in order to keep their menu prices as low as possible. Even when successful, average profit margins in the restaurant industry are low, typically ranging from 3

- 6% in Californ ia. 42 As a result, restaurants have developed a reputation as a high

- risk business, a perception that is mostly accurate. Recent restaurant business research indicates that the restaurant ownership takeover (i.e. failure) rate is 26% within one calendar yea r of opening, which increases to a cumulative figure of 60% in the first three years. 43 Thus, special attention must be paid to the additional cost of regulatory compliance that new charbroiler regulations may impose

. In line with previous studies commissioned by AQMDs, this report prepares estimates for the profitability of California restaurants in order to better understand the costs they would face in complying with new emissions control regulations. Unfortunately, because most restaurants are privately

- held business enterprises, only a limited amount of information about the profits of restaurants is readily available. Two different attempts to approximate restaurant profitability are presented here using publicly a ccessible sales data. Although these estimates do not provide a complete picture of restaurant profitability in California, they do shed some light on the subject. The two estimates presented here are:

( 1) Industry

- wide county a verages , using data from th e U.S. Census Bureau’s 2007 Economic Census

, 44 and compiled by air q uality management district; and

( 2) Estimates for large restaurants in relevant counties, usin g data from the Hoover’s Online sales database. 45

By presenting from county

- level averages and more specific estimates for large restaurants (those more likely to be subject to new regulations), these figures illustrate the size of restaurant profitability in the 21 California counties of interest in this study.


### Profitability of the Average Restaurant

Using county

- level sales data from the U.S. Census Bureau’s 2007 Economic Census and profit margin estimates from the National Restaurant Association ( “ NRA ” ) published in their 2010 Restaurant Industry Operat

ions Report , it can be seen that average restaurant sales and profitability in California varies depending on location and type of business.Regulating Emissions from Under

- fired Charbroilers | 23

Table 4 | 2007 Economic Census d ata , o rganized by Air Quality Management District

2007 NAICS code Meaning of 2007 NAICS

code Number of

employer establish

ments Employer

value of sales, shipments, receipts,
revenue, or business done ($1,000) Average

employer value of sales, shipments, receipts,
revenue, or business done Estimated

profit margin Estimated

average annual profit per establishment

Bay Area Air Quality Management District 72211 Full

- service restaurants 6,842 $6,374,836 $931,721 3.5% $32,610 7222 Limited

- service eating places 7,271 $5,107,950 $702,510 5.9% $41,448 722211 Limited

- service restaurants 5,182 $3,815,875 $736,371 5.9% $43,446 San Joaquin Valley Air Pollution Control District 72211 Full

- service restaurants 1,683 $1,103,461 $655,651 3.5% $22,948 7222 Limited

- service eating places 2,925 $2,207,372 $754,657 5.9% $44,525 722211 Limited

- service restaurants 2,230 $1,783,108 $799,600 5.9% $47,176 South Coast Air Quality Management District 72211 Full

- service restaurants 11,331 $11,813,442 $1,042,577 3.5% $36,490 7222 Limited

- service eating places 16,473 $12,332,379 $748,642 5.9% $44,170 722211 Limited

- service restaurants 12,576 $10,238,968 $814,167 5.9% $48,036
With average revenue figures ranging from $655,651 to over $1 million, there is slight variation in sales across region and type of restaurant. Given this variation in profits from $23,000 to over $48,000, this analysis indicates that if all restaurants wo uld be required to purchase control technologies, the cost of compliance may result in a heavier burden for full

- service restaurants.


### Profitability of Larger Restaurants

However, not all restaurants will need to purchase emissions

- control technology, sinc e not all restaurants contribute equally to the PM pollution problem. Because a greater proportion of PM emissions come from high

- volume restaurants with large charbroilers, it is important to move past industry

- wide statistics and construct profit estimat es for restaurants of above

- average size. On average, restaurants in the largest quintile by workforce size employ 60 people. Using data from Hoover’s Online sales database for restaurants in affected counties, w e estimate that larger restaurants earn appr oximately $110,000 in profit every year (see Appendix C for a more detailed methodological explanation). These results are outlined below in Table 5 :

Table 5 | Estimated s ales and p rofit d ata for l arger r estaurants in AQMD counties

Type of Restaurant Number in Data Total Sales Estimated Profit* Larger Restaurant Corporations 373 $1,285 million $51.4 million For a Restaurant with 60 Employees** $2,749,756 $109,990 Fast

- Food Chain Companies 52 $236 million $9.45 million For a Fast Food Restaurant with 60 Employees $2,665,231 $106,609 Independent Family Restaurant Companies 20 $59.1 million $2.36 million For an Independent Family Restaurant with 60 Employees $3,060,992 $122,440 *Calculated with a 4% profit margin (CA Restaurant Association) **Average size of restaurant staff, including part

- time employees (National Restaurant Association)Regulating Emissions from Under

- fired Charbroilers | 24

Previous regulatory efforts have shown particular interest in the impact of emissions

- control regulation on two types of restaurants: fast

- food establishments and independent family restaurants. Among large restaurants in affected counties, fast food restaurants earn slightly below t he general average ($106,609) and independent family restaurants earn more ($122,440).


