Support California’s $15 Million Incentives for Natural Refrigerants

NASRC is calling on our members and partners to demonstrate support for the proposed $15 million allocation to refund the California Air Resources Board (CARB) F-gas Reduction Incentive Program (FRIP) for the 2021-22 California budget (see page 9). Without strong demonstrated support from the industry, the proposed funding is at risk of redistribution to other initiatives. 

FRIP was established as part of the California Cooling Act (SB 1013) to alleviate the financial burdens associated with ultra-low global warming potential (GWP) refrigerants and was allocated $1 million under California’s 2019-20 fiscal year budget. The initial round of funding provided grants for 13 natural refrigerant projects, which NASRC coordinated under our Aggregated Incentives Program (AIP), see all awarded projects here.

Though the first round of funding demonstrated the potential of the program, it only scratched the surface of offsetting the significant cost burden California food retailers face in transitioning away from HFCs. With the capital cost of replacing a supermarket refrigeration system averaging over $1 million, replacing the roughly 4,000 supermarket locations in California equates to $4 billion in capital equipment costs that must be paid by food retailers operating in the state. This cost burden is only expected to increase with increasing regulatory pressures at the state and federal levels.

What’s Needed?

Given adequate funding renewed over a multi-year period, FRIP’s proven framework could go a long way in supporting the transition, but there is no guarantee that the proposed allocations will be approved. While we are pleased to see such a significant increase in the proposed budget compared to the first round, we are concerned that the money could be redistributed to other initiatives if the California legislature does not hear from the industry.

To that end, NASRC has prepared a template letter of support to help our members and partners demonstrate support for the funding. Our goal is to protect and increase the funding allocations in this and subsequent budget cycles so that FRIP can continue to support California food retailers and also provide a blueprint for other states to follow.  

If you are interested to submit a letter of support, please contact us for a template and instructions for submission.

NASRC's Incentive Program Drives $880,000 for Climate-Friendly Grocery Stores

Mill Valley, California - The North American Sustainable Refrigeration Council (NASRC), a 501(c)(3) environmental nonprofit working in partnership with the grocery industry to advance climate-friendly natural refrigerants, recently announced that they have secured a total of $880,000 in funding support for natural refrigerant grocery projects through their Aggregated Incentives Program (AIP) Pilot.

“We launched the AIP program to support grocers facing increasing regulatory pressure to transition away from HFC refrigerants,” said Danielle Wright, NASRC Executive Director. “Incentives have the power to offset cost premiums and make natural refrigerants a feasible business choice for grocers.”

Launched in 2020, NASRC’s AIP Pilot was a first-of-its-kind, no cost platform through which NASRC coordinated incentive funding for natural refrigerant projects in California grocery stores. The pilot was designed to bolster the California Air Resources Board (CARB) F-gas Reduction Incentive Program (FRIP), which was established to support the transition to climate-friendly refrigerants resulting from CARB’s HFC reduction measures that take effect on Jan 1, 2022.

“NASRC’s assistance was critical in obtaining the FRIP funding,” said Jay Schick, Refrigeration and HVAC Buyer at Costco, a FRIP awardee and AIP Pilot participant. “We hope to see the program grow in the future as this is key to accelerating our transition from HFC refrigerants.”

FRIP is part of California Climate Investments, a statewide program that puts billions of Cap-and-Trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment — particularly in disadvantaged communities. FRIP was established to address the fact that upfront costs remain a significant hurdle for grocers to transition to low global warming potential (GWP) refrigerants.

Recently, CARB awarded FRIP grants to 15 grocery projects across California, 12 of which were funded through the NASRC AIP Pilot and represented $880,000 of the total $1 million awarded. The projects funded through the AIP Pilot will use climate-friendly natural refrigerants with near-zero GWP, such as CO2 and propane.

