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EPA Issues Final Rule to Phase Down HFCs as White House Announces Measures to Prevent Illegal Imports

HFCs
Archives, Global Trade Daily, News

EPA Issues Final Rule to Phase Down HFCs as White House Announces Measures to Prevent Illegal Imports

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The United States Environmental Protection Agency (EPA) has finalized a rule intending to reduce the production and consumption of hydrofluorocarbons (HFCs) in the United States by enforcing a cap and phasedown program under the American Innovation and Manufacturing (AIM) Act. According to the EPA, the final rule will phase down U.S. production and consumption of HFCs by eighty-five percent over the next fifteen years. Beginning January 1, 2022, allowances will be required to produce or import HFCs. The first of such allocations are to be announced by the EPA by October 1, 2021. The AIM Act instructs the EPA to issue a fixed quantity of transferrable production and consumption allowances, which producers and importers must hold in quantities equal to the amount of HFCs they produce or import. Alongside the EPA’s final rule, the EPA and other federal agencies under the Biden Administration announced additional actions intended to reduce consumption of HFCs, with a focus on curtailing and controlling illegal imports.

The final rule establishes HFC production and consumption baselines, a statutory phasedown schedule of allowed production and consumption, and the EPA’s approach to allocating and allowing transfer of allowances. According to the EPA, a global HFC phasedown is expected in order to avoid the most severe consequences of climate change. Producers and importers of HFCs should begin to consider how to adapt their businesses to the phasedown and how to take advantage of potential HFC alternatives. According to the phasedown schedule, steep reductions in allowances are planned for 2024 and 2029 to bring HFC production and consumption down to thirty percent against the baseline.

The EPA will set the initial allocation for each producer and/or importer based upon the individual entity’s production and/or import for the highest three-year period during the 2011-2019 period. The AIM Act had originally established the baseline to be the three-year period of 2011-2013, but the proposed rule published by the EPA in May 2021 had modified that to 2017 to 2019. Now with the final rule, the EPA has determined that using the average of the highest three years in the 2011 to 2019 window would ensure an equitable phasedown consistent with prior phasedowns.

The Administration announced the formation of an interagency task force consisting of the EPA and the Department of Homeland Security (DHS) to prevent and disrupt illegal importation of HFCs into the United States. The announcement of measures to prevent illegal imports follows reports of a surge in illegal trade in HFCs in Europe due to the European Union’s strict regulation of the greenhouse gases. The White House nods to this issue in its fact sheet on the matter, referring to “rates of noncompliance similar to what has been observed in other countries…” With the issuance of the EPA’s final rule, the U.S. has adopted a similar policy on HFCs but aims to avoid the enforcement issues observed in Europe, which have undermined the purpose of HFC regulations.

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Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

Propane
Archives, Global Logistics, Global Trade Daily, Ocean Ports

Does Your Sustainability Plan Include Propane? Here Are 3 Reasons It Should.

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Clean Air Month, celebrated in May, brings heightened awareness to an important issue for ports and port communities.

Ports traffic a high number of ships, vessels, barges, and boats on a daily basis and, because many are powered by dirty, high-carbon bunker fuel, air quality issues are a particular concern in and around port communities. As the momentum to reduce emissions and improve air quality continues to grow across the international port industry, many port authorities are seeking cleaner energy alternatives to use on-site.

According to the Environmental Protection Agency (EPA), switching to cleaner fuel is one of the most effective strategies for emissions reduction. That means clean, low-emissions energy sources—like propane—can offer considerable environmental and economic advantages for various port applications.

1. Propane-powered equipment reduces emissions

Diesel engines are the current workhorse of the American economy, and although they can be reliable and efficient, older diesel engines can emit significant amounts of air pollution, including particulate matter, NOx, and carbon dioxide, according to the EPA. And while many port authorities think the solution to lower emissions is to electrify their equipment, they’re likely unaware that propane has a cleaner and more transparent emissions profile when lifecycle emissions are taken into consideration. This includes site-to-source emissions produced in the creation and transmission of electric forklift batteries.

