Carrier Corp. filed a petition with the U.S. Environmental Protection Agency (EPA) in February 2011 requesting a rulemaking to close a loophole created by the agency’s December 2009 HCFC rulemaking that allows manufacturers to produce and ship uncharged R-22-based air conditioning condensing units. The loophole is based on what Carrier Corp. calls a "misclassification" of the condensing unit as a component.
In an interview with both John Mandyck, Vice President, Sustainability and Environmental Strategies, Carrier Corp., and Drusilla Hufford, director of the Stratospheric Protection Div., Environmental Protection Agency (EPA), Contracting Business.com magazine learned that Carrier’s petition to the EPA was for a reclassification of the condensing unit from a “component” to a “sub system,” which would effectively close the dry ship loophole.
Mandyck explained that in December 2009, EPA surprised the HVAC industry when they released their final HCFC ruling by defining the condensing unit as a component and allowing for the production and sale of uncharged components for R-22-based air conditioning systems (Click here to read Contracting Business.com’s perspective on this).
Hufford says that from the EPA’S view, there was no surprise. She states that the EPA defined pre-charged components to include “all refrigerant-containing components including condensers, coils, line sets, etc., in the Pre-Charged Appliance (PCA) rule, the goal of which was to create a level playing field for U.S. manufacturers.
“EPA has consistently stated its interpretation that individual components such as condensers, evaporators, compressors, line sets, and valves in themselves do not constitute an appliance. The term “appliance” is defined in Title VI of the 1990 Clean Air Act Amendments. Over 16 years ago, in a rule addressing sales of pre-charged appliance components, the Agency stated that pre-charged components “are clearly not appliances” (November 9, 1994; 59 FR 55912).
Mandyke says, “We believe the condensing unit is more than a component. It’s actually the heart of the technology for an air conditioner. The condensing unit is a sub-assembly of components consisting of a compressor, fan, coil, and other devices. “That’s why Carrier believes the EPA should create a new regulatory definition for condensing systems as a sub-assembly of an air conditioning system. The EPA never could have intended for all condensing unit manufacturers to re-enter the R-22 market, and we would like them to take action now to close the loophole.”
Mandyck also says the EPA’s original intent was to assure that existing systems that used R-22 refrigerant could be properly serviced, so the law should allow manufacturers to make and sell components with which to service existing R-22-based systems. He noted that Carrier was forced to re-start the manufacture of R-22 condensing units after several competitors re-entered the market.
Hufford agrees with Mandyck regarding the intent of the original ruling. But she adds, “During the lengthy notice and comment process of developing the current PCA rule, EPA received several comments, including one from Heating, Airconditioning & Refrigeration Distributors International (HARDI), indicating that the condenser should be listed as an appliance component. Another commenter noted that the typical practice for some R-22 equipment was to replace the entire condensing unit when a major part, like the compressor, fails.”
Carrier’s petition was filed under the Administrative Procedures Act, which provides a way to ask the government to do a rulemaking. The ball is now in the EPA’s court. According to Hufford, the EPA is currently evaluating the petition and will determine whether to proceed with a rulemaking, or whether they need more information, or decide simply not to proceed.
From a contractor perspective, the R-22 loophole has been a cause of concern and uncertainty. Says Mandyck, “As an industry, we were prepared for the R-22 transition — manufacturers had invested in the new technology and contractors had invested in technician training, as well as in helping consumers prepare for this transition. The loophole threw all that up in the air.”
“The EPA rules,” Hufford says, “disallow the creation of completely new systems assembled in the field; thus, shipping of dry condensing units can occur without increasing the overall national equipment base for R-22. We understand most, if not all, condensing unit manufacturers offer dry R-22 condensing units.
“We are committed to transitioning U.S. markets from ozone depleting substances (ODS) through a continued gradual decline in allowable production of HCFCs. A companion rule to the PCA, also made final in December 2009, reduced U.S. HCFC production amounts to 75% below the initial baseline.”
She adds that the EPA, which enjoys a “close partnership with AHRI, ACCA, and other key players in the refrigeration and air conditioning industry,” shaped the originally proposed PCA rule in 2008, as well as the final rulemaking in 2009, using comments received from those organizations and other stakeholders.
“This close interaction with outside stakeholders allows us to say with confidence that our definition of precharged components was not a change made late in the process of developing the rule, nor was it made without opportunity for public comment and discussion,” Hufford says.
For Carrier, Mandyck adds, “The enemy of innovation is uncertainty. The R-22 loophole has placed the entire HVAC industry into a place of uncertainty. The goal is to close that loophole and re-establish what we all believed was the intent of the Clean Air Act and the protection of the ozone layer.”
Hufford says the PCA rule levels the playing field between equipment importers and domestic manufacturers, while still providing homeowners the ability to maintain existing R-22-based systems.
She adds, “HVAC contractors play a vital role in protecting the environment,” she concludes, “by reducing refrigerant emissions, while offering their customers options to meet their air conditioning needs.
“They can continue to play this crucial role by explaining to their customers both the near-term and long-term considerations of repairing existing R-22 systems with dry condensing units or replacing systems with new equipment.
Mandyck concluded the interview with some startling statistics. He says, “If 20% of the market uses these dry R-22 units, we wipe out nearly 10% of the gains achieved by the entire 13-SEER efficiency rule. If the market moves to 80% of dry R-22 units, we wipe out nearly a third of the gains from the new energy rules. That’s energy efficiency we’re leaving on the table.”
The fate of the Carrier petition remains in the hands of the EPA, and no timeline for a response has been provided.