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The paint and coatings industry has made great strides in reducing air pollution over the last two decades. Current and near-term regulations, as well as pollution prevention and waste minimization practices, have rapidly lowered the amount of volatile organic compound (VOC) emissions from the paint and coatings industry and will continue to do so in the future.
VOCs, combined with nitrogen oxides and sunlight, produce ground-level ozone, a principal component of smog. According to the U.S. Environmental Protection Agency (EPA), emissions from industrial facilities, electric utilities, motor vehicle exhaust, gasoline vapors, and chemical solvents are the major man-made sources of NOx and VOCs.1 However, studies have shown, and EPA has acknowledged, that ozone levels have improved by 33 percent over the past 30 years,2 and VOCs in particular have gone down by 53 percent. Air quality will improve even more in coming years as states continue to implement the current national standard for ozone.
Despite the progress that many industries have made from compliance with federal and state regulations, as well as private initiatives, EPA remains committed to lowering the national ozone standard to a point that compliance will be increasingly challenging — if not impossible, given existing technology — for the manufacturing sector. By Oct.1, 2015, EPA must determine whether to lower both the primary (health-based) and secondary (welfare-based) standards from the current 75 parts per billion (ppb) standard. In December 2014, EPA released a proposed rule to lower the National Ambient Air Quality Standards (NAAQS) for ozone to a level somewhere within the range of 65 to 70 ppb.3 EPA asserts that the current ozone level of 75 ppb is “not requisite to protect public health with an adequate margin of safety,” and is proposing this revision to increase public health protections, “including for ‘at risk’ populations such as children, older adults, and people with asthma or other lung diseases.”
The American Coatings Association (ACA) represents the $24 billion dollar paint and coatings industry in the United States, operating in all 50 states, and employing over 268,000 people engaged in the manufacture, application, and distribution of its products. ACA members are committed to supporting clean air and a clean environment; however, they also face a potential new standard and regulations that will make it difficult to innovate, manufacture products, build new projects, and improve infrastructure.
EPA’s proposal will have a significant impact on almost every industry in the country, making it among the most expensive regulations in our nation’s history. Implementing the proposed new NAAQS will immediately cause many parts of the country that are in attainment with the current ozone standard to be reclassified as being in non-attainment, or noncompliance. Local communities will face burdens to commercial and industrial activity not only vital to creating jobs, but also to providing tax revenue that supports important local services.
ACA and the coatings industry support retention of the current national ozone standard of 75 ppb for ground-level ozone, and continue to urge EPA to focus its efforts on completing the implementation of its current standard before further lowering the NAAQS for ozone.
This Issue Backgrounder addresses why air quality regulations have a significant impact on the paint and coatings industry; why continued, demonstrable improvements in air quality need to be recognized; and why current standards must be fully implemented by the states before EPA considers lowering an already stringent ozone standard.
EPA’s Mandate & the Coatings Industry’s Strides
Under the Clean Air Act, EPA is required to set health-based NAAQS for specific pollutants, including ozone. This standard must be reviewed every five years, and EPA cannot consider implementation costs when setting NAAQS.4 EPA failed to meet its 2013 deadline after setting the ozone standard in 2008, and is now under a court-ordered deadline to make a decision on whether to revise the standards by Oct.1, 2015.
NAAQS are standards for outdoor ambient air that are intended to protect public health and welfare from pollution. “NAAQS do not directly limit emissions of a pollutant; rather, they set in motion a long process in which states and EPA identify areas that do not meet the standards, and states prepare implementation plans to demonstrate how emissions will be lowered sufficiently to reach attainment.”5 States are tasked with enacting pollution control regulations to meet the national standards by updating their state implementation plans (SIPs) to limit VOCs in architectural coatings, factory applied coatings, and consumer products. For several decades, federal, state and local regulations have limited VOCs in coatings and how these products are applied and used.
