23133598_sUSA: A manufacturers’ association is the latest group to challenge the US government’s new commercial refrigeration energy efficiency rules.

The North American Association of Food Equipment Manufacturers (NAFEM) has filed a petition for court review of the US Department of Energy’s Commercial Refrigeration Energy Efficiency Rule issued on March 28.

The rule updates DOE energy conservation standards set in 2009 and outlines more stringent energy conservation standards for some classes of commercial refrigeration equipment. According to NAFEM, it has unintended consequences that may negatively impact all product categories.

NAFEM’s May 23 filing is said to have come after active participation in the agency’s rule-making process and months of discussion between NAFEM members, staff, legal counsel and close coordination with the Air-Conditioning, Heating and Refrigeration Institute (AHRI), which filed a separate petition on May 27.

Challenge

On behalf of its 155 members, NAFEM is challenging four issues in regulations sponsored by the Department of Energy (DOE) and the US Environmental Protection Agency (EPA). These issues include the limits being placed on high GWP refrigerants and concerns that the proposed new energy efficiency standards are not technologically feasible or economically justifiable

The EPA’s intention to approve “natural” and prohibit some uses of higher GWP gases as part of a phase-down of HFCs is questioned by NAFEM on the grounds of product choice, quality, cost and safety.

The EPA is currently collecting stakeholder information that will lead to a Notice of Proposed Rulemaking (NOPR), in August or September. The EPA is expected to develop a proposed rule that would expand the list of low GWP alternatives for air conditioning and refrigeration applications, and add alternatives, particularly where current options are limited. Refrigerants included in current discussions include ethane, isobutane, propane, the hydrocarbon blend R441A  and R32. Since these refrigerants are flammable, EPA also is planning to propose appropriate use conditions. The proposed compliance date is 2017.

In discussions with the EPA, NAFEM has gone on record to say the proposed rule dramatically and suddenly reduces the variety of refrigeration options and products in the marketplace. Also, the elimination of R134a as a blowing agent in insulation means a costly conversion, which limits a manufacturers’ ability to manufacture custom products.

More importantly, NAFEM maintains the proposed rule creates a number of safety and business concerns with regard to flammability and places an undue burden on small businesses, including cost increases from research and development, listing, plant retrofit, insurance, distribution and employee training.

It also argues that it will increase the operators’ desire to extend the lifetime of older products and limits a manufacturers’ ability to conduct product quality reviews and develop new products.

Most importantly, NAFEM maintains at a minimum, EPA should consider extending the compliance time to accommodate small businesses, considering a manufacturer with hundreds of products – specialised and customised – could require at least 10 years to design a SNAP-compliant product.

Following a meeting last April with the EPA SNAP team, NAFEM discussed the industry’s position and concerns, and identified additional points of information to provide EPA during an upcoming follow-up meeting. Materials are currently under development to identify the pros and cons of each refrigerant option, and specific uses in commercial foodservice equipment, to substantiate a reasonable compliance timeline.

0058Not feasible

NAFEM also maintains that the proposed energy efficiency standards for automatic commercial ice makers are not technologically feasible or economically justifiable.

After review of the DOE’s market assessment, NAFEM identified what the industry believes to be several critical flaws, including an under-estimation of the cost of the regulation; under-estimated equipment lifetime estimates; equipment classes are not fully considered; non-regulatory initiatives, like Energy Star, the Federal Energy Management Programme, local/state regulatory initiatives, LEED, etc, are not fully considered; terms and conditions of the Montreal Protocol are not considered; and the impact on small businesses was not completely examined. Of equal importance, the cumulative regulatory burden of SNAP, CRE, etc, has not been fully considered.

Additionally, NAFEM maintains that the NOPR fails to comply with Executive Orders 12866 and 13563, which required agencies to limit regulations to necessary situations and ensure the negative effects on stakeholders are limited.

11953182_sNAFEM also claims the market assessment by DOE was incorrect because it assumed the marketplace uses incremental mark-ups, one for the baseline appliance, and a reduced mark-up for energy efficient components; it under-estimates the installation costs to operators; the technology suggested doesn’t exist; the testing software used by DOE was not validated with the actual test data; and the prescribed improvements suggested were not tested to determine whether actual improvements were achieved.

As a result, NAFEM has coordinated weekly conference calls with members and AHRI to coordinate its strategy and response, secured an impact statement from the National Restaurant Association (NRA), coordinated members’ government outreach to Congress, and filed comments to the NOPR on behalf of the association last month.

The same standards as indicated in the proposed NOPR for commercial ice makers applied to the CRE standards rulemaking. NAFEM filed comments in November 2012 during the comment period; DOE issued its final rule on this issue in February.

Similar to its ice-maker concerns, NAFEM also claims that the Commercial Refrigeration Equipment Energy Conservation Standards final rule is also not technologically feasible nor economically justifiable, the DOE’s assessment was flawed, and the regulatory burden (both domestic and international), was not fully considered.

After coordinating weekly conference calls with members and AHRI to coordinate strategy and response, and having no other recourse, NAFEM filed a petition for Administrative Appeal on  May 23 to request a negotiated rulemaking. NAFEM says it is awaiting a response from the 7th Circuit US Court of Appeals.

The association is also challenging the walk-in cooler and walk-in freezer standards on the basis and is currently is evaluating the final rule to determine next steps.

 

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