### Comparing the Cost of Technology to Restaurant Profits

Previous socioeconomic analyses of charbroiling regulation have used similar profit estimates to measure the impact of installation mandates on restaurant business operations. Using the annualized control technology cost data presented above and the profit estimate prepared for large restaurants in relevant AQMDs, the cost of adopting emissions control technology represents 10

- 14 % of restaurant profits depending on the specific type of technology adopted , as illustrated below in Table 6 :

Table 6 | Annualized c ost of e missions c ontrol devices as a share of a nnual r estaurant p rofits

Sources: Hoover’s Online, CE

- CERT
Although drawn from different data sources, these findings parallel the socioeconomic study commissioned by the SJVAPCD in 2009, which found that the cost of installing viable emissions control technologies would represent 8.98

- 12.49% of restaurant profits. 46 These figures may appear modest at first glance, given that installing control technologies would amount to only a tenth of restaurant profits. However, it should be noted that this figure is several times larger than the case of successful chain

- driven charbroiler regulations, where the cost of installing catalytic oxidizers represented just 2.2% of average restaurant profits. 47



### 5. 7 Future Prosp ects

Increased scale may increase cost effectiveness. If more restaurants install pollution control technologies then the prices of the products are estimated to decrease. The prices of newer technologies such as wet scrubbers would be the most responsive to increased demand because of reduced production costs as they scale up. The production of wet scrubbers is not yet to scale and

Technology ESP (Avg.) HEPA

(Avg.) Wet

Scrubber (Avg.)
PM Emissions Removal Rate 47% 52% 85% Capital Cost $38,750 $42,303 $50,000
Installation Costs $15,000 $3,700 $5,619 Operating Costs $3,081 $7,165 $4,633 Average Annualized Cost of Adoption $10,734 $15,075 $12,552
Average Restaurant Profit Estimate $109,990 $109,990 $109,990
Cost of Technology as Proportion of Profits 9.76% 13.71% 11.41%Regulating Emissions from Under

- fired Charbroilers | 25

so there is a potential for significant cost reductions for the capital costs

. 48 If about 120 units are sold per year, the aver age annual cost would be $6

, 800, and the average cost

- effectiveness would be about $14

, 000/ton PM removed.
South Coast is undergoing another testing phase this year. There are at least two promising new emissions control technologies, regenerating ceramic filters and boundary layer momentum. 49

 Regenerating c eramic f ilters are made of honeycombed ceramic material that can be coated with an oxidizer, which reacts with the emissions. They are very effective according
to CE

- CERT testing. However, they usually require weekly or even daily filter replacement since the filtration process is a chemical reaction. If ceramic filters can be regenerated (cleaned) automatically at night , then this could be a very good option

.

 Boundary layer momentum is a new technology that has been submitted to CE

- CERT for testing this year. It uses turbulent airflow to increase the size of the particulate and then uses inertial separation.
UV light is another new technology being offered to supplement ESP and HEPA filter pollution con trol systems in recent years but so far has not been submitted for testing. 3



### 5. 8 Administrative Costs

Without proper enforcement, r estaurants seeking to avoid ongoing maintenance costs could easily remove parts of the emissions control unit or simply not turn them on. Since it is easy to disable the emissions control system, it is important for regulators to be able to easily check if emissions control systems a re operational. One suggestion is for the control technology to install a diagnostic test mode

. T hen a visiting inspector can push a button to run the diagnostic mode, which will notify the inspector if there are pieces missing. Emissions control units can also in clude remote communications (

real

- time monitoring

) so that regulators can remotely check the status of the unit. This technology is readily available and affordable. However, regulators need to decide what kind of process they prefer so that the design specifications can be made available for manufacturers.


### Summary

There are several technologies currently available on the market that can effectively reduce
PM emissions

. However, t o date, t echnological development has been slow because of the lack of demand in the market for pollution controls. Because of the competitive nature of the restaurant industry, profit margins are fairly slim and the cost of installing emissions control units is about 10% of restaurant profits , far above that of previous chain

- driven charbroiler emissions control efforts

. Costs for new restaurants are lower and much less variable than c osts for retrofits, and i ncreased scale would also reduce costs and encourage technological development.Regulating Emissions from Under

- fired Charbroilers | 26



### 6. O PTIONS FOR 

### A GENCY 

### A CTION

In lig ht of the present lack of affordable technological options, agencies can consider several classes of alternatives to address the high levels of PM emissions from under

- fired charbroilers while reducing compliance costs for restaurants. In this section, we first discuss the no

- policy case in which restaurants operate without regulatory impetus to reduce emissions. Bearing in mind the regulatory framework outlined above in Figure 1 , we next introduce alternatives in which agencies regulate the cooking process and alternatives in which agencies regulate cooking outputs, followed by non

- regulatory tactics that can shift and/or decrease compliance costs.

Our discussion of alternatives that regulate the cooking process takes into account both cooking and emissions control technologies, and includes the following approaches:

 Ban under

- fired charbroiling as a cooking method

 Revisit a technological standard for emissions control devices

Our discussion of alternatives that regulate cooking outputs includes the following approaches:

 Subsidize PM emissions reductions from restaurants that use under

- fired charbroilers

 Tax PM emissions from restaurants that use under

- fired charbroilers

 Disburse tradable PM emissions permits to restaurants that use unde r

- fired charbroilers
We close the section by discussing some ancillary non

- regulatory tactics that should be considered in order to buttress the deployment of any regulatory strategy, including the following:

 Public education campaign about restaurant pollution

 “Clean Beef” labeling program
It should be stressed that these options are not all mutually exclusive and can in some cases be combined to maximize efficacy and take advantage of potential complementarities.



### 6.1 Let Pr esent Trends Continue

We should first consider whether restaurants that currently use under

- fired charbroilers would curb emissions in the absence of an AQMD mandate . After all, many multi

- use buildings and restaurants in high

- end residential areas currently install emissions controls , even where no AQMD rules apply . In many instances, this is an artifact of a zoning or building requirement, but in other cases, such as in casinos, restaurants want to eliminate smoke and odors. For smaller restaurants, howev er, there is no such motivation to voluntarily use emissions control devices, which generate neither revenues nor appreciable cost savings to defray the high associated costs. Similarly, in the absence of any regulatory impetus, these restaurants will have no reason to seek alternative ways to reduce emissions. It is therefore evident that maintaining the status quo would fail to reduce PM emissions from a majority of California restaurants.Regulating Emissions from Under

- fired Charbroilers | 27



### 6. 2 Regulating the Cooking Process

Without voluntary action to red uce restaurant emissions, agency intervention will be required to bring California’s air districts into compliance with national standards. One avenue for such regulation is to address the cooking process and the machinery it entails, which is where AQMDs have focused most of their efforts to date. These approaches have the advantage of being fairly administratively feasible, but can entail substantial compliance costs for restaurants.