Since the late 1970’s, the paint and coatings industry has significantly reduced its emissions of VOCs and hazardous air pollutants (HAPs), and this trend has continued. Market forces have played a role as the industry has become more service-oriented, providing just-in-time orders, smaller batch sizes, more waterborne and low-VOC coatings, and better transfer technology. VOC emissions from architectural coatings have drastically decreased over the last few decades as industry has moved towards low-VOC waterborne technologies, even while the use of architectural coatings has increased over the same time period nationwide.
For instance, VOCs from architectural paint and coatings in the Los Angeles, Calif. area — the air basin with the most severe air quality issues in the country — have decreased by over 75 percent over the course of the last decade, from 2002 to 2013, according to the local air district.6 Furthermore, the National Association of Manufacturers (NAM) and NERA Economic Consulting released a study citing that ozone-forming emissions have been cut in half since 1980, and the regulations already in place will continue to cut emissions by another 36 percent from current levels.7
ACA believes that emphasizing market-driven innovations and existing policies to improve fuel economy, increase energy efficiency, and reduce air pollution from cars, facilities, and products will drive further air quality improvements over the next decade. In 2011, President Barack Obama ordered EPA to abandon a similar attempt to lower the ozone standard, citing the need to reduce regulatory burdens in a recovering economy. EPA’s new proposal, however, raises serious concerns about whether lowering VOC content in consumer and commercial products is technically feasible at this time, or worth the time and resources spent by manufacturers to comply with little return on investment in terms of improved air quality.8
Negative Impact of a Lower Ozone Standard
Currently, 227 counties have not yet achieved the current 75 ppb standard. Consequently, making the national ozone standard even lower could push virtually the entire country into nonattainment, and cause almost every state to face penalties that would, in turn, hurt manufacturers and the economy.
EPA’s own maps indicate that approximately 358 counties would violate a 70 ppb standard, and 200 additional counties would violate a 65 ppb standard, for a total of 558 counties in violation based on 2011-2013 monitoring data.9 Other studies have shown that at 70 ppb, 48 percent of the population would live in counties at risk of violating the standard, and 59 percent at 65 ppb.10 With a possible 60 ppb standard, a vast majority of the country would be in nonattainment. This standard would not just affect cities — the U.S. Chamber of Commerce even identified 12 national parks that would not meet EPA’s ozone standard, if implemented.11
EPA’s national ozone standard produces a powerful trickle-down effect on states and local areas, and a lower ozone standard would have a significantly negative impact on the country’s economic competitiveness and job growth, while driving up compliance costs. States that are in nonattainment are required to impose an extensive range of regulations to achieve the standard.
EPA claims the cost of implementing an ozone standard of 70 ppb would be $3.9 billion annually, beginning in 2025, and a 65 ppb standard would cost $15 billion annually — though those estimates don’t include California. However, a recent study conducted by NAM and NERA Economic Consulting finds that EPA’s proposal will actually cost the economy $140 billion per year, result in 1.4 million fewer jobs on average through 2040, and cost the average household $830 per year in the form of lost consumption.12
For the paint and coatings industry, being located in a nonattainment area often results in increased operating costs, added recordkeeping, and other regulatory burdens, such as permitting delays and restrictions on expansions. These regulations require controls on everything from product formulation, use, and sale, to manufacturing operations, creating barriers to business development. The national ozone standard impacts nearly every product the industry’s manufacturers sell because states in nonattainment establish stringent limits on the VOCs on paint, adhesives, sealants, automotive refinish products, aerospace coatings, and marine coatings.
States in nonattainment also impose regulations on paint manufacturing and application facilities, forcing companies to limit activity, change their manufacturing processes, or install costly pollution control devices. Should EPA move forward with its proposal, areas that have worked hard to come into attainment will be thrown back into non-attainment without the requisite means necessary to implement the revised goal. Further, the fact that two-thirds of the controls needed to achieve attainment are not identified by EPA (“unknown controls”) could lead to unintended consequences such as plant closures, threatening manufacturing jobs.
