Environmental Protection Agency Issues Final Rule to Reduce Emissions of Hydrofluorocarbons by 85% over 15 Years

Administration Actions Strengthen Competitiveness of Domestic Industries, Maintain and Create Good Jobs, and Reduce Climate Pollution

Today, the Biden Administration is announcing a set of historic actions to phase down super-polluting hydrofluorocarbons (HFCs), bolster the competitiveness of American industries, and maintain and create hundreds of thousands of good-paying, union jobs across the country. The Environmental Protection Agency (EPA) will release a new rule, alongside other interagency actions, that together represent one of the most impactful federal efforts to reduce climate pollution in decades. HFCs are potent greenhouse gases found in a range of appliances and substances, including refrigerators, air conditioners and foams. These harmful pollutants have an impact on warming our climate that is hundreds to thousands of times greater than the same amount of carbon dioxide. HFCs are exacerbating climate change and extreme weather events – and the corresponding public health threats, physical damage, and economic costs.

Today’s actions build on a foundation of widespread support from Democrats and Republicans, industry leaders, and environmental organizations, all of whom supported the bipartisan American Innovation and Manufacturing (AIM) Act passed last year. These steps are expected to result in reductions of more than 4.5 billion metric tons of carbon dioxide-equivalent by 2050 — equal to nearly three years of U.S. power sector emissions at 2019 levels — making today’s announcement one of the most consequential climate actions taken by the federal government in years. Today’s actions will make the U.S. domestic approach consistent with key provisions contained in the Kigali Amendment to the Montreal Protocol, an international agreement to reduce the consumption and production of HFCs. That amendment, if implemented worldwide, can prevent up to one half a degree Celsius of warming this century.

As directed in the AIM Act, the final rule from EPA will establish a landmark climate protection program that will phase down the production and consumption of HFCs by 85% below baseline levels within the next 15 years. The United States is already a leader in innovation and manufacturing of HFC alternatives, and today’s actions will ensure that American industries remain competitive in this expanding global market. EPA’s rule establishes an allowance allocation and trading program to reduce HFCs, and creates a robust compliance and enforcement system. In addition, EPA is committing to addressing the use of HFCs in products, and is currently reviewing more than a dozen petitions to restrict HFC use in a wide range of applications. Together, these actions will ensure that American communities and workers reap the climate and economic benefits of the phasedown of HFCs. EPA estimates the cumulative benefits of today’s rule — more than $272 billion through 2050 — will benefit populations that may be especially vulnerable to damages from climate change, and will result in significant compliance savings for industry.

Reflecting President Biden’s whole-of-government approach to tackling the climate crisis, six agencies are today taking several steps to build on this progress. Together, the new commitments will support U.S. industries and workers and protect communities from climate pollution and other impacts.

The Administration is taking coordinated steps across the federal government to catalyze reductions in HFCs, through four main action areas:

Preventing illegal trade, production, use, and sale of climate-damaging HFCs by leveraging collaboration across the federal government, and preparing for enforcement actions to deter and punish violations of the law.
Supporting the development of HFC alternatives in partnership with other federal departments and agencies, the private and public sector, states, and other key stakeholders.
Managing HFC stocks to promote use of recovered HFCs from retired equipment to offset the need for newly manufactured HFCs, and leveraging the federal government’s purchasing power to support use of alternatives and reclaimed HFCs for federal facilities, equipment, and fleets.
Advancing research and testing to identify HFC alternatives and technologies.

Preventing Illegal Trade, Production, Use, and Sale of Climate-Damaging HFCs and Deterring and Punishing Violations

Illegal trade in HFCs poses a fundamental risk to America’s climate and economic goals. If the United States were to see rates of noncompliance similar to what has been observed in other countries, the result could be as much as 43-90 million metric tons of additional carbon dioxide-equivalent emissions in a single year, which is roughly equal to the annual emissions from 22 coal-fired power plants. This high level of non-compliance would put U.S. businesses at a competitive disadvantage and discourage innovation in HFC alternatives. To address these issues, the Administration is taking the following actions:

