EPA Proposes Phasedown of Manufacture and Use of HFC Refrigerants
On December 15, 2022, EPA proposed new regulations that would begin a phasedown of the manufacture and use of hydrofluorocarbons (HFCs). HFCs are widely used as refrigerants in industrial, commercial, residential, and automotive refrigeration systems, and are less widely used as propellants in foam-blowing and other industrial applications. In fact, HFCs have long been promoted as environmentally-friendly substitutes for ozone-depleting chlorofluorocarbon (CFC) and hydrochlorofluorocarbon (HCFC) refrigerants as a result of the 1987 Montreal Protocol. Although HFCs do not damage the ozone layer, they have extremely long atmospheric lifetimes and high Global Warming Potentials (GWPs). Because of this, EPA has been working to restrict the use of HFCs for several years, but previous efforts have been stalled by lawsuits challenging EPA’s existing authority to regulate these compounds.
The authority to restrict the use of HFCs was provided by Congress as part of the American Innovation & Manufacturing (AIM) Act, which was signed into law in December 2020 and directed EPA to implement an 85 percent phasedown of the production and consumption of HFCs by 2035. As currently proposed, the phasedown would begin on January 1, 2025 with a ban on the manufacture or import of products using HFCs in specified amounts and in specified industrial sectors. Subsequent bans on the sale, distribution, and export of these products are proposed to follow in 2026 and 2027. Common HFC refrigerants include R-32, R-134a, and R-143a.
The specific HFC manufacture and use restrictions depend on the size of the refrigeration (or propellant) application as well as the industrial sector in which it is used. In some applications, specific refrigerants are banned across an industry sector and in other applications, the restrictions depend on the refrigerant charge capacity and the GWP of the refrigerant blend in use. For example, industrial process refrigeration systems containing more than 200 pounds of refrigerant are limited to refrigerants (or blends) with a GWP of less than 150. Smaller industrial process refrigeration systems may contain refrigerants with a GWP of less than 300.
While existing equipment (as of December 27, 2020) is exempt from the restrictions and may continue to use HFCs, the restricted supply of new HFC products will lead to increased difficulty and expense in continuing to operate HFC equipment. This market effect has already been seen with the dwindling supply of ozone-depleting CFC and HCFC refrigerants available for older refrigeration systems. It is often prohibitively expensive to continue to operate and maintain these older systems, with retrofit or replacement becoming the only cost-effective option.
Manufacturers and distributors of products containing HFCs will need to transition to acceptable alternatives quickly to comply with the restrictions. The proposed rule also includes recordkeeping, labeling, and reporting requirements necessary for manufacturers and distributors to demonstrate product compliance. Operators of existing HFC systems should be aware of the phasedown so that the retrofit or replacement of existing systems can be appropriately planned and budgeted.
EPA is accepting comments on the proposed regulations until January 30, 2023. If you wish to discuss the proposed regulations or want to better understand how they may affect your business, please contact Shoshana (Suzanne Ilene) Schiller, Esq. at 484-430-2354 or Will Hitchcock at 484-430-2356.