EPA Proposes Rule Cracking Down on Refrigerants

On April 30, the Environmental Protection Agency (EPA) released a notice of proposed rulemaking to create a rationing scheme for hydrofluorocarbons (HFCs), a widely used class of refrigerants. The proposed restrictions are being promulgated pursuant to legislation added to the massive appropriations and COVID-19 relief bill enacted during the lame duck session of Congress last December. HFCs are being targeted as greenhouse gases, and the EPA has also released a draft Regulatory Impact Analysis estimating $284 billion in climate-related benefits from these measures through 2050.

The agency’s previous estimate that HFCs account for no more than 3 percent of current warming was not mentioned during the rollout of the Notice of Proposed Rulemaking and Regulatory Impact Analysis.

HFCs are the refrigerants currently used in hundreds of millions of pieces of air conditioning and refrigeration equipment. This includes most home and vehicle air conditioners, as well as the air conditioning and refrigeration systems relied upon by millions of businesses.

The cost of HFCs needed to repair this equipment will very likely rise as production levels are ratcheted down pursuant to the law. New equipment would also increase in cost as it will have to be redesigned to operate on one of the environmentally acceptable replacements for HFCs. One such refrigerant, being used in new vehicles, costs about five times the HFC it replaces. Several of the new refrigerants are classified by standard-setting bodies as mildly flammable, which raises safety issues to go along with the costs.

At the same time the EPA has initiated the implementation of these domestic measures restricting HFCs, the Biden administration may also move ahead with international ones. The United Nations’ Kigali Amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer (Kigali Amendment) is ready to be submitted by the president to the Senate for the required treaty ratification vote. No date for doing so has yet been set.

The comment period for the EPA’s proposed rule will be 45 days after its publication in the Federal Register.