### Ban Under

- f ired Charbroiling

One option is to induce a shift toward cook ing methods that pollute less by banning under

fired charbroilers. As discussed above, many successful restaurants cook meat using chain

- driven charbroilers (e.g., Burger King) or clamshell griddles (e.g., McDonald’s), and often produce very comparable pro ducts to restaurants that use under

- fired charbroilers. Encouraging a shift away from under

- fired charbroiling toward substitute cooking methods would lower emissions and in many cases approximate the same finished product.

However, alternative beef

- cookin g methods are primarily used in limited

- service restaurants, whereas the restaurants that use under

- fired charbroilers are often larger, full

- service restaurants (e.g., Hard Rock Café, Outback Steakhouse, Applebee’s, and T.G

. I. Friday’s) . One possible solu tion would therefore be to ban the purchase of new under

- fired charbroilers by limited

- service restaurants, allowing those already in operation to complete their useful service lives. Still, the contention that under

- fired charbroilers have close substitut es even in limited

- service restaurants is likely to be seen by restaurants as an overly simplistic perspective. Any regulations that alter or compromise these aspects may therefore be viewed as a movement to homogenize meat products and erode brand identit y. Requiring a change of cooking method would thus face staunch resistance from restaurants as they resist large, if difficult to quantify, costs associated with making fundamental adaptations to their businesses.


### Revisit a Technological Standard for Emiss ions Control Devices

Another option is to revisit a technological standard for controlling emissions from under

fired charbroilers. In doing so, agencies should learn from BAAQMD’s successes and failings. Regulation 6, Rule 2 was a success insofar as it pa ssed through the rulemaking process. However, its design was flawed from its inception, as outlined above, which has eroded the rule’s credibility with various types of stakeholders.
The narrow or nonexistent scope of applicability for the BAAQMD rule hig hlights the need for lower threshold amounts. A reasonable approach is to emulate threshold levels in regulations of chain

- driven charbroilers, which have been successful by all accounts. In contrast to the thresholds for beef cooking and purchasing of 800 and 1

, 000 pounds, respectively, for restaurants that use under

- fired charbroilers, the BAAQMD rule set the corresponding thresholds for restaurants that use chain

- driven charbroilers at just 400 and 500 pounds. Similarly, the latest SJVAPCD rule forRegulating Emissions from Under

- fired Charbroilers | 28

chain

- driven charbroilers set the weekly cooking threshold to 400 pounds of meat. As illustrated below in Figure 6 , lowering meat

- cooking thresholds could significantly widen the scope of applicability for a technological standard for under

- fired charbroilers. Also, there is no grill area requirement for chain

- driven charbroiler rules, which eliminates one avenue for regulatory evasion.

Figure 6 | Distribution of Bay Area restaurants by weekly beef

- cooking amounts

Source: BAAQMD
Agencies should also consider calibrating a threshold to the size of a restaurant’s fume hood, which may be correlated with the amount of meat it cooks. If this is the case, fume hood size would capture information about meat cooking tendencies and would be less vulnerable to manipulation by restaurants; whereas restaurants can underreport or artificially depress the amount of meat they
purc hase and cook, their fume hoods are invariant and must be large enough to accommodate a restaurant’s peak cooking load. If CE

- CERT tests confirm this relationship, then calibrating a rule to restaurants with sufficiently large fume hoods could provide for a more enforceable rule.
Refining the scope of applicability for a technological standard will broaden the universe of impacted restaurants and increase the potential for emissions reductions. But another important consequence of wider impact is that it wo uld generate technology

- forcing outcomes to make the use of emissions control devices a more viable option. With demand bolstered by a credible standard, more manufacturers will submit their devic es to CE

- CERT for certification, making it likely that AQMDs can certify several designs for use in their standards and effectively providing regulatory haven to solidify demand guarantees. Certified device manufacturers can then scale up production and drive down costs to reasonable levels and further diminish com pliance costs for restaurants.
Even with reduced compliance costs, it is important to consider how restaurants may respond to the additional burden if they are subject to new rules. Whereas restaurants have heretofore taken a “delay until f urther clarity e merges” approach in response to regulatory 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

0 500 1000 1500 2000 2500 3000 Percentage of Restaurants

Pounds of Beef Cooked Per WeekRegulating Emissions from Under

- fired Charbroilers | 29

uncertainty, 50 a technology

- forcing standard can offer resolution that will impel firms to act in response. The adaptation strategies available to restaurants are shown below in Figure 7 :
Figure 7 | Restaurant adaptation decision tree in response to a technology

- forcing standard

A restaurant that falls subject to, and complies with, a technology

- forcing standard can absorb compliance costs in a number of ways, including cost

- cutting measures such as decreasing employee wages, postponing acquisitions/expansions or other investments, or spending a portion of retained earnings. However, a compliant restaurant need not necessarily bear th e entire cost of regulation

– in response to higher expenses, restaurants can pad revenues by raising prices on their food, effectively passing the burden along to consumers.

To the extent that a technology

- forcing standard is effective in driving down the cost of compliant technologies, the distribution of restaurant adaptation outcomes should tend away from business closure

– on one hand, fewer restaurants will opt to exit the market rather than complying, and on the other hand, restaurants that attemp t to comply will be less likely to fail under the added financial duress of compliance. Note also that one available strategy for restaurants is to evade thresholds so that they are not subject to the standard, such as replacing an under

- fired charbroiler with a different cooking mechanism such as a chain

- driven or flameless broiler.
The implementation of a technology

- forcing standard as outlined herein can refine past attempts at regulations of under

- fired charbroilers by expanding the scope of applicabili ty, decreasing the cost of compliance by generating economies of scale in the production of control devices, and allowing the burden of regulation to be shared by restaurants and consumers without

Impetus Applicability Compliance AdaptationRegulating Emissions from Under

- fired Charbroilers | 30

excessive government cost.



