California’s New Hydrofluorocarbon (HFC) Reduction Requirements

How new environmental laws in the nation’s most populous state will impact the bottom line of most companies, large or small.

California was the first state in the US to enact a law banning products containing HFC blowing agents (as well as refrigerants), whether the products are produced in, or sold into, the state. For polyurethane blowing agents, new policy changes took effect on January 1, 2019, for certain uses, with most other uses taking effect January 1, 2020, and a few others taking effect January 1, 2021. Here’s a breakdown of those deadlines and the polyurethane products affected…

January 1, 2019*
• Rigid polyurethane and polyisocyanurate laminated boardstock
• Rigid PU slabstock
• Flexible polyurethane
• Integral skin polyurethane

January 1, 2020*
• Rigid polyurethane appliance foam
• Rigid polyurethane commercial refrigeration and sandwich panels
• Rigid polyurethane marine flotation foam
• Rigid polyurethane high-pressure two-component spray foam
• Rigid polyurethane one-component foam sealants

January 1, 2021*
• Polystyrene extruded boardstock and billet (XPS)
• Rigid polyurethane low-pressure two-component spray foam

If you’re a manufacturer still using HFC-blown polyurethanes, we thought you should be aware of these deadlines, especially if any of your products are manufactured, assembled and/or sold in the state of California. Eventually giving up all sales in the most populous state in America – which also has the largest economy – will severely impact the bottom line of most companies, large or small.

Fortunately, Foam Supplies has the proven, effective and reliable answer that ensures your business can carry on uninterrupted: foam systems made with our Ecomate® blowing agent technology. Ecomate was developed and patented in 2002 as the first next generation foam blowing agent to deliver comparable or better performance than CFCs, HCFCs and HFCs – without the negative environmental impacts.

In 2003, the US EPA first listed Ecomate as an approved substitute for CFCs and HCFCs in all foam blowing end uses under its SNAP (Significant New Alternatives Policy) Program. That means we have more than 15 years of proven performance – a history you can count on when switching from HFC-based to Ecomate-based polyurethane systems. Our products include Ecofoam® rigid insulating foams, Ecoflex™ flexible and integral skin foams, Ecomarine flotation foams and more. Plus, switching to any of these foams typically requires little to no changes to your manufacturing processes.

To learn more about current and future HFC phase-outs in the state of California, visit the California Air Resources Board (CARB) Website.

*Except for specific military, space and aeronautics-related applications with special extensions.

Kigali Amendment Effective as of January 1, 2019

The Kigali Amendment to the Montreal Protocol has been ratified by 71 countries. Here’s what it could mean for your business.

The Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer became effective January 1st of this year, following ratification by 71 countries in the accord. The Amendment was created to help reduce the production and consumption of hydrofluorocarbons (HFCs) by more than 80 per cent over the next 30 years, which is projected to reduce global warming by up to 0.4°C this century.

Under the amendment, developed countries will reduce HFC consumption beginning in 2019. Most developing countries will freeze consumption in 2024, with a small number of developing countries with unique circumstances freezing consumption in 2028.

If you are a US manufacturer still using HFC-blown polyurethanes, you are no doubt aware that these changes will affect your company’s ability to export your products in the very near future. Plus, the United States could also ratify the agreement at any time, which would ultimately eliminate the use of HFCs here at home.

With the future of HFC blowing agents in serious doubt worldwide, one thing is certain: Ecomate® blowing agent technology is the proven effective alternative to HFCs that is available right now in both rigid and flexible polyurethane foam systems. Ecomate-based foam systems will meet or exceed the properties achieved with HFC-134a, HFC-245fa and other HFC blowing agents – including critical foam properties such as thermal efficiency, adhesion, dimensional stability, flotation and more.

While the US has yet to ratify the Kigali Amendment, both Republican and Democratic lawmakers, the US Chamber of Commerce and various trade organizations are strongly in favor of it. They say that the goals of the Kigali Amendment can be accomplished without an increase in costs to the U.S. consumer, and in some cases can generate savings, and also be a win for the environment and the U.S. economy.

To learn more about how the Kigali Amendment reduces climate change, watch this short animated video prepared by UN Environment, the leading global voice on the environment.

Nevada Becomes 23rd State in US Climate Alliance

Environmental stewardship – and new state government policies – grow quickly as states take action against climate change.

On March 12, 2019, Nevada Governor Steve Sisolak announced plans to join the US Climate Alliance, making Nevada the 23rd member of the organization, which is committed to reducing greenhouse gas emissions and eliminating the harmful effects of hydrofluorocarbon (HFC) blowing agents and refrigerants.

Nevada joins five other states – Illinois, New Mexico, Michigan, Wisconsin and Maine – which have become members of the Alliance since January 1st of this year alone. The entire group, comprised of 22 US states and Puerto Rico, now represents over half (51%) of the US population and a combined $11 trillion economy.

As members of the US Climate Alliance, each member state or territory commits to reducing their emissions and to enacting climate policy measures that are in line with the US target under the Paris Agreement. Many have already introduced legislation to phase out HFCs, similar to California’s, or have announced plans to do so. This will further reduce the number of states that will permit the sale of products containing HFC blowing agents and will drastically shrink the US market for these products.

The rapid growth of the Alliance since its founding in June 2017 is proof that more and more bipartisan leaders in the US are concerned about climate change, and are willing to take on the mantle of environmental stewardship, whether or not the US Federal Government takes action on the issue.

At Foam Supplies, we also have a history of being environmental stewards – a long history that reaches back more than 15 years since our development of the world’s first proven, reliable, cost-effective alternative to HFC blowing agents, Ecomate®. As more and more US states pass laws to phase out HFCs, Foam Supplies will have the regulatory compliant foam systems you need, including rigid, flexible, integral skin, marine flotation, spray and more.

To learn more about the US Climate Alliance and its members, visit their website at[/vc_column_text][/vc_column][/vc_row]

There’s Still Time to Get Valuable Tax Incentives on PU Equipment

Here’s some great – and potentially very profitable – news for our customers. The Tax Cuts and Jobs Act that was signed into law in December of 2017 contains a hidden benefit for many industries: the expansion of Section 179. This expansion allows businesses to immediately deduct up to $1 million in qualifying equipment purchases for the 2018 tax year.

Created in 1958, Section 179 allows companies to take depreciation deductions for certain assets in one year rather than depreciating those items over the useful life of the product. The tax reform bill greatly expanded the products covered by Section 179, including manufacturing equipment like the kind used in foam dispensing.

This change to immediate expensing provides a great opportunity for companies to save money when making new purchases…often enough to influence purchase vs. repair decisions, providing the necessary motivation to replace aging systems with new and more efficient equipment.

To illustrate the potential savings, consider the example of a $14,000 equipment purchase in years past (39-year depreciation schedule) compared to 2018:

Old Tax Law

  • Equipment Cost: $14,000

  • 2018 Deduction: $350

  • 2018 Tax Savings: $125

Current Tax Law

  • Equipment Cost: $14,000

  • 2018 Deduction: $14,000

  • 2018 Tax Savings: $5,000

These costs and savings are estimated. Be sure to check with your tax advisor to see how Section 179 applies to your specific situation. And be sure to contact your FSI Account Manager to make your equipment purchases by year end.