The outcome is likely to include higher costs and less availability of key chemicals, including those used in coatings production, as the cost of production rises and the increased costs affect future capacity. All these outcomes are likely to occur unless EPA chooses not to adopt the lower standard. Congress has taken measures this year to halt or slow the rulemaking by introducing legislation and has held countless hearings to raise awareness of this serious issue. Both the House and Senate have considered appropriations riders to block EPA from revising the ozone standard for one year.13 Both the House and the Senate introduced the “Clean Air Strong Economies (CASE) Act,” legislation that would prohibit EPA from lowering the NAAQS until at least 85 percent of counties that are in nonattainment areas have met the standard.14 ACA has supported this legislation, along with many other industries, urging EPA to fully implement the 2008 standard before creating a lower standard. Concerns also have been raised by members of Congress that EPA’s proposal would set the ozone standard close to “background levels,” meaning the level of ozone in an area that would exist absent any man-made emissions.15 Congressional members have also seriously questioned the adequacy of the health studies EPA used to justify a potential lower ozone standard.”16
EPA’s proposed rule could set out pollution policies, including limits on VOCs, that ACA believes will have negative implications for states, municipalities, and industry, especially for paint and coatings manufacturers that are already striving to meet the existing ozone standard. State and local governments are struggling to meet the current primary ozone standards, and a nonattainment designation could adversely impact these communities, making it more difficult to attract and retain industry and sustain economic growth and vitality.
ACA maintains that the cost of the new proposed standard does not appear to be commensurate with anticipated air quality improvement, particularly since the current ozone standard has itself not been fully implemented, making a revision at this time premature. The impact on coatings manufacturers will come in the form of increased pressure on the part of regulators to lower VOCs in formulations, along with increased pressures on end users that could result in offshoring of VOC-intensive processes, such as surface coating.
EPA should retain the existing 75 ppb standard for ground-level ozone so that industry and the states can meet these requirements before moving the targets again.
For more information, please contact ACA staff:
Javaneh Nekoomaram, Counsel, Government Affairs; (202) 719-3715 or firstname.lastname@example.org
Tim Serie, Counsel, Government Affairs; (202) 719-3706 or email@example.com
David Darling, Senior Director, Environmental Affairs; (202) 719-3689 or firstname.lastname@example.org
1 EPA webinar on “Proposed Revisions to National Ambient Air Quality Standards for Ozone, December 2014”
2 EPA, “National Trends in Ozone Levels”
3 79 Fed. Reg. 75234 (December 17, 2014).
4 Whitman v. American Trucking Assns, Inc., 531 U.S. 457 (2001).
5 James E. McCarthy, “CRS Report: Ozone Air Quality Standards: EPA’s 2015 Revision,” February 26, 2015
6 South Coast Air Quality Management District 2007 Air Quality Management Plan, Appendix III; South Coast Air Quality Management District Par 1113 Working Group Meeting Presentation, June 17, 2015
7 NERA/NAM Study
8 Testimony of Stacy-Ann Taylor, Roof Coatings Manufacturers Association
9 EPA webinar, “Proposed Revisions to National Ambient Air Quality Standards for Ozone, December 2014”
10 Small Business & Entrepreneurial Council
11 Sean Hackbarth, “These 12 National Parks Won’t Meet EPA’s Ozone Standard,” December 9, 2014
12 Study by NERA/NAM
13 H.R. 2822, House Fiscal Year 2016 Interior-Environment Appropriations Bill.
14 S.751, introduced by Sen. John Thune (R-SD), and H.R. 1388 introduced, by Rep. Pete Olson (R-TX-22). Both bills were introduced on March 17, 2015, the same day the comment period closed for EPA’s proposed ozone rule.
15 Patrick Ambrosio, “EPA’s McCabe Defends Ozone Proposal from Criticism about Cost, Achievability,” BNA Daily Environmental Report, June 12, 2015
16 Patrick Ambrosio, “Republicans Question Ozone Studies, Urge EPA to Consider Effects of Job Loss,” BNA Daily Environmental Report, June 17, 2015