### 6.3 Regulating Cooking Outputs

In addition to exploring regulatory strategies that target the cooking process, regulators should consider options that directly address the pollution from restaurants. These types of options have the advantage of lessening compliance costs for restaurants , but tend to do so at the expense of administrative ease. 

### Subsidize PM Emissions Reductions

Since restaurants have previously mounted effective opposition to proposed regulations on the basis of stifling upfront costs, agencies might consider offering fin ancial incentives to reduce their initial expenses. In this way, agencies can ease the burden for restaurants wishing to aid AQMDs in their efforts to improve air quality.
SJVAPCD launched a charbroiler incentive pilot program in 2009 in hopes of advancin g retrofits of under

- fired charbroilers with PM emissions control devices. The program was intended to cover 60

- 90% of capital costs of such installations at up to 10 restaurants. However, SJVAPCD received no applications for funding during the one

- year wi ndow in which the incentive was available. In hindsight, restaurants had little financial incentive to participate, as would

- be participants would still have been left with considerable operation and maintenance expenses. From a compliance standpoint, rest aurants may have felt seized the chance for a subsidized installation if a credible technological standard had been imminent, but with such uncertainty surrounding the passage of a rule in SJVAPCD, the incentive program provided no such “early

- adopter disc ount.”
An emissions reduction subsidy that remains agnostic regarding the method of reduction would stand a better chance for success. By crediting restaurants for each ton of PM reduced below a baseline amount, irrespective of how they achieve these reduc tions, AQMDs can extend incentives to other methods of emissions reductions and decrease compliance costs for restaurants. However, the need to assess a pre

- subsidy baseline level of PM emissions for each restaurant might create the perverse incentive for restaurants to emit more PM beforehand, in order to later capture the largest subsidy without actually reducing emissions levels very much from typical levels.



### Tax PM Emissions

Similar to the agnostic emissions reductions subsidy, an emissions tax has the advantage of letting restaurants decide how best to reduce emissions. In this scheme, AQMDs would set a tax rate for any PM emitted by the restaurants above a certain threshold, and then restaurants could make strategic decisions regarding how to bear the tax burden or avoid penalty by reducing emissions. Still, agencies would be left with the difficult task of setting an appropriate tax rate; if set too low, the tax will not have the desired impact, and if set too high, then the tax will be too stifling fo r restaurants to handle. Even assuming an appropriately calibrated tax rate, agencies would still faceRegulating Emissions from Under

- fired Charbroilers | 31

the legal challenge of obtaining the authority to assess taxes on restaurants, as well as the administrative challenge of collecting the tax proceeds.



### Di sburse Tradable PM Emissions Permits

Both an emissions reduction subsidy and an emissions tax would allow restaurants to decide how best to cut emissions to fit into a pre

- specified emissions budget. Establishing a market for tradable emissions permits goe s even further to reduce compliance costs for restaurants by allowing them to decide not only how to fit into an emissions budget, but also how large this budget can be. Under this scheme, if a restaurant does not wish to cook less beef or explore technolo gical options, it could purchase emissions permits to offset its activities. Less polluting restaurants would benefit from this scheme by selling excess permits from their initial allotments.
When comparing the administrative burden posed by tradable emiss ions permits relative to a subsidy or a tax, it is not clear that a tradable permits system is easier to administer. While enforcement could be accomplished by random inspection rather than exhaustive complete inspections, the added onus of designing a mar ketplace and placing initial permit allocations may offset this benefit.


### Summary of Direct Emissions Regulations

Any of the above strategies to regulate the output (i.e., pollution) from cooking rather than the cooking process should, in theory, produce si milar results to a well

- designed technological standard in terms of aggregate emissions reductions. That is, with well

- functioning markets for restaurant food and for various technological options that reduce emissions

— i n addition to perfect information am ong the various stakeholders

— restaurants should arrive at a very similar mix of compliance and adaptation strategies that result in equivalent emissions reductions. However, the assumptions behind this equivalence do not hold in this particular regulatory landscape, in which one leadin g option for reducing emissions

— control devices

— i s not cost

- competitive.
The options that directly address emissions rather than the process of cooking de

- emphasize the use of expensive control devices, essentially limiting t heir prospects for viability down the road. By encouraging restaurants to take alternative approaches to reduce emissions, agencies would do little to foster adequate demand that control technologies require to merit serious consideration for widespread us e in restaurants. By effectively failing to incorporate control devices into the universe of reasonable compliance paths, these strategies to regulate cooking outputs are unlikely to achieve substantial emissions reductions.



### 6.4 Non

- r egulatory Options

In c onjunction with any of the above regulatory options, agencies should employ non

regulatory strategies to strengthen their position in the rulemaking process. Opposition by the restaurant industry has derailed or at least weakened all past attempts to pass proposed regulationsRegulating Emissions from Under

- fired Charbroilers | 32

for under

- fired charbroilers in California, due in part to a political battle in which AQMDs were swimming upstream with little external support. 

### Public Education Program for Consumers

The public is largely unaware that restaurants are a significant source of local air pollution. In the South Coast Air Basin, for example, commercial cooking accounts for 10% of total direct emissions of PM 2.5 , the second

- largest contributor to direct PM emissions behind only dust from paved roads (see Ap pendix D ). Without knowledge about this fact, however, the public is skeptical of the need for rules that impose costs on restaurants and is sympathetic to the restaurant industry. More public awareness about PM emissions from restaurants could gain AQMDs and health departments some political traction throughout the rulemaking process to counterbalance pressure applied by the restaurant industry. 

