Economic	Impact	Screening	Analysis	for	Regulatory	

Options	to	Change	Listing	Status	of	High‐GWP	

Alternatives	

P REPARED FOR :

       Stratospheric	Protection	Division		

Office	of	Air	and	Radiation		

U.S.	Environmental	Protection	Agency		

Washington,	D.C.	20460		

P REPARED B Y :

ICF	International		

1725	Eye	Street,	NW		

Washington,	DC	20006		

J UNE 25, 2014
Economic Impact Screening Analysis	 	 i

Executive Summary

In accordance with the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory

Enforcement Fairness Act (SBREFA), this analysis provides the initial screening to assess the potential economic

impacts on small entities associated with proposed regulatory options to change the listing status of certain

high‐GWP alternatives used in aerosols, foams, commercial refrigeration, and motor vehicle air conditioning

(MVAC). Industries potentially affected by these proposed regulatory options were primarily identified by North

American Industry Classification System (NAICS) codes. Small businesses in each affected industry were classified

as such based on size definitions established by the Small Business Administration. Economic impacts on

affected small businesses were calculated using a direct compliance cost method. The “sales test” was applied

by estimating annualized compliance costs for affected small businesses as a percentage of those businesses’

annual sales.  

This screening analysis finds that the proposed rulemaking can be presumed to have no significant economic

impact on a substantial number of small entities (SISNOSE). This screening analysis assessed 23 regulatory

options. The finding of no SISNOSE is based on the Agency’s proposed regulatory options, as summarized in

Exhibit ES‐1; however, analysis of the other regulatory options under consideration shows that any combination

of the various options under consideration still present no SISNOSE.  

This screening analysis finds that this

proposed rulemaking can be presumed to

have no SISNOSE for the following reasons:

 About 500,000 small businesses

could be subject to the rulemaking,

although more than 99% of small

businesses subject to this proposed

rulemaking would be expected to

experience zero compliance costs.

 For about 190 small businesses that

are expected to incur compliance

costs as a result of this rulemaking,

their costs are estimated to be less

than 1% of annual sales.

 This analysis indicates that about

120 of the nearly 500,000 affected

small businesses—or <0.1%—could

incur costs in excess of 1% of annual

sales, and that 44 small businesses

could incur costs in excess of 3% of annual sales. These estimates are less than the thresholds for a

substantial number determination (i.e., less than 100 businesses, and less than 20% of affected entities).

Exhibit ES‐1: Summary of Regulatory Options Analyzed

 List unacceptable HFC‐134a for new MVACs starting in model year 2021.

 List unacceptable HFC‐134a and HFC‐125 for aerosols in 2016, with

exceptions for HFC‐134a for medical aerosols and technical aerosols for

HFC‐134a; list HFC‐227ea unacceptable for aerosols in 2016, with

exceptions for metered dose inhalers.

 List unacceptable all HFCs, except HFC‐152a, and all HFC blends in 1)

rigid polyurethane appliance foam; 2) flexible polyurethane: slabstock

and moulded; 3) rigid polyurethane: commercial refrigeration and

sandwich;  4) rigid polyurethane and polyisocyanurate laminated

boardstock; 5) rigid polyurethane slabstock; 6) polyurethane integral

skin; 7) polystyrene: extruded sheet; 8) polystyrene: extruded

boardstock and billet; 9) polyolefin; and 10) phenolic foams in 2017.  

 List unacceptable HFC‐134a and Formacel TI in Rigid Polyurethane Spray

foam in 2017.

 List unacceptable 10 high‐GWP HFCs/HFC blends for new and retrofit

retail food refrigeration equipment (supermarkets and condensing

units) in 2016.

 List unacceptable 32 high‐GWP HFCs/HFC blends for new reach‐in

coolers and other self‐contained retail food refrigerators and freezers

and for vending machines in 2016.

 List unacceptable R‐404A and R‐507A for retrofit reach‐in coolers and

other self‐contained retail food refrigerators and freezers and for

vending machines in 2016.
Economic Impact Screening Analysis	 	 ii

Total annualized compliance costs across affected small businesses are estimated at approximately $10.7 or

$14.3 million, using a 3% or 7% discount rate, respectively. Affected small businesses are manufacturers of

light‐duty vehicles and trucks, consumer aerosol products, domestic and commercial refrigerated

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

foams, and self‐contained retail food equipment and vending machines.

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

Economic Impact  

Number of Small Entities

Subject to the Rule and

Experiencing Given

Economic Impact  

Percent of All Small

Entities Subject to the Rule

That are Experiencing

Given Economic Impact

Decision Matrix Comparison

Less than 1% for all

affected small

entitiesa

     

187 0.04%

Does not exceed threshold; Any number

of small businesses and any percentage

yields “Presumed No SISNOSE”

1% or more for one

or more affected

small entitiesb

117 0.02%

Does not exceed threshold; Between 100

and 999 small business and less than 20%

yields “Presumed No SISNOSE”

Greater than 3% for

one or more affected

small entities

44 0.01%

Does not exceed threshold; Fewer than

100 small businesses and less than 20%

yields “Presumed No SISNOSE” a Represents small entities affected with an economic impact equal to or lesser than 1% but greater than 0%.    b This category aggregates the number of small entities that would be expected to experience an impact of 1% to 3% with the number of

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

   
Economic Impact Screening Analysis	 	 iii

Table of Contents

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

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

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

2 Summary of General Approach and Key Analytical Assumptions ...................................................................... 4

3 Motor Vehicle Air Conditioning Sector............................................................................................................. 12

3.1 Small Entities Potentially Subject to the Rulemaking..................................................................................12

3.2 Estimated Economic Impact on Affected Small Entities .............................................................................14

3.3 Impact of Regulatory Timelines under Consideration.................................................................................15

4 Aerosol Sector................................................................................................................................................... 16

4.1 Small Entities Potentially Subject to the Rulemaking..................................................................................16

4.2 Estimated Economic Impact on Affected Small Entities .............................................................................19

5 Foam Sector...................................................................................................................................................... 20

5.1 Small Entities Potentially Subject to the Rulemaking..................................................................................21

5.1.1 Polystyrene Foam Product Manufacturing (NAICS code 326140)........................................................22

5.1.2 Household Refrigerator and Home Freezer Manufacturing (NAICS code 335222)..............................23

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

Equipment Manufacturing (NAICS code 333415)..............................................................................................23

5.1.4 Urethane and Other Foam Product (Except Polystyrene) Manufacturing (NAICS code 326150) ........24

5.1.5 Summary of Small Business Impacted in the Foam Sector...................................................................26

5.2 Estimated Economic Impact on Affected Small Entities .............................................................................27

5.2.1 Regulatory Option 3..............................................................................................................................27

5.2.2 Regulatory Option 4..............................................................................................................................30

5.2.3 Regulatory Options 5a, 5b, and 5c........................................................................................................31

5.2.4 Regulatory Option 6..............................................................................................................................34

6 Commercial Refrigeration Sector...................................................................................................................... 35

6.1 Small Entities Potentially Subject to the Rulemaking..................................................................................36

6.1.1 Remote Retail Food Equipment (Supermarkets and Condensing Units)..............................................36

6.1.2 Self‐Contained Retail Food Equipment and Vending Machines...........................................................39

6.2 Estimated Economic Impact on Affected Small Entities .............................................................................41

6.2.1 Remote Retail Food Equipment (Supermarkets and Condensing Units)..............................................41

6.2.2 Self‐Contained Retail Food Equipment and Vending Machines...........................................................42

7 Conclusion......................................................................................................................................................... 45

7.1 Decision Matrix for Determining Significant Economic Impact on a Substantial Number of Small

Entities...................................................................................................................................................................45

7.2 Aggregated Small Business Impacts of Proposed Regulatory Actions........................................................46

Appendix A: Summary of the Small Business Impact of All Regulatory Options..................................................... 52

References............................................................................................................................................................... 56
Economic Impact Screening Analysis	 	 iv

List of Tables

Table 1: Regulatory Options under Consideration and Analysis............................................................................... 1

Table 2: General Steps and Approach for Small Business Impact Analyses.............................................................. 4

Table 3: Regulatory Options under Analysis.............................................................................................................. 7

Table 4: MVAC Regulatory Options under Consideration....................................................................................... 12

Table 5: Estimated Number of Small Light Duty Vehicle Manufacturers Affected by the Regulatory Options a .... 14

Table 6: Estimated Economic Impact on Small Entities in the Automobile Manufacturing Industry (Sales Test).. 15

Table 7: Aerosol Proposed Regulatory Option ........................................................................................................ 16

Table 8: Estimated Number of Aerosols Sector Small Businesses Affected by the Proposed Regulation .............. 18

Table 9: Estimated Economic Impact on Small Businesses (Sales Test).................................................................. 19

Table 10: Foams Regulatory Options under Consideration .................................................................................... 20

Table 11: NAICS Codes for Foams Sector and Applicable Regulatory Options ....................................................... 21

Table 12: Estimated Number of XPS Boardstock and Billet Small Businesses Affected by the Regulatory Options23

Table 13: Estimated Number of Appliance Small Businesses Affected by the Regulatory Options........................ 23

Table 14. Estimated Number of Commercial Refrigeration Small Businesses Affected by the Regulatory Options

................................................................................................................................................................................. 24

Table 15: Assumptions about the Percentage of Affected Entities in NAICS Code 326150.................................... 25

Table 16: Estimated Number of Small Businesses Manufacturing Non‐Appliance PU Foam Types Affected by the

Regulatory Options.................................................................................................................................................. 26

Table 17: Estimated Number of Small Businesses Affected in the Foam Sector, by Regulatory Option ................ 26

Table 18: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Option 3 (Sales Test)................................................................................................................................................ 28

Table 19: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Option 4 (Sales Test)................................................................................................................................................ 30

Table 20: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Options 5a, 5b, and 5c (Sales Test).......................................................................................................................... 31

Table 21: Commercial Refrigeration Regulatory Options under Consideration ..................................................... 35

Table 22: NAICS Codes for Affected Retail Food Industries.................................................................................... 37

Table 23: Estimated Number of Retail Food Small Businesses Affected by the Regulatory Options* ................... 38

Table 24: Estimated Number of Self‐Contained Retail Food Equipment and Vending Machine Manufacturing

Small Businesses Affected by the Regulatory Options............................................................................................ 41

Table 25: Estimated Economic Impact on Small Entities with Remote Retail Food Equipment for Options 7a, 7b,

7c, 8a, 8b, and 8c (Sales Test).................................................................................................................................. 42

Table 26: Estimated Economic Impact on Small Entities in the Self‐Contained Retail Food and Vending Machine

Sectors by Regulatory Option (Sales Test) .............................................................................................................. 44

Table 27: Decision Matrix for Certifying SISNOSE ................................................................................................... 45

Table 28: Summary of the Small Business Impact of the Proposed Regulatory Options at 7% Discount Rate ...... 46

Table 29: Summary of the Small Business Impact of the Proposed Regulatory Options at 3% Discount Rate ...... 48

Table 30: Aggregated Economic Impacts on Small Businesses............................................................................... 51
Economic Impact Screening Analysis	 	 1

1 Introduction

In accordance with the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory

Enforcement Fairness Act (SBREFA),1 this analysis provides the initial screening to assess the potential economic

impacts on small entities associated with regulatory options under consideration to change the listing status of

certain high‐GWP alternatives used in aerosols, foams, commercial refrigeration, and motor vehicle air

conditioning (MVAC). Hereafter, these will be referred to interchangeably in this document as the “regulatory

options,” or the “regulatory options under consideration.”

This analysis finds that the proposed rulemaking can be presumed to have no significant economic impact on a

substantial number of small entities (SISNOSE). This determination applies to a rulemaking that includes EPA’s

proposed regulatory options 1c, 2, 5b, 7b, 8b, 9b, and 10c, but is equally true for any combination of the various

options under consideration, as shown in Table 1. Analysis was completed on each of the regulatory options

outlined below.

Table 1: Regulatory Options under Consideration and Analysis

Sector Option

Number Description of Regulatory Option

MVACs 1a List unacceptable HFC‐134a for new MVACs starting at January 1, 2017.

1b List unacceptable HFC‐134a for new MVACs starting at January 1, 2019.

1c List unacceptable HFC‐134a for new MVACs starting in model year 2021.

Aerosols 2 List unacceptable HFC‐125 for aerosols in 2016, restrict use of HFC‐134a to certain medical

aerosols and technical aerosols in 2016; restrict HFC‐227ea in aerosols to metered dose

inhalers in 2016.

Foams 3 List unacceptable HFC‐134a in 1) rigid polyurethane: (household) appliance; 2) flexible

polyurethane: slabstock and moulded; 3) rigid polyurethane: spray; 4) rigid polyurethane:

commercial refrigeration; 5) rigid polyurethane: sandwich; and 6) polystyrene: extruded

boardstock and billet foams in 2017.  

4 List unacceptable HFC‐134a in polyurethane integral skin in 2017.

5a List unacceptable all HFCs except HFC‐152a and all HFC blends in 1) rigid polyurethane:

(household) appliance; 2) flexible polyurethane: slabstock and moulded; 3) rigid polyurethane:

spray; 4) rigid polyurethane: commercial refrigeration; 5) rigid polyurethane: sandwich; 6)  

polystyrene: extruded boardstock and billet; and 7) polyurethane integral skin in 2017.

5b List unacceptable all HFCs except HFC‐152a and all HFC blends in 1) rigid polyurethane:

(household) appliance; 2) flexible polyurethane: slabstock and moulded; 3) rigid polyurethane:

commercial refrigeration;  4) rigid polyurethane: sandwich;  5) rigid polyurethane and

polyisocyanurate laminated boardstock; 6) rigid polyurethane: slabstock; 7) polyurethane

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

10) polyolefin; and 11) phenolic foams in 2017.

List unacceptable HFC‐134a and Formacel TI in rigid polyurethane spray foam in 2017.

5c List unacceptable all HFCs except HFC‐152a and all HFC blends in all foam blowing end‐uses: 1)

rigid polyurethane: (household) appliance; 2) flexible polyurethane: slabstock and moulded; 3)

rigid polyurethane: spray; 4) rigid polyurethane: commercial refrigeration; 5) rigid

polyurethane: sandwich; 6) rigid polyurethane and polyisocyanurate laminated boardstock; 7)

                                                            

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

rulemaking may have on small entities. For rules that pose “a significant economic impact on a substantial number of small

entities,” an initial and final regulatory flexibility analysis is further required.
Economic Impact Screening Analysis	 	 2

Sector Option

Number Description of Regulatory Option

rigid polyurethane: slabstock; 8) polyurethane integral skin; 9) polystyrene: extruded sheet;

10) polystyrene: extruded boardstock and billet; 11) polyolefin; and 12) phenolic foams in

2017.

6 List unacceptable HFC‐143a and HFC‐134a in phenolic foams in 2017.

Commercial

Refrigeration

7a List unacceptable R‐404A and R‐507A for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016.

7b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B, R‐422A, R‐422C, R‐

422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016.

7c List unacceptable R‐404A and R‐507A for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016; eight other high‐GWP refrigerants (R‐407B, R‐

421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, and R‐227ea) are subject to gold‐level

GreenChill certification charge size criteria.2

8a List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in retail

food refrigeration equipment (supermarkets and condensing units) in 2016.

8b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B, R‐422A, R‐422C, R‐

422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for retrofits from CFC‐12, R‐502, and HCFC‐22 in

retail food refrigeration equipment (supermarkets and condensing units) in 2016.

8c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in retail

food refrigeration equipment (supermarkets and condensing units) in 2016; eight other high‐

GWP refrigerants (R‐407B, R‐421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, and R‐227ea) are

subject to gold‐level GreenChill certification charge size criteria.2

9a List unacceptable 26 refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐

422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002

formulation), and RS‐44 (2003 formulation)) for new reach‐in coolers and other self‐contained

refrigerators and freezers and for vending machines in 2016.

9b List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea,

Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F,

R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers and for vending machines in 2016.

