Comment Log Display

Comments to the California Air Resources Board
From Cap & Seal Co., Inc.
Regarding the Revised Climate Change Draft Scoping Plan
December 1, 2008

Cap & Seal Co., Inc. is the manufacturer of threaded tops and
gaskets for refrigerant cans as well as rupture discs for
refrigerant cylinders.  We submit the following comments on the
Revised Draft AB 32 Scoping Plan.

While we understand that the Scoping Plan is only a road map for
climate change policy in California, and that the place to take up
the specifics of the recommendations is within the respective
rulemakings that will follow within each sector, we have grave
concerns over the fact that CARB is also proposing to establish an
upstream mitigation fee on the use of high GWP gases, a fee that
will ultimately be passed on to consumers through higher product
prices IN ADDITION TO a very complex and involved recycling program
for small cans of refrigerant.  The extra cost of the two programs
could put refrigerant out of reach for the very people we are
trying to provide alternatives for, the working and jobless middle
class and poor of your state.  

In the revised Scoping Plan, CARB identified four Discrete Early
Action measures to reduce greenhouse gas emissions from the
refrigerants used in car air conditioners, semiconductor
manufacturing, air quality tracer studies, and consumer products.
CARB has also identified additional potential reduction
opportunities based on specifications for future commercial and
industrial refrigeration, changing the refrigerants used in auto
air conditioning systems, and ensuring that existing car air
conditioning systems as well as stationary refrigeration equipment
do not leak.

We support a balanced, cost-effective plan to reduce greenhouse
gas emissions.  Cap & Seal, working through ARPI is already playing
a meaningful role in helping the state meet its policy goals for
reducing green house gas emissions in California through
participation in the early action rulemaking on Reduction of
Refrigerant Emissions from Non-Professional Servicing.  

For two years we have worked with staff collaboratively and in
good faith to develop a draft regulation that will yield real
emissions reductions, is workable, and yet does not disadvantage
low income Californians or communities of color.   Importantly, the
draft regulation should achieve an objective cost effectiveness
measure.  But it hasn’t been easy and it won’t be without
additional cost to the consumer.

Nevertheless, even with the reductions from the specific high GWP
measures described above, the Scoping Plan would layer on top of
the regulation an upstream fee for all refrigerant sold.  ARPI
discussed with CARB staff the possibility of a fee IN LIEU OF the
regulation, but were told that emissions reductions were the
objective.  Now, on the eve of adoption of the regulation the
prospect of a fee is raised IN ADDITION TO our mitigation
proposals.

The Plan notes that an upstream fee would ensure that the climate
impact of these substances is reflected in the total cost of the
product.  Since the fee WILL FOLLOW the mitigation regulations, the
“total cost” of our products will have already increased
exponentially.

And to add insult to injury, the Plan states that this mitigation
fee would “complement” the downstream high GWP regulations
currently being developed.  We suspect that the result of a
substantial fee in addition to the extra cost of the recycling and
packaging improvements will be destruction of markets and economic
hardship for both ARPI companies and Californians.  We also
anticipate the creation of increased smuggling activity in
refrigerant, both in small cans and cylinders, from Mexico and
neighboring states because of this proposed fee.  

During the conversion to R134a from R12, a national “floor tax”
was put on R12 to encourage conversion to 134a.   This was mostly
effective but caused a situation where honest manufacturers were
being pushed out of markets by smugglers.   R12 became the second
most trafficked item across the borders, second only to illegal
drugs.  There were instances of full ISO containers being smuggled
as well as intentionally mismarked 30 lb cylinders and falsified
certifications.   It would be advisable to speak with US Customs
yourselves about their opinion this idea to create a market for
illegal 134a before you ask them for their help in this matter.  
You will certainly need all the enforcement help you can get.  

Adding a large fee to the increased cost of a newly promulgated
regulation that involves a product container redesign, a
reclamation program and an extensive education regime is not
complementary.  It is punitive.  It could render the product line
uneconomic and constitute a de facto product ban, thus ensuring an
adverse impact on minorities and those on fixed incomes.  This was
exactly the result ARPI members were seeking to avoid through the
development of an alternative regulation on the servicing of
vehicle air conditioners by non-professionals.     

We wonder why the Plan would suggest that revenues from this fee
could be used to mitigate greenhouse gas emissions either from
other high GWP compounds or other greenhouse gases instead of to
offset the costs associated with compliance with the regulatory
regime noted above.  We rather think that a good bit of the money
collected will be needed for enforcement activities to keep illegal
refrigerant out of California.  

ARPI companies will continue to work with CARB staff on the
rulemaking.  Rest assured that we also stand ready to work with the
Board to implement a regulatory scheme aimed at reducing greenhouse
gas emissions while not devastating our industry.  We want to be
part of the solution, but not if the price is our businesses.  

Respectfully Submitted,

Thomas  J. Brown
President
Cap & Seal Co., Inc.