### “Clean Beef” Labeling Program

By providing strategic business positioning to restaurants that adopt emissions

- r educing measures, such as through a “clean beef” label, restaurants may be able to realize increased sales and profits. A “clean beef” program would allow beef

- cooking restaurants that meet certain specified emissions standards to receive a “clean beef” ce rtification. This recognition could then be used by

restaurants in advertisements and on menus

— similar to logos used for organically

- grown foo d or vegan items

— to provide a comparative advantage in public interfacing.Regulating Emissions from Under

- fired Charbroilers | 33



### 7. R ECOMMENDATIONS


### Revisiting Regulatory Barriers

As outlined above, previous regulatory efforts have run aground on the issue of cost

— AQMDs have struggled to set thresholds and design credible rules that clearly signal how the cost of compliance should be paid for and how costs can be reduced through innovation and scaling up demand. Our regulatory recommendations focus on two key aspects of this problem:

( 1) G athering more useful information thro ugh a working group model; and ( 2) I mplementing a credible technology

- forcing standard to increas e compliance.



### 7. 1 Working Group on Restaurant Emissions

In order to gather more useful information about the costs faced by restaurants in ado pting control technologies

— and about the technological standards and enforcement policies that would achieve PM re duct

ions at the lowest overall cost

— the U.S. EPA should take the lead in forming the Working Group on Restaurant Emissions, which can focus on regulating emissions from under

fired charbroiler s . Regulatory bodies in other states have attempted to bring tog ether air quality management experts in workin g groups to tackle PM emissions; however

, these efforts have typically not involved private sector and non

- profit organizations. 51 Suggestions for the composition of the W orking G roup are presented in Table 7 be low :

Table 7 | Proposed stakeholder membership in Working Group on Restaurant Emissions Group Example Organizations Role Individual Goals

U

. S

. EPA Region 9 Air Division Coordination, r ule d esign Achieving PM t argets
AQMDs BAAQMD

, SCAQMD, SJVA PCD Information gathering,

r ule d esign Achieving PM t argets

Local p ublic h ealth b oards Alameda County E nvironmental Health Department, Los Angeles County Department of Public Health Enforcement a ssistance, i nformation on PM h ealth p roblems Sustaining quality of restaurant oversight

Environmental h ealth
g roups Bay Area Clean Air Task Force members, Southern California Public Health Association Building p ublic a wareness Achieving PM t argets

Emissions c ontrol

t echnology

m anufacturers Captive Aire, CAST (Crest Distributing)

, Gaylord Technology information and capital cost estimates Increasing demand

Building t rades

c ontractors and s ub

c ontractors Commercial Kitchen Consulting

, Air Cleaning Technology

, Prime Efficiency Equipment Technology information and installation cost estimates Increasing demand

Restaurant i ndustry

r epresentatives California Restaurant Association, Golden Gate Restaurant Association R estaurant i nformation,

n egotiating r ule d esign for

m aximum e fficiency Minimizing r egulatory i mpact on members

Consumer a dvocacy

o rganizations Consumer Federation of California Providing consumer i nput Public h ealth and

m inimizing c onsumer b urdenRegulating Emissions from Under

- fired Charbroilers | 34



### Goals for the Working Group

U.S. EPA, in its advisory and coordination role relating to air quality standards, would be the natural leader of this working group. Ideally, U.S. EPA would help guide and manage the participation of AQMDs, who presently do not possess the information necessary to design credible and enforceable rules. At minimum, the issues that should be addressed through this framework are:

 Restaurant industry o perations i nformation

 Restaurant r enovations and r etrofits

 Bringing d own the c ost of t echnology

 Designing l owest

- c ost e nforcement m echanisms

 In put from e nvironmental h ealth and c on sumer a dvocacy g roups 52

Taken together, obtaining more complete information about these important issues will help AQMDs put proper thresholds and enforcement mechanisms in place, and in general lead to more credible and effective rule design processes. Ide ally, this process will gather enough information to enable AQMDs to adopt credible technology

- forcing standards that bring down the cost of emissions

- control technology adoption for California restaurants.



### 7. 2 I mplement a Credible Technology

- f orcing Stan dard

With guidance from the Working Group on Restaurant Emissions, we recommend that the EPA work in conjunction with local AQMDs to draft new technolog y

- forcing standards. An effective rule would prohibit the use of under

- fired charbroilers without an approved control device at restaurants that cook more than a certain amount of meat per week, no sooner than five years after the standard is published.

The standard must use a lower threshold than h as been used in the past for under

- fired charbroilers in order to expand the number of restaurants to which the standard would apply. Moreover, incorporating other types of meat besides beef will increase the emissions reduction potential of such a standar d. However, it is up to the Working Group to calibrate the threshold, based on a sound understanding of restaurant business dynamics, contractors’ installation considerations, and manufacturers’ capacity to innovate and bring costs down. Additionally, the Working Group should closely follow the ongoing testing at CE

- CERT to consider whether a fume hood size threshold is better suited than a meat

- cooking threshold to this sort of regulation. By more carefully calibrating thresholds, our proposed standard wil l broaden the scope of applicability and more effectively curb restaurant emissions.
The standard must also be set to go into effe ct with a minimum of five

- years lead time to allow the market for control devices to mature by the time regulations go into ef fect. Control device manufacturers must be given adequate time to respond to the veritable demand guarantee provided by the standard, so they can reach scale in production and bring down costs to reasonable levels. This technology

- forcing aspect is crucial , as it bears promise for reducing compliance costs enoughRegulating Emissions from Under

- fired Charbroilers | 35

for restaurants to be able to install control devices on a large scale without significant adverse financial impact.
Finally, the governmental stakeholders of the Working Group will already be familiar with the administrative requirements posed by this sort of technology

- forcing standard, since it is simply a refinement of what has been proposed several times throughout California in recent history. The largest added administrative burden would be for the EPA to coordinate and convene the disparate stakeholders who will compose the Working Group, but this should be a small price to pay to finally achieve emissions reductions from California’s restaurants.Regulating Emissions from Under

- fired Charbroilers | 36



### C ONCLUSION

In order to meet planned PM reduction targets over the next few years, California’s air qu ality management districts wish to design, implement

, and enforce credible rules that reduce emissions from restaurant

- operated under

- fired charbroilers. Although technologies do exist to mitigate these emissions, restaurants presently have little

— if any

— incentive s to ad opt emissions

- control technologies under the current regulatory approach. In order to facilitate information

- sharing among stakeholder groups, encourage the adopti on of emissions

- control technology by restaurants, and initiate innovation and cost reductions for emissions control technologies , this report recommends the formation of a U.S. EPA

- led working group of stakeholders that will work toward the implementation of a technology

- forcing emissions

- control standard by relevant AQMDs.

