# * Al-lAM

ASSOCIAnoNOFHOME APPUANCEMANUFACTURER S 1111 19th Street NW Suite 402 Washington, DC 20036



## Testimony of Robert D. McArver 202
.872.5955 202
.872
.9354 www.aham
.org



## Vice President, Policy & 

## Government Relations Association ofHome Appliance Manufacturers

Before the United States Environmental Protection Agency
Regarding EPA'sProposed Rulemaking on the Change ofListing Status for Certain Substitutes underthe Significant New Alternatives Policy (SNAP) Program DocketID No. EPA -HQ- OAR- 

## 2014-0198


## August 27, 2014

Leadershtp,.. **Know/ed~** ,.. novationGood morning. My name is Rob McArver, and I am the Vice President of Policy and Government Relations for the Association of Home Appliance Manufacturers. I appreciate the

opportunity to exp l ain why AHAM is opposed to the proposed delisting rule as it applies to refr igera to r foam. This proposed action is well beyond the authority delegated to EPA under the Clean Air Act , is unnecessary to protect the environment, exposes a lack of regulatory coordination among federal agencies and creates significant burdens to US businesses. AHAM represents manufacturers of major, portable and floor care home appliances, as well as suppliers to the industry. AHAM ' s more than 150 members employ tens of thousands of peop l e in the US and produce more than 95% of the household appliances shipped for sale within the US. The factory shipment value of these products is more than $30 billion annually. The home appliance industry, through its products and innovation, is essential to US consumer lifestyles, health, safety and convenience. Through its technology, employees and productivity, the industry contributes significantly to US jobs and economic security. Home appliances also are a success story in terms of energy efficiency and environmental protection. New appliances often represent the most effective choice a consumer can make to reduce home energy use and costs. The US appliance manufacturing industry has been at the forefront of providing consumers increasingly sustainable and environmentally preferable products. Over time , we have transitioned our products to highly efficient, non-ozone depleting substances , which has cost manufacturers hundreds of millions of dollars. All of these transitions (from CFCs to HCFCs to HFCs) have been encouraged- actually urged and applauded

- by EPA, including the extremely beneficial move to HFCs. With these new generations of products, we have eliminated almost all use of ozone depleting substances. As a consequence of our efforts, along with EPA ' s Energy Star program and the DOE appliance standards , we offer products that have dramatically increased energy efficiency without sacrificing features or high quality. Indeed, it is well understood that the energy efficiency benefits that we provide with fluorocarbons far outstrip the impact of the modest amount of resulting HFC emissions. We recognize that HFCs are ultimately transitional chemicals. Although it not sufficiently reflected in EPA's analysis, in fact a significant portion of products sold in the US market no longer use HFCs as foam blowing agents , opting instead for hydrocarbons or HFO. Despite this , the EPA proposal goes well beyond the actions that were suggested in pre-proposal workshops, indeed going so far as to propose unnecessarily accelerated delisting of widely used chemicals that still have significant beneficial uses in the United States. This action only serves to insert the federal government into the marketplace by forcing investments that are economically unsound. These actions exceed EPA's legal authority and are unnecessary, and thus we oppose them. What EPA has proposed is not authorized under Section 612 of the Clean Air Act. The statute requires the "replacing" of ozone-dep letin g substances with s ub stitutes as a trigger for regul atory

action, but nowhere in the United States are ODSs being substituted for non - ODS materials in refrigerator foam-blowing agents. The HFC-based foam blowing agents used in domestic refrigerators today are not alternatives for ozone depleting substances. Virtually none of our current refrigerator models existed when ODSs were used, and these models never contained

