U.S. freezer efficiency rules set in climate push roil businesses

WASHINGTON Wed Aug 27, 2014 2:22pm EDT

WASHINGTON Aug 27 (Reuters) - The Obama administration's rush to tackle climate change with new energy efficiency standards on grocery-store freezers has drawn fire from companies that in the past backed tighter benchmarks but say the latest rules are technically flawed and could drive some manufacturers out of business.

The rules could backfire by raising prices for users, who may then opt to hold onto old, less efficient equipment, according to a trade organization that has challenged the regulations in federal court.

Business groups such as the U.S. Chamber of Commerce have also criticized the White House's use of "social cost of carbon" calculations, which aim to put a dollar value on the impact of pollution, to justify stricter efficiency measures.

Without action from a divided Congress, the White House has focused on using executive actions and regulations from the U.S. Department of Energy and the Environmental Protection Agency to propel Obama's "Climate Action Plan."

Opponents say the administration, in racing to roll out various regulations during Obama's second term, risks sacrificing business interests to meet political goals.

The Energy Department has said the standards for walk-in coolers and walk-in freezers would save consumers nearly $450 billion. In 2030 the annual savings would equal 0.5 percent of total U.S. commercial energy use in 2014, the DOE said.

The rules addressing equipment such as large walk-in freezers found in supermarkets are a key element of energy efficiency standards announced by Obama in May during a speech at a California Wal-Mart store.

Makers of those products say the standards are not technically feasible at this time. That echoes industry criticism that EPA regulations on new power plants call for technology that is not available on a commercial scale.

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) said significant technical errors embedded in the efficiency standards for walk-in freezers would prevent the realization of the trumpeted gains.

AHRI members such as Johnson Controls, Lennox International and United Technologies could be among those affected by the rule.

"It makes a great press release, but when you actually look at the energy savings achieved it's much less," AHRI President Stephen Yurek told Reuters.

AHRI has filed federal lawsuits asking for a judicial review of the walk-in freezer rule and a rule finalized in February setting standards for commercial refrigeration equipment.

The group is awaiting a response from the DOE. If the agency agrees, the court proceedings would be moot; otherwise, the suit could drag on for up to two years.

A business coalition including the Chamber of Commerce and the American Petroleum Institute, calling the rules "flawed," zeroed in on the use of the social cost of carbon, a monetary estimate of how pollution affects health, weather and other factors.

This year the administration increased its 2020 SCC estimate to $43 per tonne, up 58 percent from the previous estimate made in 2010, after a multi-agency review.

By not reflecting the EPA's actions to address sources of carbon, the Energy Department could wind up double counting any drop in emissions from rules such as the freezer standards, critics say.

"The result may be to promote excessive and economically unjustified regulations," the coalition said of the rule on walk-in freezers.

Electric utilities and oil companies are currently battling with the administration over the scope of climate rules, but AHRI has generally supported higher efficiency levels.

Some of the minimum standards for commercial refrigeration equipment are above the levels required for products to receive the EPA's Energy Star designation awarded to the most efficient products available for consumers, AHRI said.

If the rules stand, smaller manufacturers that cannot afford to redesign products may be forced out of business, the group said.

Critics also say the Energy Department failed to fully consider input from the industry on highly technical aspects of the standards in its haste to finish the regulations.

The Energy Department said the rule-making process included "multiple public comment periods during which manufacturers, other stakeholders" could weigh in.

Robert Wilkins, vice president of public affairs at Danfoss Group, maker of industrial components, said he attended public meetings the DOE held regarding the standards where government officials could not explain how they arrived at some of the assumptions underpinning the rules.

"They are using assumptions that are wishes and dreams," Wilkins said.

(The DOE's 76-page cooler and freezer rules: www.regulations.gov/# !documentDetail;D=EERE-2008-BT-STD-0015-0141

(Reporting by Ayesha Rascoe; Editing by Ros Krasny and Leslie Adler)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.