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Regulatory Impact Statement - Adopted Part 494

6 NYCRR Part 494, Hydrofluorocarbon Standards and Reporting

A key source of greenhouse gases (GHGs) are hydrofluorocarbons (HFCs). In addition to having increased exponentially in recent decades, HFC emissions are expected to continue to grow through 2050. Part 494 would adopt regulatory provisions similar to those promulgated by the United States Environmental Protection Agency (EPA) pursuant to the Clean Air Act and Significant New Alternatives Program (SNAP) in 2015 and 2016. Specifically, Part 494 would prohibit specific HFCs in certain refrigerants, aerosol propellants, and foam-blowing agents end-uses that represent avoidable HFC emissions where safer alternatives are available. The SNAP rules were partially vacated by the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit). Further, EPA has failed to implement the rules, including issuing a guidance document purporting to eliminate restrictions on the use of HFCs, however, such guidance document was vacated the D.C. Circuit. In the absence of national policies and federal action, New York State has the opportunity to adopt an action that will have a significant impact on GHG emissions in the State while building off of the extensive, publicly-funded analysis and public review that formed the basis of the EPA rulemakings.

1. Statutory Authority

The statutory authority to promulgate this rulemaking is derived from the Department's obligation to prevent and control air pollution, including GHGs and HFCs, as set out in the Environmental Conservation Law (ECL) at Sections 1-0101, 1-0303, 3-0301, 19-0103, 19-0105, 19-0107, 19-0301, 19-0303, 19-0305, 71-2103, 71-2105.

ECL Section 1-0101. This section declares that it is a policy of New York State to conserve, improve and protect its natural resources and environment and control air pollution in order to enhance the health, safety and welfare of the people of New York State and their overall economic and social wellbeing. This section further declares that the Department shall promote patterns of development and technology which minimize adverse impact on the environment. The proposed rulemaking prohibits HFCs in certain end-uses, which minimizes the adverse impact on the environment from HFC emissions, thereby protecting the State's natural resources and environment.

ECL Section 1-0303. This section defines the term "pollution." Pollution is: "the presence in the environment of conditions and or contaminants in quantities of characteristics which are or may be injurious to human, plant or animal life or to property or which unreasonably interfere with the comfortable enjoyment of life and property throughout such areas of the state as shall be affected thereby." The proposed rulemaking will remove contaminants in the form of HFC emissions and associated atmospheric concentrations of GHGs from the environment which are injurious to human, plant and animal life or to property throughout the State.

ECL Section 3-0301. This section empowers the Department to develop programs to carry out the environmental policy of New York State set forth in section 1-0101. Section 3-0301 specifically empowers the Department to, among other things: provide for the prevention and abatement of air pollution; monitor the environment to afford more effective and efficient control practices; identify changes in ecological systems and to warn of emergency conditions; and adopt such regulations as may be necessary, convenient or desirable to effectuate the environmental policy of the State. The proposed rulemaking is necessary, convenient, and desirable to effectuate the State's policy of reducing GHG emissions.

ECL Section 19-0103. This section declares that it is the policy of New York State to maintain a reasonable degree of purity of air resources. In carrying out such policy, the Department is required to balance public health and welfare, the industrial development of the State, propagation and protection of flora and fauna, and the protection of personal property and other resources. To that end, the Department is required to use all available practical and reasonable methods to prevent and control air pollution in the State. The proposed rulemaking meets this requirement by preventing and controlling HFC emissions in the State, while also balancing interests through the establishment of specific exemptions.

ECL Section 19-0105. This section declares that it is the purpose of Article 19 of the ECL to safeguard the air resources of New York State under a program which is consistent with the policy expressed in section 19-0103 and in accordance with other provisions of Article 19. The proposed rulemaking serves to establish a regulatory program of limiting HFCs in certain end-uses, consistent with the policy expressed in Article 19 of preventing and controlling air pollution, including GHGs such as HFCs.

