California furniture industry seeks formaldehyde rule extension
Says more time needed to clear non-compliant inventory
Heath Combs -- Furniture Today, September 29, 2009
HIGH POINT — Furniture industry officials in California are still pushing for an extension of the deadline to sell products that don't meet the state's strict new limits for formaldehyde emissions.Furniture and other goods face a July 1 deadline.
California's law - which the U.S. Senate is considering as a model for a possible national formaldehyde rule - is in the early stages in enforcement. The regulation sets caps on emissions allowed from composite panel products, including hardwood plywood, particleboard and medium density fiberboard (MDF), materials that are commonly used in furniture.
In May, the California Air Resources Board, which is implementing the rule, extended deadlines for distributors and retailers of composite panel to sell their noncompliant product, because the economic downturn left them with significant inventories of such goods. That deadline was extended by four months, to Sept. 30.
Still, having the deadline hit in the midst of an economic downturn has been frustrating for some composite panel distributors.
Ernie Montano, vice president of Del Valle, Kahman and Co., an importer and distributor of composite panel, said his customers have been boycotting the purchase of uncertified board and many now only want Phase II certified stock, even though the rule is still only in its Phase I period.
They do not want to get stuck with a hot potato, he said.
Montano said the company has written off hundreds of thousands of dollars in obsolete inventory and has $1.2 million in Phase I stock that it can't sell.
The rule would have been better implemented with a permanent grandfathering of existing stock, he said. Foreign mills were put at a disadvantage during the phasing-in since so few foreign mills were certified before the rule took effect Jan. 1, he said.
"Most all domestic mills were certified before a single foreign mill was certified," Montano said.
He added many other composite panel distributors now face dire financial straits because of inventory they can't sell.
CARB recently began a survey of panel distributors to find out how much non-compliant inventory was still in the pipeline. The agency said it wanted to find out how those products are selling and track distributors' plans for disposing of the inventories. It has not released results from that survey.
Officials from CARB have not returned phone calls over the last several months from Furniture/Today.
Meanwhile, the Western Home Furnishings Assn. is working with other groups in California to extend the rule's sell-through dates for finished goods, including furniture, by one year to July 1, 2011, said Sharron Bradley, executive director of the WHFA. Bradley said the organization is preparing a survey to find out how much non-compliant inventory retailers estimate they will hold next year.
The organization is hearing from many who have large inventories, she said. CARB has said it will consider additional data but won't make any promises about extending sell-through dates, Bradley said.
"The industry needs time to get rid of product, not further harm those harmed already," she said. "Anyone that can add their voice would be a great help."
Bob Schoenfeld, quality control manager for Petaluma, Calif.-based retailer Scandinavian Designs, has been working with CARB officials to gain support for a single sell-through period for floor samples. Under current rules, retailers would have to sell their existing inventory by next July to comply with Phase 1 of the rule, then would have to sell off any Phase 1-compliant inventory when tougher Phase 2 standards start getting phased in, in July 2011.
Schoenfeld said that based on recent conversations with CARB officials, a change looks unlikely, but officials at the agency have left themselves room to reevaluate their decision.
According to the Composite Panel Assn., a national rule similar to California's was introduced this month by Sens. Amy Klobuchar, D-Minn., and Mike Crapo R-Idaho. It would give the U.S. Environmental Protection Agency responsibility for testing, certification, recordkeeping and enforcement and would add a new section to the federal Toxic Substances Control Act.
It would require the EPA to enact a national rule by 2011.
Congress should carefully study the rule's implementation in California before considering it as a national standard, Montano said.
"CARB's regulation has caused a financial disaster to businesses in California. And many believe the rest of the country will suffer the same fate," he said. "The U.S. Senate may simply adopt CARB's regulation without much modification and I can assure you that the guinea pigs in California have lost millions of dollars in trying to comply."
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