1. Negative Impacts of EPA’s SNAP Regulation

2. 2 Who is NAFEM ? The North American Association of Food Equipment Manufacturers Represents:  550 foodservice equipment & supplies manufacturers  220 members w/annual revenues of $5M or less;  78 members w/annual revenues of $5-10M;  89 members w/annual revenues of $25-10M.

3. NAFEM Members Manufacture:  Blast Chillers  Cabinets, Refrigerated  Cook-Chill Systems  Coolers, Bar Back  Coolers, Beverage  Coolers, Display/Floral  Coolers, Milk  Reach-in Cooler  Walk-In Cooler  Coolers, Wine  Coolers, Display/Pastry  Deli Cabinets, Cases  Dispensers, Ice, Ice & Beverage  Dispensers, Ice Cream  Dispensers, Ice Tea 3

4. NAFEM Members Manufacture:  Freezer Bases, Undercounter  Freezers, Reach-in, Roll-in  Freezers, Soft Ice Cream  Gelato Equipment  Ice Crushers  Ice Machines  Ice Storage & Transport  Refrigerated Merchandisers  Refrigerated Pass- through  Refrigerated Drawers  Remote Compressors & Condensers  Refrigeration Evaporators  Refrigerator Bases  Refrigerators, Reach-in, Roll-In  Refrigerators, Walk- ins  Slush Machines  Sno-Cone Machines  Vending Machines 4

5. SNAP Basics  The Significant New Alternatives Policy (SNAP) Program is authorized by Section 612(c) of the Clean Air Act.  SNAP is designed to protect the stratospheric ozone layer by phasing out ozone-depleting chemicals.  To meet this goal the EPA publishes and updates lists of acceptable and unacceptable substitutes for class I or class II ozone-depleting substances.class Iclass II  Status of substances is determined by EPA’s determination a less harmful alternative is available. 5

6. Industries Targeted by SNAP  Refrigeration & Air Conditioning Refrigeration & Air Conditioning  Foam Blowing Agents Foam Blowing Agents  Cleaning Solvents Cleaning Solvents  Fire Suppression and Explosion Protection Fire Suppression and Explosion Protection  Aerosols Aerosols  Sterilants Sterilants  Tobacco Expansion Tobacco Expansion  Adhesives, Coatings & Inks Adhesives, Coatings & Inks 6

7. SNAP Basics: Proposed Alternative Refrigerants Equipment ConsideredProposed AdditionsPreviously approved 12/20/11 76 FR 78832 Retail food refrigeration (new stand-alone only) * doesn’t apply to large CRE systems such as multiplex direct expansion systems, WICF due to charge limits Isobutane (R-600a) Limit 150 gr (5.29 oz.) R441A Propane (R-290) Very low temperature refrigeration and non-mechanical heat transfer (new stand-alone only) Ethane (R-170) Limit 150 gr (5.29 oz.) multi systems -- Retail food refrigeration (condensing units and supermarket systems)(new) (condensing units and supermarket systems)(retrofit)* No new proposed additions-- Vending machines (new) Isobutane (R-600a), Propane (R- 290) Limit 150 gr (5.29 oz.) R441A CO 2 (R-744) Household refrigerators and freezers (new only) Propane (R-290) Limit 57gr (2.01 oz.) Isobutane (R-600a) R-441 Residential and light commercial AC and heat pumps. (new) Propane (R-290) Difluoromethane (HFC-32, R-32) R-441 Limits vary-see table 3-6 in NPRM 7

8. Issues with Proposed Alternative Refrigerants  Not “Drop-In” Replacements  Flammable  High Pressure  Unavailable in US Market 8

9. Refrigerant Evaluation Factors 9

10. SNAP Blowing Agent Issues  What is the EPA is specifically delisting? –R134A  What alternatives are Available? –Water based & Cyclopentane  Why the alternatives don’t work? –Foam Formation/Filling Issues –Decreased Thermal Resistance Leads to Increased Heat Loss  Why a supplier switch would be necessary? –Suppliers are choosing one substitute over another  Costly Extension to Time it Takes to Manufacture Each Product & Sales Per Year  May Impact Foodservice Heating Equipment 10

11. Executive Branch Over Regulation  11 2005 20062007200820092010 2011 201220132014 2015 2016 2017-2018 DOE Final Rule on ACIM Test Procedure EPACT Enacted DOE Final Rule on ARI & ASHRAE Energy Use Calculation Ice Maker ECS Effective Date*est* DOE Test Procedure NOPR Ice Makers Ice Maker ECS NOPR DOE Final Rule on Ice Maker ECS EPA SNAP Stakeholder Meetings DOE Test Procedure Final Rule Comm. Refrig. DOE ECS CRE WIC/F Dates DOE ECS Ice Cream Freezers NOPR DOE Ice Maker Final Rule DOE ECS Ice Cream Freezers Final Rule DOE NOPR ECS Vending Machines DOE Final Rule Vending Machine Effective Date EPA V 3.0 Energy Star Compliance Date DOE & EPA Regulations EPA has announced the review of hot food holding cabinet ratings & is exploring blast chill freezers as potential products to add to the program.

12. Executive Branch Over Regulation  DOE’s Automatic Commercial Ice Makers Energy Conservation Standards Rulemaking, Docket No. EERE-2010-BT-STD-0037  DOE’s Commercial Refrigeration Equipment Energy Conservation Standards Rulemaking, Docket No. EERE-2010-BT-STD-003  DOE’s Walk-in Coolers and Walk-in Freezers Energy Conservation Standards Rulemaking, Docket No. EERE-2008-BT-STD-0015  EPA’s Protection of Stratospheric Ozone: Listing of Substitutes for Refrigeration and Air Conditioning and Revision of the Venting Prohibition for Certain Refrigerant Substitutes, Docket No. EPA-HQ- OAR-2013-0748-0001 12

13. Markets SNAP will Impact  Restaurants/Chains (990,000 in the US)  Corporate Facilities  Correctional Facilities  Health Care  Lodging & Casinos  Schools  Science, Floral, etc.  Supermarkets  Mass Transportation 13

14. SNAP Unintended Consequences Marketplace Variety Reduction Unknown User & Operator Safety & Health Risks Costly Infrastructure Changes to Plants Trapped Inventory Through Supply Chain Gives Advantage to Foreign Companies Importing Products Lab Testing Shortages Causes Noncompliance Passes Direct Costs to Customers Limits Product Innovation Increased Insurance, Placement, & Servicing Costs for Customers 14

15. Stakeholder Impacts: Small Business Questions Are your costs “as-incurred”? Do you have limited or uncertain financing options? How much will this raise your insurance premiums? What training will be required and how will you pay for it? Have your 2015 budgets and capital requests been made? Do your local building and fire codes and regulations support flammable refrigerants? Can your current facility run concurrent operations while transitioning? Can small companies compete (from a technical resource pool standpoint) with the salary and benefits offered to develop these products? 15

16. Request to EPA  Extend the compliance deadline: –To prevent dramatic and sudden price increases. –To allow time to ensure product lines are safe. –To allow time for product testing. –To allow time for training. –To allow time for components & refrigerants to become available in the US market. 16

17. Coalition Action: Next Steps  Letters Requesting Extension from Hill  Committee Outreach: 2014 Hearings & Legislation  Develop Coalition Materials  Weekly Meeting/Membership Outreach 17

18. SNAP Coalition Thank you for taking time to learn about SNAP and how it will impact each of your industries. NAFEM looks forward to working with you as a voice demanding common sense in the regulatory process. 18 Contact: Annie McCarthy NAFEM Government Relations 202.714.6162 amccarthy@smithbucklin.com