Regulators’ Proposal Would Make Lithium Batteries More Expensive

The Pipeline and Hazardous Materials Safety Administration [PHMSA] in January issued a notice of proposed rulemaking [NPRM] for regulations intended to improve the safety of shipping lithium batteries and cells via air. Unfortunately, by requiring the batteries and battery-containing products be shipped as hazardous materials, the proposed regs are onerous and could make the use of air cargo prohibitively expensive.

This proposed regs are especially puzzling coming from the Obama Administration, since lithium batteries are considered an essential element in the low-carbon, “green jobs” economy the Administration is always talking about.

As the National Association of Manufacturers contended in comments submitted on the proposed rule:

As the federal government encourages greater energy independence, the development of a lithium ion battery industry in the United States is more critical than ever. The [proposal] is totally inconsistent with national policy goals because the rule will make it more difficult and more expensive to ship large advanced batteries that are used for electric and hybrid vehicles and domestic energy exploration. Achieving a level playing field in the United States that keeps transportation services efficient and costs competitive is critical to the success of these larger policies intended to promote energy independence.

The NAM’s objections are many, including not just the additional, unnecessary costs but the competitive disadvantage the rules would impose on U.S. manufacturers. From our comments:

Due to the impacts of designating lithium ion and lithium metal cells and batteries and the products containing these batteries as Class 9 hazardous materials when shipped by air, shippers will face increased costs from transportation providers because most air carriers charge additional fees for carriage of fully regulated hazardous materials shipments. In addition, the restriction to only cargo aircraft for these shipments as well as the proposed rule’s Class C compartment requirement for stowage aboard the aircraft will squeeze the available air cargo market as competition for cargo space will increase as all manufacturers affected by this NPRM will be limited to cargo aircraft. One manufacturer believes that an effect of the rule will be a loss of 80 to 90% of the existing airfreight capacity that will force shippers to redesign entire supply chains in less than a six-month timeframe. As a result, shipping costs will skyrocket and shipping delays will be an inevitable byproduct of a restricted air cargo market. Manufacturers believe that the PHMSA cost-benefit analysis is inadequate and does not consider these transportation market impacts to shippers as a result of very short implementation of the NPRM. Further, the PHMSA cost benefit analysis does not even consider the supply chain relationships impacted by this NPRM or the global nature of modern supply chains.

The comment period ended March 12 and the docket, PHMSA-2009-0095, closes Thursday.

Join the discussion One Comment

Leave a Reply