Where Rules Regulate Refrigeration, Uncertainty Surrounds Trump Administration
Randel said the new administration has brought a “severe shift” in the regulatory climate. For the last few years the emphasis was on creating and strengthening regulations. “Now we’re in a climate of reforming the regulatory process and minimizing the burden. There is a shift in mindset,” he said. Randel said he expects to see fewer regulations. President Trump signed an executive order that would require two existing regulations be eliminated for every new regulation, he explained. “He is also proposing spending limits for regulations for each agency. We know that it will be much more difficult for the Environmental Protection Agency or Occupational Safety and Health Administration to initiate and finalize a regulation under these policies.”
OSHA was starting to revise Process Safety Management, but Randel believes it is unlikely that there will be much action to advance a new PSM rule under this administration, which could benefit the natural refrigerant industry. “We feel like there is not a need to add additional burdens to facilities under the PSM regulation and that the PSM program does not need to be amended at this time,” Randel said. “From our position we would be pleased not to see additional restrictions on PSM-covered facilities.”
The Risk Management Rule was finalized by the Obama administration but wasn’t slated to take effect until March 14, 2017. “For rules in that situation, the Trump administration has placed a delay on the effective date,” Randel said, adding that there could be further delays of the effective date as the new policy decision makers in EPA and other agencies look at the late-term regulations finalized by the Obama administration.
Liz Whiteley, former executive director of the North American Sustainable Refrigeration Council, said reversing or vacating parts of regulations is a cumbersome and complicated process. “For the most part, refrigerant regulations have the support of industry, albeit there are some specific decisions that are more contentious,” Whiteley said. She added that she doesn’t think going after Significant New Alternatives Policy [SNAP] program delisting rules, the recent section 608 rule or the rules regarding federal procurement are really worth the fight for this administration.
Mark Menzer, director of public affairs for Danfoss, based in Baltimore, Maryland, said he expects to see some reorganization and budget changes, but expects the existing Significant New Alternatives Policy Program rules that have already been issued to remain in effect. “Recent rules have been pulled back to be re-evaluated, but none of the SNAP rules fall into that category,” he said, adding that the EPA uses SNAP rules to enforce the HFC phase out. “Industry will talk to EPA about continuing that.” Menzer said SNAP has helped equipment manufacturers and end users make long-term plans, providing a degree of certainty.
Whiteley said natural refrigerants are subject to fewer EPA regulations. “For example, the section 608 rules, which now apply to HFCs, do not apply to CO2 or propane. And natural refrigerants will never be subject to a phasedown or SNAP delisting. So, in some ways natural refrigerants are the ‘anti-regulation’ choice,” she said.
BUSINESS LIKELY TO MOVE FORWARD
Whiteley said regulations are perhaps the most meaningful driver of change especially in end-uses such as retail food refrigeration. “We haven’t gone from CFCs, to HCFCs, to high-GWP HFCs to now mid-GWP HFCs just for kicks. We’ve made those transitions due to our obligations set forth in the Montreal Protocol and the Clean Air Act,” she said.
While end-users are influenced by regulations or the expectation of future regulations, they are also driven by a sense that moving to non-fluorinated refrigerants is the right thing to do. “How much of that decision is driven by the desire to reach the end solution and minimize regulatory burden and how much is driven by a desire to combat climate change, I don’t know. It probably varies from business to business,” she said, adding that both are very valid reasons for adopting natural refrigeration technologies.
Administrations come and go, and in order to be successful in business, companies have to be cognizant of the short term and conscious of the long game. “In other words, have a vision and make sure everything you do is in the name of executing on that vision, even if the vision evolves, as all do.”
Tristam Coffin, director of sustainability and facilities at Whole Foods Market
Menzer said he thinks major food retail and cold storage operations will continue to phase out HFCs even if they don’t feel like they’re being enforced. “I think they show corporate responsibility and I think they will continue to do so,” he said. “The pendulum swings both ways and I think it is pretty clear that the world is moving in this direction and things can change in four years. Companies should keep that in mind as well.”
Randel said that if companies have already decided to move from HFCs to a natural refrigerant, he doesn’t see the uncertainty of the next four years changing their long-term vision. “In the short term we might see a slowing of HFC restrictions and we may not see them advance quite as quickly as we would have had Clinton won or if Obama were still in office, but I don’t necessarily see that changing the momentum and the dynamics from HFCs to an alternative, which in many cases would be a natural refrigerant.”
Tristam Coffin, director of sustainability and facilities at Whole Foods Market, said that although Whole Foods is mindful of regulation, government mandates are not the driving force behind the company’s decision to adopt natural refrigerants. Instead it is driven first by its values, and being stewards of the environment ranks high on its agenda.
“We of course keep a close eye on regulations and would prefer to be far enough out ahead of any given regulations so that we never feel like we are playing catch-up and because we strive to be innovators,” Coffin said, He added that administrations come and go, and in order to be successful in business, companies have to be cognizant of the short term and conscious of the long game. “In other words, have a vision and make sure everything you do is in the name of executing on that vision, even if the vision evolves, as all do.”
Because part of Whole Foods’ vision is to be a conscious organization, the company plans to implement the best and most sustainable systems and programs, such as natural refrigerants, as they become available, assuming they make good business sense, Coffin said. “And natural refrigerants make good business sense,” he said.
THE TRUMP ADMINISTRATION AND THE KINGALI AMENDMENT
Not only has the Trump administration created uncertainty about regulation and how business will approach natural refrigerants, it has also created uncertainty over the Paris Climate Agreement and Kigali amendment. “Trump has signaled he would like to pull the United States out of the Paris Climate Agreement. His secretary of State has stated a little bit of a different position saying he thinks it’s better if we are at the table,” Randel said.
Whiteley said ultimately it will be up to the State Department, which is now headed by Rex Tillerson, to bring the Kigali amendment to Congress for ratification. “In his confirmation hearing, Tillerson said the HFC amendment requires ‘review and study.’ Not exactly an enthusiastic endorsement. However, I believe there is enough industry support behind the HFC phasedown that the U.S. will ultimately ratify the Kigali Amendment to the Montreal Protocol,” Whiteley said, adding that it may take longer than it should or longer than it would under a Democratic administration.
Menzer said the Montreal Protocol and the Kigali amendment make the SNAP program even more important. “If we ratify the Kigali amendment, we need a way of enforcing it. We think the SNAP program is a good way of doing it,” he said.
CONTINUED NATURAL REFRIGERANT GROWTH IN CALIFORNIA
Despite federal uncertainty, those within the industry said they expect California to continue its path towards phase outs. “The California legislature has set very aggressive greenhouse gas emission reduction targets, and agencies like the California Air Resources Board are fully committed to enacting regulations that ensure California will meet those targets,” Whiteley said.
The high level of uncertainty about the new presidential administration will likely reaffirm California’s commitment to combating climate change and following through with its emissions reductions goals, Whiteley said. “As California stays the course and shows that we can reduce emissions and still maintain a thriving economy, I think it will set a really great example for the rest of the country. And perhaps that will help the United States maintain credibility on the global climate stage as well,” she said.
