MEMORANDUM

TO : Debbie Ottinger , EPA

FROM : Carrie Richardson Fry and Karen Schaffner, RTI

DATE : July 14 , 2014

SUBJECT : Economic Analysis of Adding Chemical

- Specific and Default GWPs to Table A

- 1

Proposed changes to the Greenhouse Gas Reporting Rule , including updates to subpart A and conforming changes to subpart I and s ubpart L , were evaluated to determine their economic impact s on facilities covered by the subparts related to emissions or supply of fluorinated GHGs and HTFs. The proposed changes i nclude the addition of both chemical specific and default GWPs for fluorinated GHGs that are not currently listed on Table A

- 1 of subpart A

. These GWPs would be added to Table A

- 1. Impact of Added Chemical

- Specific and Default GWPs on Rule Applicability

. All of the GHGs to which the new chemical

- specific and default GWPs would be applied are fluorinated GHGs. Nine subparts cover industries that emit or supply fluorinated GHGs. We have concluded that the applicability of these subparts would not be affe cted by EPA’s proposed addition of chemical

- specific and default GWPs. Table 1 summarizes the rationale for this
assessment.

Table 1 . Rationale for Assessment of Impact

Subpart Not Affected / Affected by Addition of GWPs Rationale

F

– Aluminum Production Not Affected All facilities must report

- no threshold ; also, fluorinated GHGs emitted are not affected by this action

I

– Electronics Manufacturing Not Affected Threshold based on emissions of fluorinated GHGs whose GWPs are not affected by this action

L

- Fluorinated Gas Production Not Affected All facilities covered by subpart already expected to be above thre sh old

. Facilities producing fluorinated
a ne sthetics , which currently fall below the threshold, will not experience a n increase in GW Ps. O

- HCFC

- 22 Production and HFC

- 23 Destruction Not Affected Threshold not based on CO 2 e ; also, fluorinated GHG emitted is not affected by this action

T

– Magnesium Production Not Affected CO 2 e emissions overwhelmingly dominated by fluorinated GHGs whose GWPs are not affected by this action . (Affected GHGs comprise less than one percent of one facility’s CO 2 e emissions.)Table 1 . Rationale for Assessment of Impact

Subpart Not Affected / Affected by Addition of GWPs Rationale DD

- Use of Electric Transmission and Distribution Equipment Not Affected Threshold not based on CO 2 e ; also, fluorinated GHG s emitted are not affected by this action OO

- Suppliers of Industrial Greenhouse Gases Not Affected All importers/exporters of affected fluorinated GHGs
are already expected to be above threshold a QQ

- Imports and Exports of Equipment Pre

– charged with Fluorinated GHGs or Containing Fluorinated GHGs in Closed

– cell Foams Not Affected CO 2 e supplies overwhelmingly dominated by fluorinated GHGs whose GWPs are not affected by this action

SS

- Manufacture of Electric Transmission and Distribution Equipment No t Affected Threshold not based on CO 2 e ; fluorinated GHG s emitted are not affected by this action

a The fluorinated GHGs that are covered by this action and that have significant GWPs are specialty gases used in niche applications as opposed to widely used commodities, and the set of importers and exporters of these GHGs is consequently expected to be small and limited to those already identified as supplying those niche applications

. All of these importers and exporters already report under subpart OO

. Impact of Added Chemical

- Specific and Default GWPs on Subpart I and Subpart L Requirements

. Subpart I and s ubpart L both require facilities to perform preliminary calculations to determine whether the CO 2 e emissions from a stack system or vent, respectively, exceed a threshold or cutoff

. If the cutoff is exceeded, the facility is required to perform emission testing rather than to use an alternative emission estimation approach. In these preliminary calculations, subpart L and subpart I both require facilities to use a default GWP of 2,000 for fluorinated GHGs that do not have GWPs on Table A

- 1. For both subparts, EPA is proposing to replace the default GWP of 2,000 with the chemical

- specific and default GWPs that would be added to Table A

- 1 , which range from less than 1 to 10,000

. For subpart I we have concluded that any impacts on facilities reporting under subpart I were accounted for in the most recent economic analysis for subpart I ( EPA

- HQ

- OAR

- 20 12

- 0934 ). The burden estimates in that analysis were based on the assumption s that facilities would

use the correct GWPs in their calculations , accurately calcula te their CO 2e emissions , and appropriately cat egorize all stack systems as above or below the cutoff. In any event , EPA’s analysis has shown that the impact of the new GWP s on the calculated CO 2e stack emissions of individual facilities is likely to be very small . Based on an analysis of reporting ye ar 2012 emissions, only one facility would see an increase in calculated CO 2 e stack emissions . That increase would be about 3 0 mtCO 2 e , o r 0.2 percent of the facility’s fluorinated GHG stack emissions

. Fifteen facilities would see a decrease in calculated CO 2 e emissions, with the largest decrease being about 700 mtCO 2 e

.For subpart L w e have also concluded that any impacts on facilities were accounted for

in the initial economic analysis for subpart L. The initial economics evaluation for s ubpart L

assum ed that the affected facilities were using GWPs that accurately reflected the actual GWPs of the emitted compounds when performing the applicability calculations required as a part of the s ubpart L rule. We assumed t he facilities were accurately calculatin g their CO 2e emissions and that all process vents were appropriately categorized above or below the cutoff . T herefore , the addition of GWPs to Table A

- 1 of subpart A is not expected to increase the costs incurred by subpart L facilities above those initial ly calculated for subpart L

.