NAM official advises manufacturers prepare for emission regulations

Katy Devlin, Glass Magazine
March 29, 2010
COMMERCIAL, RETAIL, AUTO, FABRICATION : MEETINGS AND EVENTS

Energy and climate change dominated the conversation on the third day of Glass Week at the Paris Las Vegas, hosted by the Glass Association of North America, Topeka, Kan. The conference runs through March 30. During the GANA membership meeting March 27, Keith McCoy, vice president, energy and resources policy, National Association of Manufacturers, Washington, D.C., provided an update on government climate change activities and offered tips to manufacturers. Whether through legislation, regulation or back door rules, such as those through the U.S. Securities and Exchange Commission, manufacturers will be pressured to reduce emissions, he said.

McCoy said he does not expect cap and trade legislation to become a reality “anytime soon.” However, McCoy said the manufacturing industry should pay closer attention to an effort from Sen. John Kerry, D-Mass., Sen. Lindsey Graham, R-S.C., and Sen. Joe Lieberman, I-Conn., to work closely with industry and create legislation that addresses climate change by sectors: utilities, automotive and manufacturing.

The plan includes an energy intensive manufacturing provision in which qualifying manufacturers, including those in the glass industry, would not face cap and trade regulations until 2020. “Then the cap comes off and it gradually decreases. In 2025, it will accelerate rapidly until the cap comes off almost completely,” McCoy said.

“Some argue that manufacturers have 10 years in which to comply with this. Our argument back is that many companies install equipment that has a 30- or 40-year lifespan. Why would they change it out if they don’t have to?” McCoy asked. “Some companies will start to do this over time. But, in a competitive market with tight margins, why would they do this early? … Depending on how successful this is, it could be a game changer.”

The EPA has been given authority by the Supreme Court to regulate greenhouse gas emissions through the Clean Air Act. “But, they’re regulating the economy,” McCoy said. “The Clean Air Act was not designed to regulate carbon.” The EPA is moving forward on an automotive emissions rule, and representatives of the manufacturing industry are concerned that it will open a door for the EPA to regulate stationary sources—manufacturers.

NAM filed a lawsuit arguing EPA does not have the legal authority to regulate carbon emissions. “We’re not challenging science,” he said. “We’re challenging how the EPA is doing this.”

The SEC is also getting involved in climate change, and issued a requirement for manufacturers to disclose carbon emissions and what actions the company is taking to reduce emissions. “This is a back door attempt to reduce emissions,” McCoy said.

McCoy recommends that manufacturers prepare for regulations by measuring greenhouse gas emissions and looking for ways to voluntarily reduce emissions. “Manufacturers need to find ways to mitigate some of the heartburn that’s going to happen in later years,” he said. “Look at your greenhouse gases and implement systems to reduce what you’re emitting.”

McCoy said companies should also investigate available tax incentives for manufacturers. “The [Department of Energy] has hundreds of billions of dollars that it is looking to give out,” he said. “I strongly encourage you to look at some of this money.”