In a recent blog, the Natural Resources Defense Council raised a host of questions regarding the creation of HFC allowances by the U.S. Environmental Protection Agency (EPA), which is gathering feedback on the topic from stakeholders until July 6.

HFC allowances are the key part of the EPA’s first proposed rule implementing the American Innovation and Manufacturing Act (AIM), published on May 19 in the Federal Registry. The AIM Act authorizes the EPA to phase down the production and consumption of HFCs by 85% by 2036.

The EPA, which held a public hearing on the proposed rule attended by a variety of interested stakeholders on June 3, is accepting further comments until July 6. Stakeholders may send comments, identified by Docket ID No. EPA-HQ-OAR-2021- 0044, via the Federal eRulemaking Portal.  A final rule on the allowances is expected to be released in September.

Other proposals under the AIM Act, expected later this year, will focus on limiting which HFCs can be used in specific sectors, and refrigerant management requirements to control leaks and emissions from equipment.

The EPA’s allowance rule will set the HFC production and consumption baseline levels from which reductions will be made, establish an initial methodology for allocating HFC allowances for 2022 and 2023, and create “a robust, agile, and innovative compliance and enforcement system,” said the EPA.

In April, the Environmental Investigation Agency (EIA) sent a letter to Michael S. Regan, EPA Administrator petitioning the agency to use new powers granted under the AIM Act in the “most ambitious and effective way” to prohibit the use of HFCs. The NRDC, Green America and shecco America (a division of shecco, publisher of this website) were co-signatories on the petition.

In May, U.S. Senators Dianne Feinstein and Alex Padilla, both California Democrats called on the EPA to use California’s strict HFC regulations for air conditioning and refrigeration equipment as a model to further reduce the production and use of HFCs nationwide.

Reaction to hearing

Last week, the NRDC followed up the June 3 EPA hearing with a blog commenting on the agency’s allowance proposal as well as industry stakeholder comments made dur8ng the hearing; the blog was authored by Christina Theodoridi, NRDC’s Technical Analyst, Climate & Clean Energy Program; and Alex Hillbrand, its HFC Expert, Climate & Clean Energy and International Programs.

The NRDC representatives said they “generally support” the EPA’s calculation of HFC baseline production and consumption levels.

In particular, the NRDC:

  • Agrees with the EPA’s proposal to base allocations on the most recent market shares, specifically 2017-2019, rather than older periods. “Doing otherwise would result in too many allocations going to companies whose market shares have declined,” the bloggers wrote.
  •  Agrees with the EPA’s proposal that companies must be required to destroy byproduct emissions of HFC-23 (GWP of more than 12,000) at all of their facilities in order to be eligible for HFC allowances. HFC-23 (R23) is a by-product from the production process of a HCFC-22 (R22), which is still manufactured in quantity as a feedstock for other chemicals (though it is banned as a refrigerant as of 2020). “We encourage EPA to also consider penalties for facilities that have accidental HFC-23 emissions,” the NRDC bloggers wrote. 

(HFC-23 may also be produced as a byproduct in the production of other HFCs, according to the NRDC. In addition, there is new research suggesting that HFC-23 is a significant degradation product of HFO-1234ze in the atmosphere.)

  •  Agrees with the EPA’s proposed ban on the use of disposable cylinders (opposed by industry stakeholders), which is “an effort to reduce waste, protect against illegal imports, and avoid unnecessary emissions of residual HFC left at the bottom of the container (known as the ‘heel’) upon disposal.”

However, the NRDC challenged the EPA in a number of areas. The NRDC:

  • Opposes including in the baseline any amounts that were imported in violation of applicable greenhouse gas reporting requirements.
  • Believes that companies that have been found to have engaged in illegal HFC dumping should not be allocated any HFC consumption allowances, even if anti-dumping/countervailing duties have been paid. 
  • Agrees with U.S. refrigerant producers who raised concerns over the EPA’s proposal to exempt import of equipment pre-charged with HFCs under the allocation framework.
  • Believes the EPA should limit the amount of HFC allowances allocated for bear spray manufacture to an amount reflecting the volume of bear spray actually used for protection against bears encountered in the wild. The AIM Act carves out temporary allocations to six uses designated under subsection (e)(4)(B)(iv), including for defense sprays. NRDC is concerned by news reports of illegitimate use of bear spray against people.

Industry stakeholders at the hearing indicated a preference for multi-year allocations instead of EPA’s current approach to setting allowances annually, the NRDC bloggers noted.

Commenting that the NRDC appreciates EPA’s “consideration of the environmental justice and health implications” of the HFC allocation rule, the NRDC representatives wrote that they  “encourage EPA to use AIM Act and other authorities to strengthen protections for communities near chemical production facilities.”

The NRDC is in the process of examining the EPA’s Toxic Releases Inventory “to evaluate evidence of toxic releases associated with HFC and HFO production,” they wrote. “Preliminarily, at one facility in particular, we see a major increase in releases of several chemicals – including carbon tetrachloride (CTC), hydrogen fluoride (HF), hydrogen chloride (HCl) and ethylene – starting around the time major HFO-1234yf production capacity came online.”

These releases, they added, “pose threats to neighboring communities and should be prevented. Communities around HFC and HFO production plants should not be put at risk.” 

EPA has several authorities to help avoid risks to communities – from conditions on allowance allocations under the AIM Act and Clean Air Act Title VI to other Clean Air Act authorities such as Section 112. “We’ll be providing EPA detailed recommendations on how to eliminate to the maximum extent feasible releases of these toxic substances,” they wrote.”

EPA anticipates that the HFC phasedown will avoid the equivalent of 4.7 billion metric tons of CO2 through 2050—equivalent to three years of today’s entire U.S. power sector emissionsm the NRDC bloggers noted.  

“We encourage EPA to also consider penalties for facilities that have accidental HFC-23 emissions.”

– Christina Theodoridi and Alex Hillbrand, NRDC

Want to find out more, or have something to say about this story? Join the ATMOsphere network to meet and engage with like-minded stakeholders in the clean cooling and natural refrigerant arena.