So I was watching the CARB/EPA conference last week and a fascinating new point was raised about the new EPA regulations. Under the current proposed terms, after these new regulations go into effect, the bottom line result is that we never really will be able to have a new composite wood manufacturer start up in the United States.
Impossible, you say? Here's the situation: The regulations cover all "hardwood plywood, medium-density fiberboard, and particleboard sold, supplied, offered for sale, or manufactured (including imported) in the United States." The regulations have also been expanded to cover all downstream production, and after the established phase-in period for certification, it becomes illegal to sell uncertified products.
However, "To obtain product certification, a panel producer must apply to a TSCA Title VI Accredited TPC. The application must contain the following: (5) At least one test conducted in accordance with § 770.20(c). (6) Three months of routine quality control tests conducted in accordance with § 770.20(b).
That means they have to monitor at least three months of production just to apply for certification. What are they going to do with those three months of production? They can't sell it-they can't even export it since the regs cover all U.S. manufacturing. (That's another issue with these regs-because they cover all the production manufactured here, including material for export, U.S. exporters are going to be at a disadvantage in other markets because of the increased certification costs.)
So anyway, if this reg goes through as written, we could basically never make a new manufacturer unless they were able to afford the startup costs of producing and destroying over three months of production while waiting to get eligible to apply for certification. (Note that after the three month routine tests are done, they still have to do tests under TPC supervision before becoming certified-so that's another couple of months of uncertified production that can't be sold.)
Of course this issue has now (thankfully!) been identified and it will be commented on by many groups (including the NWFA) and certainly some solution will be found. I don't know what it will be, but certainly the goal of this regulation is not to prevent any new manufacturer from starting up. Some provisions will have to be made.
However, this is a great example of why we must read these regulations and read them in great detail. Don't think of this as simply "Federal CARB"-it goes WAY beyond that. And, as my friend says, "the devil is in the details."
Think about this: For the last two months, I've focused my energies almost exclusively on digging into the EPA regulations. I've been involved in dozens of webinars and conferences and have been working with domestic manufacturers, distributors, importers, TPCs, lawyers, government officials, association representatives, and many others both in the flooring industry and other wood industries, trying to figure out what these regulations mean. During that time there was a lot of discussion about this specific three-month qualifying period and how it relates to the proposed overall timeline of one year to get everyone certified. But, until last Thursday, no one had said "Gee, what does that mean to a company that doesn't exist now? How can a completely new mill start up and comply with that?"
Once it was said, everyone knew "Wow, that's a huge problem." But just think what might have happened if these regulations had been passed without anyone identifying that issue! These regs could have gone into effect and suddenly no one could ever afford to start a new manufacturing facility again. That would be one hell of an unintended consequence.
I am sure there are many other unintended consequences inside these regulations. We've certainly identified a lot of confusing sections and flat-out contradictions. That is understandable, because it's a complex issue to cover. But again, this is why you MUST get involved. The regulations are out for public comment because we're the public they are going to impact. We're the professionals who understand our industry. We're the ones who need to ask the questions such as: "Did you intend, when you wrote it this way, to stop any new manufacturing facilities from ever being started again?" The answer will surely come back "No!" and a solution will be found before these regulations are finalized.
But if no one ever asks the questions, we may find ourselves struggling to cope with unintended consequences for the rest of our lives…
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