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U.S. EPA Finalizes Rule Cutting HFCs by 40% in 2024–2028

HFC allowances for production and import in 2024 will be delivered by September 29.

The U.S. Environmental Protection Agency (EPA) on July 11 announced its latest action to phase down the use of climate super-pollutant HFCs, issuing a final rule to implement a 40% reduction below historic levels from 2024 through 2028.

The rule aligns with the bipartisan American Innovation and Manufacturing (AIM) Act’s goals to reduce the production and consumption (imports) of these climate-damaging refrigerants by 85% by 2036 and help avoid up to 0.5 °C of global warming by 2100.

HFC allowances for 2024 will be allocated by September 29, 2023. The phase-down schedule under this program is consistent with the schedule laid out in the Kigali Amendment to the Montreal Protocol, which the United States ratified in October 2022.

The EPA issued a proposed rule on October 20, 2022 to implement a 40% reduction of consumption and production below the baseline level starting in 2024, and continuing through 2028.

The final rule builds on the success of the 10% phasedown step implemented for 2022 and 2023 by establishing a similar allowance methodology “to provide regulatory certainty to industry and stakeholders, ensuring the most efficient implementation under the ongoing phasedown,” said the EPA in a statement.

“This rulemaking is a critical next step in the Biden-Harris Administration’s ambitious plans to phase down climate super-pollutants and ensure the United States leads the way as countries around the world implement the Kigali Amendment,” said Joe Goffman, Principal Deputy Assistant Administrator of EPA’s Office of Air and Radiation. “The U.S. HFC phasedown program, bolstered by domestic innovation to develop alternative chemicals and equipment, is paving the way for the United States to tackle climate change and strengthen global competitiveness.”

“President Biden has brought together a broad coalition of American manufacturers to work on next-generation technologies across refrigeration, HVAC systems and more – helping us cool without contributing more to global warming,” said Ali Zaidi, White House National Climate Advisor. “With today’s final rule, this Administration is continuing to deliver win-wins for climate action and U.S. manufacturing competitiveness while ensuring that American workers reap the benefits of a growing global market for HFC alternatives.”

“As an original co-author of the bipartisan AIM Act, I applaud this action by EPA, which moves us closer to our goal of an 85% reduction in HFCs by 2036,” said U.S. Senator Tom Carper (Del.), Chairman of the Senate Environment and Public Works Committee. “By phasing down the use of these super pollutants, we can both address climate change and support domestic manufacturing — a win-win. I commend the Biden-Harris Administration for their work to ensure that our nation remains a global leader in the fight against climate change and production of the next generation of refrigerants.”

“Phasing down hydrofluorocarbons is a critical component of our national climate action strategy,” U.S. Representative Paul Tonko (Democrat from New York) said. “That’s why I was proud to help lead the bipartisan AIM Act to seize this powerful opportunity to spur economic growth, protect consumers and address these climate super pollutants. I applaud the Biden Administration’s latest action to keep this program on track by providing HFC producers and users the certainty they need to navigate this next stage of the phasedown. And I encourage additional steps under the law to further position U.S. manufacturers as the worldwide leaders in the clean energy economy of the future.”

“The Alliance appreciates the prompt and timely completion of the HFC allowance rule for the 2024 through 2028 period,” said Kevin Fay, Executive Director of the Alliance for Responsible Atmospheric Policy, “as this allows continued U.S. leadership in the efficient global phasedown of HFCs, and smooths the transition to low-global warming potential chemicals and user technologies here and around the globe. The industry is appreciative of the attention and support provided by the EPA and the Biden Administration in this cooperative effort.”

“This latest allocation rule is a critical step in the implementation of the AIM Act schedule for phasing down hydrofluorocarbon refrigerants,” said AHRI President & CEO Stephen Yurek. “Our industry appreciates the work of the EPA and the timely issuance of this rule, as we prepare for the next HFC reduction step-down next January.”

“This demonstrates EPA’s commitment to stay on track to deliver on the Kigali Amendment goals and protect our planet from destructive super-pollutants,” said Avipsa Mahapatra, Climate Campaign Lead at the Environmental Investigation Agency. “The U.S. is demonstrating leadership not just at home but also in international discussions at the Montreal Protocol to prevent illegal trade and unnecessary emissions through robust implementation and enforcement of the HFC phasedown.”

The United States began the HFC phasedown on January 1, 2022, with a reduction of HFC production and imports to 10% below historic baseline levels. Since then, allowances have been needed to import and produce HFCs. Starting in 2024 the phasedown will be 40% below historic levels, “a significant decrease in the number of available production and consumption allowances compared to previous years,” said the EPA.

Robust enforcement

In addition to setting up an allowance allocation program, the HFC phase-down program has established “robust enforcement mechanisms to ensure a level playing field for U.S. companies complying with the phasedown requirements,” said the EPA. Since January 2022, the Interagency Task Force on Illegal HFC Trade, co-led by EPA and the Department of Homeland Security, has prevented illegal HFC shipments equivalent to more than 1 million metric tons of CO₂ at the border, which is equivalent to the CO2 emissions from over 206,000 homes’ electricity use for one year.

EPA also applies administrative consequences, such as revocation and retirement of allowances, for noncompliance that can be in addition to any civil or criminal enforcement action. EPA has finalized administrative consequences by retiring more than 6.5 million metric tons of CO2e for 2022 and 2023 for companies that misreported data or imported HFCs without the requisite number of allowances.

EPA is planning two additional regulatory actions under the AIM Act in 2023. The first is a final rule placing restrictions on the use of HFCs in certain sectors to facilitate sector-based transitions to alternative chemicals, and the second is a proposed rule establishing certain requirements for the management of HFCs and HFC substitutes in equipment, such as air conditioners.

“This rulemaking is a critical next step in the Biden-Harris Administration’s ambitious plans to phase down climate super-pollutants and ensure the United States leads the way as countries around the world implement the Kigali Amendment.”

Joe Goffman, Principal Deputy Assistant Administrator of EPA’s Office of Air and Radiation

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