Comment Log Display

Ozone Depleting Substances Protocol – Summary of Evidence

AB 32 Offsets Challenge – Public Comments on October 19, 2011

Laurie Williams and Allan Zabel, as individuals and as volunteers
for Citizens Climate Lobby

Summary of Evidence that Proposed Greenhouse Gas Offset Protocols
and Regulations do not meet the AB 32 Integrity Criteria

Standard in Protocol:
The proposed Ozone Depleting Substances (“ODS”) Protocol would
provide offset credits for any ODS projects that meet the
description of such a project.  This is contrary to the AB 32
Integrity Criteria -- the requirement that all emission reductions
meet the following criteria (See Section 38562(d)): 

AB 32 Integrity Criteria:

“(d) Any regulation adopted by the state board pursuant to this
part or Part 5 (commencing with Section 38570) shall ensure all
of the following:
(1) The greenhouse gas emission reductions achieved are real,
permanent, quantifiable, verifiable, and enforceable by the state
board.
(2) For regulations pursuant to Part 5 (commencing with
Section 38570), the reduction is in addition to any greenhouse
gas emission reduction otherwise required by law or regulation,
and any other greenhouse gas emission reduction that otherwise
would occur.

Evidence of Failure to Meet Integrity Criteria

1.  All Reductions Are Deemed Additional: In the ODS Protocol, the
ARB establishes a standard which treats all ODS reductions from
allowed projects as being additional.  This standard relies on
grossly distorted, misinterpreted, and incomplete information used
by the Climate Action Reserve (“CAR”) to draft an earlier version
of the ODS protocol (“CAR ODS Protocol”).  In establishing this
standard, the ARB also ignores more recent data gathered and
published by the ARB itself concerning California data.

	a.  Flaws in Earlier CAR ODS Protocol: In Appendix B of the CAR
ODS Protocol (Attachment 1, pp. 59-62), CAR sets forth data which,
CAR claims, demonstrates that very little ODS is destroyed in the
United States.
  
Table B.1. Destruction of ODS in the U.S. 
CFC 	2003 Destroyed (kg) 	2004 Destroyed (kg) 
CFC-11 	58,846 	109,884 
CFC-12 	23,709 	62,364 
CFC-114 	464 	4,044 
CFC-115 	4,401 	6,737 

Source: Reproduced from ICF, ODS Destruction in the United States
of America and Abroad (2009), prepared for U.S. EPA. 

	However, the “ODS Destruction in the United State of America and
Abroad” (“2009 Report”) from which CAR took this data very clearly
states that the data is very incomplete. “Table 3 presents the
total reported quantity of ODS (by type) destroyed in the U.S. for
the years 2003 and 2004. Data is only presented for those
facilities destroying ODS commercially that provided responses to
questionnaires. Several other companies reported sending ODS to
other off-site destruction facilities, but these data were not
included due to their incomplete nature. Therefore, the data
presented are not inclusive of all commercial ODS destruction that
occurred in the U.S. in 2003 and 2004. Quantities of ODS
destruction as reported in the TRI database, are presented in
Appendix C.”  See Attachment 2, at p. 20 of 2009 Report, emphasis
in original.  The data in Appendix C, taken from EPA’s Toxic
Release Inventory, shows that the 2003 data used by CAR understates
the actual ODS destruction as follows:

CFC	2003 Destroyed Kg (CAR)	2003 Destroyed Kg (EPA TRI)
CFC-11	58,846	103,995
CFC-12	23,709	38,599
CFC-114	464	1,085,015
CFC-115	4,401	314,143

Even these TRI figures may undercount actual destruction because,
as stated in the 2009 report, ODS listed as “Treated Off-Site” in
the TRI data base were not included as destroyed due to lack of
certainty that they were, in fact, destroyed.  See Attachment 2, at
pp. 48-9 of 2009 Report).

	In addition to understating ODS destruction rates by more than a
factor of 17 times for the combination of the 4 CFC listed, CAR
also “interpreted” the meaning of this data and added its own
completely unverifiable data.  CAR decided that the 2003-04 data
represented practices of handling ODS which were “not yet
influenced” by the potential incentives for generating GAG offsets
and further relied up data provided by industry anonymously in
minimizing the amount of historic and ongoing ODS destruction which
might qualify for generating offsets under the ODS Protocol. 
Attachment 1, at p. 59-60.

	b.  Current ODS Recovery From Foam in California: “California has
two appliance recycling facilities operated by JACO Environmental,
and two facilities operated by Appliance Recycling Centers of
America (ARCA). They handle about 145,000 to 150 000 units per
year, with the vast majority of units recycled as part of a
state-wide electric utility incentive program to remove older
working appliances (that are energy efficient) from the electricity
grid. JACK and ARCA handle 80,000 units for Southern California
Edison, 40,000 units for Pacific Gas & Electric (PG&E) and a
further 25,000 units for Sacramento Municipal Utility District
(SAUD). Therefore about 12- 13% of residential
refrigerator-freezers reaching end-of-life in California is
recycled using a comprehensive foam blowing agent recovery
process.”  See Attachment 3, pp. 51-2.

2.  ODS Projects Already Occurring: Projects of the type described
in the ODS Protocol are currently being implemented.  Therefore,
the ODS Protocol would grant credit to projects which have occurred
and will continue to occur in the course of business-as-usual.

	a.  Huge Project in Philadelphia: “GE and ARCA Inc. announced
Sept. 9 that the UNTHA Recycling Technology system was ready to
crunch its first refrigerator. It will recover about 95 percent of
the insulating foam, plus high-quality plastics, aluminum, copper
and steel.