9c List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea,

Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F,

R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers and for medium temperature vending machines (e.g., beverages, unfrozen foods)

in 2016.  List unacceptable 26 refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a

(55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐

507A, RS‐24 (2002 formulation), and RS‐44 (2003 formulation)) for new vending machines

operating at a low temperature (e.g., ice cream, frozen foods) in 2016.

                                                            

2 Under the gold‐level GreenChill certification charge criteria, a store must achieve an average HFC refrigerant charge of no

more than 1.25 pounds of refrigerant per 1,000 BTU per hour total evaporator cooling load. See

http://www2.epa.gov/greenchill/greenchill‐store‐certification‐criteria for more information.
Economic Impact Screening Analysis	 	 3

Sector Option

Number Description of Regulatory Option

9d List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea,

Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F,

R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers, excluding large systems (i.e., systems that contain a compressor that is greater

than 3/4 horsepower (HP)), and for vending machines in 2016. List unacceptable 26

refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐

407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐

422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation),

and RS‐44 (2003 formulation)) for new large reach‐in coolers and self‐contained refrigerators

and freezers in 2016.

10a List unacceptable 25 refrigerants (KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐

407A, R‐407B, R‐407C, R‐407F, R‐417A, R‐417C, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐

422D, R‐424A, R‐426A, R‐427A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002

formulation), and RS‐44 (2003 formulation))for retrofits from CFC‐12, R‐502, and HCFC‐22 in

2016 for reach‐in coolers and other self‐contained retail food refrigerators and freezers and

for vending machines.

10b List unacceptable 31 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, Ikon B, KDD6,

R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐417A, R‐

417C, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐427A, R‐428A, R‐

434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation), SP34E,

and THR‐03) for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016 for reach‐in coolers and

other self‐contained retail food refrigerators and freezers and for vending machines.

10c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016

for reach‐in coolers and other self‐contained retail food refrigerators and freezers and for

vending machines.

The remainder of this report is organized as follows:

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

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

 Chapters 3, 4, 5, and 6 identify the small entities potentially affected by the regulatory options under

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

aerosols, foams, and commercial refrigeration sectors, respectively.

 Chapter 7 summarizes the aggregate small business impacts of the proposed rulemaking, along with a

recommendation for certification based on a decision matrix for determining SISNOSE.
Economic Impact Screening Analysis	 	 4

2 Summary of General Approach and Key Analytical Assumptions

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

the affected sectors and regulatory options, as shown in Table 2.

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

Step Approach

Identify the types of

industries expected to be

directly impacted by each

regulatory option

For all sectors, potentially affected industries were identified by North

American Industry Classification System (NAICS) codes. Economic data about

each affected industry—including number of firms and establishments3 by

employment or receipts size—was obtained from the U.S. Census Bureau’s

Industry Statistics Portal (http://www.census.gov/econ/isp/) and includes data

from the 2007 Economic Census.  The economic census profiles U.S. national

and local economies every five years, and the 2007 data is the latest available

at the time of this writing.

Determine what proportion

of impacted industries are

small businesses

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

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

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

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

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

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

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

establishments is typically greater than, and can be no lower than, the number

of firms by definition.

Determine what proportion

of small businesses could be

directly impacted

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

into consideration whether the HFCs affected by this proposed rulemaking are

still—or were ever—known to be in use, and what proportion of the market

the affected HFCs are expected to represent at the time that the regulations

would come into effect.  

For the purposes of

quantifying compliance

costs, make assumptions

about the alternative

refrigerants, foam blowing

agents, and aerosols that

would likely be used in place

of the  HFCs affected by this

proposed rulemaking

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

assumptions regarding which alternatives are implemented in the transition

away from the HFCs affected by this proposed rulemaking. These assumptions

are not intended to represent the range of available alternatives, or to imply

that other alternatives are not available. For a fuller accounting of substitutes,

please refer to the lists of acceptable substitutes as published under EPA’s

Significant New Alternatives Policy (SNAP) Program

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

about the alternative modeled was made on an individual sector or end‐use

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

EPA’s report on Global Mitigation of Non‐CO2 Greenhouse Gases: 2010‐2030

(EPA 2013), and lists of acceptable substitutes under SNAP.

                                                            

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

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

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

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

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

associated establishments.
Economic Impact Screening Analysis	 	 5

Step Approach

Quantify the economic

impact on small businesses

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

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

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

the regulatory options under consideration. These costs were annualized to

calculate a metric that can be compared with annual sales in the next step of

the analysis. 4

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

capital costs were annualized over the expected lifetime of the capital

equipment using the opportunity cost of capital (discount rate). This screening

analysis uses a 3 percent and 7 percent discount rate, in line with OMB Circular

A‐94, which provides guidelines for discount rates in benefit‐cost analyses of

federal programs. Where applicable, annual non‐capital compliance costs—

such as ongoing operating and maintenance costs—are added to the

annualized capital costs to yield a total annualized cost of compliance.

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

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

Economic Analysis.

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

on Global Mitigation of Non‐CO2 Greenhouse Gases: 2010‐2030 (EPA 2013)

were employed. For sub‐sectors for which these cost data were not estimated,

other available sources were sought, as described in the individual sector

chapters. It should be noted that all cost information reflects the current cost

of compliance, and thus likely represents a higher‐end estimate of the cost of

compliance in the years in which the regulatory options would become

effective (i.e., 2016 and beyond). For example, the price of alternative

refrigerants and blowing agents would likely be expected to decrease over

time.

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

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

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

receipts or annual value of shipments5 was utilized as a reasonable proxy.

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

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

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

instances, the result is shown as Not Applicable (NA). In other cases, the

annualized cost of compliance was expected to be zero because the cost of

using alternative refrigerants or blowing agents was negligible (i.e. zero

dollars). In these instances, the result is shown as 0%. In some other cases, the

                                                            

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

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

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

and reflects an expectation that such upfront capital expenditures might be financed. 5 Total value of shipments includes the received or receivable net selling values of all products shipped (exclusive of freight

and taxes).
Economic Impact Screening Analysis	 	 6

Step Approach

annualized cost was found to be negative (i.e. cost‐saving) because the annual

cost savings associated with a lower‐cost alternative outweighed the

annualized value of the upfront capital expenditure. In these instances, the

result is shown as <0%.

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

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

summarizes some of these key assumptions by sector—including which HFCs are currently assumed to be in use

in each sector, and to which alternatives each end‐use is assumed to transition—for the purposes of estimating

costs. Table 3 also summarizes the types of entities expected to be directly impacted.  
Economic Impact Screening Analysis 

Table 3: Regulatory Options under Analysis

Sector Option Number Description of Regulatory Option Primary HFC(s) Assumed to be Currently in Use Alternativ

Modeled Purpose oCost Anal

MVACs 1a List unacceptable HFC‐134a for new MVACs starting at January 1, 2017. HFC‐134a HFO‐1234

1b List unacceptable HFC‐134a for new MVACs starting at January 1, 2019. 

1c List unacceptable HFC‐134a for new MVACs starting in model year 2021.

Aerosols 2 List unacceptable HFC‐125 for aerosols in 2016, restrict use of HFC‐134a to

certain medical aerosols and technical aerosols in 2016; restrict HFC‐227ea

in aerosols to metered dose inhalers in 2016.

Majority of

remaining HFC useis in excepted

uses; HFC‐134a in

tire inflators

Hydrocarb

Foams 3 List unacceptable HFC‐134a in 2017 in: 

rigid polyurethane: (household) appliance HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

flexible polyurethane: slabstock and moulded None No transitrigid polyurethane: spray HFC‐245fa No transitrigid polyurethane: commercial refrigeration HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

rigid polyurethane: sandwich HFC‐245fa; HFC‐

134a

Hydrocarb

polystyrene: extruded boardstock and billet foams HFC‐134a Hydrocarb

4 List unacceptable HFC‐134a in polyurethane integral skin in 2017 HFC‐134a CO2 

5a List unacceptable all HFCs except HFC‐152a and all HFC blends in 2017 in: 

rigid polyurethane: (household) appliance HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

flexible polyurethane: slabstock and moulded None No transitrigid polyurethane: spray HFC‐245fa Solstice LBrigid polyurethane: commercial refrigeration HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

rigid polyurethane: sandwich HFC‐245fa; HFC‐

134a

Hydrocarb

polystyrene: extruded boardstock and billet foams HFC‐134a Hydrocarbpolyurethane integral skin HFC‐134a CO2
Economic Impact Screening Analysis 

Sector Option Number Description of Regulatory Option Primary HFC(s) Assumed to be Currently in Use Alternativ

Modeled Purpose oCost Anal

5b List unacceptable all HFCs except HFC‐152a and HFC blends in 2017 in: 

rigid polyurethane: (household) appliance HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

flexible polyurethane: slabstock and moulded None No transitrigid polyurethane: commercial refrigeration HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

rigid polyurethane: sandwich HFC‐245fa; HFC‐

134a

Hydrocarb

rigid polyurethane and polyisocyanurate laminated boardstock HFC‐245fa Hydrocarbrigid polyurethane: slabstock None No transitpolyurethane integral skin HFC‐134a CO2polystyrene: extruded sheet HFC‐152a No transitpolystyrene: extruded boardstock and billet foams HFC‐134a Hydrocarbpolyolefin None No transitphenolic None No transit

List unacceptable HFC‐134a and Formacel TI in 2017 in:

rigid polyurethane: spray HFC‐245fa No transit

5c List unacceptable all HFCs except HFC‐152a and HFC blends in all foam

blowing end uses in 2017:

rigid polyurethane: (household) appliance HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

flexible polyurethane: slabstock and moulded None No transitrigid polyurethane: spray HFC‐245fa Solstice LBrigid polyurethane: commercial refrigeration HFC‐245fa; HFC‐

134a

Hydrocarband Solsti

rigid polyurethane: sandwich HFC‐245fa; HFC‐

134a

Hydrocarb

rigid polyurethane and polyisocyanurate laminated boardstock HFC‐245fa Hydrocarbrigid polyurethane: slabstock None No transitpolyurethane integral skin HFC‐134a CO2polystyrene: extruded sheet HFC‐152a No transitpolystyrene: extruded boardstock and billet foams HFC‐134a Hydrocarbpolyolefin None No transit
Economic Impact Screening Analysis 

Sector Option Number Description of Regulatory Option Primary HFC(s) Assumed to be Currently in Use Alternativ

Modeled Purpose oCost Anal

phenolic None No transit

6 List unacceptable HFC‐143a and HFC‐134a in phenolic foams in 2017 None Hydrocarb

CommercialRefrigeration

7a List unacceptable R‐404A and R‐507A for new retail food refrigeration

equipment (supermarkets and condensing units) in 2016.

R‐404A; R‐507A R‐407A 

7b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B,

R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for new

refrigeration equipment (supermarkets and condensing units) in 2016.

R‐404A; R‐507A R‐407A

7c List unacceptable R‐404A and R‐507A for new retail food refrigeration

equipment (supermarkets and condensing units) in 2016; eight other high‐

GWP refrigerants (R‐407B, R‐421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A,

and R‐227ea) are subject to gold‐level GreenChill certification charge size

criteria.6

R‐404A; R‐507A R‐407A

8a List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and

HCFC‐22 in retail food refrigeration equipment (supermarkets and

condensing units) in 2016.

R‐404A; R‐507A; R‐

422D

R‐407A

8b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B,

R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for retrofits

from CFC‐12, R‐502, and HCFC‐22 in retail food refrigeration equipment

(supermarkets and condensing units) in 2016.

R‐404A; R‐507A; R‐

422D

R‐407A

8c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and

HCFC‐22 in retail food refrigeration equipment (supermarkets and

condensing units) in 2016; eight other high‐GWP refrigerants (R‐407B, R‐

421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, and R‐227ea) are subject to

gold‐level GreenChill certification charge size criteria.6

R‐404A; R‐507A; R‐422D

R‐407A

9a List unacceptable 26 refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a

(55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B,

R‐404A; HFC‐134a HFC‐134a 

6 Under the gold‐level GreenChill certification charge criteria, a store must achieve an average HFC refrigerant charge of no more than 1.2

1,000 BTU per hour total evaporator cooling load. See http://www2.epa.gov/greenchill/greenchill‐store‐certification‐criteria for more info
Economic Impact Screening Analysis 

Sector Option Number Description of Regulatory Option Primary HFC(s) Assumed to be Currently in Use Alternativ

Modeled Purpose oCost Anal

R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A,

R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), and RS‐

44 (2003 formulation)) for new reach‐in coolers and other self‐contained

retail food refrigerators and freezers and for vending machines in 2016.

R‐404A; HFC‐134a HFC‐134a 

9b List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐

134a, HFC‐227ea, Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐

437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail

food refrigerators and freezers and for medium temperature vending

machines (e.g., beverages, unfrozen foods) in 2016.

R‐404A; HFC‐134a Hydrocarb

R‐404A; HFC‐134a CO2 

9c List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐

134a, HFC‐227ea, Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐

437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail

food refrigerators and freezers and for medium temperature vending

machines (e.g., beverages, unfrozen foods) in 2016. List unacceptable 26

refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐

437A, R‐438A, R‐507A, RS‐24 (2002 formulation), and RS‐44 (2003

formulation)) for new vending machines operating at a low temperature

(e.g., ice cream, frozen foods) in 2016.

R‐404A; HFC‐134a Hydrocarb

R‐404A; HFC‐134a HFC‐134a 

lowtemperatuCO2

9d List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐

134a, HFC‐227ea, Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐

437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

R‐404A; HFC‐134a HFC‐134a 

large syste

hydrocarb
Economic Impact Screening Analysis 

Sector Option Number Description of Regulatory Option Primary HFC(s) Assumed to be Currently in Use Alternativ

Modeled Purpose oCost Anal

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail

food refrigerators and freezers, excluding large systems (i.e., systems that

contain a compressor that is greater than 3/4 horsepower (HP)), and for

vending machines in 2016. List unacceptable 26 refrigerants (HFC‐227ea,

KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐

407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐

422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐

24 (2002 formulation), and RS‐44 (2003 formulation)) for new large reach‐in

coolers and self‐contained retail food refrigerators and freezers in 2016.

R‐404A; HFC‐134a CO2 

10a List unacceptable 25 refrigerants (KDD6, R‐125/290/134a/600a

(55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐417A, R‐417C,

R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐427A,

R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), and RS‐

44 (2003 formulation)) for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016

for reach‐in coolers and other self‐contained retail food refrigerators and

freezers and for vending machines.

None None 

10b List unacceptable 31 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐

134a, Ikon B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A,

R‐407B, R‐407C, R‐407F, R‐417A, R‐417C, R‐421A, R‐421B, R‐422A, R‐422B,

R‐422C, R‐422D, R‐424A, R‐426A, R‐427A, R‐428A, R‐434A, R‐437A, R‐438A,

R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation), SP34E, andTHR‐03) for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016 for reach‐in

coolers and other self‐contained retail food refrigerators and freezers and

for vending machines.

None None 

10c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and

HCFC‐22 in 2016 for reach‐in coolers and other self‐contained retail food

refrigerators and freezers and for vending machines.

None None 

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

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

substitutes, please refer to the lists of acceptable substitutes as published under EPA’s SNAP Program (www.epa.gov/ozone/snap/).
Economic Impact Screening Analysis    12

3 Motor Vehicle Air Conditioning Sector

The regulatory options under consideration that are relevant to the MVAC sector are summarized below in Table

4. While all options under consideration are analyzed below, EPA’s proposed option is 1c. The regulatory options

considered are expected to directly affect light duty vehicle and truck manufacturers, as described in the

sections that follow.  

Table 4: MVAC Regulatory Options under Consideration

Option Number Sector Regulatory Options

1a MVACs List HFC‐134a unacceptable for new MVACs starting at January 1, 2017

1b MVACs List HFC‐134a unacceptable for new MVACs starting at January 1, 2019

1c MVACs List HFC‐134a unacceptable for new MVACs starting in model year (MY) 2021

3.1 Small Entities Potentially Subject to the Rulemaking

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

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

(MY) 2017‐2025 light‐duty vehicles. 77 FR 62624, 62807‐810 (October 15, 2012); see also 75 FR 25325, 25431‐32

(May 7, 2010) (discussing the same issue for MY 2012‐2016 light duty vehicles).   