The grants will support innovative projects, including partial transitions to natural refrigerants in four existing Whole Foods Market facilities. Because natural refrigerants are not a “drop-in” solution, they require a full system replacement rather than a simple gas retrofit, representing a much greater challenge for grocers. “There’s no straightforward solution for replacing HFC equipment,” said Mike Ellinger, Principal Program Manager of Engineering, Compliance & Sustainability at Whole Foods Market. “The FRIP funding will allow us to test several innovative approaches and the results will inform our strategy for existing stores in the future.”

ALDI, another national chain grocer, received awards for seven projects through the AIP Pilot, four of which are located in disadvantaged communities that are disproportionately impacted by the changing climate. "The funding ALDI receives through FRIP supports our continued dedication to natural refrigerant technology,” said Dan Gavin, ALDI Vice President of National Real Estate. “At ALDI, we continue to explore new ways to lower our carbon footprint, and we are particularly excited about the energy data we will receive from this outstanding program."

In addition to the grants, FRIP awardees will participate in data sharing and service workforce development activities, further addressing barriers that are slowing the adoption of natural refrigerants in the US. NASRC is supporting the implementation of these activities as part of their AIP Pilot.

Due to the COVID pandemic, the FRIP funding was not renewed in the California 2021 fiscal year budget. NASRC is advocating for the program to receive additional funding in the future to support full or partial system replacements in existing stores. There will be opportunities to submit comments in support of renewed FIRP funding later this year, but in the meantime NASRC is thinking bigger.

“Our goal with the pilot was always to expand beyond California,” said Wright. “Given the upcoming federal HFC phasedown, there is a need for national funding support to aid the transition. That’s where we’re looking next.”    

---

About North American Sustainable Refrigeration Council
The North American Sustainable Refrigeration Council (NASRC) is a 501(c)(3) environmental nonprofit working in partnership with the grocery refrigeration industry to advance climate-friendly natural refrigerants and reduce greenhouse gas (GHG) emissions caused by traditional refrigerants. The organization works with stakeholders from across the grocery refrigeration industry, including over 38,000 food retail locations, to eliminate the barriers preventing the adoption of natural refrigerants. For more information, visit www.nasrc.org.

NASRC AIP Drives $0.9 Million for Nat Refs!

NASRC has secured new funding for natural refrigerant projects through our Aggregated Incentives Program (AIP) Pilot, which was developed to bolster the California Air Resources Board (CARB) F-gas Reduction Incentive Program (FRIP) and accelerate funding resources for natural refrigerants.

AIP Funding Results

Of the 16 recently awarded CARB FRIP grants, 13 grocery projects were funded through the NASRC AIP Pilot and represented $880,000 of the total $1 million awarded!

Other AIP Outcomes

In addition to awarded funds, the AIP Pilot resulted in several other exciting initiatives. Here are some of the other outcomes & next steps:

• New Funding Support Through Carbon Offset Credits
  Through the AIP Pilot, a new funding opportunity emerged that will provide grocers funding for the sale of carbon offset credits from natural refrigerant projects. To develop a scalable market of carbon offset credits, NASRC is launching a pilot and will begin soliciting project submissions in the next few weeks.
  

• Performance Data to Inform Industry Best Practices
  Southern California Edison (SCE) is developing a comprehensive M&V study to evaluate and compare the energy performance of FRIP projects, which include multiple natural refrigerant system types across various climate zones. NASRC will support the design and roll-out of the study and coordinate information sharing throughout the industry.
  

• Technician Training Opportunities
  FRIP awardees will provide technician training opportunities to support a workforce that is trained in the installation and maintenance of natural refrigerant technologies. NASRC will work with grantees and CARB to support the workforce development activities.
  

• Scaled Incentive Opportunities
  The AIP Pilot demonstrated the demand for incentives to offset the costs of natural refrigerant technologies as well as the benefits of incentive programs designed to address other natural refrigerant barriers. NASRC is evaluating lessons from AIP and assessing new opportunities to develop scalable sources of natural refrigerant funding support at a national level.

Have more questions about AIP or natural refrigerant incentive opportunities? Contact us.