CFCs or HCFCs. At present , we are on the second , third or fourth generation of refrigerator products since ODSs were used in US production. It is misguided for EPA to interpret its SNAP p2authority as allowing itto regulate the use ofchemicalsinproduct categories generations beyond theiruse ofozone depleting substances and without any enddate
. There is simply no ODS substitution taking place, and thus EPAdoes nothave authority toregulate further inthis area. If at some point, EPA is authorized to phase out HFCs consistent with future international obligations, then that mayconstitute a more appropriate avenue for phasedown measures. Evenifthe SNAP authority somehow applies here, there have beenno changes inthe human health orenvironmental impact ofrefrigerator HFC use since they were approved byEPAthat wouldjustifythisproposal. No facts about the toxicity orclimateimpactofthese chemicals have changed. Norhave their emissions profile andclimate impact changed, otherthan thattheir use inthe US market is significantly less than EPA estimates [verify]. Obviously, alternatives exist, butthe CleanAir Actand numerous presidential executive ordersrequire the careful consideration ofcosts andbenefits and the necessity ofregulation before US business ofall sizes are further burdened
. AHAM isworking ona current valid estimate ofthereduced level ofHFC usage in refrigerator foam and what is forecasted for future demand, and we will provide that data inourwritten comments. Initial analysis indicates, however, thatby 2015 many refrigerators sold in the US will not use high GWP foam blowing agents, andthe trend ofdramatic reductions in the use of high GWP HFCsbythis responsible industry will accelerate inthe future. Regardless ofthese trends, manufacturers ofall sizes will be impacted bythisrule. Forthose thathave not fully transitioned from HFC foam-blowing agents and do nothave the time orthe capital to investina 100%transition by an arbitrary January 1, 2017 date, the impact ofthese proposals couldbe devastating. These same firms have invested millions ofdollars innewDOEefficiencyrequirements that become effective in less than a month
. TheDOE requirements were based onthe assumption of the availability ofHFCs and have diverted the scarce capital that is available for regulationdriven investment. To make matters worse, the major newburdens EPAproposes are unnecessary becausethe use and potential emissions ofhigh GWP HFCs forrefrigerators sold in the US market are far less than were estimated. This isa classic example ofthe cumulative regulatory burdenthat falls onmanufacturers when EPA and DOE fail to coordinate their rulemaking activity. EPA also significantly underestimates the costs ofthis proposal. Oneparticularly disappointing example is the suggestion that refrigeratormanufacturers seeking to replace HFCs infoamblowing agents have "drop-in" substitutes. 

### Infact, there are no available drop-ins. That false butconvenient misnomer overlooks the years and millions ofdollars ofwork necessary to ensure continued manufacturing efficiency;product quality, performance andlongevity; anevaluation ofpotential impacts onenergy efficiency; and the compatibilityofplastics used. Ontop ofthat, it is well known that the use ofhydrocarbon foam inUS factories requires aninvestmentin bomb-proofmg suchproduction toprotect employees, sometimes new VOC controls, and careful reformulation analyses to ensure continued energy efficiency. These steps are neither cheap noreasy, and the significantburdens they impose were inadequately addressed inthe proposal. By forcing 100% across the board transition in such a p3short period of time, this proposal would put companies and their products at risk , given the limited alternatives that are currently available. We also note that without an y legal rationale , EPA has propo s ed to re v erse its long-standing interpretation of the Clean Air Act with respect to the import of products containing HCFC 141- b as a foam-blowing agent. EPA is required by the Administrative Procedures Act to exp l ain why its previous l ega l evaluation was incorrect and i t has not done so. We ask that EPA release to the public all previous legal analyses on this issue , including an explanation of why the earlier interpretation was incorrect. The proposal does not offer an adequate rationale for reve r sing such a long- s tanding interpretation. AHAM urges EPA to drop this ill-considered effort after more carefully and accurately taking into account the realities of the marketplace and the true costs and benefits of this effort. There is not much point in promoting an international regulatory regime if the agency is going to apply this blunt and inappropriate regulatory in s trument domestically, regardles s o f the shape of a future international scheme. The appliance indu s try ' s transition away from HFC s is well underway . EPA ' s proposal s hould reflect and support this progress , rather than impede it. Thank you for consideration of our comments. p4