When refrigerants leak from current motor vehicle air conditioning systems, they contribute to overall GHG

emissions. Using lower GWP refrigerants can significantly reduce the climate impact of these emissions. Given

the increasing availability of lower‐GWP chemicals suitable for this purpose and systems that can use them, as

well as increasing requirement for lower‐GWP refrigerants in Europe, EPA based the light‐duty GHG standards

for MYs 2017‐2025 in part on an expected gr adual transition to lower‐GWP refrigerants. Thus, in setting the

level of the standards, EPA projected that the industry will make the full transition to lower‐GWP refrigerants

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

model years reflects a projected 20 percent increase in substitution in each model year and complete transition

by MY 2021. 77 FR 62720/2‐3. In support of the assumption of this multi‐year transition, the Light‐Duty GHG rule

for MYs 2017‐2025 includes an extensive discussion of the refrigerant substitute availability and technical

feasibility of transitioning the fleet. 77 FR 62720; 62807‐810.

Given current industry trends and other regulatory incentives and requirements, all light duty vehicle and truck

manufacturers are expected to transition their vehicle production for domestic sales out of HFC‐134a prior to

the effective date of this regulatory option (i.e., model year 2021). However, this analysis implicitly assumes that

all manufacturers would continue to produce light‐duty vehicles and trucks containing HFC‐134a in the United

States for export in the absence of this proposed rulemaking. Since the EPA rulemaking documents already

analyze domestic sales, this analysis considers only export sales to estimate costs that would be incurred as a

result of this rulemaking.

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

assemble and install the MVAC systems in‐house. As such, this analysis assumes that some light duty vehicle and
Economic Impact Screening Analysis    13

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

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

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

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

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

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

Exhibit 1 below.   

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

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

7 The small business

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

an estimate of 198 small businesses in these industries.8

  

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

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

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

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

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

reduce GHG emissions and improve fuel economy of light‐duty vehicles.9 Adopting MVAC systems with low‐GWP

refrigerants is one of many strategies to reduce GHG emissions in this sector.  

The technical support document for EPA’s Light‐Duty Greenhouse Gas final rule estimates that for MY2017, 20%

of the U.S. market will have adopted alternative MVAC systems, and that in each subsequent year the

penetration will increase an additional 20%, reaching 100% by MY 2021 (EPA/NHTSA 2012). This analysis adopts

these assumptions, with the caveat that these penetrations are applied only to a given manufacturer’s vehicle

production for domestic sales. This analysis conservatively assumes that all manufacturers would continue to

produce light‐duty vehicles and trucks containing HFC‐134a for export under all of the regulatory options. Thus,

for each regulatory option, the percent of businesses affected for all production (i.e., for domestic sales and for

export) is equal to the percent of the market that has not already transitioned subsequent to the EPA/NHTSA

regulations. The remainder of small businesses affected is only for the portion of their production that is

destined for export.  

Table 5 below presents the number of small businesses estimated to be directly affected by the regulatory

options.  It should be noted that this analysis conservatively adds together the potentially affected small

                                                            

7 This industry comprises establishments primarily engaged in manufacturing light trucks and utility vehicles, including light

duty vans, pick‐up trucks, minivans, and sport utility vehicles. 8 Because Census data disaggregated by employment size are only available by establishment size, the definition was

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

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

establishments for this industry (i.e., 174 firms to 188 establishments).   9 The EPA/NHTSA Final Rulemaking to Establish 2017 and Later Model Year Light‐Duty Vehicle Greenhouse Gas Emissions

and Corporate Average Fuel Economy Standards was issued August 28, 2012.
Economic Impact Screening Analysis    14

businesses in NAICS codes 336111 and 336112, although it is possible that some companies have separate

establishments dedicated to manufacturing automobiles and light trucks, and thus could be double‐counted.

Table 5: Estimated Number of Small Light Duty Vehicle Manufacturers Affected by the Regulatory Options a

Regulatory

Option

NAICS 336111

Automobile

Manufacturing

NAICS 336112

Light Truck

and Utility

Vehicle

Manufacturing

Total

Total Number of Small Businesses 155 43 198

1a (2017)

Estimated

Number of Small

Businesses

Affected

All Production 124 b 35 b 158

Production for Export Only 31 9 40

Total 155 43 198

1b (2019)

Estimated

Number of Small

Businesses

Affected

All Production 62 c 17 c 79

Production for Export Only 93 26 119

Total 155 43 198

1c

(MY2021)

Estimated

Number of Small

Businesses

Affected

All Production 0 d 0 d 0

Production for Export Only 155 43 198

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

small businesses—is 241. b 80% of small businesses assumed to be affected.   c 40% of small businesses assumed to be affected.   d 0% of small businesses assumed to be affected.  

3.2 Estimated Economic Impact on Affected Small Entities

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

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

compliance costs were estimated based on the assumption that HFC‐134a MVACs would be replaced by HFO‐

1234yf, although other SNAP‐approved alternatives also exist.  

Exhibit 1: Related Industries Not Directly Affected by the Proposed Rulemaking

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

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

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

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

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

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

and other regulatory incentives and requirements.   

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

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

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

associated costs are considered to be required pursuant to Section 609 rather than the proposed rulemaking.
Economic Impact Screening Analysis    15

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

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

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

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

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

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

The automobile manufacturing industry is a competitive market and costs of vehicles are highly variable. It is

difficult to estimate the proportion of the cost that would be borne by the consumer and by the manufacturer.

Incremental costs could potentially be estimated at about $8.8 million for manufacturers that may produce

solely for an export market for countries that do not have regulations or initiatives mitigating HFC‐134a use in

motor vehicles or for countries where the market demand is more elastic to incremental cost changes. However,

for this analysis it is assumed that the impact of the rulemaking on most export sales is minimal due to export

countries with similar regulations or initiatives mitigating HFC‐134a use such as the European MAC Directive

(2006/40/EC). It is also assumed that there would be economies of scale and learning over time which would

further minimize the cost impact for this industry. As such, compliance costs as a percentage of average sales

per small business establishment are shown as zero in Table 6 below.

Table 6: Estimated Economic Impact on Small Entities in the Automobile Manufacturing Industry (Sales Test)

NAICS Industry Name

Annual Compliance Cost as a Percentage of Average Sales per

Small Business Establishment

1a (2017) 1b (2019) 1c (MY2021)

336111 Automobile manufacturing 0% 0% 0%

336112 Light truck and utility vehicle

manufacturing 0% 0% 0%

3.3 Impact of Regulatory Timelines under Consideration

The regulatory option to list HFC‐134a as unacceptable for new MVACs is being considered under three

timeframes: 2017, 2019, and model year 2021. Because industry costs were estimated on a static, per‐unit

MVAC system cost basis, the economic impact on all small businesses in the automobile manufacturing industry

are estimated to be less than 0.1%—irrespective of the regulatory timeframe considered. While the cost

estimates and assumptions used to develop this analysis are not sensitive enough to reflect all time‐related

considerations, costs would be expected to decrease over time as the alternative systems become produced at

greater economies of scale in the United States and abroad (e.g., in response to recent regulations promulgated

by EPA and NHTSA, as well as the European MAC Directive (2007/46/EC)). In addition, listing HFC‐134a

unacceptable in later years could also reduce the impact on small businesses, as these companies are

anticipated to be already transitioning their vehicle production for domestic sales out of HFC‐134a MVAC

systems by 2021, in response to voluntary compliance credits for alternative low GWP refrigerants allowed

under EPA and NHTSA joint regulations (as described in Section 3.1).
Economic Impact Screening Analysis    16

4 Aerosol Sector

The proposed regulatory option that would be expected to affect the aerosol sector is shown below in Table 7.  

This regulatory option would be expected to affect all aerosol products, with some exceptions for certain

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

or those that do not meet the criteria for the exceptions under the proposed regulatory option would be

required to reformulate or redesign products to use alternative propellants or alternative delivery systems.

Table 7: Aerosol Proposed Regulatory Option

Option

Number

Sector Regulatory Options

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

medical aerosols and technical aerosols in 2016; restrict HFC‐227ea in aerosols to

metered dose inhalers in 2016.

4.1 Small Entities Potentially Subject to the Rulemaking

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

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

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

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

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

cleaning products; eyeglass and keyboard dusters; room fresheners; food dispensing products; freeze

sprays for removal of chewing gum, pet excrement, and other wastes; and novelty aerosols (e.g.,

artificial snow, plastic string, noise makers, and cork poppers).

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

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

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

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

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

dusters (e.g., for photographic negatives, semiconductor chip manufacture, specimens for observation

under electron microscope); and spinnerette lubricant/cleaning sprays.  Other miscellaneous products

such as document preservation sprays are also considered in this category.

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

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

wart removal sprays, antifungals, and calamine sprays, among the products that would be restricted

from using HFC‐134a and HFC‐227ea. Aerosol propellants are also used in metered dose inhalers (MDIs);

however, use of HFC‐134a and HFC‐227ea in MDIs would be excepted from the proposed regulatory

restriction.   

The industries directly affected by this proposed regulatory option were identified using NAICS codes, as shown

in Table 8 below. However, the broader industries represented by these NAICS codes may also manufacture a
Economic Impact Screening Analysis    17

majority of products which are not aerosols, such as creams, polishes, lotions, and other chemicals and

equipment.  In addition to manufacturing many non‐aerosol products, these manufacturers are also likely to

produce aerosol products that are already using non‐HFC technologies.  

In fact, while this rulemaking proposes to list HFC‐125 as unacceptable and to restrict HFC‐227ea to metered

dose inhalers and HFC‐134a to certain technical and medical aerosols, HFC‐125 and HFC‐227ea10 are not

currently used as aerosol propellants. IPCC (2011) estimates that in developed countries, more than 98% of non‐

medical aerosols now use non‐ozone‐depleting, low‐GWP propellants (e.g., hydrocarbons, dimethyl ether, CO2,

or nitrogen). As such, this proposed rulemaking, if finalized, would serve to avoid future use of these HFC

propellants.

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

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

(e.g., flammability). The following technical aerosol applications are anticipated to be excepted from restrictions

on HFC‐134a. This list also incorporates those applications that were previously excepted from the nonessential

products regulations (EPA 2010):

 Certain medical devices including metered dose inhalers;  

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

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

 Mold release agents;

 Spinnerette lubricant/cleaning sprays

 Document preservation sprays; and

 Pesticides for use near electrical wires or in aircraft

  

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

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

inflators would be subject to the regulatory prohibition on use of HFC‐134a as a propellant.

Table 8 below presents the estimated number of entities expected to be directly affected by the proposed

regulatory option applicable to aerosols. A significant portion of the aerosol product manufacturing industry has

already transitioned out of the HFCs proposed for regulation or is expected to be excepted. However, two tire

inflator manufacturers using HFC‐134a propellant are considered to be small businesses and are expected to be

affected by this proposed rulemaking.11

                                                            

10 HFC‐227ea is used as a propellant in MDIs, which would be excepted under this regulatory option. 11 The two manufacturers, Radiator Specialty Company and Warren Distribution, Inc. were determined to be small

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

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

Co.) exceed the small business size threshold.  
Economic Impact Screening Analysis    18

Table 8: Estimated Number of Aerosols Sector Small Businesses Affected by the Proposed Regulation

NAICS

Code Industry Name Relevant Aerosol Products Included

Small

Business

Threshold

(Number of

Employees)

Percent of

Industry

Assumed to

Use HFCs

Affected by

Regulatory

Option 2

Estimated

Number of

Small

Businesses

Affected

325620 Perfumes, makeups and

other toiletries

 Aerosol hairsprays  

 Cologne and perfume manufacturing

 Deodorants

500 0% 0

325612 Polishes and other

sanitation goods

 Air fresheners

 Household cleaning products

 Specialized dusters

 Degreasers (household)

 Deodorants (non‐personal)

 Aircraft cleaner

500 E/0%a 0

325520 Adhesive manufacturing

 Household maintenance adhesives

 Caulking  

 Sealants

500 0% 0

324191 Petroleum lubricating oil

and grease manufacturing

 Auto products

 Lubricants 500 E/0%a 0

325510 Paint and coating

manufacturing

 Dispersions

 Paint

 Enamel paint

 Latex paint

 Coatings

500 0% 0

325998

All other miscellaneous

chemical product and

preparation manufacturing

 Degreasers

 Defluxers

 Freeze sprays

 Mold release agents

 Wasp and hornet sprayb  

 Spinnerette lubricant sprays

 Document preservation sprays

 Tire inflators

500 E/0%c 2

325412 Pharmaceutical

preparation manufacturing

 Freeze sprays (wart treatment)

 Calamine spray

750 0% 0

325199 All other basic organic

chemical manufacturing  Anti‐fungal sprays 1,000 0% 0

339113 Surgical appliance and

supplies manufacturing  Liquid bandages 500 0% 0

Note: Bolded items have been identified as products that are likely to use HFC‐134a, but are excepted from the regulatory

restrictions; “E” represents entities that are found to be excepted from the regulatory restriction. a Some products in this category are excepted from the regulatory restriction. For restricted products, it is expected that all

manufacturers would already have transitioned out of the HFCs proposed for regulation, thus 0% are expected to be affected. bOnly wasp and hornet spray for use near power lines would qualify for an exception, not household sprays. c The majority of the products in this category are excepted from the regulatory restriction. For the restricted products, it is

expected that all manufacturers would already have transitioned out of the HFCs proposed for regulation. However, aerosol

tire inflators containing HFC‐134a would be subject to the regulatory option. Two manufacturers that produce tire inflators

with HFC‐134a propellant were identified as small businesses.  
Economic Impact Screening Analysis    19

4.2 Estimated Economic Impact on Affected Small Entities

Table 9 presents a summary of the annualized compliance costs as a percentage of average annual sales for the

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

industries, due to the already widespread use of non‐HFC‐134a aerosol propellants, and exceptions for HFC‐

134a and HFC‐227ea in MDIs, and HFC‐134a in technical aerosols for specialized uses. In addition, small

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

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

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

Table 9: Estimated Economic Impact on Small Businesses (Sales Test)

NAICS Industry Name

Annual Compliance Cost as a

Percentage of Annual Sales per

Small Business

325620 Perfumes, makeups and other toiletries NA

325612 Polishes and other sanitation goods NA

325520 Adhesive manufacturing NA

324191 Petroleum lubricating oil and grease manufacturing NA

325510 Paint and coating manufacturing NA

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

325412 Pharmaceutical preparation manufacturing NA

325199 All other basic organic chemical manufacturing NA

339113 Surgical appliance and supplies manufacturing NA

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

* On an annualized basis, small businesses are expected to experience some cost savings as a result of compliance with this

regulatory option.

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

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

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

$342,000 in 2013 dollars, which covers costs to convert a facility to accommodate a flammable aerosol

propellant (e.g., installing sensors and storage capacity) and to test and certify equipment to Underwriter’s

Laboratory (UL) standards (EPA 2013). These upfront costs are offset by annual savings of about $260,000 per

facility associated with a lower‐cost hydrocarbon‐based propellant. Incremental annual operating costs were

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

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

manufacture 1 million consumer aerosol cans 13 per year and were annualized assuming a lifetime of 10 years.

                                                            

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

that manufacture as few as 200,000 aerosol cans per year can expect to see cost savings as a result of compliance with this

regulatory option.   13 Each aerosol can is assumed to contain an HFC‐134a aerosol propellant charge of two ounces (EPA 2013).  
Economic Impact Screening Analysis    20

5 Foam Sector

The regulatory options under consideration that would be expected to affect the foam sector are summarized

below in Table 10.  While all options under consideration are analyzed below, EPA’s proposed option is 5b. The

regulatory options would be expected to affect manufacturers of domestic and commercial refrigerated

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

and phenolic foams. Because of the complexity of the foam sector—with its multiple foam types and NAICS

codes—Section 5.1 on identifying small entities potentially subject to the rulemaking and Section 5.2 on the

economic impact are organized slightly differently from other sectors discussed in this report. Section 5.1

presents the small entities subject to the rulemaking by NAICS code, followed by a summary by regulatory

option. Section 5.2 presents the economic impact on small entities organized by regulatory option.