ECL Section 19-0107. This section defines the terms "air contaminant" and "air pollution." "Air contaminant" is defined as "a dust, fume, gas, mist, odor, smoke, vapor, pollen, noise or any combination thereof." "Air pollution" is defined as "the presence in the outdoor atmosphere of one or more air contaminants in quantities, of characteristics and of a duration which are injurious to human, plant or animal life or to property or which unreasonably interfere with the comfortable enjoyment of life and property throughout the State or throughout such areas of the State as shall be affected thereby." HFC is an "air contaminant" that causes "air pollution" as defined in the ECL because it is a gas that is present in the outdoor atmosphere in quantities that engender and/or provoke climate change, which is injurious to life and property in New York State.

ECL Section 19-0301. This section declares that the Department has the power to promulgate regulations for preventing, controlling or prohibiting air pollution. This section provides authority for the Department to establish the proposed rulemaking because it furthers preventing and control of air pollution in the form of HFC emissions and associated atmospheric concentrations of GHGs.

ECL Section 19-0303 also establishes procedures for adopting any code, rule or regulation which contains a requirement that is more stringent than the Clean Air Act or regulations issued pursuant to the Clean Air Act by the EPA. This requires the Department to include analysis in the Regulatory Impact Statement (RIS) explaining State regulatory requirements that are more stringent than those found in the Clean Air Act or its implementing regulations. Since the D.C. Circuit partially vacated the EPA regulations establishing the phase-down of HFCs and EPA's subsequent guidance document, there are currently no federal prohibitions on the specific HFC substances in certain end-uses as proposed in Part 494. Federal regulatory requirements regarding HFCs are discussed further in the Federal Standards section of this RIS. The Federal Standards section, as well as elsewhere in this RIS, also explains how Part 494 would meet criteria in ECL Section 19-0303(4), if it was applicable to this rulemaking. Further, the cost-effectiveness of the proposed revisions and whether reasonably available alternatives exist is discussed in the RIS. The RIS thoroughly discusses the public health and environmental protection benefits of the proposed revisions.

ECL Section 19-0305. This section authorizes the Department to enforce the codes, rules and regulations established in accordance with Article 19.

Finally, Sections 71-2103 and 71-2105 set forth the civil and criminal penalty structures for violations of Article 19, as well as regulations promulgated thereunder.

2. Legislative Objectives

There is strong scientific evidence that the earth's climate is changing and that GHGs from HFCs and other human activities are the major contributor to this change. Climate change represents an enormous environmental challenge for the State because, unabated, it will have serious adverse impacts on the State's natural resources, public health, and infrastructure. Substances comprised of HFCs and blends thereof were introduced as substitutes for ozone-depleting substances such as chlorofluorocarbons. However, HFCs are potent GHGs with up to 14,800 times the climate forcing ability of carbon dioxide. HFCs are included in the list of seven gases addressed under the United Nation's Framework Convention on Climate Change and the Paris Climate Agreement. Furthermore, HFCs are planned to be phased-down internationally under the Kigali Amendment to the Montreal Protocol.

Articles 1 and 3 of the ECL set out the overall State policy of protection of the environment and provide general authority to adopt and enforce measures to achieve this goal, including the regulation of air pollution originating from consumer products. Article 19 of the ECL was specifically adopted for the purpose of safeguarding the air resources of New York from pollution. Further, to meet the State's commitments regarding the reduction of GHG emissions, and consistent with existing legislative enactments in the Climate Leadership and Community Protection Act (CLCPA), Part 494 will control emissions of fluorinated greenhouse gases that contribute to climate change. Specifically, the CLPCA includes HFCs in the statutory definition of GHG and codifies statutory requirements to reduce GHG emissions. Further, the CLCPA contemplates measures to limit the use of chemicals, substances, or products that contribute to global climate change when released to the atmosphere as an action to achieve GHG emission reductions, which is the heart of Part 494. The CLCPA grants the Department statutory authority to regulate and control GHG emissions to ensure compliance with the required statewide GHG emissions reduction limits. Finally, the CLCPA explicitly states it shall not limit the existing authority of a state entity to adopt and implement GHG emissions reduction measures, such as the Department's authority to regulate GHG emissions pursuant to ECL Article 19.