Sometimes data can speak louder than words and the Propane Education & Research Council has valuable data to support the claim that this is the cleanest energy source for port operations. Most notably, using propane produces 43 percent fewer greenhouse gas emissions than using an equivalent amount of electricity generated from the U.S. grid, according to data from PERC. And thanks to propane’s energy versatility, crews can reduce emissions across a port with propane-powered forklifts, port and terminal tractors, light- and medium-duty vehicles, shuttles, power generation, and even small marine vessels.

For smaller material handling needs on-site, propane forklifts reduce emissions compared with their diesel and electric counterparts. Compared with electric, propane can reduce SOx emissions by 76 percent, and compared with diesel forklift engines, propane forklift engines can produce up to 97 percent fewer hydrocarbon and nitrogen oxide (NOx) emissions—without any drop-off in payload or power.

Propane can bring emissions reductions to a port’s vehicle fleet, too. Terminal tractors powered by propane autogas produce 12 percent fewer lifecycle greenhouse gas emissions than gasoline-fueled terminal tractors, according to data from the Argonne National Laboratory. And propane autogas vehicles reduce NOx emissions by up to 36 percent compared to diesel vehicles, greenhouse gas emissions by up to 22 percent compared to gasoline vehicles, and up to 45 percent less particulate matter than electric vehicles throughout the full fuel cycle.

2. Propane is environmentally friendly

When ships come in and out of ports day in and day out, not only do they release harmful emissions into the atmosphere, but they can also have a negative impact on water resources, ecosystems, and marine life. Powering land- and sea-side port equipment with propane can introduce a more environmentally-friendly solution. It is an approved clean alternative fuel under the Clean Air Act. Additionally, the energy source is non-toxic and, if leaked, it vaporizes and dissipates into the air, eliminating contamination to air, land, and water resources. Spilled gasoline or diesel, on the other hand, can quickly contaminate these resources.

3. Propane is only getting cleaner

The energy source itself is seeing innovation and in the near future, more propane will be made from renewable sources. Renewable propane is a byproduct of the renewable diesel and jet fuel production process, which converts plant and vegetable oils, waste greases, and animal fat into energy. Because it’s produced from renewable, raw materials, renewable propane is even cleaner than conventional propane—and far cleaner than other energy sources. And considering its chemical structure and physical properties are the same as traditional propane, renewable propane can be used for all the same applications.

To learn more about the environmental benefits and versatility of propane for port operations, visit Propane.com/Ports.

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Matt McDonald is the director of off-road business development for the Propane Education & Research Council. He can be reached at matt.mcdonald@propane.com.

environment
Archives, Global Trade Daily, International Trade

Does Your Company Care About The Environment As Much As Consumers Do?

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It’s not just a product’s quality that compels consumers to purchase it. More people today care about how the item was manufactured and whether the company is harming the environment.

Studies show sustainability is a factor driving customers’ buying decisions. Recent research by IBM revealed that nearly six in 10 consumers surveyed are willing to change their shopping habits to reduce environmental impact, and nearly eight in 10 indicated sustainability is important to them.

That’s why companies can’t afford to pay only lip service to sustainability issues, says David Radlo (www.davidradlo.com), best-selling author of Principles of Cartel Disruption: Accelerate and Maximize Performance, and an internationally recognized expert on corporate innovation and leadership.

“Organizations are under increasing pressure from customers, investors, employees, banks, legislators and insurance companies to embrace social and environmental concerns,” Radlo says. “Studies increasingly show that the business benefits of sustainable strategies can be quantified and are real. There is a significant amount of money to be made and saved in the area of sustainability. It can give you a competitive advantage and improve your brand image, and it can also spur innovation.”

Radlo offers these points on how companies can prioritize and improve sustainability while turning it into a win-win for the environment and their business:

Assess your company’s sustainability level. “Most companies don’t know where to start,” Radlo says. “You start with a complete assessment. As it is conducted, link your sustainability efforts to the strategic plan and how it will impact your stakeholders. Determine your current status and what improvements you’d like to make.”

Identify ways to reduce waste and emissions. “Waste and pollution are indicators of inefficiencies, which tend to generate unneeded costs and environmental problems,” Radlo says. “The goal is to achieve breakthroughs that would lead to manufacturing without any form of waste and no carbon equivalent emissions. Waste elimination is achieved at the source through product design, producer responsibility, and waste reduction strategies down the supply chain. Some concepts to eliminate waste include cleaner production, product dismantling, recycling, reuse, and composting.”