Table 10: Foams Regulatory Options under Consideration

Sector Option

Number Regulatory Options

Foams 3 List unacceptable HFC‐134a in 2017 in the following applications:

rigid polyurethane: (household) appliance

flexible polyurethane: slabstock and moulded

rigid polyurethane: spray

rigid polyurethane: commercial refrigeration

rigid polyurethane: sandwich

polystyrene: extruded boardstock and billet

4 List unacceptable HFC‐134a in polyurethane integral skin in 2017

5a List unacceptable all HFCs except HFC‐152a and HFC blends, in 2017 in the following end uses and

applications:

rigid polyurethane: (household) appliance

flexible polyurethane: slabstock and moulded

rigid polyurethane: spray

rigid polyurethane: commercial refrigeration

rigid polyurethane: sandwich

polystyrene: extruded boardstock and billet

polyurethane integral skin

5b List unacceptable HFC‐134a and Formacel TI in rigid polyurethane spray foam in 2017.

List unacceptable all HFCs, except HFC‐152a, and HFC blends in the following applications:

rigid polyurethane: (household) appliance

flexible polyurethane: slabstock and moulded

rigid polyurethane: commercial refrigeration

rigid polyurethane: sandwich

rigid polyurethane and polyisocyanurate laminated boardstock

rigid polyurethane: slabstock

polyurethane integral skin

polystyrene: extruded sheet

polystyrene: extruded boardstock and billet

polyolefin

phenolic

5c List unacceptable all HFCs, except HFC‐152a, and HFC blends in 2017 in all foam blowing end‐

uses:  

rigid polyurethane: (household) appliance

flexible polyurethane: slabstock and moulded
Economic Impact Screening Analysis    21

Sector Option

Number Regulatory Options

rigid polyurethane: spray

rigid polyurethane: commercial refrigeration

rigid polyurethane: sandwich

rigid polyurethane and polyisocyanurate laminated boardstock

rigid polyurethane: slabstock

polyurethane integral skin

polystyrene: extruded sheet

polystyrene: extruded boardstock and billet

polyolefin

phenolic

6 List unacceptable HFC‐143a and HFC‐134a in phenolic foams in 2017

5.1 Small Entities Potentially Subject to the Rulemaking

The industries directly affected by each regulatory option under consideration in the foam sector were identified

using NAICS codes, as shown in Table 11. Foam end‐uses included under each of the broader industries are also

shown. The remaining sections analyze the number of small businesses under each NAICS code affected by each

regulatory option, followed by a summary.

Table 11: NAICS Codes for Foams Sector and Applicable Regulatory Options

NAICS Code Industry Name Relevant Foam End‐Uses

Relevant Regulatory Option(s)

3 4 5a 5b 5c 6

326140 Polystyrene foam product

manufacturing

Polystyrene: extruded

boardstock and billet

         

Polystyrene: extruded sheet  

335222 Household refrigerator and

home freezer manufacturing

Rigid polyurethane:

(household) appliance

         

333415 Air‐conditioning and warm

air heating equipment and

commercial and industrial

refrigeration equipment

manufacturing

Rigid polyurethane:

commercial refrigeration

         

326150 Urethane and other foam

product (except

polystyrene) manufacturing

Flexible polyurethane:

slabstock and moulded

         

Rigid polyurethane: spray      a    

Rigid polyurethane: sandwich          

Rigid polyurethane: slabstock     

Rigid polyurethane and

polyisocyanurate laminated

boardstock

         

Polyurethane integral skin       

Polyolefin  

Phenolic    a Unlike the other regulatory options that would list unacceptable all HFCs and HFC blends except HFC‐152a, this option would list

unacceptable only HFC‐134a and Formacel TI in rigid polyurethane spray foam.
Economic Impact Screening Analysis    22

5.1.1 Polystyrene Foam Product Manufacturing (NAICS code 326140)

The extruded polystyrene (XPS) boardstock and billet

manufacturing and XPS sheet manufacturing industries fall within

the broader NAICS code 326140, polystyrene foam product

manufacturing. Within this broader NAICS code industry, only a

portion of companies would be expected to manufacture products with HFC‐blown XPS boardstock and billet

and XPS sheet foam.  The proportion of each industry was estimated using a two‐step process and data from

EPA’s Vintaging Model (EPA 2012):

1. First, the amount of blowing agent used specifically for XPS boardstock and billet foam and XPS sheet

foam were compared to the sub‐sector total. This yielded an assumption that roughly 50% of

companies within the NAICS code 326140 were producing XPS boardstock and billet and the other 50%

were producing XPS sheet foam. Companies producing XPS boardstock and billet would potentially be

subject to regulatory options 3, 5a, 5b, and 5c, while companies producing XPS sheet would potentially

be subject to regulatory options 5b and 5c.

2. Second, the amount of HFC blowing agent used for XPS boardstock and billet and XPS sheet were

compared to the total amount of blowing agent used for each respective industry. It is estimated that

nearly 80% of XPS boardstock and billet uses HFC‐134a, while the remainder uses HFC‐152a, blends of

HFC‐134/HFC‐152a, hydrocarbons, or CO2. Because no other high‐GWP HFCs are expected to be used in

XPS boardstock and billet, this same assumption was applied for regulatory options 3 and 5a, 5b, and

5c. For XPS sheet foam, it is estimated that the market relies only on HFC‐152a, hydrocarbons, and CO2;

therefore, no companies manufacturing XPS sheet foam are expected to be affected by the regulatory

options under consideration.

The combined result of these two steps is that approximately 39% of entities within the polystyrene foam

product manufacturing NAICS code are assumed to be manufacturing XPS boardstock and billet blown with HFC‐

134a, and thus affected by the regulatory options. As noted above, XPS sheet foam is not known to be blown

with the HFCs listed as unacceptable under the regulatory options, and thus no companies manufacturing XPS

sheet foam are anticipated to be affected.

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

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

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

impacted by the regulatory options under consideration, a scaling ratio was used between total firms and

establishments for this industry (i.e., 368 firms to 515 establishments). Table 12 below presents the number of

small businesses estimated to be directly affected by regulatory options 3 and 5a, 5b and 5c.   

Regulatory Options Affecting this

NAICS Code: 3 and 5a, 5b, and 5c
Economic Impact Screening Analysis    23

Table 12: Estimated Number of XPS Boardstock and Billet Small Businesses Affected by the Regulatory Options

NAICS

Code Industry Name Total Number ofSmall Businesses

Estimated Number of Small Businesses Affected  

Regulatory

Option 3

Regulatory

Option 5a

Regulatory

Option 5b

Regulatory

Option 5c

326140 Polystyrene foam product

manufacturing 364a 141 141 141 141

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

businesses—is 368.

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

The household appliance foam industry is matched to NAICS code

335222, household refrigerator and home freezer manufacturing.

14  It

is assumed that among domestically manufactured appliances sold

today, approximately 10% use HFC‐134a‐blown foam, while 55% use

HFC‐245fa and the remaining 35% use hydrocarbons. As such, regulatory option 3 (listing HFC‐134a

unacceptable) is assumed to affect 10% of the small businesses in this foam end‐use.  Further, regulatory

options 5a, 5b, and 5c are assumed to affect 65% of the small businesses in manufacturing appliance foam, since

an estimated 65% of companies would need to transition away from HFC‐134a and HFC‐245fa.  

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

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

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

impacted by the regulatory options under consideration, a scaling ratio was used between total firms and

establishments for this industry (i.e., 19 firms to 25 establishments). Table 13 below presents the number of

small businesses estimated to be directly affected by regulatory options 3 and 5a, 5b, and 5c.   

Table 13: Estimated Number of Appliance Small Businesses Affected by the Regulatory Options

NAICS

Code Industry Name

Total

Number of

Small

Businesses

Estimated Number of Small Businesses Affected  

Regulatory

Option 3

Regulatory

Option 5a

Regulatory

Option 5b

Regulatory

Option 5c

335222 Household refrigerator and

home freezer manufacturing 14a 1 9 9 9

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

businesses—is 19.

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

Refrigeration Equipment Manufacturing (NAICS code 333415)

The commercial refrigeration foam industry is matched to NAICS

code 333415, air‐conditioning and warm air heating equipment

and commercial and industrial refrigeration equipment

manufacturing.

15 It is assumed that among domestically

                                                            

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

time of appliance manufacture. 15 In contrast to many other polyurethane foam types, commercial refrigeration foam is blown directly into commercial

appliances at time of manufacture.

Regulatory Options Affecting this

NAICS Code: 3 and 5a, 5b, and 5c

Regulatory Options Affecting this

NAICS Code: 3 and 5a, 5b, and 5c
Economic Impact Screening Analysis    24

manufactured commercial refrigeration equipment sold today, approximately 10% use HFC‐134a‐blown foam,

while 40% use HFC‐245fa and the remaining 50% use hydrocarbons. As such, regulatory option 3 (listing HFC‐

134a unacceptable) is assumed to affect 10% of the small businesses manufacturing commercial appliances that

contain foam insulation (i.e., refrigerated units). Further, regulatory options 5a, 5b, and 5c are assumed to affect

50% of the small businesses manufacturing commercial refrigeration foam, since an estimated 50% of

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

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

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

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

impacted by the regulatory options under consideration, a scaling ratio was used between total firms and

establishments for this industry (i.e., 730 firms to 902 establishments).  

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

those that would not be affected by the regulatory options, the relevant subset of the economic sector—NAICS

code 3334153 commercial refrigerators and related equipment—was used to identify the number of businesses

that could be affected by the regulatory options. Data on the number of establishments at the disaggregated

NAICS code 3334153 level, however, are not available; as a proxy, Census data on the value of product

shipments of NAICS code 3334153 relative to the broader NAICS code 333415 were used (U.S. Census 2007,

2014).   Based on these data, it was estimated that 13.5% of the small businesses in NAICS code 333415

manufacture commercial refrigeration equipment and could be affected by the regulatory options. Table 14

below presents the number of small businesses estimated to be directly affected by regulatory options 3 and 5a,

5b, and 5c.   

Table 14. Estimated Number of Commercial Refrigeration Small Businesses Affected by the Regulatory Options

NAICS

Code Industry Name

Total Number

of Small

Businesses

Estimated Number of Small Businesses Affected  

Regulatory

Option 3

Regulatory

Option 5a

Regulatory

Option 5b

Regulatory

Option 5c

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

95a 9 47 47 47

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

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

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

326150)

The remaining foam types affected by the regulatory options—

flexible PU slabstock/moulded, rigid PU spray, sandwich panels,

integral skin foams, rigid PU slabstock, rigid PU/PIR laminated

boardstock, polyolefin, and phenolic foams—all fall under NAICS

code 326150, urethane and other foam product (except polystyrene) manufacturing.

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

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

Regulatory Options Affecting this

NAICS Code: 3, 4, 5a, 5b, 5c, and 6
Economic Impact Screening Analysis    25

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

Vintaging Model (EPA 2012):

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

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

manufacturing each foam type within this NAICS code.  

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

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

foam type. This yielded a proxy for the percentage of companies in each foam type that are using HFC

blowing agents proposed to be listed as unacceptable.  

The combined result of these two steps yields—for each regulatory option and each PU foam type—the percent

of companies assumed to be manufacturing covered foam products with certain HFCs that could be subject to

the regulatory options. These percentages are summarized in Table 15.  

Table 15: Assumptions about the Percentage of Affected Entities in NAICS Code 326150

Relevant Foam Types

% of Entities Assumed to be Affected

Regulatory

Option 3

Regulatory

Option 4

Regulatory

Option 5a

Regulatory

Option 5b

Regulatory

Option 5c

Regulatory

Option  6

Flexible polyurethane:  

slabstock and moulded 0%a NA 0%a 0%a 0%a NA

Rigid polyurethane: spray 0%a NA 14.0% 0%a 14.0% NA

Rigid polyurethane: sandwich 0.3% NA 1.0% 1.0% 1.0% NA

Rigid polyurethane: slabstock   NA NA 0%a 0%a 0%a NA

Rigid polyurethane and

polyisocyanurate laminated

boardstock

NA NA NA 10.4% 10.4% NA

Polyurethane integral skin NA 0.2% 0.2% 0.2% 0.2% NA

Polyolefin NA NA 0%a 0%a 0%a NA

Phenolic   NA NA NA 0%a 0%a 0%

NA = not applicable.   a Because the HFCs proposed for listing as unacceptable are not currently in use, 0% of small businesses are assumed to be affected.

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

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

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

firms with less than 500 employees) impacted by the regulatory options under consideration, a scaling ratio

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

applied to the number of establishments with less than 500 employees.  

Table 16 below presents the number of small businesses estimated to be directly affected by regulatory options

3, 4, 5a, 5b, 5c, and 6.   
Economic Impact Screening Analysis    26

Table 16: Estimated Number of Small Businesses Manufacturing Non‐Appliance PU Foam Types Affected by

the Regulatory Options

NAICS

Code Industry Name

Total Number

of Small

Businesses

Foam Type

Estimated Number of Small Businesses

Affected by Regulatory Option

3 4 5a 5b 5c 6

326150

Urethane and

other foam

product (except

polystyrene)

manufacturing

481a

Flexible polyurethane:

slabstock and moulded 0 NA 0 0 0 NA

Rigid polyurethane: spray 0 NA 67 0 67 NA

Rigid polyurethane: sandwich 2 NA 5 5 5 NA

Rigid polyurethane: slabstock NA NA NA 0 0 NA

Rigid polyurethane and

polyisocyanurate laminated

boardstock

NA NA NA 50 50 NA

Polyurethane integral skin NA 1 1 1 1 NA

Polyolefin NA NA NA 0 0 NA

Phenolic NA NA NA 0 0 0 a Based on U.S. Census Bureau (2007). Includes total number of small business establishments for all urethane foam types, including

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

5.1.5 Summary of Small Business Impacted in the Foam Sector

Table 17 below summarizes the number of small businesses estimated to be impacted in each NAICS code and

foam type, by regulatory option.

Table 17: Estimated Number of Small Businesses Affected in the Foam Sector, by Regulatory Option

NAICS

Code Industry Name Relevant Foam End‐Uses

Estimated Number of Small Businesses

Affected by Regulatory Option

3 4 5a 5b 5c 6

326140 Polystyrene foam product

manufacturing

Polystyrene: extruded

boardstock and billet   141 NA 141 141 141 NA

Polystyrene: extruded sheet NA NA NA 0 0 NA

335222

Household refrigerator

and home freezer

manufacturing

Rigid polyurethane (household)

appliance 1 NA 9 9 9 NA

333415

Air‐conditioning and warm

air heating equipment and

commercial and industrial

refrigeration equipment

manufacturing

Rigid polyurethane:

commercial refrigeration 9 NA 47 47 47 NA

326150

Urethane and other foam

product (except

polystyrene)

manufacturing

Flexible polyurethane:

slabstock and moulded 0 NA 0 0 0 NA

Rigid polyurethane: spray 0 NA 67 0 67 NA

Rigid polyurethane: sandwich 2 NA 5 5 5 NA

Rigid polyurethane: slabstock NA NA NA 0 0 NA

Rigid polyurethane and

polyisocyanurate laminated

boardstock

NA NA NA 50 50 NA

Polyurethane integral skin NA 1 1 1 1 NA

Polyolefin NA NA NA 0 0 NA

Phenolic NA NA NA 0 0 0

Total 154 1 270 253 320 0

Note: Totals may not sum due to independent rounding.
Economic Impact Screening Analysis    27

5.2 Estimated Economic Impact on Affected Small Entities

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

manufacturers for each regulatory option, and provides a comparison of those costs to average annual sales per

establishment. All costs and savings are expressed in 2013 U.S. dollars. Where available and appropriate,

compliance costs were estimated based on EPA’s report on Global Mitigation of Non‐CO2 Greenhouse Gases:

2010‐2030 (EPA 2013). Because EPA (2013) costs are based on typical U.S. facility sizes, in some cases, they were

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

production lines (and/or lower run‐times) and lower annual blowing agent consumption. For those foam types

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

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

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

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

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

facility size (i.e., annual blowing agent use) and alternative used.  

