A new California law will compel carpet makers to tack on a 5-cent per yard tax on carpet sold in The Golden State starting July 1, one of several rules that could drive up carpet costs at a time when the industry is struggling to recover from deep cuts and steep sales declines.
If worse comes to worst, new environmental regulation on carpet could make rugs and carpets cost-prohibitive to sell in some states, which in turn would cost jobs in Chattanooga and North Georgia, industry officials say.
The Carpet America Recovery Effort, or CARE, will use revenues from California's newest levy as an enticement to spur carpet recycling efforts throughout the state, similar to how many states collect a surcharge to support the recycling of tires - another petroleum product.
Consumers will foot the bill for the new law (AB 2398) in the form of slightly higher prices on all carpet shipped to California for sale.
But supporters of the bill claim it's a small price to pay to keep millions of tons of carpet from landfills.
Teresa Bui, policy associate for the nonprofit group Californians Against Waste, said she would prefer to have recycling quotas in the bill, but still supports it as a significant step forward for recycling.
"This is the nation's first comprehensive and industry-financed carpet recycling program," she said. "Carpet is a significant waste problem - it's 3.2 percent of all landfill waste."
In addition to reducing greenhouse gases and reducing demand for petroleum, the bill will generate jobs, growing the state's recycling work force to 250 jobs from 60 currently, Bui said.
Prior to the downturn in carpet sales five years ago, CARE estimates nearly 2.5 million tons of carpet ended up in landfills every year, Georgina Sikorski, executive director of CARE.
The 100 yards of carpet that will cost a additional $5 to recycle under the new California law could help save 44 gallons of oil, 1 million BTUs, and 450 pounds of landfill waste, according to the group's website.
"It's not a huge amount, but it's enough for us to provide incentives to the carpet recyclers," Sikorski said.
The tricky part for industry-supported CARE is to play along with California lawmakers without encouraging other states to take the concept to an unworkable extreme, said Frank Hurd, vice president of the Carpet and Rug Institute in Dalton, Ga.
"If this were to grow to 50 cents a square yard, it would be a disincentive to purchase carpet," he said. "We're very conscious of that, and we're doing everything we can to resist things that will move in that direction."
A bill in the Washington state legislature would have required carpet makers to sponsor recycling centers in any city with more than 100,000 residents, or 40 sites altogether, Hurd said.
"There is no way you could afford that economically," he said. "Nobody bothered to ask if this made sense."
Though lobbying stopped the bill, it's set to come up again in 2012, he said.
"We've got some good-intentioned folks who don't understand how business works, how to be efficient or how to make regulations effective without killing industry," Hurd said.
The California law is a compromise manufacturers reached with legislators to avoid costlier regulation. But far more troublesome rules lurk on the horizon for the Dalton-based industry, said Werner Braun, president of the Carpet and Rug Institute.
California scientists are adopting carpet emission recommendations that are 500 times stricter than current industry specifications and 120 times more stringent than European rules, Braun said.
The proposed limit affects levels of allowable caprolactam, a chemical used in the manufacture of Nylon-6. Besides carpet, Nylon-6 is also the basis for food packaging, tires, umbrellas, luggage, sleeping bags, clothes and medical applications.
In 1991 caprolactam was included on the list of hazardous air pollutants by the U.S. Clean Air Act of 1990. The chemical was removed from the list in 1993.
Further restrictions on caprolactam could cause prove expensive and what Braun terms "deselection," a situation in which consumers are unable to afford to buy products that have been altered to be legally compliant.
"One of the major consequences of this is going to be jobs," he said, noting the already-struggling California had shed nearly 30,000 jobs in May alone.
The irony, as Braun sees it, is that the partially self-regulating carpet industry has already adopted limits below OSHA and European guidelines in an effort to stave off just such an action from the state.
OSHA's limit of 1,000 micrograms per cubic meter for eight hours per day is designed to keep workers safe over a 40-year career.
Europe's regulatory body has adopted a limit of 240 micrograms per cubic meter, Braun said. The industry-created Green Label Plus standard mandates levels at or below 100 micrograms, even though caprolactam in carpet dissipates after only a few weeks, he said.
California wants just 2 micrograms per cubic meter.
Braun, the rock-climbing former toxicologist from Dow Chemical Co., added that he takes California's ruling as a personal affront to his 40 years of experience with human-chemical interactions.
"It's toxicologically absurd," he said of the state's experiments with rats' inhalation of the substance. "Caprolactam is what we call a semi-volatile, which means it's really hard to get that into the air in the first place."
But the real danger, as with AB 2398, is what could happen if the recommendation by the state's Office of Environmental Health Hazard Assessment were to be adopted elsewhere.
"Thankfully, there aren't a lot of states like California," Braun said.
Sam Delson, a spokesman for California's Environmental Protection Agency, doesn't see the caprolactam debate in the same terms as his colleagues in the carpet industry.
After all, the Office of Environmental Health Hazard Assessment doesn't make laws or enforce regulations, it only issues non-binding recommendations after careful scientific inquiry.
"Obviously with carpet, off-gassing of substances is an air quality issue," Delson said.
In practical terms, everything starts with a series of risk assessments.
After his agency's assessment, other agencies use the California EPA's recommendations to issue their own recommendations on whether to implement rules.
"Under California's air toxics hot spots program, facilities that need to conduct a risk assessment of airborne emissions use reference exposure levels to evaluate the concentrations of chemicals in the air," Delson said. "The risk assessments are used by local air pollution control districts to determine whether there is a need for pollution controls."
The spat started with a set of experiments conducted by the California EPA on rats using caprolactam, in which investigators found damage to the lining of the nose and airway after chronic exposure to the chemical, Delson said.
Investigators set the chemical's allowable level as low as they did to protect "sensitive subpopulations such as infants and children, the elderly, and people with asthma or other respiratory diseases," he said.
OSHA guidelines are designed to protect working individuals, not infants or people with chronic illnesses, he contended.
Workplace rules also "take into account factors such as the cost and technical feasibility of measures that employers would need to implement to meet their standards."
But the fact that the state doesn't even consider in the cost of compliance with regulation is part of the problem, said Ralph Boe, president of carpetmaker Beaulieu of America.
"Someone's come up with an idea that if 100 micrograms is good, than two is even better," Boe said. "We want these products to be as safe as we can make them, but we have to be economic too."
More importantly, "we don't even have the capability yet" to make carpet with that level of caprolactam," Boe said.
He also takes issue with the state's tests, which he said the agency insists on performing at the factory where concentrations are highest.
"If you think about it, the product's going to be made, shipped, installed, and all this time it will be continuing to lose whatever residuals are in it over time," Boe said.
Boe faces are an immediate loss of sales in California, whose population represents about 10 percent of all Americans, he said.
But the pain won't be equally spread around. Not all carpet is made with Nylon, and not all Nylon is Nylon-6, so some carpet manufacturers will feel more pain than others.
Dan Frierson, chairman and CEO of The Dixie Group, uses a different type of Nylon, and therefore doesn't use much caprolactam.
"The direct impact on us would be minimal, but on the industry it would be significant," Frierson said. "I think, obviously it's a case of overregulation and a case of nonscience-based standards. Whenever you start down that path, it's not good for the industry."