Create an implementation plan and operationalize. “Develop your people for this important transition,” Radlo says. “Along the way, improve your processes and focus on the outcomes you wish to achieve. What measurement can you put into place concerning your customers, employees, stakeholders, and shareholder loyalty?”

Permeate the work culture, in addition to financial sustainability, with a go-green mentality. “The more that overall sustainability is ingrained and practiced in your culture, the stronger the company’s commitment is, and the message spreads organically and authentically,” Radlo says. “When your organization becomes a steward of the environment, and you fully integrate sustainability into your culture, the company now has a long-term vision and the processes in place to continue it.”

“Sustainability works for the greater good of any organization,” Rado says, “and it creates progress toward environmental and social improvement.”

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David Radlo (www.davidradlo.com), best-selling author of Principles of Cartel Disruption: Accelerate and Maximize Performance, is an internationally-recognized expert in leadership, innovation, and growth. He is a partner with RB Markets-Achievemost, a Masters professional outside director, a growth coach, and an International Fortune 500 speaker. He is experienced in the U.S. and globally, building sustainable consumer food brands such as Born Free, Farmer’s Best, and Egg-Land’s Best, and has personally negotiated agreements with Fidel Castro. He works with senior executives, venture firms, private, public, family, and college entities. His accomplishments in his 28 years as a CEO include delivering a six-fold increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), and a 30-fold increase in enterprise value. He is a graduate of Tufts University and NYU’s Stern School of Business.

carbon capture
Archives, Global Logistics, Global Trade Daily, Trucking

Four Ways Carbon Capture Will Be A Game-Changer for Climate Change

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Climate change is real, and carbon plays a significant role. According to the EPA, about 65 percent of global greenhouse gas emissions are carbon dioxide from fossil fuels and other industrial processes. This doesn’t even include other sources of carbon dioxide or other greenhouse gas emissions such as methane and nitrous oxide.

Carbon and other greenhouse gasses retain radiant heat from the sun, which causes an insulating effect that raises the atmospheric temperature. This overall temperature increase, also referred to as global warming, has been shown to be a direct cause of numerous negative climate events including the melting of polar ice caps, rising ocean levels, devastating and in some cases irreparable damage to ocean coral reefs, as well as unstable and harsh weather and storm patterns that cause catastrophic damage and loss of life. The use of technology such as carbon capture could be part of a global solution to the world’s carbon emission problem.

What is carbon capture?

Simply put, carbon capture is a means of collecting carbon from exhaust flues when it is produced as a biproduct of fossil fuel combustion (primarily CO and CO2). This carbon is released into the air from sources such as powerplants, manufacturing plants, or various modes of transportation that use carbon-based fuels including coal, natural gas, biomass, oil, and other fuel sources. The idea is to collect the carbon before it is released into the environment, thereby reducing its environmental impact.

Four ways in which carbon capture will be a game-changer

By reducing carbon emissions released into the atmosphere from industrial sources, we can make a significant impact on climate change. Carbon capture has encouraging potential and could radically alter the energy landscape because:

1. It allows the continued use of highly energy-dense and efficient carbon-based fuels (coal, natural gas and oil) without contributing additional carbon gasses to the atmosphere.

2. When applied to biomass-fueled combustion power plants, carbon capture has the potential to result in negative carbon emissions. Since the biomass sources—in the form of forest and agricultural waste—absorb and store carbon dioxide as part of natural lifecycles, capturing and sequestering the carbon dioxide after it is released effectively removes carbon dioxide from the atmosphere.

3. It sustains healthy global economic growth through abundant and affordable energy.

4. It retains billions of dollars in sunk costs in existing carbon-based generation infrastructure by sequestering carbon emissions.

What are the challenges of implementing carbon capture technology?

While carbon capture is incredibly promising, it does come with its own challenges. To date, the technologies that have shown potential have not been demonstrated at scale. By and large, they have only been verified in test environments. More tests in real-life carbon capture situations need to take place to prove that it is truly a viable option. Additionally, the economic tipping point has not been reached to allow carbon capture to compete with traditional thermal, nuclear, or renewable generation due to the intensive capital cost of installation.

