EPA Proposes 40% Cut in HFC Phasedown in 2024

A new proposal is turning heads in the HVAC world concerning the continued phasedown of hydrofluorocarbon production (HFC) and consumption allowances from 2024-2028. What does this HFC phasedown coming in 2024 mean for HVAC professionals in the new year? 

In this article, we’ll look at the latest proposed “final rule” and keep you up to date on the latest information as the Environmental Protection Agency (EPA) proposes to amend existing regulations. This will implement certain provisions of the American Innovation and Manufacturing Act of 2020.

Keep reading to discover everything you need to know about the 2024 Proposal:

  • When and how long this proposal could be implemented
  • The latest details of the proposed regulations
  • How the HFCs are measured according to the baseline
  • Its connection to the AIM Act of 2020

Understanding The New EPA Proposed Rule

A recent proposal by the U.S. Environmental Protection Agency (EPA) calls for a 40% reduction below baseline levels of HFC production beginning in 2024. 

This final rule aligns with the AIM Act of 2020 and shares requirements in the HFC phasedown commonly used in the HVAC industry.

Why a 40% reduction? This was calculated using the three highest years of production of regulated substances from 2011 through 2019 that were averaged.

The 2020 AIM Act

This new HFC phasedown proposal follows in the footsteps of the AIM Act, or the American Innovation and Manufacturing Act, passed in 2020. 

This initiative, passed into law in December 2020 as part of the COVID-19 relief and omnibus spending bill, tackled issue of high global warming potential (GWP) hydrofluorocarbons (HFCs). 

HFCs are synthetic gasses commonly used in air conditioning, refrigeration, and other applications, but they are known for their negative impact on the environment. 

The AIM Act represents a crucial step towards the HFC phasedown and transitioning to more sustainable alternatives.

Economic Implications

While the AIM Act focused mainly on environmental concerns, there are also several economic implications:

Market Opportunities: The transition to lower-GWP alternatives creates opportunities for businesses in the development and production of these alternatives. This can drive innovation and economic growth.

Energy Efficiency: Many of the alternative refrigerants are more energy-efficient, potentially leading to reduced energy consumption and lower operating costs for end-users.

Compliance Costs: Some industries may face costs associated with complying with the new regulations and transitioning to alternative technologies. However, these costs are expected to be offset by long-term environmental and energy savings, such as upgrading to a more efficient air conditioner.

The HFC Problem

Hydrofluorocarbons, or HFCs, have been widely used as refrigerants and cooling agents for decades.

While they were initially used as alternatives to ozone-depleting substances like chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HFCs), HFCs definitely have their own environmental challenges. 

These synthetic gasses have extremely high global warming potentials. This means that when released into the atmosphere, they trap heat far more effectively than carbon dioxide (CO2). This may contribute to global warming and climate change.

HFCs are very concerning because they are often a part of HVAC systems. Since HVAC systems have become popular in many regions, the use of HFCs has skyrocketed, exacerbating the global warming problem.

Cracking Down On Illegal HFCs

Enforcing the phase down of HFCs has been challenging for law forces. Since the start of 2023, businesses have needed allowances for importing or producing HFCs.

Since 2022 the Interagency Task Force on Illegal HFC Trade claim to have prevented more than 1.1 MMTCO2e (millions of metric tons of carbon dioxide equivalent) of illegal HFC shipments—this is the equivalent to emissions from almost 250,000 gas-powered cars in a year!


The HFC Phasedown Environmental Impact

The 2024 HFC Phasedown and AIM Act’s primary goal is to significantly reduce HFC emissions, hopefully reducing global warming. The act’s provisions has several positives for the environment: 

  • Reduced Greenhouse Gas Emissions: By phasing down HFCs, the AIM Act is set to reduce millions of metric tons of CO2-equivalent emissions. This helps with  the fight against climate change.
  • Protection of Ozone Layer: The reduction in HFC production helps with the protection of the ozone layer since many HFCs, particularly older generations, are likely to deplete ozone.
  • Encouragement of Sustainable Alternatives: The act encourages the adoption of lower-GWP alternatives. These are less harmful to the environment and are often more energy-efficient.
  • Global Leadership: By aligning with the Kigali Amendment and taking a proactive role in phasing down HFCs, the U.S. demonstrates global leadership in climate action and cooperation.

Challenges and Considerations

The HFC phasedown and AIM Act are significant steps towards addressing the environmental impact of HFCs. But of course, there are some challenges for the HVAC industry:

Industry Transition: Some industries, like HVAC, that rely on HFCs must transition to alternative refrigerants and technologies.

Regulatory Compliance: Equipment manufacturers and importers will now have to be mindful of regulations. This ensures they meet quota requirements and report everything correctly.

Technological Innovation: Lower-GWP alternatives are needed. This means research and development will be important to help find better (and cost-effective) solutions. 

International Cooperation: To really reduce HFC, buy-in is needed from other countries as well.  It’s important for international entities to adhere to the Kigali Amendment.

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Keeping Up With the HFC Phasedown

Now, you have a better idea on exactly what the EPA has proposed, and when this may go into effect. It’s not easy to follow, but we’ll continue to keep you updated.

Check back here as we continue to update information on the HFC phase down as well as any other legislation that affects the trades. 


Related: New 2023 Residential Efficiency Standards: What HVAC Companies Should Know


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