Key Actions to Phasedown HFCs 40% in 2024 Put U.S. on Track with Kigali Amendment to Protect People and the Planet

WASHINGTON (Oct. 20, 2022) – Today, the U.S. Environmental Protection Agency (EPA) announced additional actions to phase down climate-damaging hydrofluorocarbons (HFCs), a crucial component of President Biden’s ambitious agenda to combat the climate crisis while advancing American manufacturing and innovation. EPA today issued a proposed rule to implement the next step of the nation’s HFC phasedown, an ambitious 40% reduction below historic levels starting in 2024. The proposal follows the Senate’s bipartisan approval to ratify the Kigali Amendment to the Montreal Protocol, a global agreement to phase down HFCs and avoid up to 0.5°C of global warming by the end of this century.

“From day one, President Biden promised ambitious action to address the climate crisis and its impacts, which are becoming ever more disruptive and costing billions of dollars every year. Today’s action once again delivers on his promise,” said EPA Administrator Michael S. Regan.  “This proposal also sets the United States on track to meet the goals of the Kigali Amendment, fostering innovation and economic growth in the private sector and reinforcing U.S. leadership in the global fight against climate change.”

HFCs are a class of potent greenhouse gases commonly used in refrigeration and air conditioning, aerosols, and foam products. Their climate impact can be hundreds to thousands of times stronger than the same amount of carbon dioxide. Under the bipartisan American Innovation and Manufacturing (AIM) Act, the EPA has established a national HFC Phasedown Program that will reduce the production and consumption of these chemicals by 85% by 2036. The Biden-Harris Administration has also launched actions across other agencies to support this phasedown, which will create thousands of jobs to help ensure American companies outcompete the rest of the world in innovating and manufacturing HFC alternatives.

Today’s proposal establishes the methodology for allocating HFC production and consumption allowances for 2024 and later years, similar to the methodology used for issuing allowances in 2022 and 2023—an initial step to achieve 10% of this phasedown. Now, the number of available allowances in 2024 will be reduced significantly to 40% below historic levels. Today’s proposal would amend the historic consumption baseline level from which reductions are made to reflect corrected data submitted to EPA, as well as more precisely specify recordkeeping and reporting requirements, to help preserve the environmental and economic benefits associated with the HFC phasedown.

“Last month, we achieved a historic climate win in the Senate by coming together in a bipartisan manner to ratify the Kigali Amendment,” said Senate Environment and Public Works Committee Chairman Tom Carper (Del.). “I applaud the Biden Administration’s continued commitment to fully implementing the American Innovation and Manufacturing Act on schedule. Doing so keeps our nation on track to meet our HFC-reduction goals required under this global treaty, which is good for our planet and good for American businesses and workers.”

“I am proud to see the Biden Administration take this next step to implement the AIM Act. Phasing down HFCs is a critical component of our national climate action strategy, which is why Congress provided EPA with even more funding to administer this law under the Inflation Reduction Act,” said Congressman Paul Tonko (NY-20). “I hope EPA will move forward with a rule that further demonstrates that smart climate policies not only protect our environment, but also support U.S. consumers and manufacturers.”

“Super pollutants, like HFCs and methane, are the low-hanging fruit in the fight to slow climate change” said Congressman Scott Peters (CA-52). “Two years ago, Congress passed bipartisan legislation to phase down the production and consumption of HFCs by 85% by 2036. Today, the U.S. Environmental Protection Agency will ensure we reduce these dangerous pollutants and protecting communities across the globe from climate change-fueled disasters.”

To ensure a level playing field for companies complying with the phasedown requirements, the HFC Phasedown Program has established robust enforcement mechanisms, drawing from experience globally with illegal HFC trade and with attempts to illegally introduce ozone-depleting substances into the U.S. market. Since January 1 of this year, companies have needed allowances for producing or importing HFCs. In the first nine months of this year, the Interagency Task Force on Illegal HFC Trade, co-led by EPA and the Department of Homeland Security, has prevented illegal HFC shipments equivalent to more than 889,000 metric tons of carbon dioxide (CO₂) at the border, the same amount as the emissions from nearly 173,000 homes’ electricity use for one year.

Additionally, on September 30, EPA issued allowances to companies authorizing them to produce or import HFCs in 2023. EPA issued total allowances at the same level as in 2022 per the phasedown schedule, although the number of entities receiving allowances for 2023 increased slightly. EPA also notified certain companies that the Agency intends to retire some of their allowances due to misreporting data. The Agency’s administrative consequences authority, which allows EPA to retire, revoke, or withhold the allocation of allowances, or ban a company from receiving, transferring, or conferring allowances, is an important tool to deter illegal HFC production and import.

EPA is planning to issue additional proposed rules regarding HFCs under the AIM Act. The next proposed rule will focus on transitioning away from HFCs in the refrigeration and air conditioning, foams, and aerosols sectors. The refrigeration and air conditioning sector uses the most HFCs in the United States.