As the U.S. Environmental Protection Agency (EPA) prepares for the next round of HFC rulemaking for the American Innovation and Manufacturing (AIM) Act, the agency collected industry feedback at the ATMOsphere (ATMO) America Summit 2022.
ATMO America, organized by ATMOsphere (publisher of Hydrocarbons21.com), was held June 7–8 in Washington, D.C.
Cindy Newberg, Director of the EPA’s Stratospheric Protection Division, participated in a policy discussion panel and a special workshop aimed at hearing from industry stakeholders. The AIM Act is designed to achieve an 85% phase down of HFC gases by 2036.
In particular, Newberg focused the panel and workshop on the impending “technology transitions” proposed rulemaking, one of three parts of the AIM Act. The rule will facilitate the transition to next-generation technologies such as natural refrigerants by restricting, fully, partially, or on a graduated schedule, HFCs’ uses in different sectors and subsectors.
The other two parts of the AIM Act pertain to distributing HFC allowances and maximizing reclamation while minimizing refrigerant releases from equipment.
For the technology transitions rule, last October the EPA granted 10 petitions and partially granted one petition from industry stakeholders concerning how it should regulate HFCs. The agency is obliged to consider those petitions but is not required to adopt them.
The petitions – from NGOs, industry trade associations, states and private companies – covered more than 40 subsectors in the refrigeration, air-conditioning, aerosol and foam sectors.
Some petitions requested restrictions that are identical or similar to the Significant New Alternatives Policy (SNAP) rules, which were partially vacated by the Washington, D.C., Circuit Court in 2017 and remanded to the EPA. Other petitions requested that EPA’s restrictions go further than the SNAP rules “by setting lower GWP limits and/or adding additional HFC uses (e.g., in dehumidifiers),” said Newberg.
On June 30, the EPA will be holding online workshops to solicit further input from stakeholders on the AIM Act Technology Transitions rulemaking for the refrigeration, air-conditioning, motor vehicle air-conditioning, aerosol and foam sectors.
Later this year, the EPA will issue a proposed rulemaking on the technology transitions rule, followed by a public comment period. The deadline for issuing a final rule is October 7, 2023.
Allowances for 2024 and beyond
Last September, the EPA issued its first final rule on the allocation and trading of allowances for HFC use under the AIM Act. Under this rule, the EPA set the HFC production and consumption baseline levels from which reductions will be made, establishes an initial methodology for allocating and trading HFC allowances for 2022 and 2023 and creates a “robust, agile, and innovative” compliance and enforcement system, the EPA says on its website.
EPA now intends to develop a new notice-and-comment rulemaking to establish allowance criteria for 2024 and later years. A proposed rule will be announced later this year, followed by a public comment period, and a final rule will be released in 2023.
According to Newberg, the new allowances rule will require total allowances allocated for 2024 to decrease to 60% of baseline. The EPA is considering different approaches to allocating these allowances, including:
- Past production and consumption from a set number of years
- Reevaluating with data from recent years, including accounting for transfers between allowance holders
- Past data, with a fee for production or imports
- Auctions, in part or in whole
- A mix, such as phasing in an auction or fee over time
Stakeholders’ workshop with EPA
Also at ATMO America, the EPA’s Cindy Newberg and ATMOsphere CEO Marc Chasserot led an interactive workshop allowing natural refrigerant industry stakeholders to interact with EPA officials, asking questions, addressing concerns and highlighting priorities in regard to the U.S. AIM Act rollout.
In particular, participants addressed the impending technology transitions rule.
The following is a summary of their proposals:
- Participating stakeholders broadly agreed that establishing sector- and sub-sector-focused GWP limits for refrigerants based on available alternatives is preferred over addressing each refrigerant used in each application. The latter was the method adopted under the EPA’s SNAP but is no longer practical given the number of new fluorinated chemical refrigerants that have been, and are continuing to be, marketed. Stakeholders said they see regulatory efforts targeting specific refrigerants as difficult to enforce.
- Stakeholders said a clearly established sector- focused GWP limit would be the clearest signal the EPA could provide.
- Moreover, stakeholders said, aggressive GWP limits can steer the industry towards low-GWP refrigerants like naturals, rather than allowing end users to waste time, money and resources by opting for refrigerants that may be subject to regulatory measures again. In addition, continuous amendments to HFC regulations would unnecessarily burden end users and create ambiguity, they said.
- Stakeholders noted that, especially in commercial refrigeration, the technology is ready to kick off the transition away from high-GWP refrigerants towards low-GWP natural alternatives.
- Industry representatives also asked for clarity and consistency across the measures targeting fluorinated gases within the AIM Act. In addition, different regulatory frameworks at the state level add complexity to industry compliance.
- Stakeholders suggested that the EPA investigate possible incentive mechanism to facilitate the transition towards natural refrigerants. Incentives should target not only new stores, but also retrofits, and they should complement the f-gas price changes stemming from f-gas regulations.
- The EPA should also be mindful of transition periods to allow industry players enough time to adapt to new measures. Some stakeholders proposed a two-to-five-year transition period to allow all industries in commercial refrigeration to transition away from HFCs. Other proposals varied, including, for all commercial refrigeration, a 10- GWP maximum, three-to-five year transition period, or a 600-GWP maximum by 2035; and, for new commercial refrigeration systems, an HFC ban by 2025.
- Some stakeholders also raised concerns about the next generation of synthetic fluorinated refrigerants (HFOs) in connection to the toxicity of their atmospheric by-products, notably trifluoroacetic acid (TFA).
- Some stakeholders asked the EPA to address HVAC as soon as possible to speed up its transition to natural refrigerants. They suggested a ban of refrigerants with a GWP of more than 100 by 2026.
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