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

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

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

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

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

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

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

agent, rather than HFCs.

5.2.1 Regulatory Option 3

Under this option, HFC‐134a would be listed as unacceptable in 2017 in appliance, flexible, spray, commercial

refrigeration, sandwich, and XPS boardstock/billet foams.  

Table 18 presents a summary of the annualized compliance costs as a percentage of the average annual sales for

each foam type considered under Regulatory Option 3. Average annual sales per establishment were calculated

by dividing total value of shipments (as a proxy for sales) by the number of establishments, for each small

business establishment size (e.g., 0‐4 employees, 5‐9 employees, 10‐19 employees, etc.). The specific

assumption used for each foam type to estimate annualized compliance costs are presented after the table.
Economic Impact Screening Analysis    28

Table 18: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Option 3 (Sales Test)

NAICS

Code Industry Name Foam Type

Annual Compliance Cost as

a Percentage of Average

Sales per Establishment

326140 Polystyrene foam product manufacturing Polystyrene: extruded boardstock

and billet foams <0.1%–7.5%

335222 Household refrigerator and home freezer

manufacturing

Rigid polyurethane (household)

appliance <0%‐2.0%a

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

Rigid polyurethane: commercial

refrigeration <0%‐3.1%a

326150 Urethane and other foam product (except

polystyrene) manufacturing

Flexible polyurethane: slabstock

and moulded 0%b

Rigid polyurethane: spray 0%b

Rigid polyurethane: sandwich <0.1%–5.5% aOn an annualized basis, small businesses are expected to experience some cost savings as a result of compliance with this regulatory

option.   b Because the HFCs proposed for listing as unacceptable are not currently in use, annual compliance costs are assumed to be zero.

Polystyrene Foam Product Manufacturing

 XPS Boardstock and Billet—Manufacturers of this foam type rely on HFC‐134a, as well as HFC‐152a,

CO2, and hydrocarbons. For the purposes of quantifying compliance costs for this analysis, it was

assumed that companies still using HFC‐134a would transition to hydrocarbons. Capital costs for a

facility to transition to hydrocarbons were estimated to be approximately $641,000 for one production

line (UNEP 2011b, 2013b); for small businesses, a single production line was assumed. These capital

costs include installation of storage tank and accessory; retrofit of extruder and die; installation of safety

equipment (ventilation system, gas detector system, explosion‐proof electrical components, fire‐proof

components and static prevention components); civil work; technical and safety training; and

technology transfer, trials, product testing and safety certification (UNEP 2011). Incremental annual

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

associated with the use of hydrocarbons—due to the need for raw materials for fire retardants—these

costs are not expected to outweigh the annual savings associated with the lower blowing agent cost.

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

for other foam types transitioning to hydrocarbons. Costs were annualized over an assumed facility

lifetime of 25 years. Although the smallest facilities (i.e., those with less than 20 employees)  may face

significant annualized compliance costs representing up to 7.5% of annual sales, for the majority of small

businesses that must make changes to comply with the regulatory option (78 of 364 small businesses in

the industry sector), compliance costs are estimated at less than 1% of annual sales.  

Household Refrigerator and Home Freezer Manufacturing		

 Rigid Polyurethane: (Household) Appliance— Manufacturers of this foam type use HFC‐245fa, HFC‐

134a, and hydrocarbons.  For the purposes of quantifying compliance costs for this analysis, it was

assumed that 10% of manufacturers of this foam type currently rely on HFC‐134a and would transition

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

also conservatively assumed to be adopted to help achieve energy efficiency standards and/or to avoid
Economic Impact Screening Analysis    29

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

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

50% to Solstice LBA and 50% to hydrocarbons.  

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

Capital facility costs to convert to hydrocarbons were assumed to be $5.1 million per facility, but these

costs are offset by annual savings of up to $1.4 million per facility due to lower blowing agent costs;

these cost savings vary based on facility size (i.e., number of units produced). The short‐term impact of

the initial capital expenditures would depend in part on how small businesses are able to finance their

upfront costs. No capital costs were assumed to convert to Solstice LBA (since this option is considered

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

to $752,000 per facility, due to higher blowing agent costs. Annual costs/savings associated with

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

estimated based on reported value of shipments and an assumed value of $1,500 per appliance. All

costs were annualized assuming a facility lifetime of 25 years.  The majority of small businesses in this

sector, which rely on HFC‐245fa and hydrocarbons, would not be expected to be impacted under this

regulatory option.

Commercial and Industrial Refrigeration Equipment Manufacturing

 Rigid Polyurethane: Commercial Refrigeration— Manufacturers of this foam type use HFC‐245fa, HFC‐

134a, hydrocarbons, and CO2 (water). For the purposes of quantifying compliance costs for this analysis,

it was assumed that 10% of manufacturers of this foam type currently rely on HFC‐134a, and would

transition to Solstice LBA or hydrocarbons. Hydrocarbons may be a more cost‐effective option, but

Solstice LBA is also conservatively assumed to be adopted to help achieve energy efficiency standards

and/or to avoid incurring upfront capital costs. Specifically, establishments with zero to nine employees

are assumed to transition fully to Solstice LBA, while establishments with 10 to 750 employees are

assumed to transition 50% to Solstice LBA and 50% to hydrocarbons.

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

Capital costs to transition to hydrocarbons were assumed to total approximately $1.3 million per facility,

while net annual savings are estimated to be up to $992,000 per facility, due to lower blowing agent

costs. The short‐term impact of the initial capital expenditures would be expected to depend in part on

how small businesses are able to finance their upfront costs. Conversely, no capital costs were assumed

to convert to Solstice LBA (since this option is considered to be a near drop‐in replacement for HFC‐

245fa), but annual costs per facility were estimated to be up to $224,000 per facility, due to higher

blowing agent costs. Annual costs/savings associated with blowing agent costs were scaled by the

number of appliances manufactured per facility, which was estimated based on reported value of

shipments and an assumed value of $2,000 per equipment. All costs were annualized assuming a facility

lifetime of 25 years. The majority of small businesses in this sector, which rely on HFC‐245fa and

hydrocarbons, would not be expected to be impacted under this regulatory option.

Urethane and Other Foam Product (Except Polystyrene) Manufacturing

 Flexible Polyurethane: Slabstock and Moulded—Because manufacturers of this foam type currently use

only hydrocarbons, prohibiting the use of HFC‐134a in this end‐use would not be expected to impact
Economic Impact Screening Analysis    30

businesses, small or otherwise. The regulatory option would serve to avoid use of HFC‐134a in the

future.

 Rigid Polyurethane: Spray—Because foam manufacturers in this category utilize HFC‐245fa and CO2

only, prohibiting use of HFC‐134a in this end‐use would not be expected to impact small businesses. This

regulatory option would serve to avoid use of HFC‐134a in the future.  

 Rigid Polyurethane: Sandwich Panels—Manufacturers of sandwich panel foams use HFC‐134a, as well

as HFC‐245fa, CO2, and hydrocarbons. For the purposes of quantifying compliance costs for this analysis,

it was assumed that companies still using HFC‐134a would transition to hydrocarbons. One time‐capital

costs for conversion were assumed to be $183,000 for a typical firm producing approximately 13.3

metric tons (MT) of blowing agent annually; this is assumed to cover retrofitting or replacement of foam

dispensers, purchase of a pre‐mixing system, retrofitting of jigs, purchase of safety related equipment,

and conducting trials, training, testing and certification (UNEP 2012, UNEP 2013a).  Incremental annual

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

associated with the use of hydrocarbons—due to the need for raw materials for fire retardants—these

costs are not expected to outweigh the annual savings associated with the lower incremental blowing

agent cost. Indeed, this assumption is conservative given the significant annual cost savings assumed in

EPA (2013) for other foam types transitioning to hydrocarbons. Costs were annualized over an assumed

facility lifetime of 25 years.    

5.2.2 Regulatory Option 4

Regulatory option 4 lists HFC‐134a unacceptable for use in flexible polyurethane integral skin in 2017. U.S.

manufacturers of integral skin foams are assumed to primarily use HFC‐134a, CO2, and hydrocarbons. Table 19

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

foams. Average annual sales per establishment were calculated by dividing total value of shipments (as a proxy

for sales) by the number of establishments, for each small business establishment size (e.g., 0‐4 employees, 5‐9

employees, 10‐19 employees, etc.). While compliance costs are estimated to range as high as 5.3% of annual

sales, very few small businesses (<5) are anticipated to be subject to this regulatory option. The specific

assumptions used to estimate annualized compliance costs are presented after the table.

Table 19: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Option 4 (Sales Test)  

NAICS Industry Name Foam Type

Annual Compliance Cost as a

Percentage of Average Sales per

Small Business Establishment  

326150 Urethane and other foam product

(except polystyrene) manufacturing Polyurethane integral skin <0.1%–5.5%

Urethane and Other Foam Product (Except Polystyrene) Manufacturing

 Polyurethane Integral Skin—For the purposes of quantifying compliance costs for this analysis, it was

assumed that companies still using HFC‐134a would transition to CO2. Capital costs were assumed to be

about $184,000 for a typical firm producing 7.7 MT of blowing agent annually; this is assumed to cover

the purchase or retrofit of foam dispensers, purchase of cooling equipment, purchase of a pre‐mixing

tank, and trials (UNEP 2012, UNEP 2013a). Incremental annual operating costs were assumed to be zero;
Economic Impact Screening Analysis    31

while an increase in operating costs may be experienced associated with the use of CO2,these costs are

not expected to outweigh the annual savings associated with the lower incremental blowing agent cost.

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

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

lifetime.  

5.2.3 Regulatory Options 5a, 5b, and 5c		

Under option 5a, all HFCs, except HFC‐152a, and HFC blends would be listed as unacceptable in 2017 in

appliance, flexible, spray, commercial refrigeration, sandwich, extruded polystyrene boardstock/billet, and

integral skin foams. Under option 5b, all HFCs, except HFC‐152a, and HFC blends would be listed as unacceptable

in 2017 in all foam end‐uses and applications except for spray foam: appliance, flexible, commercial

refrigeration, sandwich, extruded polystyrene boardstock/billet, integral skin foams, PU/PIR laminated

boardstock, rigid slabstock, extruded polystyrene sheet, polyolefin and phenolic foams. Option 5b would also list

HFC‐134a and Formacel TI unacceptable in spray foam in 2017, while allowing use of other HFCs or HFC blends

for this application. Under option 5c, all HFCs, except HFC‐152a, and HFC blends would be listed as unacceptable

in 2017 in all foam end‐uses.

Table 20 presents a summary of the annualized compliance costs as a percentage of the average annual sales for

each foam type considered under regulatory options 5a, 5b, and 5c. Average annual sales per establishment

were calculated by dividing total value of shipments (as a proxy for sales) by the number of establishments, for

each small business establishment size (e.g., 0‐4 employees, 5‐9 employees, 10‐19 employees, etc.). Because

average annual sales were calculated by establishment size, a range is provided for annual compliance costs as a

percentage of annual sales.  In general, annual compliance costs represent a higher percentage of annual sales

for smaller establishments. The specific assumptions used for each foam type to estimate annualized

compliance costs are presented after the table.

Table 20: Estimated Economic Impact on Small Entities in the Foam Manufacturing Industry under Regulatory

Options 5a, 5b, and 5c (Sales Test)

NAICS

Code Industry Name Foam Type

Annual Compliance Cost as a Percentage of

Average Sales per Establishment

Regulatory

Option 5a  

Regulatory

Option 5b

Regulatory

Option 5c

326140 Polystyrene foam product

manufacturing

Polystyrene: extruded

boardstock and billet   <0.1%–7.2% <0.1%–7.2% <0.1%–7.2%

Polystyrene: extruded sheet NA 0%a 0%a

335222 Household refrigerator and

home freezer manufacturing

Rigid polyurethane:

(household) appliance <0%b

–2.0% <0%b–2.0% <0%b–2.0%

333415

Air‐conditioning and warm

air heating equipment and

commercial and industrial

refrigeration equipment

manufacturing

Rigid polyurethane:

commercial refrigeration <0%b

–3.1% <0%b–3.1% <0%b–3.1%

326150

Urethane and other foam

product (except

polystyrene) manufacturing

Flexible polyurethane:

slabstock and moulded NA 0%a 0%a

Rigid polyurethane: spray 0.2%–40.0% 0%a 0.2%–40.0%

Rigid polyurethane: sandwich <0.1%–5.5% <0.1%–5.5% <0.1%–5.5%
Economic Impact Screening Analysis    32

NAICS

Code Industry Name Foam Type

Annual Compliance Cost as a Percentage of

Average Sales per Establishment

Regulatory

Option 5a  

Regulatory

Option 5b

Regulatory

Option 5c

Polyurethane integral skin <0.1%–5.5% <0.1%–5.5% <0.1%–5.5%

Rigid polyurethane slabstock NA 0%a 0%a

Rigid polyurethane and

polyisocyanurate laminated

boardstock

NA <0.1%–12.9% <0.1%–12.9%

Polyolefin NA 0%a 0%a

Phenolic NA 0%a 0%a

NA indicates that the regulatory option does not apply to the foam type. a Because the HFCs proposed for listing as unacceptable are not currently in use, annual compliance costs are assumed to be zero. b On an annualized basis, the largest‐sized small businesses (i.e., those with 500 to 999 employees) are expected to experience some cost

savings as a result of compliance with this regulatory option.

Polystyrene Foam Product Manufacturing

 XPS Boardstock and Billet—These regulatory options would be expected to impact only XPS boardstock

and billet manufacturers using HFC‐134a, since no other HFCs except HFC‐152a are currently in use.

Therefore, the costs of these options are consistent with those presented under regulatory option 3 (see

Section 5.2.2).

 XPS Sheet—Regulatory options 5b and 5c would not be expected to impact any XPS sheet

manufacturers because HFC‐152a is currently the only HFC in use. However, these regulatory options

would serve to avoid use of other HFCs.

Household Refrigerator and Home Freezer Manufacturing		

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

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

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

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

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

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

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

50% to Solstice LBA and 50% to hydrocarbons.  

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

Capital facility costs to convert to hydrocarbons were assumed to be $5.1 million per facility, but these

costs are offset by annual savings of up to $1.4 million per facility due to lower blowing agent costs;

these savings are varied depending on facility size (i.e., number of units produced).  The short‐term

impact of the initial capital expenditures would be expected to depend in part on how small businesses

are able to finance their upfront costs. Conversely, no capital costs were assumed to convert to Solstice

LBA (since this option is considered to be a near drop‐in replacement for HFC‐245fa), but annual costs

per facility were estimated to be up to $752,000 per facility, due to higher blowing agent costs. Annual

costs/savings associated with blowing agent costs were scaled by the number of appliances

manufactured per facility, which was estimated based on reported value of shipments and an assumed

value of $1,500 per appliance. All costs were annualized assuming a facility lifetime of 25 years.  
Economic Impact Screening Analysis    33

Commercial and Industrial Refrigeration Equipment Manufacturing

 Rigid Polyurethane: Commercial Refrigeration—Manufacturers using HFC‐245fa and HFC‐134a would

be impacted by these regulatory options. For the purposes of quantifying compliance costs for this

analysis, it was assumed that companies still using HFC‐245fa and HFC‐134a would transition to

hydrocarbons or Solstice LBA.  

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

Capital costs to transition to hydrocarbons were assumed to total approximately $1.3 million per facility,

while net annual savings are estimated to be up to $992,000 per facility, due to lower blowing agent

costs. The short‐term impact of the initial capital expenditures would be expected to depend in part on

how small businesses are able to finance their upfront costs. No capital costs were assumed to convert

to Solstice LBA (since this option is considered to be a near drop‐in replacement for HFC‐245fa), but

annual costs per facility were estimated to be up to $224,000 per facility, due to higher blowing agent

costs. Annual costs/savings associated with blowing agent costs were scaled by the number of

appliances manufactured per facility, which was estimated based on reported value of shipments and an

assumed value of $2,000 per equipment. All costs were annualized assuming a facility lifetime of 25

years.  

