HFCsOn Dec. 27, 2020, Congress enacted the American Innovation and Manufacturing (AIM) Act of 2020. The AIM Act is the first step the United States Government took to meet the requirements of the United Nations’ Kigali Agreement, a 2016 amendment to the Montreal Protocol, seeking to phase down the worldwide use of Hydrofluorocarbons (HFCs). (Click on image at right to enlarge.)

HFCs are synthetic compounds introduced to the world in the 1980s following the Montreal Protocol’s gradual production phase-down of halons and chlorofluorocarbons (CFCs), a class of ozone-depleting chemicals. 

Despite their ozone friendly properties, HFCs are potent greenhouse gases used in a variety of commercial and industrial applications, such as fire suppression agents, the production of polymer foams, plasma etching for semiconductor technology, and as a refrigerant used in air conditioning and refrigeration systems. 

Intending to align US climate policy with the existing efforts of the international community, the AIM Act instructed the EPA to execute the following policies:

  1. Phase-down the production and consumption of HFCs in the United States by 85% over the next 15 years through a closed allowance allocation and trading program
  2. Establish standards for the management and reclamation of HFCs used in refrigerant systems, and
  3. Establish sector-based use restrictions to facilitate the transition to alternative, next-generation refrigeration technologies

In order to implement these goals, the EPA initiated rulemaking activity to meet the deadlines prescribed in the statute. On Sept. 23, 2021, The EPA released a pre-published version of their Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program under the American Innovation and Manufacturing Act Final Rule. Under the Final Rule:

  1. Producers and importers must hold the appropriate number of production and consumption allowances prior to introducing any regulated HFCs into commerce.
  2. The EPA determines the allocation of allowances to stakeholder companies through the consumption and production baselines established in the Final Rule.
  3. Production and consumption allowances are calendar-year specific and distributed to producers and importers on the first of October every year.
  4. The EPA will lower the production and consumption baselines, as determined from the statutory schedule, through 2036.
  5. The EPA intends on gradually implementing a robust digital recordkeeping and reporting system to ensure compliance with the requirements of the Final Rule.

AEM member companies may find themselves impacted by the goals and requirements of the AIM ACT and the EPA’s Final Rule. These impacts will depend on a company’s use of HFCs, position in the supply chain, or adopted business practices. AEM has worked diligently to stay in front of issues related to HFC use in its members’ equipment, whether through direct engagement with EPA regarding this rule, or the ongoing EPA SNAP application related to R-1234yf.

For more information, or to learn how to can get more involved, please reach out to AEM’s Jason Malcore at jmalcore@aem.org. All AEM work regarding this topic takes place in the AEM Regulatory Compliance Steering Committee.

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