In the settlement announced Sept. 3 by the U.S. Environmental Protection Agency and the Department of Justice, Costco will pay $335,000 in penalties for federal Clean Air Act violations and improve refrigerant management at 274 stores at an estimated cost of $2 million over the next three years.

“Cutting harmful greenhouse gas emissions is a national priority for EPA, and this settlement will lead to significant reductions of an ozone-depleting gas that is 1,700 times more potent than carbon dioxide,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Fixing leaks of refrigerants, improving compliance and reducing emissions will make a real difference in protecting us from the dangers of ozone depletion, while reducing the impact on climate change.”

“Compliance with the nation’s Clean Air Act is key to protecting all Americans from air pollution that damages our atmosphere and changes our climate,” said Sam Hirsch, acting assistant attorney general for the Justice Department’s Environment and Natural Resources Division. “Industry needs to lead the way in abandoning harmful chemicals in favor of using and developing greener, environmentally friendly alternatives to protect our health and our climate.”

Costco violated the federal Clean Air Act by failing to repair leaks of the refrigerant HCFC-22, a hydrochlorofluorocarbon and a powerful ozone-depleting substance, between 2004 and 2007. Costco also failed to keep adequate records of the servicing of its refrigeration equipment, required by the Clean Air Act to prevent harmful leaks.

Under the settlement, Costco will implement a refrigerant management system to prevent and repair coolant leaks and reduce its corporate-wide average leak rate by one-fifth (from 24 percent in 2011 to 19 percent or less by 2017). Costco will install and operate environmentally friendly glycol secondary loop refrigeration systems and centrally monitored refrigerant leak detection systems at all new stores for three years.  As required by the settlement, Costco will retrofit commercial refrigeration equipment at 30 stores, reducing ozone-depleting and greenhouse gas emissions.

The measures required of Costco by the settlement are expected to prevent more than 105,000 pounds of future releases of ozone-depleting refrigerants that destroy the ozone layer. Destroying the ozone layer results in dangerous amounts of cancer-causing ultraviolet solar radiation striking the earth, increasing skin cancers and cataracts.

R-22 is also a potent greenhouse gas with 1,700 times more global warming potential than carbon dioxide or CO2.  The measures required by the settlement are expected to reduce Costco’s greenhouse gas emissions by the equivalent of approximately 30,000 metric tons of carbon dioxide per year. 

The settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions, including large grocery stores. 

Clean Air Act Title VI requires owners or operators of commercial refrigeration equipment with over 50 pounds of ozone-depleting refrigerants, and with an annual leak rate greater than 35 percent, to repair all leaks within 30 days.

Corporate commitments to reduce emissions from refrigeration systems have been increasing in recent years. EPA’s GreenChill Partnership Program works with food retailers to reduce refrigerant emissions and decrease their impact on the ozone layer and climate change by transitioning to environmentally friendlier refrigerants, using less refrigerant and eliminating leaks, and adopting green refrigeration technologies and best environmental practices.

Costco, headquartered in Issaquah, Washington, operates 466 stores in 43 U.S. states, the District of Columbia, and Puerto Rico, and additional stores worldwide, with revenues of $105.2 billion in 2013. The settlement covers 274 Costco stores that have commercial refrigeration equipment regulated by the Clean Air Act.

The proposed settlement is subject to a 30-day public comment period and final court approval.

Read the proposed settlement at: http://www2.epa.gov/enforcement/costco-wholesale-corporation-clean-air-act-settlement.