As part of 31 actions aimed at rolling back previously enacted environmental regulations, the U.S. Environmental Protection Agency (EPA) announced yesterday that it would be pursue “reconsideration of technology transition[s] rule that forces companies to use certain technologies that increased costs on food at grocery stores and semiconductor manufacturing.”
The Technology Transitions rule is one of three pillars of the American Innovation and Manufacturing (AIM) Act, enacted in 2020. The EPA released the final version of the Technology Transitions rule in October 2023 to accelerate the ongoing transition to more efficient and climate-safe technologies in new refrigeration, heating and cooling systems and other products by restricting the use of HFCs where alternatives are already available.
The rule bans HFCs in certain new equipment and sets a limit on the GWP of the HFCs that can be used in each subsector, with compliance dates ranging from 2025 to 2028. It sets GWP limits of 150 for many refrigeration uses and 700 for air conditioning and heat pumps.
Any changes to the Technology Transitions rule would need to be made through the EPA’s rule-making process. “We are watching this carefully and interacting with EPA officials and key members of Congress,” said Francis Dietz, Vice President, Public Affairs Air-Conditioning, Heating, and Refrigeration Institute (AHRI). “Obviously, we prefer that the rule remain intact and on schedule.”
Dietz noted that under subsection (i) of the AIM Act, a revised technology transitions rule could not take effect until one year after a new final rule is published. “Therefore, even if the EPA initiated changes to the Technology Transitions rule or other regulations affected by yesterday’s announcement, those changes would likely take considerable time to be implemented.”
“Obviously, we prefer that the rule remain intact and on schedule.”
Francis Dietz, AHRI
Rolling back the Technology Transitions rule “is not in the best interest of industry, the US economy or the environment,” said Christina Starr, Senior Manager, Climate Campaign, Environmental Investigation Agency (EIA) US. “It could lead to price increases for HFC-based refrigerants by exacerbating supply shortages if companies slow down their adoption of natural refrigerants, which reduce our reliance on these foreign manufactured chemicals.”
“I don’t think most of our sector of the industry supports this reconsideration at all,” said Eric Smith, Vice President and Technical Director at The International Institute of All-Natural Refrigeration. “It is more of the dizzying volley of pro-environment/anti-environment maneuvering we have witnessed for the past dozen plus years.”
The AIM Act, a bipartisan bill supported by the HVAC&R industry, was enacted on December 27, 2020 (during the first Trump administration). It authorizes the EPA to phase down the production and import of HFCs, manage these HFCs and their substitutes, and facilitate the transition to next-generation technologies through sector-based restrictions (Technology Transitions rule). The EPA has finalized regulations for all three phases – most recently the management rule.
In January, U.S. House Representative Neal Dunn, a Florida Republican, introduced a joint resolution to strike down the management rule. It was followed by a comparable Senate resolution from Kansas Senator Roger Marshall, also a Republican.
Campaign signals
During the 2024 presidential campaign, the 2025 Presidential Transition Project – known as Project 2025 – recommended in its section on the EPA that a potential future Republican administration repeal Biden administration HFC regulations authorized by the AIM Act “that are unnecessarily stringent and costly.”
Donald Trump distanced himself from Project 2025 during the presidential campaign but as president has named Russell Vought, one of its chief architects, as White House Budget Director.
Project 2025’s EPA section did not indicate which regulations under the AIM Act it thought were unnecessarily stringent and costly. But the section also urges that a Republican-led EPA, in implementing the AIM Act, “refrain from granting petitions from opportunistic manufacturers to add new restrictions that further skew the market toward costlier refrigerants and equipment,” without indicating which refrigerants and equipment were costlier.
The section also asks that the EPA “conduct realistic cost assessments” of the AIM Act “that reflect actual consumer experiences instead of the current unrealistic ones claiming that the program is virtually cost-free.”
The EPA has disclosed that, in addition to the climate benefits from avoided emissions of HFCs, the Technology Transitions part of the AIM Act alone “provides up to $4.5 billion [€4.2 billion] in cost savings to consumers and businesses,” largely driven by the lower cost of HFC substitutes and increased energy efficiency of products using lower-GWP substitutes.
Danielle Wright, Executive Director of the North American Sustainable Refrigeration Council (NASRC) noted that the “core part” of the AIM Act and the “driving economic force of the [HFC] phasedown” is the HFC Allowance and Allocation requirement. This controls the supply of HFCs, and is not the target of the EPA’s announcement. “We see the impacts when the chemical manufacturers discontinue refrigerants like R404A and R507A,” she said. “The Technology Transition Rule was designed to soften the blow as high GWP refrigerants become unavailable.”
But Wright said she believes the EPA’s effort to deregulate will spur more state activity. “The two most likely pathways for states are either a sales ban on virgin HFCs, forcing end users to use expensive reclaimed refrigerants, or a ban on PFAS that includes refrigerants in the definition. Both will result in the patchwork of regulations that makes it tough to do business nationally.”
Meanwhile, the EPA views its announcement as aligned with the Trump administration’s plans to restructure the federal government. “Today is the greatest day of deregulation our nation has seen,” said EPA Administrator Lee Zeldin. “We are driving a dagger straight into the heart of the climate change religion to drive down cost of living for American families, unleash American energy, bring auto jobs back to the U.S. and more.”
Good for end users?
In the end-user community, food retailer trade groups have opposed the Technology Transitions rule, saying the timelines for refrigerant changes were too tight. The FMI – Food Industry Association, along with several other associations, filed a lawsuit in 2023 challenging the EPA’s regulation. Both the FMI and the National Grocers Association (NGA) welcomed the EPA’s reconsideration announcement.
“FMI is pleased the EPA has agreed to reconsider the Technology Transitions Rule to allow EPA time to review the incredible burdens placed on the food industry and its unrealistically tight implementation timelines,” said Leslie Sarasin, FMI President and Chief Executive Officer.
But the EIA’s Starr noted that rolling back the Technology Transitions rule will create “further uncertainty for end users” and mean a “patchwork of state rules.” Already, states like California and New York have put these strict GWP limits in place “and other states are likely to follow suit,” she said.
And the IIAR’s Smith believes end users who hold onto “leaky HFC refrigeration systems” as a result of a rule change may find this to be “penny-wise and dollar-foolish.” He added that larger end users “seem to have the sense that converting to natural refrigerants when the time is right for them is the most logical move because, after all, in the long run it saves them costs and it assures them that they will have a long-lasting and compliant system in the future.”
This article was updated on March 13 with input from the IIAR, EIA, FMI and NGA.