3. Needs and Benefits

The proposed rule prohibits high-Global Warming Potential substances in specific end-uses, including supermarket systems, refrigerators, foam-blowing agents, and aerosol propellants. Specifically, the rule applies to any person who sells, offers for sale, installs, uses, or enters into commerce in the State of New York any substance in the listed end-uses. Regarding any person who enters substances in the listed-end uses into commerce, the rule is intended to apply to intrastate commerce. However, the proposed rule provides flexibility based on safety and other considerations and includes the exemptions that accompanied these prohibitions when they were adopted in the EPA SNAP Program. Finally, in order to ensure compliance and provide for enforceability, the proposed rule requires disclosure and record-keeping requirements on covered end-uses.

The proposed action is needed to mitigate the major sources of HFCs in the State of New York, which, as discussed, are highly-potent GHGs. Analyses conducted by the California Air Resources Board on behalf of the United State Climate Alliance suggests that the proposed action would result in annual emissions of HFCs in New York State that are 16% lower in 2030 compared to a Business As Usual scenario. Between 2020 and 2030, 17 million metric tons of CO2-equivalent emissions would be avoided by the proposed action, up to 2.3 million metric tons per year. By adopting prohibitions and regulatory provisions previously promulgated by EPA, the proposed action also builds off of the extensive review conducted by EPA to minimize overall risks to human health and the environment.

Stakeholder Outreach
The Department conducted pre-proposal, stakeholder outreach throughout 2019, beginning with two public webinars held on November 14 and 18, 2018 to discuss the likely provisions of Part 494. Additional meetings regarding specific sectors also occurred, such as a meeting with the equipment manufacturing sector on December 11, 2019 and the foam-blowing sector on February 26, 2019. The stakeholder groups consisted of the regulated community to be affected by the proposed regulation, consultants, and interested environmental advocacy groups. The Department reviewed the feedback received in further developing Part 494.

4. Costs

The EPA estimated that the nationwide implementation of these prohibitions would result in a cumulative cost over the lifetime of affected equipment of up to $114.6 million. New York State's share of these costs could be up to $6.9 million, as New York State makes up 6% of the United State population. However, this likely overestimates actual costs as: a) EPA's estimate of costs are primarily applied to manufacturers that are not located in New York State; b) the current proposal is more limited in scope than the EPA rules; and c) EPA rules began going into effect in 2016. Hence, some of the affected entities have already made the transition to alternative substances and already incurred the costs that would be associated with this rulemaking.

EPA's estimation of cost focused on the specific industries directly affected by Part 494 and found these costs to be limited to very few individual businesses. EPA determined that the majority of affected businesses would be retail food operations (more than 640,000 businesses nationwide), but fewer than 0.1% of these businesses would incur any new costs, or costs greater than those already incurred as a result of other federal regulations. Instead, 79% of the total estimated cost from the EPA program would be incurred on manufacturers of stationary air-conditioning equipment ($63 million) and polystyrene foam products ($27.5 million), which represent fewer than 20 businesses nationwide.

For the largest set of businesses affected by this action, or retail food businesses, the EPA considered that there would be no new costs as these entities are also in the process of replacing the affected equipment pursuant to the phase-down of ozone-depleting substances. Additionally, the prohibitions that are being adopted in this rulemaking do not include many "drop-in" alternatives. The affected businesses may choose to transition to other, more climate-friendly and energy-efficient alternatives that would involve new costs, but that is not required at this time.

The proposed rule does not apply to the use of the affected products or equipment by consumers (or "residential use"), although it does apply to the sale of those products to consumers. As such, this proposed action could indirectly affect consumers and businesses in the State of New York as it may affect the availability of products and equipment on the market, but such costs are also limited. In the case of consumer products, the proposed action applies to the sale and use of products manufactured after an effective date, not the continued sale of previously-manufactured products already in the State. In the case of equipment, the proposed action would not affect systems already installed or their servicing.

This proposed action may also impose new administrative and record-keeping costs for certain manufacturers. However, the State of California already requires the same administrative and record-keeping requirements on similar entities, so new costs are limited. The Department may incur costs to issue and enforce the proposed action but can properly administer the regulation with the application of existing resources and current Department staff.

5. Paperwork

The proposed rule will impose minimal additional paperwork on certain manufacturers for recording-keeping and the creation and distribution of a written disclosure statement but is not expected to be unduly burdensome.

