BOARD MEETING DATE: July 11, 2003
AGENDA NO. 9

Modify Existing Financial Incentive Program to Assist Dry Cleaners Converting to Non-Perchloroethylene Alternative Cleaning Technologies

SYNOPSIS:

On December 6, 2002, the Board established a $2 million financial incentives grant program to assist dry cleaners converting to non-perchloroethylene alternative garment cleaning technologies, which include carbon dioxide (CO₂), wet cleaning, hydrocarbon and silicon-based solvent technologies. The program has been operating successfully since that time. However, in order to offset the high cost of CO₂ technology, and in view of a recent study on silicon-based solvents and other operational issues, staff recommends: i) increasing the grant for CO₂ conversions, ii) suspending grants for silicon-based solvent cleaning technologies effective April 4, 2003, and iii) providing partial grants to cleaners under special circumstances, or for specialty wet cleaning systems.

COMMITTEE:

Stationary Source, June 27, 2003, Reviewed

RECOMMENDED ACTIONS:

Authorize the Executive Officer to modify the existing grant program to:

1. Increase the total grant for CO₂ conversion from $10,000 to $20,000 from the $2 million Dry Cleaners Incentive Grant Program Fund, (Fund 43), previously approved by the Board.
    
2. Suspend the grant for silicon-based solvent cleaning technology effective April 4, 2003, and provide up to $2,000 to cleaners who received an AQMD grant for silicone-based solvent cleaning technology and would like to convert to hydrocarbon technology.
   
3. Grant from the Dry Cleaners Incentive Grant Program Fund (Fund 43) up to $5,000 to cleaners converting to wet cleaning who:

1. Purchased a washer and dryer on or after December 6, 2002, but purchased tensioning equipment before December 6, 2002; or
2. Do not purchase tensioning equipment where it is not needed for their specialty operation as demonstrated to the Executive Officer’s satisfaction.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

There are approximately 2,100 dry cleaners operating in the South Coast Air Basin, the majority of whom use perchloroethylene (perc). Perc has been identified as a toxic air contaminant by the U.S. Environmental Protection Agency and a probable human carcinogen by the State of California. On December 6, 2002, the Board amended Rule 1421 – Control of Perchloroethylene Emissions from Dry Cleaning Systems - which will result in a gradual replacement of perc equipment with non-perc alternatives.

Non-perc alternatives currently available include wet cleaning, hydrocarbon, silicon-based solvent cleaning and CO₂ cleaning. On December 6, 2002, the Board also established a $2 million financial incentive grant to assist dry cleaners make early transitions to non-perc alternative cleaning technologies. On June 6, 2003, the Board transferred $2 million into the Dry Cleaners Incentive Grant Program Fund (Fund 43) to implement this program. This incentive program provides a $10,000 grant for non-polluting CO₂ and wet cleaning systems and a $5,000 for hydrocarbon technologies and other solvent cleaning technologies. The lower grant for hydrocarbon systems is a reflection of the trade-off of toxic emissions for an increase in VOC emissions. The lower amount for other solvent technologies, which include silicon-based solvent technology, reflects a cautious approach where toxicity studies have not been fully completed. Table 1 summarizes grants pending and provided to date.

Wet Cleaning
Under the grant program, a wet cleaning system consists of computerized washer and dryer with special design features and specialized finishing equipment which include a tensioning form finisher and a tensioning pants finisher. Successful commercial dedicated wet cleaners agree that all four equipment are necessary to successfully wet clean all garments which are typically dry cleaned. Currently this program provides $10,000 for only those wet cleaning conversions that include all four equipment which are purchased and installed after December 6, 2002, the date of program adoption. However, the program does not allow the $10,000 grant or any amount less than $10,000 for cleaners who owned tensioning equipment prior to December 6, 2002 and purchased the washer and dryer on or after December 6, 2002 to complete the four-equipment system. The program also does not allow any grant, $10,000 or less, for certain specialty cleaners that do not require any tensioning equipment for their specialty operation. An example of such specialty facilities that do not require tensioning equipment are stores that exclusively wet clean draperies.

Carbon Dioxide
The incentive program provides $10,000 for CO₂ technologies. Since the commencement of the incentive program in December, 2002, only one applicant has applied for a grant to convert to CO₂ technology. Royal Cleaners, the applicant, however, recommended that the grant for CO₂ technology should be more than the grant for wet cleaning, since the $10,000 grant for CO₂ technology is disproportionately lower than the grant for wet cleaning technology. Typical installed costs for CO₂ and wet cleaning technologies are about $100,000 and $35,000 respectively. To compensate for the higher cost of CO₂ technology, an increased grant of more than $10,000 for CO₂ technology was suggested.

Silicon-Based Solvent Cleaning Technology
GreenEarth^®, a silicon-based solvent, patented in 1998, is a cyclopentasiloxane mixture (D₅) and used as a garment cleaning solvent. Siloxanes are liquid silicones such as those used in cosmetics. They have no smell and contain no volatile organic compounds (VOCs). The final staff report for Rule 1421 (October 2002) stated "Preliminary toxicity testing on GreenEarth^®, funded by industry, indicates minimal toxicity with most categories reporting no significant toxic responses. The 2-year bioassay test (combined chronic toxicity and oncogenicity) is still in progress with results expected at the end of 2002." The uncertainity of the toxicity status for GreenEarth^® led staff to recommend a $5,000 funding level for grants for this non-perc alternative at the time of rule adoption (December 2002).

In February 2003, preliminary two-year bioassay results of the solvent GreenEarth^® raised some questions about the potential health effects of this chemical, indicating potential association with cancer.

Proposal

Wet Cleaning
Staff recommends grants up to $5,000 for applicants who purchased a washer and a dryer on or after December 6, 2002 to complete the system provided that tensioning equipment was purchased and installed before December 6, 2002. For specialty facilities, such as stores exclusively cleaning draperies, where no tensioning equipment is required, staff recommends that up to $5,000 be granted. Staff will continue to evaluate specialty situations and issue partial grants on a proportional capital cost basis consistent with this approach.

Carbon Dioxide
Staff is proposing to increase each CO₂ technology grant from $10,000 to $20,000. Due to the considerably higher cost of this technology, staff anticipates only two grant applications for this technology (including one under review). Each applicant for CO₂ conversion qualified under the financial incentive program will receive $20,000 from the $2 million financial incentive program. Staff believes that it is advantageous to have several shops use this equipment so that there is better local experience regarding the pros and cons of CO₂ technology.

Silicon-Based Solvent Cleaning Technology
While the two-year bioassay results of the GreenEarth^® solvent are preliminary and need to be thoroughly evaluated by health professionals, the AQMD staff is proposing to suspend funding for any grant applications for this chemical, received after April 4, 2003, at which time the latest preliminary bioassay results became available. Funding for applications received prior to this date will be honored. Funding may be restored at a future date, pending review by health experts, and as authorized by the Board. As of June 30, 2003, there were eleven (11) grant requests for silicon-based solvent cleaning technology. Of those grant requests, eight (8) have installed their machines and received funding through the grant program. Some silicon-based solvent cleaning technology machines can be converted to hydrocarbon technology. Consequently, staff further recommends that grants of up to $2,000 be provided to any cleaner that received an AQMD grant and would like to convert their equipment from silicon-based solvent cleaning technology (i.e., GreenEarth^®) to hydrocarbon technology.

Resource Impacts

AQMD staff will administer the grant program with existing resources from the Dry Cleaners Incentive Grant Program Fund (Fund 43).

Table1 - Non-Perc Dry Cleaning Grant Program Status
As of June 30, 2003
 

/ / /