The new UNTHA Recycling Technology (URT) system at the Appliance
Recycling Centers of America (ARCA)’s facility in Philadelphia is
ready to begin recycling as many as 150,000 refrigerators annually,
GE and ARCA announced Sept. 9. ARCA hired 50 new employees as part
of its $10 million investment in URT and other new capital
equipment. Since February, the two companies said, they have
doubled the number of states served, feeding 100,000 additional
appliance units to the Pennsylvania facility from Massachusetts,
Connecticut, Pennsylvania, Maryland, Virginia, West Virginia, New
Jersey, New York, North Carolina, Delaware, Rhode Island and
Vermont. Consumers bring their used refrigerators to participating
retailers, who then send them to ARCA as part of GE’s participation
in the EPA Responsible Appliance Disposal program.”  See Attachment
4.

	b.  Utilities Fund Projects, Realize Benefits: Southern California
Edison states that its participation in EPA’s RAD Program, which
involved recycling old and inefficient but still working
refrigerators and freezers, had a benefit-cost ratio of 3:1 or
greater, saving the company tens of millions of dollars.  See
Attachment 5.

	c.  Retailers Joining Recycling Program: Major retailers,
including Home Depot, Sears, and Best Buy have joined EPA’s RAD
Program to recycle refrigerators and freezers.  See Attachment 6.

3.  ODS Protocol Ignores Profitability of New Destruction
Technology: The standard created by the Protocol ignores recent
advances in technology, developed in Europe, which are
cost-effective and profitable.  This new technology has been
established in the United States and, given its competitive
advantages, is very likely to gain wide-spread usage.

	a.  ARCA Shows New Technology is Profitable: The 2010 ARCA annual
report shows the refrigerator and freezer recycling, especially
with the new control technology, is profitable.  “2010 was a solid
year for our appliance recycling operations. Appliance recycling
revenues increased from $15.9 million in 2009 to $19.4 million in
2010, mainly as a result of new recycling contracts we were awarded
during the year. Gross profit as a percentage of total
revenues—excluding our new joint venture, ARCA Advanced Processing,
which began operations in February 2010—increased to 42.8% from
35.6% in 2009. Gross profit increased 32%, from $9.2 million in
2009 to $12.1 million in 2010, which we attribute to stronger
byproduct revenues and improved efficiencies implemented throughout
our recycling operations.

We signed twelve contracts with electric utilities last year,
making 2010 one of our most productive years ever in terms of
adding new customers. Also of note, we were successful in retaining
the business of many of our current customers, including renewed
contracts with all of our major utility customers in California.
Southern California Edison, whose program we have provided turnkey
refrigerator and freezer recycling services for since 1994, is
rapidly approaching the collection of their 1,000,000th appliance.
The consistently high energy savings demonstrated through programs
such as Edison’s have contributed to making appliance recycling a
mainstay of energy efficiency portfolios across North America.

The February 2010 opening of our ARCA Advanced Processing facility
in Philadelphia, which was accomplished through a joint venture
with 4301 Operations, LLC, was a pivotal event in our efforts to
permanently retire old appliances through a highly effective
process and technology. Our major contract on the East Coast now
provides us with the steady stream of appliances required to make a
fully integrated appliance recycling center economically
attractive. We expect to complete the installation of an UNTHA
Recycling Technology (URT) materials recovery system for
refrigerators and freezers in our Philadelphia recycling center
during the second quarter of 2011. This equipment will not only
significantly reduce emissions of greenhouse gases and
ozone-depleting substances that can occur during the disposal of
appliances, but will also r educe the typical landfill waste of a
refrigerator by approximately 85% by weight. Another benefit of
this technology is that the URT system will enable us to generate a
finer grade of byproduct materials to sell to metals and plastics
recyclers.”  See Attachment 7, p. 7.

4.  New ODS Destruction Technology Creates Market Advantage:
Marketing information created and published by General Electric
shows there is a very significant marketing advantage for retail
sellers of refrigerators in being able to offer and perform
environmentally friendly recycling of customers’ old
refrigerators.

	a.  Recycling Creates Market Advantage: 70% of customers want
appliance recycling (see Attachment 8, p. 2), 82% of customers will
go out of their way to purchase from a manufacturer that recycles
(see Attachment 9, p. 2), and 67% of customers are willing to pay
more if a retailer offers recycling programs (see Attachment 9, p.
2).

List of Attachments
1.  Climate Action Reserve, U.S. Ozone Depleting Substances Project
Protocol, February 3, 2010
2.  ICF International, ODS Destruction in the United State of
America and Abroad, May 2009, as attached to, Compilation of
Strategies for the Environmentally Sound Management of Banks of
Ozone-Depleting Substances, United Nations Environment Programme,
June 26, 2009
3.  California Air Resources Board and California Environmental
Protection Agency, Developing a California Inventory for Ozone
Depleting Substances (ODS) and Hydrofluorocarbon (HFC) Foam Banks
and Emissions from Foams, March 14, 2011
4.  Environmental Protection, Big Goals for Philadelphia
Refrigerator Recycling Project, September 3, 2011
5.  EPA and Southern California Edison, Safeguarding the
Environment One Appliance at a Time, undated
6.  Consumer Reports, It's Getting Easier to Recycle Your Old
Appliances, September 9, 2011
7.  Appliance Recycling Centers of America, Inc., 2010 Annual
Report
8.  General Electric, GE Partners with EPA on Responsible Appliance
Disposal (RAD) Program to Reduce Greenhouse Gas Emissions and
Landfill, February 8, 2011
9.  New York Times, GE Expands Appliance Recycling for Consumers
and Retailers – How RAD, September 9, 2011