6. Local Government Mandates

Part 494 will not create any mandates for local governments as compared to other entities, including any additional compliance obligations.

7. Duplication

This proposal does not duplicate, overlap, or conflict with any other existing federal or State regulations or statutes. As stated earlier, while Part 494 is based on regulations previously promulgated by EPA, such applicable regulatory provisions and HFC restrictions have since been partially vacated by courts. Additionally, the proposed action aligns with other non-overlapping State and international rules to ensure consistency.

8. Alternatives

While a no action alternative was evaluated, the Department considers the no action alternative infeasible because HFC emissions would further increase 36% in New York State by 2030, based on a Business as Usual scenario, reaching 10% of total allowable GHG emissions in the State (14 of 143mmt of CO2e based on 1990 emissions as estimated in the most recent New York State GHG Inventory ). The proposed action and compliance schedule were primarily based on EPA's SNAP rules, which considered a rigorous evaluation of available alternatives as well as extensive public review. An alternative that relies on voluntary actions and incentives to achieve the same level of reduction would be cost-prohibitive at this scale. Notably, based on information provided by the EPA, its voluntary program for the affected supermarkets, or the Green Chill program, has only attracted 29% of stores to become members, while national emissions have doubled over the same time period (55% increase in HFC emissions 2005-2016).

9. Federal Standards

Due to the D.C. Circuit partial vacation of EPA rules, the federal rules or other restrictions do not apply or enforce the provisions proposed in Part 494 in all contexts. Further, EPA has generally failed to implement the rules. Given that the rule is based on previously promulgated federal regulations with the exception of some extended prohibition dates to accommodate lower GWP alternatives, the regulation does not result in the imposition of requirements that exceed any minimum standards of the federal government for the same or similar subject areas.

10. Compliance Schedule

This regulation will adopt a compliance schedule that prohibits specific substances in certain new or retrofitted equipment and products and given certain exemptions. Notwithstanding the following compliance schedule, pursuant to Article 19 of the ECL, Part 494 will be effective 30 days after filing with the Department of State.

January 1, 2021: Aerosol propellants; supermarket systems, remote condensing units, stand-alone units; one-component spray foam sealant and high-pressure two-component spray foams; rigid polyurethane and polyisocyanurate laminated boardstock, rigid polyurethane slabstock and other, rigid polyurethane appliance foam, rigid polyurethane commercial refrigeration and sandwich panels, rigid polyurethane marine flotation foam, flexible polyurethane, integral skin polyurethane, polystyrene extruded sheet, phenolic insulation board and bunstock, and polyolefin; low-pressure, two-component spray foam; polystyrene extruded boardstock and billet (XPS); household refrigerators and freezers (compact), retrofitted vending machines, and refrigerated food processing and dispensing equipment.
January 1, 2022: Household refrigerators and freezers (other than built-in or compact) and new vending machines.
January 1, 2023: Cold storage warehouses and household refrigerators and freezers (built-in).
January 1, 2024: Centrifugal chillers and positive displacement chillers.

1 Mexichem Fluor, Inc. v. Envtl. Prot. Agency, 866 F.3d 451 (D.C. Cir. 2017).

2 83 Fed. Reg. 18,431 (Apr. 27, 2018).

3 Nat. Res. Def. Council v. Wheeler, 955 F.3d 68 (D.C. Cir. 2020)

4 Chapter 106 of the Laws of 2019.

5 ECL § 75-0101(7).

6 ECL § 75-0111(12)(j).

7 ECL § 75-0109.

8 CLCPA § 10.

9 Supporting documents in EPA Docket ID Nos. EPA-HQ-OAR-2014-0198 and EPA-HQ-OAR-2015-0663

10 Id.

11 Id.

12 Id.

13 Id.

14 California Code of Regulations, Title 17, Division 3, Chapter 1, Subchapter 10 Climate Change, Article 4. Prohibitions on Use of Certain Hydrofluorocarbons in Stationary Refrigeration and Foam End-Uses.

15 NYSERDA. 2019. New York State Greenhouse Gas Inventory: 1990-2016.

16 e.g., EPA Press Release. November 10,2019.