BILL ANALYSIS AB 1373 Page 1 Date of Hearing: April 20, 2009 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Nancy Skinner, Chair AB 1373 (Skinner) - As Amended: April 14, 2009 SUBJECT : High global warming potential (GWP): refrigerants SUMMARY : Requires the California Energy Commission (CEC), on or before December 1, 2011, to assess, in consultation with the State Air Resources Board (ARB) the potential to dramatically reduce the use and emissions of high-GWP compounds in stationary refrigeration and air-conditioning industry in California. EXISTING LAW : 1)Requires ARB to adopt a statewide greenhouse gas (GHG) emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. 2)Requires CEC to adopt and periodically update lighting, insulation climate control system, and other building design and construction standards (known as Title 24 standards) that increase the efficiency in the use of energy and water for new residential and new nonresidential buildings. FISCAL EFFECT : Unknown THIS BILL : 1)Requires the CEC, as part of its 2011 update to the energy efficiency standards under Title 24, to assess, in consultation with ARB, the potential to dramatically reduce the use and emissions of high-GWP compounds in stationary refrigeration and air-conditioning industry in California on or before December 1, 2011, so long as existing staff and funds are available. 2)Defines "high-GWP" to mean a global warming potential that is greater than 150 carbon dioxide equivalents. 3)Defines "low-GWP" to mean a global warming potential that is less than or equal to 150 carbon dioxide equivalents. AB 1373 Page 2 4)Specifies that the assessment include: a) An analysis of the nexus between energy efficiency and GHG emissions within stationary refrigeration and air conditioning systems, and an assessment of the energy efficiency of low-GWP systems; AB 1373 Page 3 b) An analysis of the current technological status of stationary refrigerant and air conditioning systems using low-GWP materials and their potential for use in California by 2020; c) An analysis of economic costs and safety of low-GWP materials; d) Identification of existing laws, codes, regulations and incentive programs pertinent to the safety and energy efficiency of stationary refrigeration and air conditioning; and an analysis of how they can be modified to promote the use of low-GWP refrigerants; and e) Recommendations for new incentive programs and pilot programs. 5)Requires the CEC, on or before January 1, 2012, to submit the study to the Legislature. 6)Authorizes the CEC and ARB to offer incentives and develop pilot projects to encourage the use of low-GWP refrigerants; ARB can also develop relevant worker training programs. COMMENTS : According to the author's office, California's commercial refrigerators and air conditioners leak high GWP gases that are typically 1,500 and 4,000 times more powerful than carbon dioxide in contributing to global warming. According to the ARB, the 200,000 individual facilities that are estimated to use these substances in California release the equivalent of 32 million metric tons (MMT) of carbon dioxide (CO2), roughly equal to the CO2 emissions of nearly six million cars. The author states that while the commercial refrigeration and air-conditioning industry in Europe and Australia have already begun installing systems using climate friendly low-GWP refrigerants, the U.S. market has lagged. These systems, using "natural" refrigerants like CO2, hydrocarbon and ammonia, have low GHG emissions and have the potential to use less energy. As shown by the lack of market adoption of alternative, climate-friendly systems in the state, California lacks the incentives and regulatory structure to facilitate large-scale adoption of low-GWP refrigerants. AB 1373 Page 4 1)Background. High-GWP gases are used as refrigerants in a wide variety of stationary air conditioning and refrigeration equipment such as chillers, supermarket systems, industrial process refrigeration, refrigerated vending machines. They include: chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), ozone depleting substances (ODS) that are regulated under the U.S. Clean Air Act; and hydrofluorocarbons (HFCs), non-ozone depleting substitutes, but like the CFCs and HCFCs, are potent global warming gases. Leaks from these systems are commonplace and their leak rates are estimated to range from 35-100 percent depending on the system. For large systems, both direct (leaks from vibration, thermal expansion, and ruptures) and indirect (inefficient energy use, lack of heat recovery) CO2-equivalent emissions amount to approximately five MMT/year. A single, significant leaking system can emit over 7,000 metric tons of emissions. According to the ARB, total emissions from this sector are expected to grow to over 35 MMT by 2020. AB 1373 Page 5 2)Existing regulations focus on controlling leaks. Federal Clean Air Act regulations prohibit the intentional release of ODS refrigerants, require the repair, retrofit, or replacement of certain equipment, set certification requirements for equipment and technicians, and restrict the sale of refrigerants to certified technicians. In addition to federal record-keeping requirements, the South Coast Air Quality Management District (SCAQMD) imposes a reporting requirement for certain systems containing more than 50 lbs of an ODS. Despite these restrictions, US EPA estimates that there are significant and preventable emissions of these high-GWP gases from refrigeration and air-conditioning systems due to improper maintenance, service, and disposal practices, and the continued reliance on older, inefficient equipment. Moreover, these restrictions do not apply to HFCs. 3)ARB's early-action measure tightens control of high-GWP refrigerants. In a regulation set to take effect in January 2010, ARB is proposing to build on existing regulations by controlling emissions from all high-GWP refrigerants via reporting, leak tests, repair requirements, best practices for installation and servicing, sale restrictions, safe disposal. This measure is projected to reduce emissions by 15 MMT by 2020, leaving about 16 million MMT of emissions uncontrolled. In order to encourage use of low-GWP alternatives, ARB is also proposing to impose a mitigation fee on every pound of refrigerant sold in California. 4)Need for a greater emphasis on alternatives. Given the large deficit of emissions unaccounted for in ARB's regulation, this bill takes the first step towards encouraging the adoption of climate-friendly refrigerants in California. Low-GWP refrigerants such as ammonia, hydrocarbons, and even carbon dioxide have been used in Europe, Australia, and Japan for many years and they are now being used in applications that previously favored high-GWP refrigerants. While concerns about safety, toxicity, and efficacy have limited their use in North America new technology and advancements are beginning to minimize or eliminate these concerns. This bill requires the CEC to assess the potential to dramatically reduce the use and emissions of high-GWP compounds through the use of market incentives, pilot programs, and other mechanisms. The author acknowledges that factors such safety, AB 1373 Page 6 available technology, energy efficiency tradeoffs, and cost-effectiveness must be considered in detail in order to ensure an orderly transition to low-GWP refrigerants. REGISTERED SUPPORT / OPPOSITION : Support American Lung Association Breathe California California League of Conservation Voters Center for Biological Diversity Coalition for Clean Air Environmental Defense Fund Greenpeace Sierra Club California Union of Concerned Scientists Opposition None on File Analysis Prepared by : Dan Chia / NAT. RES. / (916) 319-2092