Urethane and Other Foam Product (Except Polystyrene) Manufacturing

 Flexible Polyurethane: Slabstock and Moulded—As previously mentioned, this foam type is currently

manufactured in the United States using only hydrocarbons. Therefore, prohibiting the use of HFCs in

this end‐use would not be expected to impact small businesses. Regulatory options 5b and 5c would

serve to avoid use of HFCs.

 Rigid Polyurethane: Spray—Only those manufacturers using HFC‐245fa would be expected to be

impacted by regulatory options 5a and 5c, as there is no use of HFC‐134a and no significant use of

blends using HFC‐365mfc or other HFCs in this application in the United States. Prohibiting the use of

HFC‐134a and Formacel TI in spray foams under regulatory option 5b would not be expected to impact

manufacturers producing spray foams because there is not expected to be any use of these compounds

in this end‐use. For the purposes of quantifying compliance costs for options 5a and 5c, it was assumed

that companies still using HFC‐245fa would transition to Solstice LBA, which according to industry

sources, has just begun to penetrate the U.S. market. Capital costs were assumed to be $211,000 per

facility, covering the cost of formulation development and compliance testing. Incremental annual

operating costs were conservatively estimated to be $97,000 per facility, due to higher blowing agent

costs (EPA 2013); actual costs may be lower given potential efficiency savings. Actual compliance costs

may vary based on the size of each manufacturing facility. Costs were annualized over the facility

lifetime, assumed to be 25 years.  

 Rigid Polyurethane: Sandwich—These regulatory options would be expected to impact manufacturers

producing sandwich panel foam using HFC‐134a and HFC‐245fa blowing agent. For the purposes of

quantifying compliance costs for this analysis, it was assumed that companies still using HFC‐134a or

HFC‐245fa would transition to hydrocarbons. Because costs were not available at the level of detail to

compare between a transition away from HFC‐134a versus HFC‐245fa, costs are consistent with those

presented under option 3 (see Section 5.2.1).  
Economic Impact Screening Analysis    34

 Polyurethane Integral Skin—These regulatory options would be expected to impact integral skin

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

Therefore, the costs of these options are consistent with those presented under option 4 (see Section

5.2.2).

 PU/PIR Laminated Boardstock— Manufacturers of this foam type rely on HFC‐134a, as well as HFC‐

245fa and hydrocarbons. For the purposes of quantifying compliance costs for this analysis under

regulatory options 5b and 5c, it was assumed that companies using HFC‐134a or HFC‐245fa would

transition to hydrocarbons. Capital costs for a facility to transition to hydrocarbons were estimated to be

approximately $432,000 for one production line that produces 25 MT of blowing agent per year (UNEP

2009, 2011a, 2010c). The capital costs associated with the conversion to hydrocarbons include

hydrocarbon storage systems, replacement or retrofit of existing foaming dispenser including jigs and

fixtures, installation of safety related equipment, trials, and certification (UNEP 2010c). Incremental

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

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

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

blowing agent cost. This assumption is conservative given the significant annual cost savings assumed in

EPA (2013) for other foam types transitioning to hydrocarbons. Costs were annualized over an assumed

facility lifetime of 25 years. Although the smallest facilities (i.e., those with less than 20 employees)  may

face significant annualized compliance costs representing up to about 13% of annual sales, for the

majority of small businesses (42 of 50), compliance costs are estimated at 2% or less of annual sales.

 Polyolefin—This foam type is assumed to be manufactured in the United States using only

hydrocarbons. Therefore, prohibiting the use of HFCs in this end‐use under regulatory options 5b and 5c

would not be expected to impact small businesses.

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

Therefore, prohibiting the use of HFCs in this end‐use under regulatory options 5b and 5c would not be

expected to impact small businesses.

5.2.4 Regulatory Option 6

Under this option, HFC‐143a and HFC‐134a would be listed as unacceptable in phenolic foams in 2017. However,

manufacturers in this foam sector are not assumed to use HFC‐143a or HFC‐134a, but rather rely on

hydrocarbons. Thus, this regulatory option would serve to avoid use of HFC‐143a or HFC‐134a.     
Economic Impact Screening Analysis    35

6 Commercial Refrigeration Sector

All four of the regulatory options under consideration are expected to affect the commercial refrigeration

sector, as summarized below in Table 21; each set of regulatory options (identified by the number 7, 8, 9 or 10)

has three to four specific options (identified by an additional letter; e.g., 7a, 7b, and 7c).  While all options under

consideration are analyzed below, EPA’s proposed options in each set are 7b, 8b, 9b, and 10c.

As shown in Table 21, two sets of regulatory options would affect remote retail food equipment—i.e.,

compressor rack systems (typically used in supermarkets) and condensing units (also used in supermarkets, as

well as convenience stores and other commercial locations), referred to here as supermarkets and condensing

units—while two sets of regulatory options would affect self‐contained retail food equipment and vending

machines.  

Table 21: Commercial Refrigeration Regulatory Options under Consideration

Option

Number Regulatory Options Subsector

7a List unacceptable R‐404A and R‐507A for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016.

New Remote

Retail Food

Equipment

7b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B, R‐422A, R‐422C, R‐

422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016.

7c List unacceptable R‐404A and R‐507A for new retail food refrigeration equipment

(supermarkets and condensing units) in 2016; eight other high‐GWP refrigerants (R‐407B, R‐

421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, and R‐227ea) are subject to gold‐level

GreenChill certification charge size criteria.16

8a List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in retail

food refrigeration equipment (supermarkets and condensing units) in 2016.

Remote Retail

Food

Equipment

Retrofits

8b List unacceptable 10 high‐GWP HFCs/HFC blends (R‐404A, R‐407B, R‐421B, R‐422A, R‐422C, R‐

422D, R‐428A, R‐434A, R‐507A, and R‐227ea) for retrofits from CFC‐12, R‐502, and HCFC‐22 in

retail food refrigeration equipment (supermarkets and condensing units) in 2016.

8c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in retail

food refrigeration equipment (supermarkets and condensing units) in 2016; eight other high‐

GWP refrigerants (R‐407B, R‐421B, R‐422A, R‐422C, R‐422D, R‐428A, R‐434A, and R‐227ea) are

subject to gold‐level GreenChill certification charge size criteria.20

9a List unacceptable 26 refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐

404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐

422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002

formulation), and RS‐44 (2003 formulation)) for new reach‐in coolers and other self‐contained

retail food refrigerators and freezers and for vending machines in 2016.

New Self‐

Contained

Retail Food

Equipment

and Vending

Machines

9b List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea, Ikon

B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐

410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers and for vending machines in 2016.

                                                            

16 Under the gold‐level GreenChill certification charge criteria, a store must achieve an average HFC refrigerant charge of no

more than 1.25 pounds of refrigerant per 1,000 BTU per hour total evaporator cooling load. See

http://www2.epa.gov/greenchill/greenchill‐store‐certification‐criteria for further information.
Economic Impact Screening Analysis    36

9c List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea, Ikon

B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐

410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers and for medium temperature vending machines (e.g., beverages, unfrozen foods)

in 2016.  List unacceptable 26 refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a

(55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐

421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐

507A, RS‐24 (2002 formulation), and RS‐44 (2003 formulation)) for new vending machines

operating at a low temperature (e.g., ice cream, frozen foods) in 2016.

9d List unacceptable 32 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, HFC‐227ea, Ikon

B, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐

410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐

428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation),

SP34E, and THR‐03) for new reach‐in coolers and other self‐contained retail food refrigerators

and freezers, excluding large systems (i.e., systems that contain a compressor that is greater

than 3/4 horsepower (HP)), and for vending machines in 2016.  List unacceptable 26

refrigerants (HFC‐227ea, KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐

407B, R‐407C, R‐407F, R‐410A, R‐410B, R‐417A, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐

422D, R‐424A, R‐426A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002 formulation), and

RS‐44 (2003 formulation)) for new large reach‐in coolers and self‐contained refrigerators and

freezers in 2016.  

10a List unacceptable 25 refrigerants (KDD6, R‐125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐

407A, R‐407B, R‐407C, R‐407F, R‐417A, R‐417C, R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐

422D, R‐424A, R‐426A, R‐427A, R‐428A, R‐434A, R‐437A, R‐438A, R‐507A, RS‐24 (2002

formulation), and RS‐44 (2003 formulation)) for retrofits from CFC‐12, R‐502, and HCFC‐22 in

2016 for reach‐in coolers and other self‐contained retail food  refrigerators and freezers and for

vending machines. Self‐Contained

Retail Food

Equipment

and Vending

Machines

Retrofits

10b List unacceptable 31 high‐GWP HFCs/HFC blends (FOR12A, FOR12B, HFC‐134a, Ikon B, KDD6, R‐

125/290/134a/600a (55/1/42.5/1.5), R‐404A, R‐407A, R‐407B, R‐407C, R‐407F, R‐417A, R‐417C,

R‐421A, R‐421B, R‐422A, R‐422B, R‐422C, R‐422D, R‐424A, R‐426A, R‐427A, R‐428A, R‐434A, R‐

437A, R‐438A, R‐507A, RS‐24 (2002 formulation), RS‐44 (2003 formulation), SP34E, and THR‐03)

for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016 for reach‐in coolers and other self‐

contained retail food refrigerators and freezers and for vending machines.

10c List unacceptable R‐404A and R‐507A for retrofits from CFC‐12, R‐502, and HCFC‐22 in 2016 for

reach‐in coolers and other self‐contained retail food refrigerators and freezers and for vending

machines.

6.1 Small Entities Potentially Subject to the Rulemaking

6.1.1 Remote Retail Food Equipment (Supermarkets and Condensing Units)		

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

condensing unit systems) to cool food, beverages, and other refrigerated or frozen products prior to sale would

be required to use alternative refrigerants to the ones listed as unacceptable by the regulatory options in new

and retrofitted equipment beginning in 2016. Remote refrigeration systems are generally defined as systems

that consist of various components linked through a refrigerant piping network.  Rack systems, which are most

commonly used in supermarkets as well as warehouse clubs and superstores, consist of racks of multiple

compressors and other components that are connected to a remote condenser and linked to display cases,
Economic Impact Screening Analysis    37

reach‐ins, and walk‐ins through a piping network.  Condensing unit systems, which are more commonly used in

convenience stores and other medium‐sized retail food establishments, consist of one or two compressors, one

condenser, and one receiver assembled into a condensing unit system, which is then linked to display cases,

reach‐ins, or walk‐ins through a piping network.  Since new remote refrigeration systems are typically installed

and charged onsite, and existing systems are also retrofitted onsite, the economic impact of complying with this

regulation is expected to be most directly incurred by the end‐users of the equipment.   

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

stores, drug stores, hotels, cafeterias, specialty food stores, restaurants, and bars. Table 22 below presents the

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

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

Table 22: NAICS Codes for Affected Retail Food Industries

NAICS

Code Industry Name

Total

Number of

Firms in Each

Industry*

Small Business

Threshold: Annual

Sales per Firm

Total Number

of Small

Businesses in

Each Industry

44511 Supermarkets and other grocery (except convenience)

stores 34,009 $30 million 33,332

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

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

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

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

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

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

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

4453 Beer, wine, and liquor stores 23,206 $7 million 22,697

453110 Florist 16,031 $7 million 16,001

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

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

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

452910 Warehouse clubs and superstores 11 $27 million 0

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

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

72112 Casino hotels 177 $30 million 20

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

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

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

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

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

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

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

Source: U.S. Census Bureau (2007).
Economic Impact Screening Analysis    38

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

food industry, and industry pledges, such as those made by the Consumer Goods Forum to phase out HFC

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

HFC refrigerants.17 However, for the purposes of this analysis, it is assumed that this industry is operating under

business as usual and this analysis estimates that by 2016—in the absence of this proposed rulemaking—70% of

firms would use R‐404A or R‐507A in new supermarket and condensing unit systems, and would therefore be

affected by regulatory options 7a, 7b, or 7c.  In addition, in the absence of this proposed rulemaking, this

analysis estimates that 25% of companies would have CFC‐12, R‐502, or HCFC‐22 systems in operation in 2016

that would be available for retrofitting—with R‐404A, R‐507A, or R‐422D being the preferred retrofit

refrigerant—and would thus be affected by regulatory options 8a, 8b, or 8c.   

Applying these assumptions, Table 23 below presents the estimated number of small businesses expected to be

directly affected by the regulatory options under consideration applicable to remote retail food refrigeration

systems. Not all of these small businesses will be affected in 2016 (the year that the rulemaking proposes to list

as unacceptable 10 high‐GWP HFCs/HFC blends in supermarkets and condensing units); instead, a proportion of

these businesses are expected to be affected in each of the approximately 15 years after 2016, as existing retail

food equipment reaches end‐of‐life.

Table 23: Estimated Number of Retail Food Small Businesses Affected by the Regulatory Options*

NAICS

Code Industry Name

Estimated Number of Small Businesses Affected by Regulatory

Option under Consideration

7a 7b 7c 8a 8b 8c

44511 Supermarkets and other grocery (except

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

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

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

44522 Specialty food stores – fish and seafood

markets 1,083 1,083 1,083 387 387 387

44523 Specialty food stores – fruit and vegetable

markets 1,388 1,388 1,388 496 496 496

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

445292 Specialty food stores – confectionary and

nut stores 1,120 1,120 1,120 400 400 400

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

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

453110 Florist 11,201 11,201 11,201 4,000 4,000 4,000

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

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

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

                                                            

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

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

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

new purchases of point‐of‐sale units and large refrigeration installations” (CGF 2010).   
Economic Impact Screening Analysis    39

NAICS

Code Industry Name

Estimated Number of Small Businesses Affected by Regulatory

Option under Consideration

7a 7b 7c 8a 8b 8c

452910 Warehouse clubs and superstores 0 0 0 0 0 0

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

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

72112 Casino hotels 14 14 14 5 5 5

72211 Full‐service Restaurants 99,467 99,467 99,467 35,524 35,524 35,524

722211 Limited‐service restaurants 72,435 72,435 72,435 25,870 25,870 25,870

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

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

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

TOTAL 368,001 368,001 368,001 131,429 131,429 131,429

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

6.1.2 Self‐Contained Retail Food Equipment and Vending Machines

This subsector includes self‐contained retail food refrigerators and freezers—which are commonly located in

supermarkets, warehouse clubs/superstores, convenience stores, restaurants, bars, cafeterias, hotels, schools,

hospitals—and vending machines—which are commonly located in offices, public locations, plants, and

factories. Self‐contained systems integrate all components within their structure, and can be further

characterized by their operating temperature (e.g., medium vs. low), door type (e.g., transparent, solid,

without), and orientation (e.g., horizontal, semivertical, vertical).  Vending machines can similarly be further

characterized by their operating temperature (e.g., medium vs. low), machine use designation (e.g., indoor vs.

indoor/outdoor), and front type (e.g., glassfront vs. solid‐door).

For this subsector, it is assumed that costs associated with using an alternative refrigerant to the ones listed by

the proposed rulemaking as unacceptable in new equipment would be incurred by the manufacturers of the

equipment.  As such, no end‐users of the equipment are identified as being affected by regulatory options 9a,

9b, 9c, or 9d.  This is because self‐contained retail food equipment and vending machines are factory built and

pre‐charged prior to shipment to end‐users. Further, this analysis assumes that refrigerant retrofits are not

performed on self‐contained retail food equipment or vending machines (as discussed further below); thus, no

entities are identified as being affected by regulatory options 10a, 10b, or 10c.  

Manufacturers of commercial self‐contained retail food refrigerators/freezers and vending machines have been

identified by the Department of Energy (DOE) in support of proposed rulemakings for the Appliance and

Equipment Standards Program.  Based on the DOE’s assessments, there are a total of 33 commercial

refrigeration equipment manufacturers and 10 manufacturers of beverage vending machines (DOE 2013; DOE

2008). No data are available on the number of manufacturers of other (non‐beverage) refrigerated vending

machines, although reports suggest that beverage vending machines represent at least half—and as much as

90%—of the refrigerated vending machine market (DOE 2009).  