1 San Joaquin Valley Air Pollution Control District

– Final Staff Report for Revised Proposed Amendments to Rule 4692 (Commercial Charbroiling), dated October 8, 2009.

2 California Environmental Protection Agency, Air Resources Board

– The Health Impacts of Coarse Particulate Matter, dated January 25, 2007.

3 South Coast Air Quality Management

– Staff Report District Rule 1138 (Control of Emissions from Restaurant Operations), dated August 2009.

4 California Environmental Protection Agency, Air Resources Boa rd

– The Health Impacts of Coarse Particulate Matter, dated January 25, 2007.

5 Roe, Spivey, et al. “National Emissions Inventory for Commercial Cooking.” E.H. Pechan & Associates, Inc. and U.S. Environmental Protection Agency, Office of Air Quality Planni ng and Standards. April 20, 2004.

6 Bay Area Air Quality Management District

– Staff Report for Regulation 6, Rule 2: Commercial Cooking Equipment, dated November 2007.

7 McDonald, et al. “Emissions from Charbroiling and Grilling of Chicken and Beef,” J. A ir & Waste Management Assoc.

, vol. 53: 185

- 194, 2003.

8 Public Research Institute, Potepan, Michael, “Charbroiling Activity Estimation, Draft Report,” prepared for California Environmental Protection Agency, California Air Resources Board, June 30, 2001.

9 University of California Riverside, College of Engineering, Center for Environmental Research and Technology, Final Report: Further Development of Emission Test Methods and Development of Emission Factors for Various Commercial Cooking Operations, Contrac t No. 96027, July 1997.

10 Roe, Spivey, et al. “National Emissions Inventory for Commercial Cooking.” E.H. Pechan & Associates, Inc. and U.S. Environmental Protection Agency, Office of Air Quality Planning and Standards. April 20, 2004.

11 Bay Area Air Quali ty Management District

– Regulation 6, Rule 2: Commercial Cooking Equipment, adopted December 5, 2007.

12 San Joaquin Valley Air Pollution Control District

– Final Staff Report for Revised Proposed Amendments to Rule 4692 (Commercial Charbroiling), dated Oc tober 8, 2009.

13 South Coast Air Quality Management

– Staff Report District Rule 1138 (Control of Emissions from Restaurant Operations), dated August 2009.

14 Whitcomb, Jannette: City of Aspen & Pitkin County Environmental Health Department. Telephone inter view. March 9, 2012.
15 Gerard, D. and Lave, L. (2007) ‘Experiments in technology forcing: comparing the regulatory processes of US automobile safety and emissions regulations’, In t. J. Technology, Policy and Management, Vol. 7, No. 1, pp.1

– 14.

16 Amalia Chamorro (California Restaurant Association), in discussion with the authors, April 4, 2012.

17 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

18 Bay Area Air Quality Management District

– Staff Report for Regulati on 6, Rule 2: Commercial Cooking Equipment, dated November 2007.

19 Bill Welch. “Research Assistance in Expanding Rule 1138.” CE

- CERT. April 20, 2012.

20 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

21 Ibid.

22 South Coast Air Quality Management District

– Staff Report for Proposed Rule 1138, dated October 10, 1997.Regulating Emissions from Under

- fired Charbroilers | 37 23 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

24 Kuehn, Thomas, et al. “Characterization of Effluents From Add itional Cooking Appliances.” University of Minnesota. April 30, 2008.

25 SCQAMD

– Staff Report for Proposed Rule 1138, dated October 10, 1997.

26 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

27 Kuehn, Thomas, et al. “Char acterization of Effluents From Additional Cooking Appliances.” University of Minnesota. April 30, 2008.

28 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

29 Bay Area Air Quality Management District

– Regulation 6, Rule 2: Commercial Cooking Equipment, adopted December 5, 2007.

30 South Coast Air Quality Management

– Staff Report District Rule 1138 (Control of Emissions from Restaurant Operations), dated August 2009.

31 San Joaquin Valley Air Pollution Control District

– Final Staff Report for Revised Proposed Amendments to Rule 4692 (Commercial Charbroiling), dated October 8, 2009.

32 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

33 Don Fisher (Fisher

- Nickel, inc. PG&E Food Service Technology Center), in discussion with the authors, April 3, 2012.

34 CAST inc. also offers an energy management system, which is a type of peripheral technology that can reduce restaurant operations costs. It lowers the speed of the airflow in the hood when the kitc hen equipment is not in use. This would reduce the energy usage of the hood by about half, saving a restaurant about $1000/1000cfm depending on electricity prices. However, it can be installed independently of an emissions control unit, so it is not included in cost estimates. Dan Hopkins (CAST Inc.), in discussion with the authors, April 2012.

35 Ray Schmidt (Halton Company), in e

- mail correspondence with the authors. April 7, 2012.

36 Amalia Chamorro (California Restaurant Association), in discussion with the authors, April 4, 2012.

37 Bay Area Air Quality Management District

– Regulation 6, Rule 2: Commercial Cooking Equipment, adopted December 5, 2007.

38 Bay Area Air Quality Management District

– Regulation 6, Rule 2: Appendix D. Applied Development E conomics. October 2007.

39 Tracy Goss (SCAQMD), in discussion with the authors, April 17, 2012.

40 South Coast Air Quality Management

– Staff Report District Rule 1138 (Control of Emissions from Restaurant Operations), dated August 2009.

