As one of the world's largest users of refrigeration systems, retailers are on the front lines of the battle over the use of refrigerants in those systems.
Retailers not only must prepare to eventually switch those refrigerants to a more environmentally friendly version, they also must ensure that ozone-damaging leaks of those refrigerants by their refrigeration systems are kept to a minimum. Dealing with these responsibilities was a prominent theme at the Food Marketing Institute's Energy and Technical Services Conference, held Sept. 18 to 21 at Le Centre Sheraton in Montreal.
"We purchase [refrigeration equipment], and then it leaks," said Ed Estberg, senior director of facilities, Raley's, West Sacramento, Calif., speaking at the conference. "The Environmental Protection Agency and the federal government are holding retailers responsible for [refrigeration] equipment that we have no control over."
Under the EPA's Clean Air Act of 1990, operators of commercial refrigeration equipment are required to repair, replace or retrofit their system within 30 days if they have an annual leak rate of 35% or more, according to Deborah White, vice president and associate general counsel, FMI, Washington.
These rules apply to refrigerant that contains ozone-depleting chlorine, such as the commonly used hydrochlorofluorocarbon (HCFC) R-22 and the chlorofluorocarbon (CFC) Freon. Retailers found to be in violation of the rule are subject to fines as high as $30,000 per day
Many retailers who thought they were compliant with this regulation realized a few years ago that they may not be. "[This rule] seemed pretty simple, and the retail industry long believed that it was compliant with these regulations," said White. "In about 2002, the EPA brought its attention to some supermarkets and said, 'Guess what? We find that you're not in compliance with these regulations.' The EPA was working under a pretty aggressive interpretation of the rule, and there was a disconnect between [it] and retailers."
According to White, the confusion surrounded the calculation of the annualized leak rate and the proximity of two leak events.
FMI decided to meet with the EPA to discuss options for the industry. "We started by asking them to develop some compliance documents, but the agency really wanted to see us enter into [an industrywide] partnership agreement, so we began negotiations," said White. Those negotiations are ongoing.
Under a proposed partnership arrangement, a retailer would have to agree to convert to a more environmentally friendly refrigerant at a much faster rate than it would otherwise be required to do under the Montreal Protocol. In exchange, the EPA would promise not to bring any new enforcement actions to these retailers for violations that happened in the past.
The Montreal Protocol is an international agreement among industrialized nations to phase out the use of CFC and HCFC. As of Jan. 1, 2010, U.S. chemical manufacturers may still produce the refrigerant to service existing equipment, but they must cease production for use with new equipment. As of Jan. 1, 2030, the production and importing of HCFC must cease entirely, according to the EPA.
Retailers including Raley's and Pittsburgh-based Giant Eagle reported having already embarked upon the long and costly process of converting to the HFC (hydrofluorocarbon) refrigerant R-404a, which does not contain chlorine. No leak repair rules apply to HFC.
"You can't just drain a refrigerant and put in a new one," said Mark Harbin, manager of compliance services for Environmental Support Services (ESS), Tempe, Ariz. "It's usually a lot more complicated than that."
In addition to ceasing the use of CFC and HCFC refrigerant sooner, as part of an EPA partnership retailers would have to establish a refrigerant management plan and adopt their own set of rules and regulations regarding how they'd handle their equipment in the future, according to White.
A partnership deal with EPA has still not been struck. At issue remains a time frame for conversion to new refrigerants. In its initial proposal, FMI suggested "a specific time frame, starting with the conversion of equipment using CFC [refrigerant]," said White. "New stores would use HFC [refrigerant], and stores undergoing substantial renovation would move to HFC as well."
The EPA responded by saying it would like partnering retailers to convert all of their stores to HFC refrigerant during a specific time frame. "We thought that really wasn't going to work for the industry as a whole," said White. "We went back and said, we'll work toward that goal, but we really need more time."
As of this spring, the EPA decided to hold off on its negotiations for an industrywide partnership.
Meanwhile, the EPA is working on individual partnership agreements with at least two retailers, said White. "It wants to take care of those first, and then it will come back to the negotiations. During the negotiations period, the EPA promised to bring no new enforcement actions against retailers [for past violations], so we've got a good place in which to work."