Additional innovation and investment would need to take place to develop more cost-effective options, thereby reducing the cost and incentivizing manufacturing and transportation providers to install carbon capture systems. Finally, there exists a reputational barrier as carbon-based fuel combustion has become a target of environmental activists, who may not be receptive to the idea of “clean carbon” or “carbon neutral” initiatives. If we can both scale carbon capture and make it affordable, we can then show positive results that prove the system works. This scientific data is needed to help change the minds of environmental activists and politicians who are making environmental protection laws, to help them see substantial evidence that this type of technology will reduce carbon in the atmosphere.

The future of carbon capture

As carbon capture technology matures and closes scalability and commercial hurdles, it could result in a significant resurgence in carbon-based power generation. This will require time and money to navigate any barriers to entry both technically and politically. The bottom line is that carbon capture is incredibly promising, and as innovators in this area can show that it is good for the environment as well as for industry, it will be more likely to be adopted and supported.

As the goal of carbon reduction remains at the forefront of global concerns, IHI Power Services Corp is deeply interested in the potential advantages of carbon capture. Environmental stewardship and support services are part of its values and it is looking to new and innovative ways to protect the environment while supporting the power industry.

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Dan Consie has 30 years of experience in the power generation industry with skills in business and contract management, engineering, operation and maintenance, and rotating equipment vibration diagnostics and balancing. Consie has held plant engineer, plant manager and asset manager positions and is currently serving as vice president of strategic initiatives at IHI Power Services Corp. (IPSC).

environmental
Archives, Commentary, Global Trade Daily, Special Reports

Corporations Boast, But Small Businesses Are Key To Cleaner Environment

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When major corporations tout their contributions to social or environmental initiatives, the world takes note. As just one example, Microsoft, Apple, Facebook, and Google all drew attention at different times this year when they announced plans to work toward becoming carbon neutral.

But, despite the hype that gets associated with these big-business efforts, it may be that small businesses operating in quiet anonymity are the ones that have the greater impact on the environment, both good and bad.

“Large corporations are more motivated to use these initiatives as a means to achieve their financial objectives, whereas small businesses are more serious about making a real difference in their communities,” says Rajat Panwar, Ph.D. (www.rajatpanwar.com), an associate professor of Sustainable Business Management at Appalachian State University.

“Given that smokescreening and greenwashing are big problems in sustainability, we will be better off enabling small companies to own sustainability more so than large companies.”

That’s one reason why government-sponsored environmental initiatives need to include small businesses as critical partners if they hope to succeed, Panwar says. For example, he says, presidential candidate Joe Biden’s $2 trillion climate plan that sets a target for achieving net-zero emissions by 2050 should take into account the role small businesses can play in environmental protection.

Panwar says a few facts worth knowing on the issue include:

Small businesses’ impact is a story of numbers. Although large corporations get more attention, the vast majority of businesses are small. “In the United States, about 99% of all firms are classified as small,” Panwar says. “Even though their individual contribution to pollution is small, collectively it is enormous, which is why it should be addressed. In fact, large corporations often pollute through small firms because it is a network of numerous small firms that feed into value-chains and supply chains of large corporations.”

Grassroots initiatives need to be targeted. A tremendous gap exists between large corporations and small businesses in terms of the resources they can allocate for environmental initiatives. “That’s why climate investments like those Biden is proposing should target grassroots initiatives,” Panwar says. That would include local food production, support to small landowners for sustainable forestry, grants for circular economy initiatives, grants for businesses that would promote fixing and repairing things, local recycling, and sustainable food systems.

Small businesses are inspired by different motivations. Panwar has been involved in research into the social and environmental impact of small businesses, and he and his colleagues produced intriguing results with their study, especially as it related to what motivates businesses to be good stewards. “Small businesses are motivated to pursue social and environmental initiatives mainly to be good community citizens and generate local reputation,” he says. “Large corporations are typically inclined to pursue these initiatives to enhance shareholder wealth.”

Some people may argue that climate initiatives need to take a backseat right now while the country focuses on getting people back to work. But Panwar says economic stimulus can easily be aligned with environmental protection.

