On December 9th, the U.S. Environmental Protection Agency (EPA) announced a proposed rule under the American Innovation and Manufacturing (AIM) Act to advance the transition to more efficient heating and cooling technologies by restricting the use of hydrofluorocarbons and refrigeration, air conditioning, and heat pump equipment beginning in 2025. EPA has listed entities potentially impacted by the rule to include companies that manufacture, import, export, package, sell or otherwise distribute products that use or are intended to use HFCs, such as refrigeration and air-conditioning systems, heat pumps, foams, and aerosols.

Under the AIM Act, EPA is implementing a national HFC phasedown to achieve a 40% reduction below historic levels starting in 2024 and an 85% (HFCs) in certain products and equipment. The AIM Act authorizes EPA to limit or prohibit the use of HFCs in specific sectors and to phase in these requirements over time as appropriate. The proposed rule addresses IIAR’s petition to EPA, as well as other petitions granted in October 2021. The regulation would restrict the use of HFCs used in certain foams, aerosol products, reduction by 2036. The U.S. phasedown is also consistent with the schedule in the Kigali Amendment to the Montreal Protocol, which is a global agreement to phasedown HFCs that the United States joined on October 31, 2022.

A global HFC phasedown is expected to avoid up to 0.5 degrees Celsius of global warming by 2100. EPA has estimated that this proposed rule would provide greenhouse gas emissions reductions of up to 35
million metric tons of carbon dioxide equivalent (MMTCO2e) per year.

EPA estimates that the proposed rule would result in significant GHG emissions reduction benefits while providing savings to American consumers and industry through energy efficiency gains
and lower-cost alternatives. The proposal would result in cumulative GHG emissions reductions ranging from 134 to 903 MMTCO2e through 2050. EPA estimates that the cumulative net benefits of this proposed action are between $13.1 billion to $56.3 billion from 2025 through 2050. The GHG emissions reductions from this proposed action would provide between $5 and $51 billion in climate benefits. EPA further estimates that the proposed rule would also save U.S. industry and consumers between $5 to $8 billion from 2025 through 2050 as a result of improved energy efficiency in refrigeration, air conditioning, and heat pump products and lower cost alternatives.

EPA is proposing to restrict the use of certain higher-GWP HFCs in aerosols, foams, refrigeration, air conditioning, and heat pump products and equipment. The proposed rule would prohibit the manufacture and import of products containing restricted HFCs by January 1, 2025, in most cases, and would prohibit the sale, distribution, and export of products containing restricted HFCs a year later, which in most cases would be January 1, 2026.

A global HFC phasedown is expected to avoid up to 0.5 degrees Celsius of global warming by 2100. EPA has estimated that this proposed rule would provide greenhouse gas emissions reductions of up to 35 million metric tons of carbon dioxide equivalent (MMTCO2e) per year.

EPA developed the proposed restrictions after reviewing petitions, holding stakeholder workshops, and considering an extensive list of factors as specified in the AIM Act, including the availability of substitutes, safety, and the overall economic and environmental impacts. This review included IIAR-submitted petitions and the resulting proposal incorporates many of the policies suggested by IIAR.

The proposed rule includes a list of proposed GWP limits for a variety of sectors and types of refrigeration systems. In many cases, EPA is proposing to set a 150 GWP limit for systems with a refrigerant charge of greater than 200 pounds and a 300 GWP limit for systems with a charge of less than 200 pounds. Below is a table of selected sectors relevant to IIAR members (chart below).

EPA is proposing to restrict the use of certain higher-GWP HFCs in aerosols, foams, refrigeration, air conditioning, and heat pump products and equipment. The proposed rule would prohibit the manufacture and import of products containing restricted HFCs by January 1, 2025, in most cases, and would prohibit the sale, distribution, and export of products containing restricted HFCs a year later, which in most cases would be January 1, 2026.

IIAR has provided written comments to EPA regarding the proposed rule to further clarify its position on GWP limits for various types of refrigeration systems and will continue to work closely with the agency as it moves forward with the rulemaking process. A final rule is expected by September 2023.