Self‐Contained Retail Food Equipment. Industry data for commercial refrigeration equipment is matched to

NAICS code 333415, air‐conditioning and warm air heating equipment and commercial and industrial
Economic Impact Screening Analysis    40

refrigeration equipment manufacturing. The small business threshold for this industry is defined as a firm with

750 employees or fewer.  Based on this, DOE identified a total of 30 commercial refrigeration equipment

manufacturers that are small businesses.  

Like the remote retail food subsector, developments in the self‐contained retail food equipment and vending

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

approvals for alternative refrigerants used in self‐contained retail food systems (i.e., propane and carbon

dioxide, approved in 2011 and 2009, respectively) give companies additional options for transition. In addition,

industry pledges to phase out HFCs (e.g., the Consumer Goods Forum’s pledge to phase out HFC refrigerants in

newly purchased equipment by the end of 2015) may create momentum in the transition away from HFCs.

However, for the purposes of this analysis, it is assumed that this industry is operating under business as usual.

For the purposes of this analysis, it is assumed that 30% of the new equipment market would transition to non‐

HFC refrigerants by 2016 in the absence of this proposed rulemaking. Of the 70% of the market that does not

transition away from HFC refrigerants, it is estimated based on EPA’s Vintaging Model that 10% would continue

to use R‐404A in new equipment, while 60% would use HFC‐134a.  If regulatory option 9a is adopted, the 10% of

the market that is assumed to continue to use R‐404A would be affected.  Accordingly, three small businesses,

or 10% of the small businesses identified by DOE (2009), are expected to be affected by this rulemaking if option

9a is adopted. If regulatory option 9b or 9c is adopted, the 70% of the market that is assumed to continue to use

R‐404A or HFC‐134a would be affected.  As such, 21 small businesses, or 70% of the small businesses identified

by DOE (2009), are expected to be affected by this rulemaking if option 9b or 9c is adopted. If regulatory option

9d is adopted, the 70% of the market that is assumed to continue to use an HFC refrigerant would similarly be

affected, except for large systems that already use HFC‐134a (with “large” defined as those that contain a

compressor that is greater than 3/4 horsepower (HP)). Assuming that 10% of new systems contain a compressor

that is greater than 3/4 HP and that 10% of those systems use R‐404A, 18 small businesses, or 61% of the small

businesses identified by DOE (2009), are expected to be affected.   

As previously noted, no small businesses are expected to be affected by this rulemaking if option 10a, 10b, or

10c is adopted. While it is estimated that 3% of self‐contained retail food equipment would still have CFC‐12, R‐

502, or HCFC‐22 systems in operation in 2016 that would be available for retrofitting, it is assumed that end‐

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

high costs of retrofitting equipment relative to the cost of purchasing a new unit.

Vending Machines. Industry data for vending machine is matched to NAICS code 333311, automatic vending

machine manufacturing.  The SBA defines small business manufacturing enterprises for automatic vending

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

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

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

that 12 small‐business refrigerated vending machine manufacturers could be affected by the rulemaking.18

                                                            

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

the purposes of this analysis, it is assumed that the number of small business beverage vending machine manufacturers is
Economic Impact Screening Analysis    41

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

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

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

refrigerants. However, for the purposes of this analysis, it is assumed that this industry is operating under

business as usual. It is assumed that 40% of the market would already have transitioned to an alternative

refrigerant in new equipment by 2016. It is also assumed that of the 60% of the market that does not transition

away from HFC refrigerants, 50% would continue to use HFC‐134a in new equipment and 10% would continue to

use R‐404A, with R‐404A predominantly being used in low temperature applications (i.e., which operate at or

below 0°C) used for ice cream and other frozen goods. As a result, it is estimated that 10% of small businesses

(equivalent to one small business), could be affected by this rulemaking if option 9a is adopted, and 60% of the

small businesses identified by DOE (2009) (equivalent to seven small businesses), could be affected by this

rulemaking if option 9b, 9c, or 9d is adopted.  Additionally, due to the lifetime of the equipment and the direct

transition from CFCs to HFCs in this end‐use before 1996, it is estimated that no vending machines would have

CFC‐12, R‐502, or HCFC‐22 systems in operation in 2016 that would be available for retrofitting. Thus, no small

businesses would be expected to be affected by this rulemaking if option 10a, 10b, or 10c were adopted.  

Table 23 below summarizes the estimated number of small businesses expected to be directly affected by the

regulatory options applicable to new self‐contained retail food refrigerator/freezers and vending machines. As

already stated, no small businesses are expected to be affected by the regulatory options applicable to

equipment retrofits (i.e., options 10a, 10b, and 10c).

Table 24: Estimated Number of Self‐Contained Retail Food Equipment and Vending Machine Manufacturing

Small Businesses Affected by the Regulatory Options  

NAICS

Code Industry Name

Estimated Number of Small Businesses

Affected by Regulatory Option

9a 9b 9c 9d

333415

Air‐conditioning and warm air heating equipment and commercial

and industrial refrigeration equipment manufacturing

3 21 21 18

333311 Automatic vending machine manufacturing <3 7 7 7

Sources: DOE (2013); DOE (2008)

6.2 Estimated Economic Impact on Affected Small Entities

6.2.1 Remote Retail Food Equipment (Supermarkets and Condensing Units)

For the two sets of regulatory options that affect remote retail food equipment (i.e., supermarkets and

condensing units), covering all six options, the potential economic impact on small businesses was calculated by

comparing the estimated annualized compliance cost to average annual sales per firm (i.e., sales test).  For

modeling purposes, compliance costs were based on the assumption that under all possible options (i.e., 7a, 7b,

7c, 8a, 8b, and 8c) end‐users would use R‐407A in new and retrofitted systems in place of R‐404A and R‐507A.

The cost of using this alternative is assumed to be negligible (i.e. zero dollars) based on cost assumptions

                                                            

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

business refrigerated vending machine manufacturers could range from seven to 12 small businesses.
Economic Impact Screening Analysis    42

identified in EPA’s report on Global Mitigation of Non‐CO2 Greenhouse Gases: 2010‐2030 (EPA 2013).  As

presented in Table 25, since annualized compliance costs of using alternative refrigerants are assumed to be

negligible, annual compliance costs as a percentage of average annual sales per firm are assumed to be zero.19

Table 25: Estimated Economic Impact on Small Entities with Remote Retail Food Equipment for Options 7a,

7b, 7c, 8a, 8b, and 8c (Sales Test)

NAICS

Code Industry Name Annual Compliance Cost as a Percentageof Average Annual Sales per Firm

44511 Supermarkets and other grocery (except convenience) stores 0%

44512 Convenience stores 0%

44521 Specialty food stores – meat markets 0%

44522 Specialty food stores – fish and seafood markets 0%

44523 Specialty food stores – fruit and vegetable markets 0%

445291 Specialty food stores – baked goods stores 0%

445292 Specialty food stores – confectionary and nut stores 0%

445299 All other specialty food stores 0%

4453 Beer, wine, and liquor stores 0%

453110 Florist 0%

44711 Gasoline stations with convenience stores 0%

44719 Other gasoline stations 0%

446110 Pharmacies and drug stores 0%

452910 Warehouse clubs and superstores 0%

452990 All other general merchandise stores 0%

72111 Hotels (except casino hotels) and motels 0%

72112 Casino hotels 0%

72211 Full‐service Restaurants 0%

722211 Limited‐service restaurants 0%

722212 Cafeterias, buffets, and grill buffets 0%

722213 Snack and nonalcoholic beverage bars 0%

72241 Drinking places 0%

6.2.2 Self‐Contained Retail Food Equipment and Vending Machines

For regulatory option 9a, which affects manufacturers of self‐contained refrigerators/freezers and vending

machines, the potential economic impact on small businesses was calculated based on the assumption that all

manufacturers projected to use R‐404A would instead use HFC‐134a in new equipment. If HFC‐134a were used

in place of R‐404A, manufacturers would be required to use a slightly larger compressor to accommodate the

refrigerant. For the purposes of this analysis, it is assumed that the cost of an HFC‐134a compressor is $1/unit

more than an R‐404A compressor. Based on DOE (2009), it is additionally assumed that 55,000 R‐404A self‐

contained refrigerators/freezers and 34,200 R‐404A vending machines are sold into the market each year, each

containing one compressor. As a result, a maximum annual cost of $55,000 and $34,200 is assumed for

manufacturers of self‐contained refrigerators/freezers and vending machines, respectively.

                                                            

19 EPA (2013) assumes that there is a one‐time conversion cost associated with performing a refrigerant retrofit on a

remote retail food system.  However, since the proposed rulemaking does not require end‐users to retrofit their

equipment, but rather only prohibits the use of certain refrigerants to be used as a retrofit, the labor costs associated with

performing the retrofit itself are not associated with the proposed rulemaking and therefore not included in this analysis.
Economic Impact Screening Analysis    43

For regulatory option 9b, which also affects manufacturers of self‐contained refrigerators/freezers and vending

machines, the potential economic impact on small businesses was calculated based on the assumption that all

manufacturers of self‐contained refrigerators and freezers would use hydrocarbons (R‐290) and all

manufacturers of vending machines would use carbon dioxide in place of HFC refrigerants in new equipment.

Specifically, for manufacturers of self‐contained refrigerators/freezers, it is assumed that there is a one‐time

investment of $50,000 associated with using R‐290 in place of an HFC refrigerant. This estimate is based on

industry input, which assumes the need for manufacturers to (a) convert their facility to accommodate a

flammable refrigerant (e.g., installing sensors and storage capacity) and (b) test and certify their equipment to

UL standards. No incremental manufacturing costs are assumed given that the cost to consumers of R‐290 self‐

contained systems is on par with the cost of systems that contain an HFC (EPA 2013). For vending machine

manufactures, it is similarly assumed that there is a one‐time cost associated with using carbon dioxide in place

of HFC refrigerants. An investment of $100,000 is assumed to be required for the purchase of new equipment to

support the testing, certification, and manufacture of vending machines that contain carbon dioxide.20  

Regulatory options 9c and 9d apply most of the same assumptions described above for regulatory option 9b.  

However, for regulatory option 9c, it is assumed that manufacturers of low temperature vending machines

would use HFC‐134a in place of R‐404A. Similar to the assumptions used for option 9a, it is assumed that the

incremental cost of using HFC‐134a in lieu of R‐404A is $1/unit, resulting in a maximum total annual cost per

small business of $34,200. For regulatory option 9d, it is assumed that manufacturers of large self‐contained

equipment (defined here as those that contain a compressor greater than 3/4 HP) would continue to use HFC‐

134a or would use HFC‐134a in lieu of R‐404A.  In the case of the latter, an incremental cost of $1/unit is

assumed with a total of 5,500 R‐404A large self‐contained refrigerators/freezers being sold into the market each

year, resulting in a maximum total annual cost per small business of $5,500.21   

For manufacturers of both self‐contained refrigerators/freezers and vending machines affected by regulatory

options 9a, 9b, 9c, and 9d, average annual sales per establishment were calculated by dividing total value of

shipments (as a proxy for sales) by the number of establishments, for each small business establishment size

(e.g., 0‐4 employees, 5‐9 employees, 10‐19 employees, etc.). Because average annual sales were calculated by

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

annual compliance costs represent a higher percentage of annual sales for smaller establishments. Table 26

below presents the estimated economic impact of regulatory options 9a, 9b, 9c, and 9d on small businesses in

the self‐contained retail food and vending machine sectors.

                                                            

20 These costs may be partially offset by cost pass‐through to the consumer. One report indicated that vending machines

that are charged with carbon dioxide cost 2‐3%, or roughly $100, more than vending machines that are charged with HFCs

(DOE 2009). 21 Applying the assumptions noted above that 10% of new systems contain a compressor that is greater than 3/4 HP and

that 10% of those systems use R‐404A.
Economic Impact Screening Analysis    44

Table 26: Estimated Economic Impact on Small Entities in the Self‐Contained Retail Food and Vending Machine

Sectors by Regulatory Option (Sales Test)

NAICS

Code Industry Name

Annual Compliance Cost as a Percentage of Average Annual

Sales per Firm

9a 9b 9c 9d

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

<0.1%–13.3% <0.1%–1.1% <0.1%–1.1% <0.1%–1.3%

333311 Automatic vending machine manufacturing <0.1%–13.2% <0.1%–3.6% <0.1%–13.2% <0.1%–3.6%

For the regulatory options that could affect end‐users of self‐contained refrigerators/freezers and vending

machines (i.e., 10a, 10b, and 10c), the potential economic impact on small businesses was estimated to be zero,

given the assumption that no refrigerant retrofits of this equipment are performed.
Economic Impact Screening Analysis    45

7 Conclusion

This screening analysis finds that the proposed rulemaking can be presumed to have no significant economic

impact on a substantial number of small entities (SISNOSE), as described below. This determination applies to

the proposed regulatory options, as well as any combination of the various options under consideration. The

discussion below describes the decision matrix used to make this determination, as well as the aggregated small

business impacts associated with the proposed regulatory options.

7.1 Decision Matrix for Determining Significant Economic Impact on a

Substantial Number of Small Entities		

This analysis uses the matrix shown in Table 27 as the decision process for determining whether this rulemaking

would impose a SISNOSE. The economic threshold levels are set conservatively at 1% and 3% of sales, consistent

with similar analyses on other Title VI rules. These thresholds are set conservatively because the proposed

rulemaking affects small businesses in a range of different industries, which may have significantly different

profit margins and abilities to pass compliance costs along to customers. Based on this decision matrix, this

screening analysis finds that the proposed rulemaking can be presumed to have no SISNOSE.  

Table 27: Decision Matrix for Certifying SISNOSE

Economic Impact

Number of Small Entities

Subject to the Rule and

Experiencing Given

Economic Impact

Percent of All Small

Entities Subject to the Rule

That are Experiencing

Given Economic Impact

Certification Category

Less than 1% for all affected

small entities Any number Any percent Presumed No SISNOSE  

1% or more for one or more

affected small entities

Fewer than 100 Less than 20 percent Presumed No SISNOSE  

Fewer than 100 20% or more Uncertain – No Presumption

Between 100 and 999 Less than 20% Presumed No SISNOSE

Between 100 and 999 20% or more Uncertain – No Presumption

1000 or more Any percent Uncertain – No Presumption  

Greater than 3% for one or

more affected small entities Fewer than 100 Less than 20% Presumed No SISNOSE

Fewer than 100 20% or more Uncertain – No Presumption

Between 100 and 999 Less than 20% Uncertain – No Presumption

Between 100 and 999 20% or more

Presumed Ineligible for

Certification

1000 or more Any percentage

Presumed Ineligible for

Certification
Economic Impact Screening Analysis    46

7.2 Aggregated Small Business Impacts of Proposed Regulatory Actions

Table 28: Summary of the Small Business Impact of the Proposed Regulatory Options at 7% Discount Rate

summarizes the total number of small businesses that are expected to be subject to the proposed regulation, as

well as the total economic impact on those small businesses using a 7% discount rate. Table 28: Summary of the

Small Business Impact of the Proposed Regulatory Options at 7% Discount Rate9 summarizes the total number

of small businesses that are expected to be subject to the proposed regulation, as well as the total economic

impact on those small businesses using a 3% discount rate. These tables assume a rulemaking that includes

regulatory options 1c, 2, 5b, 7b, 8b, 9b, and 10c. (Appendix A shows the economic impacts associated with all of

the regulatory options under consideration.)

As shown, an estimated 500,000 small businesses may be subject to the proposed regulatory actions, the vast

majority of which are not expected to experience adverse economic impacts. Nearly all of the small businesses

are in the commercial refrigeration sector. The foam sector is expected to account for nearly all of total

annualized compliance costs experienced by small businesses; although these costs would be borne by about

250 small businesses, the average sales per small business are relatively high in this industry, keeping costs for

the majority of those foam manufacturers below 1% of annual sales.  

