Latest proposal under the bipartisan AIM Act promotes US development and manufacturing of climate-safe HFC alternatives, saving billions in costs

WASHINGTON – On December 9, 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 super-polluting hydrofluorocarbons (HFCs) in certain products and equipment where more climate-friendly alternatives are available. The proposed rule, which would apply both to imported and domestically manufactured products, will help ensure a level playing field for American businesses that are already transitioning to next-generation, safer alternatives, and more energy-efficient technologies.

“With this latest proposal under the bipartisan AIM Act, EPA continues to advance President Biden’s ambitious climate agenda while investing in American innovation and ingenuity,” said EPA Administrator Michael S. Regan. “This proposal will support a transition away from super-pollutant HFCs in key sectors of our economy while promoting American leadership in manufacturing of new climate-safe products, making our nation more globally competitive and delivering significant environmental and economic benefits.”

The bipartisan 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 petitions granted in October 2021 and would restrict the use of climate-damaging HFCs used in certain foams, aerosol products, and refrigeration, air conditioning, and heat pump equipment beginning in 2025. The HFCs that are being restricted under this proposal are those that have higher global warming impacts.

Under the AIM Act, the Biden-Harris Administration is implementing a national HFC phasedown to achieve a 40% reduction below historic levels starting in 2024 and an 85% reduction by 2036. The proposed rule will help guide this overall phasedown by accelerating the transition away from HFCs in areas where substitutes are available or being introduced, helping to unlock additional climate benefits and savings. EPA estimates that this action would provide greenhouse gas emissions reductions of up to 35 million metric tons of carbon dioxide equivalent (MMTCO2e) per year, equivalent to the annual fuel consumption of roughly 7.5 million gasoline-powered cars. The cumulative savings for industry and consumers—which largely result from improved energy efficiency and lower-cost refrigerants—is estimated to be up to $8 billion by 2050.

The proposal is in response to petitions from companies, industry associations, non-governmental environmental organizations, and 12 states and the District of Columbia that requested that the EPA restrict the use of certain HFCs in products and equipment across 40 subsectors. 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.

To ensure a level playing field for companies complying with the AIM Act’s national HFC phasedown, EPA has also established robust enforcement mechanisms, drawing from experience globally with illegal HFC trade and with past attempts to illegally introduce ozone-depleting substances into the U.S. market. Companies now need allowances for producing or importing HFCs.

Last month, the Interagency Task Force on Illegal HFC Trade, co-lead by EPA and the Department of Homeland Security and comprised of the Departments of Defense, Justice, and State, held their semi-annual meeting along with the White House and participants from the industry trade association The Alliance for Responsible Atmospheric Policy. The Task Force reported that they have prevented illegal HFC shipments equivalent to more than 889,000 MTCO2 in the first nine months of this year, the same amount as the emissions from nearly 173,000 homes’ electricity use for one year. The Task Force will continue to cooperate on and improve real-time monitoring of our borders to prevent illegal HFC trade, with increased opportunities for training customs officers, especially leading up to the 2024 reduction in HFCs to 40% below historic levels.

These actions also support U.S. climate leadership on the world stage. On October 31, 2022, the United States ratified the Kigali Amendment to the Montreal Protocol, an international treaty that calls for a global HFC phasedown and could avoid up to half a degree Celsius of global warming by the end of the century. EPA is conducting active and ongoing oversight of the AIM allocation and reporting program to ensure parties accurately report their import and production of HFCs and ensure that EPA is making appropriate decisions regarding HFC allocation volumes for importers and producers each year. EPA found that several entities misreported historic data. As a consequence, EPA is retiring allowances for each of the affected entities for 2023. Altogether, EPA is retiring nearly 3.9 MMTCO2e of 2023 allowances as a result of misreporting and importing without allowances. Once retired, these allowances cannot be used, providing additional environmental benefits.

The bipartisan AIM Act provides the tools that allow the United States to implement a national HFC phasedown to comply with the Kigali Amendment, as well as provisions to help transition technologies away from HFCs and manage the use of HFCs through maximizing their reclamation and minimizing their release. EPA is planning to issue a proposed rule to address the management of HFCs and their substitutes next year.

EPA will accept comments on this proposal for 45 days after publication in the Federal Register and hold a public hearing.