Creating an Interagency Task Force on Illegal HFC Trade: Today, the Administration is announcing a new, nimble interagency task force led by experts from the Department of Homeland Security (DHS), EPA’s Office of Air and Radiation, and EPA’s Office of Enforcement and Compliance Assurance. In partnership with the Departments of Justice, State, and Defense, these agencies will execute a strategy to detect, deter, and disrupt any attempt to illegally import or produce HFCs in the United States. This coordination builds on the agencies’ long experience collaborating to prevent illegal imports, including imports of ozone-depleting substances and vehicles that fail to comply with Clean Air Act standards.
Enforcing HFC Phasedown: DHS, through its component agencies U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE), is partnering with EPA to enforce the AIM Act’s phasedown of HFCs. AIM Act import enforcement is a priority that falls squarely within CBP’s mission to protect the American people, safeguard our borders, and enhance the nation’s economic prosperity, and ICE Homeland Security Investigations’ (HSI) mission to investigate, disrupt, and dismantle criminal organizations that threaten or seek to exploit U.S. customs laws.
Deterring Illegal Activity: EPA, in coordination with CBP and HSI, will deter illegal activity and pursue enforcement actions by implementing a comprehensive, innovative, and robust compliance and enforcement regime that includes, among other provisions: establishing a certification ID system to track the movement of HFCs in the United States in real time; establishing administrative consequences, such as revoking allowances, on top of, and not in lieu of, any potential enforcement action; and aggressively enforcing civil and criminal violations of the law.

Leveraging Enforcement through the Department of Justice: The Department of Justice (DOJ) fully supports efforts to pursue the illicit trade in potent, climate-damaging HFCs, and will work in close collaboration to implement a multi-pronged enforcement strategy. DOJ will work with its law enforcement partners at EPA and DHS to support the development and prosecution of cases referred by these agencies. Vigorous and well-publicized enforcement of these rules is essential to holding violators to account as well as to deterring this illegal trade by others.
DOJ’s Environment and Natural Resources Division (ENRD) has both civil and criminal enforcement tools that it can use to combat the illegal trade in HFCs. ENRD can bring civil judicial enforcement actions for violations of the law and applicable regulations, seeking civil penalties, orders to ensure future compliance with the law, and injunctive relief to mitigate the impact of prior violations. For the worst offenders, ENRD will aggressively pursue fines and imprisonment for criminal violations of the AIM Act (as well as for related crimes such as smuggling, false statements, and money laundering). ENRD also will collaborate with its law enforcement partners and other DOJ components to ensure that tariffs on HFCs are enforced fairly and help ensure that no one avoids HFC tariffs by disguise or artifice.

Supporting the Development and Use of HFC Alternatives

The Department of Defense (DoD) has established an AIM Act Working Group of the Military Services and the Coast Guard to coordinate the Armed Forces response to the AIM Act and the HFC phasedown. The Working Group encourages partnerships with other federal agencies and the defense industrial base to support characterization of all mission-critical military HFC uses and plan for future transition efforts.

Managing HFC Stocks and Leveraging the Power of Federal Procurement

The General Services Administration (GSA) will review all “Best in Class” contracts to ensure the Federal Acquisition Regulation clauses that support the use of HFC alternatives and reclaimed HFCs have been correctly incorporated into all relevant contracts.
DoD will evaluate strategies to reuse HFCs recovered from DoD equipment to enhance resilience for future missions.
DoD will assess input gathered from interested parties on the recent Request for Information on climate-related disclosures to identify greenhouse gas reduction efforts in the supply chain, as well as opportunities to leverage DoD’s purchasing power for future acquisition of goods and services to support the phasedown of HFCs. DoD will update its procurement instructions to support the tenets of the AIM Act and maintain the mission of the Department.

Advancing Innovation and Testing to Identify HFC Alternatives and Technologies

DoD will invest more than $8 million over the next five years to identify and qualify suitable low-global-warming-potential (GWP) alternatives to high-GWP HFCs in applications with military-unique performance requirements. These efforts include:
- Evaluation of low-GWP alternatives for refrigerants in ground vehicles, aviation systems, environmental control units (ECUs), fields kitchens and other military equipment;
- Evaluation of low-GWP fire suppressants in ground vehicles and aviation systems; and
- Research on low-GWP refrigerants to replace HFC refrigerants currently used in Naval systems.
DoD will seek proposals for Fiscal Year 2023 from both federal and private sector organizations to conduct research on HFC alternatives for use in air-conditioning systems of various military vehicles which have unique requirements for operation in a combat environment. This research could reduce DoD’s future needs for HFC production to support mission-critical military end uses and could also provide additional alternatives for non-military applications.

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