On April 27, EPA published a “notification of guidance” seeking to clarify the uses of certain hydrofluorocarbons (HFC) and, to a lesser extent, hydrochlorofluorocarbons (HCFCs) in various industrial and commercial products and applications, particularly for the refrigeration and air conditioning, aerosol products and foam blowing industry sectors.
This is an important notification for HVAC contractors who currently confront a kind of regulatory limbo regarding the use of certain refrigerant compounds.
Here are the core issues:
EPA has direct Clean Air Act authority to regulate HCFCs which are ozone depleting substances (ODS). EPA uses its SNAP program (Significant New Alternatives Policy) to direct ODS replacement materials. The Agency formally lists compounds as “acceptable” or “unacceptable.”
For many years, EPA listed HFC compounds as acceptable alternatives for ozone depleting substances. But that became a contentious issue because the HFCs, while safe for stratospheric ozone, have high global warming potential (GWP).
In 2014, EPA expanded its official “acceptable” or “unacceptable” listings, newly placing HFCs on the “unacceptable” side of the list as ODS alternatives. This was finalized in what the Agency refers to as the “2015 Rule.” Phase-out timelines were short – January 2016 for some compounds. For refrigeration industries, eleven HFC compounds were newly listed as unacceptable, with more compounds still to come.
Industry sued, in effect, saying to EPA: you can’t do that. Yes, your Clean Air Act authority extends to ODS, but the Act’s authority does not extend to limiting compounds otherwise declared safe but presenting climate-temperature issues.
As a directive, the 2015 Rule had a short life. In August 2017, in a cased called Mexichem Fluor, Inc. v. EPA, a US Appeals Court “vacated” the portion of the rule that established EPA’s 2015 listings. The Court ruled that:
“EPA’s authority to regulate ozone-depleting substances under Section 612 and other statutes does not give EPA authority to order the replacement of substances that are not ozone depleting but that contribute to climate change. Congress has not yet enacted general climate change legislation. Although we understand and respect EPA’s overarching effort to fill that legislative void and regulate HFCs, EPA may act only as authorized by Congress.”
As might be expected, the Court’s decision raised a lot of questions. Equipment manufacturers, refrigerant producers, and various other users, pressed EPA with questions about compliance, phase-out deadlines and long-range planning that could impact R&D, retooling, testing and compliance with fire codes.
Importantly, EPA’s April "notification of guidance" seeks to offset that confusion:
- EPA stated that it will not apply the HFC use restrictions or unacceptability listings in the 2015 Rule for any purpose prior to completion of rulemaking. (EPA’s not dropping the ball on this; in fact, the guidance also advises of a new round of notice-and-comment rulemaking, including an in-depth review of the SNAP program.)
- EPA adds confirmation and emphasis, writing that it “will implement the court’s vacatur by treating it as striking the HFC listing changes in the 2015 Rule in their entirety” (emphasis added).
- In response to a direct inquiry, EPA officials said that “companies can currently use HFC compounds that were listed as “unacceptable” within the 2015 Rule.”
Businesses should be aware that this regulatory work is not stopping. A central issue here is how the Agency can, or should, deal with refrigerants chosen because they are safe regarding ozone depletion but which present high GWP.
EPA’s April "notification of guidance" also gives notice that it is starting to evaluate next steps for proceeding with regulating HFCs and issues of high GWP. And the Agency is not wasting time. EPA announced a stakeholders’ meeting in Washington on May 4, just one week after the guidance was published.
About 100 people attended the May 4th meeting; 130 including agency personnel (and not just from EPA). The meeting was moderated by Sarah Dunham, Office Director of the Office of Atmospheric Programs. Bill Wehrum, Assistant Administrator for the Office of Air and Radiation was the top senior EPA official attending. The Agenda included a presentation on the SNAP program by Cindy Newberg, Division Director of the Stratospheric Protection Division.
The Agency plans a deep look at SNAP. Within its guidance, and also within the Agenda, EPA notes some ideas from the Court’s ruling, including the use of “retroactive disapproval” – revising an earlier determination “where faced with new developments or in light of reconsideration of the relevant facts.” Or perhaps compounds could be newly regulated via other statutes, e.g., the Toxic Substances Control Act.
Contractors should watch for these ideas, and, of course, many others, in the weeks to come. EPA is “interested in any thoughts stakeholders may have on the viability and desirability of these arrangements.”
EPA did not present a schedule for next steps.