Negative Impacts

1
Negative Impacts of EPAs SNAP Regulation
2
Who is NAFEM ?

• The North American Association
• of
• Food Equipment Manufacturers Represents
• 550 foodservice equipment supplies
  manufacturers
• 220 members w/annual revenues of 5M or less
• 78 members w/annual revenues of 5-10M
• 89 members w/annual revenues of 25-10M.

3
NAFEM Members Manufacture

• Blast Chillers
• Cabinets, Refrigerated
• Cook-Chill Systems
• Coolers, Bar Back
• Coolers, Beverage
• Coolers, Display/Floral
• Coolers, Milk
• Reach-in Cooler
• Walk-In Cooler
• Coolers, Wine
• Coolers, Display/Pastry
• Deli Cabinets, Cases
• Dispensers, Ice, Ice Beverage
• Dispensers, Ice Cream
• Dispensers, Ice Tea

4
NAFEM Members Manufacture

• Freezer Bases, Undercounter
• Freezers, Reach-in, Roll-in
• Freezers, Soft Ice Cream
• Gelato Equipment
• Ice Crushers
• Ice Machines
• Ice Storage Transport
• Refrigerated Merchandisers
• Refrigerated Pass-through
• Refrigerated Drawers
• Remote Compressors Condensers
• Refrigeration Evaporators
• Refrigerator Bases
• Refrigerators, Reach-in, Roll-In
• Refrigerators, Walk-ins
• Slush Machines

5
SNAP Basics

• The Significant New Alternatives Policy (SNAP)
  Program is authorized by Section 612(c) of the
  Clean Air Act.
• SNAP is designed to protect the stratospheric
  ozone layer by phasing out ozone-depleting
  chemicals.
• To meet this goal the EPA publishes and updates
  lists of acceptable and unacceptable substitutes
  for class I or class II ozone-depleting
  substances.
• Status of substances is determined by EPAs
  determination a less harmful alternative is
  available.

6
Industries Targeted by SNAP

• Refrigeration Air Conditioning
• Foam Blowing Agents
• Cleaning Solvents
• Fire Suppression and Explosion Protection
• Aerosols
• Sterilants
• Tobacco Expansion
• Adhesives, Coatings Inks

7
SNAP BasicsProposed Alternative Refrigerants
Equipment Considered Proposed Additions Previously approved 12/20/11 76 FR 78832
Retail food refrigeration (new stand-alone only) doesnt apply to large CRE systems such as multiplex direct expansion systems, WICF due to charge limits Isobutane (R-600a) Limit 150 gr (5.29 oz.) R441A Propane (R-290)
Very low temperature refrigeration and non-mechanical heat transfer (new stand-alone only) Ethane (R-170) Limit 150 gr (5.29 oz.) multi systems --
Retail food refrigeration (condensing units and supermarket systems)(new) (condensing units and supermarket systems)(retrofit) No new proposed additions --
Vending machines (new) Isobutane (R-600a), Propane (R-290) Limit 150 gr (5.29 oz.) R441A CO2 (R-744)
Household refrigerators and freezers (new only) Propane (R-290) Limit 57gr (2.01 oz.) Isobutane (R-600a) R-441
Residential and light commercial AC and heat pumps. (new) Propane (R-290) Difluoromethane (HFC-32, R-32) R-441 Limits vary-see table 3-6 in NPRM
8
Issues with Proposed Alternative Refrigerants

• Not Drop-In Replacements
• Flammable
• High Pressure
• Unavailable in US Market

9
Refrigerant Evaluation Factors
10
SNAP Blowing Agent Issues

• What is the EPA is specifically delisting?
• R134A
• What alternatives are Available?
• Water based Cyclopentane
• Why the alternatives dont work?
• Foam Formation/Filling Issues
• Decreased Thermal Resistance Leads to Increased
  Heat Loss
• Why a supplier switch would be necessary?
• Suppliers are choosing one substitute over
  another
• Costly Extension to Time it Takes to Manufacture
  Each Product Sales Per Year
• May Impact Foodservice Heating Equipment

