Regulatory Issues

Written on: August 1, 2022 by Doug Raymond

The California Air Resources Board (CARB) is still working on finalizing the 2021 amendments to its Consumer Products volatile organic compound (VOC) rule. This is the longest that it has taken for CARB to finalize amendments through the Office of Administrative Law (OAL) that I personally can remember. It will be an unprecedented event if these amendments are not finalized. Remember, new VOC limits become effective on Jan. 1, 2023, so Industry has only five months to comply. Make sure that your company is working on complying with these new limits. Also, remember that any products made before Jan. 1, 2023 can be sold-through for three years if properly date-coded.

The State Implementation Plan (SIP) 2022 should have been voted on in June but has been delayed until September 2022. It does not appear that there will be any more workshops on the draft SIP, with the final SIP likely released in August 2022. Remember, the SIP is the plan that instructs CARB on how much VOC reduction is needed from each source. Consumer Products are now the largest source of VOC emissions in California, so Industry can expect that more emission reductions will be needed from Consumer Products. How much is yet to be determined. The good news is that the reductions should not be needed until 2037.

OTC States
The Ohio Environmental Protection Agency finalized the amendments to its VOC Consumer Products rule on June 20; the effective date for the new limits is July 1, 2023. Ohio updated its rule from Ozone Transport Commission (OTC) Model Rule II to the OTC Model Rule IV. Please make a note of this and start your transition to Ohio-compliant products.
As we go to print, no meetings are scheduled in other States for rule updates. We are aware that Michigan, New Jersey, Washington, DC and perhaps Oregon will work on Consumer Product VOC regulations, although the timing is unknown.

On July 6, Washington State held a virtual meeting with more than 80 attendees concerning its hydro-
fluorocarbon (HFC) rule. Remember, Rule 173-443 bans the sale of small cans of refrigerants for consumer use in automobiles. Industry is trying to preserve these small containers for use by technicians, but it is not looking good. If this is of concern to you, please feel free to reach out and let me know.

On June 30, the U.S. Environmental Protection Agency (EPA) hosted virtual workshops to solicit input from stakeholders on the American Innovation & Manufacturing (AIM) Act’s upcoming Technology Transitions rulemaking for the air conditioning, motor vehicle air conditioning, refrigeration, foam and aerosol sectors. As reported in the last issue of SPRAY, the EPA has requested information on the use of HFCs in aerosol products. Industry is in the process of working with the EPA on this topic.
Later this year, the EPA will release a draft regulation that will restrict the use of HFCs in aerosol products—to what degree and when the restrictions will apply are yet to be determined. A final regulation will be issued before September 2023. Stay tuned, as there is more to come.

New/old tax
This is a new issue brought to my attention by Aeropres Corp.
In 1980, under the Carter Administration, the Comprehensive Environmental Response, Compensation & Liability Act of 1980 (CERCLA) was passed. More commonly known as the Superfund Law, this legislation introduced an excise tax on petrochemical and chemical producers, the funds of which were controlled by the EPA to clean up hazardous waste sites. In 1995, the U.S. Congress chose not to renew this tax.
The Infrastructure, Investment & Jobs Act, signed into law on Nov. 15, 2021 under the Biden Administration, expanded and reinstated the Superfund Tax, which went into effect on July 1, 2022. The application of the Superfund Tax is found in sections 4661 and 4662 of the Internal Revenue Code; also found there is the list of taxable chemicals that includes “butanes,” which refers to both normal butane and isobutane. There are 99 other chemicals listed, some of which are also used in aerosol products.
Currently, there are differing opinions as to who will be liable to pay the tax. I will follow up in the next issue of SPRAY, but be aware that the tax became effective on July 1, 2022. SPRAY