“The initiatives I am talking about will produce new jobs that would support the local economy,” he says. “If we only focused on giving energy grants, then I can see the rationale in pitting job creation versus climate consequences. But climate investments can be done very strategically so that small businesses, entrepreneurs, and landowners get the money to revamp their operations.”

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Rajat Panwar, Ph.D. (www.rajatpanwar.com), is an associate professor of Sustainable Business Management at Appalachian State University. He previously was an assistant professor at the University of British Columbia. He also has been an Affiliate Faculty member in the College of Forestry at Oregon State University, and with the Governance, Environment, and Markets program at the School of Forestry and Environmental Studies at Yale University. Panwar holds two doctorate degrees, one in Corporate Sustainability from Grenoble École de Management in France, and one in Forestry from Oregon State University.

EPA
Archives, Global Trade Daily, News

Old Dominion Confirmed for the 2020 EPA SmartWay Excellence Award

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Old Dominion takes leading sustainability efforts in the trucking industry to a new level. Thanks to its role within the SmartWay Transport Partnership, the LTL carrier has contributed to the savings of 279.7 million oil barrels, $37.5 billion in fuel costs, and 134 million tons of air pollutants, according to information released. These successes in addition to consistent efforts in sustainable operations have earned Old Dominion the EPA SmartWay Excellence Award award for the sixth year in a row.

“Sustainability is a critical component of Old Dominion’s operational strategy. We’re committed to being a good corporate citizen and our partnership with the SmartWay Transportation program helps us move towards being a more sustainable carrier,” said Greg Gantt, president and CEO, Old Dominion Freight Line.

The award and 11-year partnership with SmartWay support Old Dominion’s position as a leader in sustainable operations within the freight supply chain arena. Old Dominion represents one of roughly 3,670 companies in partnership with SmartWay. SmartWay partners range from freight shippers to manufacturers, cargo owners, retailers, and more.

Sam Faucette, Old Dominion’s vice president of safety and compliance, received the award on behalf of the company on November 5th during the EPA SmartWay Excellence virtual conference.

“We will continue to look for ways to improve our sustainability practices and ultimately reduce our carbon footprint. We are humbled by this recognition and thrilled to receive this award for the sixth consecutive year,” Gantt concluded.

diesel
Archives, Global Trade Daily, News

Port of Baltimore Announces $1.8 Million Grant Towards Diesel Emissions Reduction Act

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Older diesel-powered equipment including forklifts, yard tractors, other heavy cargo machinery, and 44 dray trucks at the Port of Baltimore will soon be replaced with newer and cleaner equipment options as part of the Diesel Emissions Reduction Act (DERA). The Port of Baltimore announced that the U.S. Environmental Protection Agency (EPA) contributed $1.8 million grant towards the initiative this week in conjunction with the EPA’s Clean Diesel Program.

“This EPA grant will help us continue cleaning the air around the Port of Baltimore,” said Governor Larry Hogan.  “Working with our federal partners, the Port is showing how to be a responsible steward of the environment and, at the same time, break cargo records, grow business and expand jobs for Marylanders.”

“We are proud of the Port’s continued leadership on cleaner and greener solutions and appreciate the support of EPA and Congress,” said Maryland Environment Secretary Ben Grumbles. “These investments are important for Maryland’s steady progress on clean air, public health and climate change.”

Beyond the DERA, the grant provides dual-support for the Port of Baltimore’s Diesel Equipment Upgrade Program. The ten-plus year program has been successful in replacing a total of more than 200 dray trucks, 110 pieces of cargo-handling equipment and repowered 10 marine engines and retrofitted 16 locomotive engines.  Reductions resulting from this initiative include 3,304 tons of nitrogen oxide, 922 tons of carbon monoxide, 165 tons of particulate matter and 141 tons of hydrocarbons.

“Through initiatives like our Diesel Equipment Upgrade Program and EPA’s Clean Diesel Program, we have reduced pollutants in the air around the Port by more than 10,000 tons in the past 12 years,” said David Thomas, acting executive director of the Maryland Department of Transportation Maryland Port Administration (MDOT MPA).