11
Executive Branch Over Regulation
DOE EPA Regulations

EPA SNAP Stakeholder Meetings
DOE ECS CRE WIC/F Dates
DOE ECS Ice Cream Freezers NOPR
DOE NOPR ECS Vending Machines
DOE ECS Ice Cream Freezers Final Rule
DOE Final Rule on Ice Maker ECS
Ice Maker ECS NOPR
DOE Final Rule on ACIM Test Procedure
EPACT Enacted




2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017-2018
EPA V 3.0 Energy Star Compliance Date
DOE Final Rule on ARI ASHRAE Energy Use
Calculation
Ice Maker ECS Effective Dateest
DOE Test Procedure NOPR Ice Makers
DOE Test Procedure Final Rule Comm. Refrig.
DOE Ice Maker Final Rule
DOE Final Rule Vending Machine Effective Date
EPA has announced the review of hot food holding cabinet ratings is exploring blast chill freezers as potential products to add to the program.
12
Executive Branch Over Regulation

• DOEs Automatic Commercial Ice Makers Energy
  Conservation Standards Rulemaking, Docket No.
  EERE-2010-BT-STD-0037
• DOEs Commercial Refrigeration Equipment Energy
  Conservation Standards Rulemaking, Docket No.
  EERE-2010-BT-STD-003
• DOEs Walk-in Coolers and Walk-in Freezers Energy
  Conservation Standards Rulemaking, Docket No.
  EERE-2008-BT-STD-0015
• EPAs Protection of Stratospheric Ozone Listing
  of Substitutes for Refrigeration and Air
  Conditioning and Revision of the Venting
  Prohibition for Certain Refrigerant Substitutes,
  Docket No. EPA-HQ-OAR-2013-0748-0001

13
Markets SNAP will Impact

• Restaurants/Chains
• (990,000 in the US)
• Corporate Facilities
• Correctional Facilities
• Health Care
• Lodging Casinos
• Schools
• Science, Floral, etc.
• Supermarkets
• Mass Transportation

14
SNAP Unintended Consequences

• Marketplace Variety Reduction
• Unknown User Operator Safety Health Risks
• Costly Infrastructure Changes to Plants
• Trapped Inventory Through Supply Chain
• Gives Advantage to Foreign Companies Importing
  Products
• Lab Testing Shortages Causes Noncompliance
• Passes Direct Costs to Customers
• Limits Product Innovation
• Increased Insurance, Placement, Servicing Costs
  for Customers

15
Stakeholder ImpactsSmall Business Questions

• Are your costs as-incurred?
• Do you have limited or uncertain financing
  options?
• How much will this raise your insurance premiums?
• What training will be required and how will you
  pay for it?
• Have your 2015 budgets and capital requests been
  made?
• Do your local building and fire codes and
  regulations support flammable refrigerants?
• Can your current facility run concurrent
  operations while transitioning?
• Can small companies compete (from a technical
  resource pool standpoint) with the salary and
  benefits offered to develop these products?

16
Request to EPA

• Extend the compliance deadline
• To prevent dramatic and sudden price increases.
• To allow time to ensure product lines are safe.
• To allow time for product testing.
• To allow time for training.
• To allow time for components refrigerants to
  become available in the US market.

17
Coalition Action Next Steps

• Letters Requesting Extension from Hill
• Committee Outreach 2014 Hearings Legislation
• Develop Coalition Materials
• Weekly Meeting/Membership Outreach

18
SNAP Coalition

• Thank you for taking time to learn about SNAP and
  how it will impact each of your industries.
• NAFEM looks forward to working with you as a
  voice demanding common sense in the regulatory
  process.

Contact Annie McCarthy NAFEM Government
Relations 202.714.6162 amccarthy_at_smithbucklin.com