Environmental VOC regulations for auto refinish shops 

The collision repair industry is getting its first look at the VOC regulations that will affect almost all coatings and materials used in the auto refinish sector. Two years after first discussing regulations to limit VOC emissions from automotive refinish materials, Environment Canada has published a draft version of its VOC rules in Canada Gazette Part I.

This is the first step on the road to becoming law. To read the official text, go to http://canadagazette.gc.ca/partI/2008/20080426/html/regle2-e.html The draft regulations differ little from what the industry expected, except that the implementation date for the regulations has been changed to Jan. 1, 2010, giving paint manufacturers, paint distributors and collision repair facilities about 19 months to complete the conversion to VOC-compliant products.

Paint industry officials estimate that about 7% of Canada’s auto refinish facilities had converted to VOC-compliant basecoat as of mid-April, 2008. Specifically, the regulation prohibits the manufacture, import, offer for sale or sale any of the 14 coatings and cleaners specified in the regulation - which includes primers, adhesion promoters, basecoats, clearcoats, and surface cleaners - if its concentration of VOCs exceeds the limits specified in the regulation. The VOC limits for auto refinish materials are part of a federal government initiative to reduce emissions from chemicals that contribute to smog in consumer and commercial products such as paints, varnishes, adhesives and vehicle refinish coatings.

Federal Environment Minister, John Baird, announced the regulations on April 26. “Our Government has a strong record of taking action to protect the environment for all Canadians,” said Minister Baird. “As part of our Turning the Corner Action Plan, which includes action on air pollutants, we are moving forward to clean the air and protect the health and environment of Canadians by proposing limits on smog-producing chemicals in everyday products.”

And now come the VOC regs

The Government is taking action to reduce the concentration of additives in certain consumer and commercial products that can release volatile organic compounds (VOC) in the air. VOC emissions from consumer and commercial products are a contributing factor in the creation of air pollution. Air pollution has been shown to have a significant adverse impact on human health, including premature deaths, hospital admissions and emergency room visits. The proposed VOC limits are aligned with a number of current and upcoming regulations in California and other sectors in the United States, and deliver on the federal government’s commitment under the Canada - US Air Quality Agreement.

The incremental costs for automotive refinish shops to comply with federal government’s new VOC emission regulations is estimated by Environment Canada to be $322 million over a 25-year period. In the economic analysis that accompanies the VOC regulation, the agency calculates the one-time equipment costs to be $141.6 million, plus $125.3 million for one-time replacement of automotive refinish products. The industry is also anticipated to incur a cost of $55.1 million for training over the 25-year period, bringing the total incremental costs to $322 million. The government expects to spend $4.5 million for enforcement over that time period, as well as $0.39 million to promote compliance with the regulations.

Environment Canada’s analysis is based on an assumption of 8100 automotive refinish and repair establishments. Approximately 70% of those facilities are considered small and medium repair shops, with 1 to 5 employees and revenue up to $400,000. Comparing the incremental costs to average revenues, Environment Canada’s analysis concludes that the incremental cost represents about 2% to 2.5% of average annual revenue for most shops.

Environment Canada has approached other federal government departments to determine if any government programs are available to assist with the costs to small business, and has identified the Canada Small Business Financing Program from Industry Canada as an option. The program can help small businesses get up to $250,000 in financing for the purchase or improvement of assets such as land, buildings and equipment.

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