41 National Restaura nt Association, Restaurant Industry Operations Report: 2010 Edition , Washington, DC (2010). Available at http://www.restaurant.org/esdpdf/2010_ops_report_under15.pdf

. 42 Amalia Ch amorro (California Restaurant Association), in discussion with the authors, April 4, 2012.

43 H.G. Parsa, John T. Self, David Njite and Tiffany King, “Why Restaurants Fail,” Cornell Hotel and Restaurant Administration Quarterly, Vol. 46, No. 3 (August 2005), 304

- 322.

44 Bureau of the Census, 2007 Economic Census , Washington D.C: Bureau of the Cens us, 2007. Available at http://www.census.gov/econ/census07/

. 45 For more information, visit http://www.hoovers.com/about/100000489

- 1.html

46 See San Joaquin Valley Unified Air Pollution Control District, “Appendix D: Final Draft Socioeconomic Impact Analysis Report for Revised Proposed Amendments to Rule 4692,” August 20, 2009, available at http://www.valleyair.org/workshops/postings/2009/09

- 17

- 09/4692/r4692_appd_ph2.pdf

. Our findings use similar methodology as previous reports, including 10

- year payback cycles, a 10% interest rate on loans, and inc lude capital, installation and on

- going operating costs. It should be noted, however, that this figure does not include one important cost faced by restaurants in installing control technology: lost sales due to closure. Restaurants may have to temporarily close while they make retrofits to their ventilation system and as a consequence would lose revenue. Also, installation costs would vary across restaurants, since restaurants located in older buildings may have to undertake more robust structural upgrades to accommodate emissions control technology.

47 SJVAPCD, “Appendix D: Final Draft Socioeconomic Impact Analysis Report,” August 2009.

48 Dan Hopkins (CAST Inc.), in discussio n with the authors, April 2012.

49 Bill Welch (CE

- CERT, UC Riverside), in discussion with the authors, March 3, 2012.

50 Alfred Marcus, Alberto Aragon

- Correa and Jonathan Pinkse. (2008) “ Firms, Regulatory Uncertainty and the Natural Environment ,” California Management Review , Vol. 54 No. 1: 11. See also Dorothy Thornton, Robert Kagan and Neil Gunningham, “Compliance Costs, Regulation, and Environmental Performance: Controlling Truck Emissions in the U.S.,” Regulation & Governance , 2:275

- 292.Regulating Emissions from Under

- fired Charbroilers | 38 51 See New Jersey Department of Environmental Prot ection, “A Collaborative Report Presenting Recommended Air Quality Strategies for Further Consideration by the State of New Jersey: Homes and Restaurants Workgroup,” October 31, 2005, available at http://www.state.nj.us/dep/baqp/rapt/final_hr_workgroup_report.pdf

. 52 See Appendix E for more detailed information about the questions that the working group should explore.Regulating Emissions from Under

- fired Charbroilers | 39



### A PPENDICES


### Appendix A: Restaurant Emissions Composition and Emissions Factors

The primary sources about restaurant emissions from different foods and cooking technologies are studies done by CE

- CERT, which is a lab at UC Riverside, and Thomas Kuehn at the University of Minnesota. We interviewed Bill Welch at CE

- CERT, who did an extensive study on restaurant emissions in 2000. He is also involved in the new study that is being conducted this year. The research from Thomas Kuehn’s lab at the University of Minnesota is documented in a file called “Characterization of Effluents from Additional Cooking Appliances” (2008), also known as ASHRAE 1375

- RP. The tests are consistent with the research results at CE

- CERT.

Figure A.1 | Average particle size distribution

Source: CE

- CERT 52

Table A.1 | Raw data for Figure 3 (emissions factors of charbroiled meat) Hamburger Steak Chicken Fish
Solid and C ondensable PM 32.65 17.19 10.48 3.3
VOC 3.94 3.94 1.82 0.38

Table A.2 | Raw data for Figure 4 (emissions factors for burgers on different cooking equipment)

Type of Cooking Technology Emissions Factor Under

- fired 32.65 Clamshell Griddle 2.2 Smokeless Broiler 1 Chain

- Driven w/ Controls 1.29 Chain

- Driven Charbroiler 7.42Regulating Emissions from Under

- fired Charbroilers | 40



### Appendix B: Calculating Costs of Technologies

Primary sources on different emission control technologies are the staff reports of the BAAQMD, SCAQMD, and SJVAPCD, correspondence with manufacturers Halton and CAST Inc., and information from CE

- CERT.

Table B.1 | Assumptions for Figure 4 (maximum retrofit costs vs. new construction costs for emissions control units): ESP and wet scrubber cost estimates

Cubic Feet per Minute (cfm) ESP

Retrofit ESP New Wet Scrubber Retrofit Wet

Scrubber New
% PM Removed 47% 47% 85% 85% Installation Costs 30 000 0 5619 0
Maintenance Costs 3081 3081 4633 4633 Capital Cost 2000 22500 22500 20000 20000 Capital Cost 3000 30000 30000 31288 31288 Capital Cost 4000 35000 35000 40000 40000 Capital Cost 4800 40152 40152 50000 50000 Capital Cost 8000 55000 55000 80000 80000
The assumptions for HEPA filter costs are a bit different because maintenance costs vary more than the capital costs simply because the replacement filters need to be larger. We estimate that maintenance costs are $6165 per year for a 2000cfm unit and incr ease $1000/1000cfm. Capital Costs should vary as well, but we were not able to get better quotes for how much the costs vary for different sizes.