Table 28: Summary of the Small Business Impact of the Proposed Regulatory Options at 7% Discount Rate

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact

on Small

Businesses

MVACs 1c 336111 Automobile manufacturing 155 $0*

336112 Light truck and utility vehicle manufacturing 43 $0*

Aerosols 2 325620 Perfumes, makeups and other toiletries  ‐    $0

325612 Polishes and other sanitation goods  ‐    $0

325520 Adhesive manufacturing  ‐    $0

324191 Petroleum lubricating oil and grease

manufacturing ‐    $0

325510 Paint and coating manufacturing  ‐    $0

325998 All Other miscellaneous chemical product and

preparation manufacturing 2  ‐$430,000

325412 Pharmaceutical preparation manufacturing  ‐    $0

325199 All other basic organic chemical

manufacturing ‐    $0

339113 Surgical appliance and supplies manufacturing  ‐    $0

Foams 5b 326140 Polystyrene foam product manufacturing 141 $10,850,000

335222 Household refrigerator and home freezer

manufacturing 9 $1,020,000

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

47  ‐$70,000

326150 Urethane and other foam product (except

polystyrene) manufacturing 56 $2,760,000
Economic Impact Screening Analysis    47

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact

on Small

Businesses

Retail

Food

7b 44511 Supermarkets and other grocery (except

convenience) stores 23,332 $0

44512 Convenience stores 11,842 $0

44521 Specialty food stores – meat markets 3,172 $0

44522 Specialty food stores – fish and seafood

markets 1,083 $0

44523 Specialty food stores – fruit and vegetable

markets 1,388 $0

445291 Specialty food stores – baked goods stores 1,554 $0

445292 Specialty food stores – confectionary and nut

stores 1,120 $0

445299 All other specialty food stores 2,214 $0

4453 Beer, wine, and liquor stores 15,888 $0

453110 Florist 11,201 $0

44711 Gasoline stations with convenience stores 30,607 $0

44719 Other gasoline stations 8,513 $0

446110 Pharmacies and drug stores 11,948 $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise stores 4,816 $0

72111 Hotels (except casino hotels) and motels 21,494 $0

72112 Casino hotels 14 $0

72211 Full‐service Restaurants 99,467 $0

722211 Limited‐service restaurants 72,435 $0

722212 Cafeterias, buffets, and grill buffets 2,874 $0

722213 Snack and nonalcoholic beverage bars 17,114 $0

72241 Drinking places 25,926 $0

8b 44511 Supermarkets and other grocery (except

convenience) stores 8,333 $0

44512 Convenience stores 4,229 $0

44521 Specialty food stores – meat markets 1,133 $0

44522 Specialty food stores – fish and seafood

markets 387 $0

44523 Specialty food stores – fruit and vegetable

markets 496 $0

445291 Specialty food stores – baked goods stores 555 $0

445292 Specialty food stores – confectionary and nut

stores

400 $0

445299 All other specialty food stores 791 $0

4453 Beer, wine, and liquor stores 5,674 $0

453110 Florist 4,000 $0
Economic Impact Screening Analysis    48

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact

on Small

Businesses

44711 Gasoline stations with convenience stores 10,931 $0

44719 Other gasoline stations 3,040 $0

446110 Pharmacies and drug stores 4,267 $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise stores 1,720 $0

72111 Hotels (except casino hotels) and motels 7,676 $0

72112 Casino hotels 5 $0

72211 Full‐service Restaurants 35,524 $0

722211 Limited‐service restaurants 25,870 $0

722212 Cafeterias, buffets, and grill buffets 1,026 $0

722213 Snack and nonalcoholic beverage bars 6,112 $0

72241 Drinking places 9,259 $0

9b

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

21 $100,000

333311 Automatic vending machine manufacturing 7 $70,000

10c NA None  ‐    $0

TOTAL for 1c, 2 5b, 7b, 8b, 9b, and 10c 499,868 $14,300,000

* Costs are assumed to be fully passed through to consumers and thus shown as zero in this table.

Table 28: Summary of the Small Business Impact of the Proposed Regulatory Options at 3% Discount Rate

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic

Impact on Small

Businesses

MVACs 1c 336111 Automobile manufacturing 155 $0

336112 Light truck and utility vehicle manufacturing 43 $0

Aerosols 2 325620 Perfumes, makeups and other toiletries  ‐    $0

325612 Polishes and other sanitation goods  ‐    $0

325520 Adhesive manufacturing  ‐    $0

324191 Petroleum lubricating oil and grease

manufacturing ‐    $0

325510 Paint and coating manufacturing  ‐    $0

325998 All Other miscellaneous chemical product and

preparation manufacturing 2  ‐$450,000

325412 Pharmaceutical preparation manufacturing  ‐    $0

325199 All other basic organic chemical

manufacturing ‐    $0

339113 Surgical appliance and supplies manufacturing  ‐    $0
Economic Impact Screening Analysis    49

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic

Impact on Small

Businesses

Foams 5b 326140 Polystyrene foam product manufacturing 141 $7,260,000

335222 Household refrigerator and home freezer

manufacturing 9 $410,000

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

47  ‐$800,000

326150 Urethane and other foam product (except

polystyrene) manufacturing 56 $1,850,000

Retail

Food

7b 44511 Supermarkets and other grocery (except

convenience) stores 23,332 $0

44512 Convenience stores 11,842 $0

44521 Specialty food stores – meat markets 3,172 $0

44522 Specialty food stores – fish and seafood

markets 1,083 $0

44523 Specialty food stores – fruit and vegetable

markets 1,388 $0

445291 Specialty food stores – baked goods stores 1,554 $0

445292 Specialty food stores – confectionary and nut

stores 1,120 $0

445299 All other specialty food stores 2,214 $0

4453 Beer, wine, and liquor stores 15,888 $0

453110 Florist 11,201 $0

44711 Gasoline stations with convenience stores 30,607 $0

44719 Other gasoline stations 8,513 $0

446110 Pharmacies and drug stores 11,948 $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise stores 4,816 $0

72111 Hotels (except casino hotels) and motels 21,494 $0

72112 Casino hotels 14 $0

72211 Full‐service Restaurants 99,467 $0

722211 Limited‐service restaurants 72,435 $0

722212 Cafeterias, buffets, and grill buffets 2,874 $0

722213 Snack and nonalcoholic beverage bars 17,114 $0

72241 Drinking places 25,926 $0

8b 44511 Supermarkets and other grocery (except

convenience) stores 8,333 $0

44512 Convenience stores 4,229 $0

44521 Specialty food stores – meat markets 1,133 $0

44522 Specialty food stores – fish and seafood

markets 387 $0
Economic Impact Screening Analysis    50

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic

Impact on Small

Businesses

44523 Specialty food stores – fruit and vegetable

markets 496 $0

445291 Specialty food stores – baked goods stores 555 $0

445292 Specialty food stores – confectionary and nut

stores

400 $0

445299 All other specialty food stores 791 $0

4453 Beer, wine, and liquor stores 5,674 $0

453110 Florist 4,000 $0

44711 Gasoline stations with convenience stores 10,931 $0

44719 Other gasoline stations 3,040 $0

446110 Pharmacies and drug stores 4,267 $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise stores 1,720 $0

72111 Hotels (except casino hotels) and motels 7,676 $0

72112 Casino hotels 5 $0

72211 Full‐service Restaurants 35,524 $0

722211 Limited‐service restaurants 25,870 $0

722212 Cafeterias, buffets, and grill buffets 1,026 $0

722213 Snack and nonalcoholic beverage bars 6,112 $0

72241 Drinking places 9,259 $0

9b

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing

21 $100,000

333311 Automatic vending machine manufacturing 7 $50,000

10c NA None  ‐    $0

TOTAL for 1c, 2 5b, 7b, 8b, 9b, and 10c 499,868 $10,710,000

Table 30 aggregates the estimated economic impacts on small businesses, according to the categories set out in

the SISNOSE decision matrix. Using the decision criteria established in Table 27, this screening analysis suggests

that this rulemaking could be presumed to have no SISNOSE for the following reasons:

 More than 99% of small businesses subject to this proposed rulemaking would be expected to

experience zero compliance costs.

 For about 190 small businesses that are expected to incur compliance costs as a result of this

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

 This analysis indicates that about 120 of the nearly 500,000 affected small businesses—or <0.1%—could

incur costs in excess of 1% of annual sales, and that less than 50 small businesses could incur costs in
Economic Impact Screening Analysis    51

excess of 3% of annual sales. These estimates are less than the thresholds for a substantial number

determination (i.e., less than 100 businesses, and less than 20% of affected entities).

While Table 30 assumes a proposed rulemaking that includes regulatory options 1c, 2, 5b, 7b, 8b, 9b, and 10c,

analysis of the other regulatory options under consideration similarly shows that all regulatory options present

no SISNOSE.

Table 29: Aggregated Economic Impacts on Small Businesses

Economic

Impact   Industry Impacted

Number of Small

Entities Subject to

the Rule and

Experiencing Given

Economic Impact  

Percent of All Small

Entities Subject to

the Rule That are

Experiencing Given

Economic Impact

Less than 1%

for all affected

small entitiesa

     

326140 Polystyrene foam product manufacturing 78  

0.04%

335222 Household refrigerator and home freezer

manufacturing 9  

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing 59  

326150 Urethane and other foam product (except

polystyrene) manufacturing 34  

333311 Automatic vending machine manufacturing 7  

   Total 187

1% or more for

one or more

affected small

entitiesb

326140 Polystyrene foam product manufacturing 63  

0.02%

326150 Urethane and other foam product (except

polystyrene) manufacturing 22  

333415

Air‐conditioning and warm air heating

equipment and commercial and industrial

refrigeration equipment manufacturing 24  

333311 Automatic vending machine Manufacturingc 7  

   Total 117  

Greater than

3% for one or

more affected

small entities

326140 Polystyrene foam product manufacturing 28  

0.01%

326150 Urethane and other foam product (except

polystyrene) manufacturing 9  

333311 Automatic vending machine manufacturingc 7  

   Total 44  

Totals may not sum due to independent rounding.

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

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

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

c This represents the high end of estimated costs for commercial refrigeration equipment manufacturers and automatic vending machine

manufacturers; at the low end, none of these businesses would incur costs in excess of 1% of annual sales.
Economic Impact Screening Analysis    52

Appendix A: Summary of the Small Business Impact of All Regulatory

Options

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact on

Small Businesses

MVACs

1a

336111 Automobile Manufacturing    

155   $0

336112 Light truck and utility vehicle

manufacturing

   

43   $0

1b

336111 Automobile Manufacturing    

155   $0

336112 Light truck and utility vehicle

manufacturing

   

43   $0

1c 336111 Automobile Manufacturing    

155   $0

336112 Light truck and utility vehicle

manufacturing

   

43   $0

Aerosols 2 325620 Perfumes, makeups and other

toiletries ‐    $0

325612 Polishes and other sanitation goods  ‐    $0

325520 Adhesive manufacturing  ‐    $0

324191 Petroleum lubricating oil and grease

manufacturing ‐    $0

325510 Paint and coating manufacturing  ‐    $0

325998

All other miscellaneous chemical

product and preparation

manufacturing

2   ‐$430,000

325412 Pharmaceutical preparation

manufacturing ‐    $0

325199 All other basic organic chemical

manufacturing ‐    $0

339113 Surgical appliance and supplies

manufacturing ‐    $0

Foams 3 326140 Polystyrene foam product

manufacturing 141   $10,850,000

335222 Household refrigerator and home

freezer manufacturing 1   $160,000

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

9   ‐$10,000

326150 Urethane and other foam product

(except polystyrene) manufacturing 2   $40,000

4 326150 Urethane and other foam product

(except polystyrene) manufacturing 1   $20,000

5a 326140 Polystyrene foam product

manufacturing 141   $10,850,000
Economic Impact Screening Analysis    53

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact on

Small Businesses

335222 Household refrigerator and home

freezer manufacturing 9   $1,020,000

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

47   ‐$70,000

326150 Urethane and other foam product

(except polystyrene) manufacturing 73   $10,490,000

5b 326140 Polystyrene foam product

manufacturing 141   $10,850,000

335222 Household refrigerator and home

freezer manufacturing 9   $1,020,000

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

47   ‐$70,000

326150 Urethane and other foam product

(except polystyrene) manufacturing 56   $2,760,000

5c 326140 Polystyrene foam product

manufacturing 141   $10,850,000

335222 Household refrigerator and home

freezer manufacturing 9   $1,020,000

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

47   ‐$70,000

326150 Urethane and other foam product

(except polystyrene) manufacturing 123   $13,740,000

6 326150 Urethane and other foam product

(except polystyrene) manufacturing ‐    $0

Retail Food 7a, 7b, or

7c 44511 Supermarkets and other grocery(except convenience) stores 23,332   $0

44512 Convenience stores 11,842   $0

44521 Specialty food stores – meat

markets 3,172   $0

44522 Specialty food stores – fish and

seafood markets 1,083   $0

44523 Specialty food stores – fruit and

vegetable markets 1,388   $0

445291 Specialty food stores – baked goods

stores 1,554   $0

445292 Specialty food stores –

confectionary and nut stores 1,120   $0

445299 All other specialty food stores 2,214   $0

4453 Beer, wine, and liquor stores 15,888   $0

453110 Florist 11,201   $0
Economic Impact Screening Analysis    54

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact on

Small Businesses

44711 Gasoline stations with convenience

stores 30,607   $0

44719 Other gasoline stations 8,513   $0

446110 Pharmacies and drug stores 11,948   $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise

stores 4,816   $0

72111 Hotels (except casino hotels) and

motels 21,494   $0

72112 Casino hotels 14   $0

72211 Full‐service restaurants 99,467   $0

722211 Limited‐service restaurants 72,435   $0

722212 Cafeterias, buffets, and grill buffets 2,874   $0

722213 Snack and nonalcoholic beverage

bars 17,114   $0

72241 Drinking places 25,926   $0

8a, 8b, or

8c 44511 Supermarkets and other grocery(except convenience) stores 8,333   $0

44512 Convenience stores 4,229   $0

44521 Specialty food stores – meat

markets 1,133   $0

44522 Specialty food stores – fish and

seafood markets 387   $0

44523 Specialty food stores – fruit and

vegetable markets 496   $0

445291 Specialty food stores – baked goods

stores

555   $0

445292 Specialty food stores –

confectionary and nut stores

400   $0

445299 All other specialty food stores 791   $0

4453 Beer, wine, and liquor stores 5,674   $0

453110 Florist 4,000   $0

44711 Gasoline stations with convenience

stores 10,931   $0

44719 Other gasoline stations 3,040   $0

446110 Pharmacies and drug stores 4,267   $0

452910 Warehouse clubs and superstores  ‐    $0

452990 All other general merchandise

stores 1,720   $0

72111 Hotels (except casino hotels) and

motels 7,676   $0

72112 Casino hotels 5   $0
Economic Impact Screening Analysis    55

Sector

Regulatory

Option

Number

NAICS

Code Industry Name

Estimated

Number of Small

Businesses

Affected by the

Rule

Total Annualized

Economic Impact on

Small Businesses

72211 Full‐service restaurants 35,524   $0

722211 Limited‐service restaurants 25,870   $0

722212 Cafeterias, buffets, and grill buffets 1,026   $0

722213 Snack and nonalcoholic beverage

bars 6,112   $0

72241 Drinking places 9,259   $0

9a

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

3   $60,000

333311 Automatic vending machine

manufacturing <3   $30,000

9b

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

21   $100,000

333311 Automatic vending machine

manufacturing 7   $70,000

9c

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

21   $100,000

333311 Automatic vending machine

manufacturing 7   $90,000

9d

333415

Air‐conditioning and warm air

heating equipment and commercial

and industrial refrigeration

equipment manufacturing

18   $90,000

333311 Automatic vending machine

manufacturing 7   $70,000

10a, 10b,

10c NA None ‐    $0
Economic Impact Screening Analysis    56

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