THE RALEY'S INITIATIVE
Raley's is well on its way to converting to HFC refrigerant in all of its 135 stores. As of September 2004, the retailer had achieved three-quarters of its goal to be converted to R-404a in all of its stores by 2010. The retailer would not comment on its current status.
Raley's stores that use HFC refrigerant are not subject to the leak repair rules of the Clean Air Act, because the EPA doesn't regulate the use of HFC at this time. Still, the prevention of refrigerant leaks is one of Estberg's priorities.
Industry observers believe that if retailers like Raley's are responsible when it comes to repairing HFC leaks, they could prevent possible future HFC regulation by the EPA. Though HFC is not currently restricted in the U.S., European countries are restricting its use under the Kyoto Protocol (see story, this page).
Estberg shared details of an initiative he's embarked on to prevent leaks of all types of refrigerants. It involves taking action at what he believes is the source of the problem: refrigeration system manufacturers.
"If [manufacturers] fix eight things, eight simple things, we can probably eliminate 80% of leaks, " said Estberg. He estimated that these solutions may cost as much as $8,000 to $10,000 more per store, but said they are worth the investment in the long run.
Estberg initially approached the Commercial Manufacturers Refrigerator Division (CMRD) of the Arlington, Va.-based Air Conditioning and Refrigeration Institute with the idea to partner a few years ago.
"In November 2004 I got a call from CMRD saying that they were ready to talk," said Estberg. After he enlisted the help of his fellow FMI Energy and Technical Services Committee members, four retailers, including Raley's, agreed in May to share their refrigerant leak data with CMRD on a quarterly basis. The four chains, which represent 1,000 stores, signed confidentiality agreements..
The information they agreed to share includes details related to the location and quantities of refrigeration leaks. Solutions may be as simple as tethering otherwise untethered caps to the system so they won't be lost when they come off, Estberg explained.
But more effective results will require greater membership, he said. "I think that there are maybe 30,000 stores in the U.S. We only represent a small portion of them, so we'd really like to see greater participation so that we can get past this thing."
CMRD member Copeland Refrigeration believes that retailers and manufacturers should work together toward the prevention of leaks. "Manufacturers should design and manufacture energy-efficient and leak-free systems, and supermarkets should maintain their equipment so that operating efficiency is maintained and leaks are minimized," said Warren Beeton, vice president, engineering, Copeland Refrigeration, Sidney, Ohio.
One manufacturer, AHT Cooling Systems, North Charleston, S.C., has all of its parts suppliers test equipment in different stages of manufacturing before delivery to AHT, said Howell Feig, director of sales.
AHT also has several different stages of controls to test for any leaks in equipment through the manufacturing process.
Kyoto Protocol Hits Home
Under an international agreement called the Montreal Protocol, the United States and other industrialized nations have agreed to phase out the use of the environmentally harmful refrigerants chlorofluorocarbon (CFC), such as Freon, and hydrochlorofluorocarbon (HCFC), such as R-22, by 2030. Some retailers have begun converting from those refrigerants to a hydrofluorocarbon (HFC) alternative called R-404a.
However, in February another international global warming treaty called the Kyoto Protocol went into effect, committing participating countries to reducing use of HFC as well as other "greenhouse gases." More than 100 countries, including the European Union, Japan and Canada, have accepted the treaty and agreed to reduce their greenhouse gas emissions from 2008 to 2012 by a percentage based on their 1990 emission levels.
While agreeing to the Kyoto Protocol in principle, the U.S. takes issue with some of its specifics and chose not to ratify it. But can U.S. retailers still be affected by the protocol?
Possibly, said Warren Beeton, vice president, engineering, Copeland Refrigeration, Sidney, Ohio. For example, 300 mayors at the recent U.S. Conference of Mayors agreed to meet or exceed Kyoto targets, he said. Additionally, Coke, McDonald's, Unilever and Nestle have committed to phasing out HFC.
"It is very possible that European HFC regulations could become a model for the state of California, or a more environmentally active U.S. administration could push for federal legislation," he said. "If, however, the refrigeration industry is proactive in reducing leaks and raising energy efficiency, we have a much better chance of avoiding regulation, and preserving HFC as a viable, legal refrigerant. HFC provides immense value to consumers as safe, non-toxic and highly energy-efficient fluids." -- JULIE GALLAGHER