Table B.2 | Assumptions for Figure 4 (maximum retrofit costs vs. new construction costs for emissions control units): HEPA filter cost estimates

Cubic Feet per Minute (cfm) HEPA

retrofit HEPA new

% PM Removed 52% 52% Capital Cost $42,303 $42,303
Installation Costs $7,100 $0
Maintenance Costs 2000 $6,165 $6,165
Maintenance Costs 3000 $7,165 $7,165
Maintenance Costs 4000 $8,165 $8,165
Maintenance Costs 4800 $8,965 $8,965
Maintenance Costs 8000 $12,165 $12,165Regulating Emissions from Under

- fired Charbroilers | 41

Capital recovery calculation for the annual equivalent costs for the emissions control units is as follows:

( ) ( )

Table B.3 | Raw data for Figure 4 (maximum retrofit costs vs. new construction costs for emissions control units)

CFM Wet

Scrubber Max Retrofit Wet

Scrubber New Wet

Scrubber Future HEPA

Max Retrofit HEPA

New ESP Max

Retrofit ESP New

2000 $8,281 $7,481 $5,745 $12,715 $12,188 $10,556 $6,284
3000 $9,888 $9,088 $6,147 $13,715 $13,188 $11,624 $7,352
4000 $11,128 $10,328 $6,457 $14,715 $14,188 $12,336 $8,064
4800 $12,552 $11,752 $6,813 $15,515 $14,988 $13,069 $8,798
8000 $16,823 $16,023 $7,881 $18,715 $18,188 $15,183 $10,912

Calculation for the tons PM per day per restaurant are as follows:

( )

Table B.4 | Assumptions (pounds of beef cooked per week vs. hood size)

CFM Pounds of Beef

Cooked per Week T ons PM

day/restaurant
2000 500 0.00089
3000 800 0.00142
4000 1000 0.00178
4800 1250 0.00223
8000 2000 0.00356

Cost

- effectiveness calculation is as follows for a given hood size.
( )Regulating Emissions from Under

- fired Charbroilers | 42

Table B.5 | Raw data for Figure 4 (cost per ton of PM removed for emissions control units)

CFM Wet

Scrubber Wet

Scrubber Future HEPA ESP

2000 $28,540 $20,806 $73,712 $55,149
3000 $21,475 $13,913 $49,770 $38,839
4000 $19,426 $11,692 $42,776 $33,403
4800 $17,604 $9,869 $36,115 $28,644
8000 $14,869 $7,135 $27,308 $21,364Regulating Emissions from Under

- fired Charbroilers | 43



### Appendix C: Notes on Large Restaurant Profitability Estimate

According to the NRA’s Restaurant Operations Report survey, which classifies restaurants by sales volume, establishments with annual sales in excess of $2 million comprise the highest classification category. Another important measure for restaurant size is the number of employees at each location. Nationa lly, according to the NRA, restaurants employ an average of 25 total employees (full and part time included).
Since this analysis seeks to focus on the largest of large restaurants, data was obtained through the Hoover’s Online database for single

- locatio n restaurant corporations with over $2 million in annual sales who also have more than 25 employees. Because this database includes estimated total sales for a company by incorporation, not by specific source, the data were cleaned

to remove restaurant cor porations whose sales statistics would be inflated by non

- restaurant sources (e.g. golf courses and hotels). In addition, since even ‘single

- location’ restaurant corporations may have several actual restaurants, this analysis computes an average profit fig ure for restaurants by calculating profit levels for a restaurant with 60 employees. (On average, restaurants with sales over $2 million have a total of 60 employees

-- full and part

- time included.) By doing this, one standard measure for the profit level of a large restaurant in the 21 California counties of concern can be calculated. The profitability of fast food restaurants (large PM sources) and independent family restaurants (whose sustainability is of interest) are also of particular concern.Regulating Emissions from Under

- fired Charbroilers | 44



### Appendix D: Sources of Particulate Matter Emissions

Figure D

. 1 | Top ten sources of PM 2.5 emissions in the South Coast Basin, 2002

Source: SCAQMDRegulating Emissions from Under

- fired Charbroilers | 45



### Appendix E: Questions for Working Group Consideration

Restaurant Industry Operations

Questions : Which restaurants are contributing the most to the PM problem? How can rule thresholds be set in order to distinguish between high

- emissions restaurants who can afford to adopt technologies and those who may be driven out of business by new regu lations?

Present Status : Right now, rulemaking activities are guided by scant information and broad generalizations about the restaurant industry, despite prior attempts at gathering survey data. A better understanding of the composition and nature of the restaurant business practices and realities would greatly improve the credibility and efficacy of new regulations.
Restaurant Renovations and Retrofits

Questions : How often and on what scale do restaurants perform renovations and updates to their HVAC s ystems? According to both contractors and restaurants, how much do actual installation costs vary by individual restaurant?

Present Status : Installing control technologies would be less costly if combined with other periodic renovations, about which AQMDs and technology manufacturers have imperfect information. A more thorough understanding of the variability and timing of installation costs and lost sales due to restaurant renovations is needed.

Bringing Down the Cost of Technology

Questions : How much of a spike in demand for control

- technology would be needed in order to bring average costs down? What technological advancements might be possible with increased financial incentives for manufacturers to pursue innovation?

Present Status : Given the unclear a nd seemingly intransigent state of regulations, control

technology manufacturers are not aggressively pursuing cost reductions and innovation strategies, which with more demand for their products could become worthwhile.

Designing Lowest

- Cost Enforcement Mechanisms

Questions : How can compliance be credibly enforced at the lowest cost to regulatory bodies and with the least administrative burden on restaurants?

Present Status : With unclear and uneven enforcement resources and policies, restaurants are

not given an incentive to maintain control

- technologies even when they are adopted. By reaching out to public health boards, which already inspect restaurants for compliance sanitation codes, and by working with manufacturers on remote communications technolo gy and restaurants on recordkeeping, AQMDs should be able to shape an enforcement strategyRegulating Emissions from Under

- fired Charbroilers | 46

that encourages compliance.
Input from Environmental Health and Consumer Advocacy Groups

Questions : What input do non

- profit advocacy groups previously uninvolved in charbroiler regulation activities have regarding these rules?

Present Status : Opening dialogue with these groups may help increase public awareness of charbroiling as a PM source, and eas e the regulatory effort as the social cost of charbroiling emissions is better known.