EPA Kicks off Phase 2 of Refrigerant Management Program, Approved Under the AIM Act

You’re here because your company owns or operates HVAC and Refrigerants equipment and you heard there are important new regulations for environmental sustainability that directly affect your operations. So, how do these new regs impact your budget and operations for next year and beyond? And how can you improve your HVAC/R compliance or sustainability posture?

Here, Trakref provides you with answers pertaining to refrigerant management in this new era of EPA refrigerant rules meant to curb your environmental footprint and enhance corporate sustainability. When the AIM Act was signed into law in December 2020, in part to address ozone depletion solutions, there were several key clauses Congress used to help define the EPA’s authority, including clause (I) which reads:

(i)     Technology and Transition

““(1) AUTHORITY – Subject to the provisions of this subsection, the Administrator may by rule restrict, fully, partially, or on a graduated schedule, the use of a regulated substance in the sector or subsector in which the regulated substance is used.”

This petition process is very clear about how to submit reports and the date line for the process. (See Trakref’s chart accompanying this article):

(A) IN GENERAL – A person may petition the EPA to create a rule under paragraph (1 – above) for the restriction on use of a regulated substance in a sector or subsector, which shall include a request that the Administrator negotiate with stakeholders

(B) RESPONSE – The Administrator shall grant or deny a petition under subparagraph (A) not later than 180 days after the date of receipt of the petition. So the EPA only has 1870 days to accept or decline the request

(C) REQUIREMENTS –

(i) EXPLANATION – If the Administrator denies a petition under subparagraph (B), the Administrator shall publish in the Federal Register an explanation of the denial.

(ii) FINAL RULE – If the Administrator grants a petition under subparagraph (B), the Administrator will establish a final rule not later than 2 years from the date of accepting the petition.

Several petitions were entered by various groups (see the attached chart), including Air-Conditioning, Heating, and Refrigeration Institute (AHRI), Environmental Investigation Agency (EIA), Natural Resource Defense Council (NRDC), Institute for Governance & Sustainable Development (IGSD), California Air Resources Board (CARB) and they were joined by at least 10 states, Household & Commercial Products Association (HCPA) and National Aerosol Association (NAA), International Institute of Ammonia Refrigeration (IIAR), American Chemistry Council’s Center for the Polyurethanes Industry (CPI), Dupont and Association of Home Appliance Manufacturers (AHAM)

Each of these groups had one thing in common. All their petitions proposed regulations to limit the use of high GWP refrigerants and asked EPA to enforce greater control over HFC emissions.

The petition process is now another tool in both industry’s and the EPA’s resource basket to bring action and attention to the HFC refrigerant topic. On September 23 of this year, the EPA completed Phase 1 of the AIM Act regulations, which delivers allocation amounts to the industry for the 2022 refrigerant import and production calendar year.

“Today’s actions are another step forward in advancing President Biden’s commitment to tackle the climate crisis, as we work to phase down and restrict the use of super-polluting HFCs as Congress directed,”

Said EPA Administrator Michael S. Regan

“In less than a year, EPA has already begun implementing the AIM Act to build a strong foundation, moving the United States away from these climate-damaging chemicals.”

EPA Administrator Michael S. Regan

September 2021

The October 8, 2021 petition response was the kickoff that began Phase 2 of the AIM Act, which is the rulemaking process. Here, the EPA stated that they were acting on Petitions to Cut Climate-Damaging HFC’s after reviewing both the economic impact and market options available to support this transition away from high GWP materials.

In summary there were 10 direct petitioners and more than 20 supporting petitioners, representing almost the entire industry including commercial businesses, NGO’s, states, and industry groups, all in support of the phaseout of refrigerants and the EPA expanding authority to control emissions.

Of the 13 petitions, one is under review because it came in October 6, only 2 days before the EPA had to react to the older petitions (within 180 days). Another is under partial review (CARB), but we don’t know which part of the CARB petition is under review and we won’t know until the EPA publishes all of this in the Federal Register. Publication usually follows statements like this within 30 days. So we expect to see something on or near November 8, 2021.  Keep in mind that EPA has been very timely and incredibly thorough in adhering to both deadlines and in adhering to due diligence processes all throughout 2021.

What is in this Petition:

1. SNAP 20 & 21, (Granted) four of the petitions requested that the EPA reinstate the restrictions of SNAP 20 and 21. The only thing that varied between the petitions was the date. Some of the petitions asked for a waiting period of one year and others just asked for immediate reinstatement starting in 2022. You can read up on the requirements of the SNAP 20 & 21 requirements in a primer we published earlier this year.

2. Two petitions requested the EPA to adopt the California Air Resource Board rules known as (CARB). Although the EPA granted one petition completely and the other petition partially with a continued review, it is clear that some form of GWP limit will be in place by 2025.

3. Limit the GWP of various refrigerants in certain applications. There are 13 petition requests to reduce the GWP of the allowed refrigerants in every system type from AC and refrigeration to process cooling. This one is a bit messy. We’ll soon be publishing a phaseout document once the EPA publishes their final rulings. For now, here is a sample of the concepts:

• • • • • Limit GWP to 150 or lower for any “New” refrigeration systems (2023)
        • Limit the GWP for residential AC to 750 or less (2023)
        • Industrial Process cooling chillers (temp>35F) 750 GWP Limit // 10-35F GWP limit of 1500 // -58 to 0F and +58F limit GWP to 2200

Additionally, three of the petitions requested the EPA phase out certain HFCs in foam and insulation, but that will directly impact manufacturers in phase 1. The rest of us will deal with this during the code phase somewhere down the road.

Overall, the petitions will impact 100% of everyone who owns or operates any device that includes a refrigerant.

This is the kickoff to the rule making process, not the end of the process. Remember, the October 8 petition phase is the industry phase, in which we asked the EPA for our wish list, and they granted it.

During phase 2, we’ll see all kinds of changes and if the EPA accepts the CARB rules. If that case, we’ll all need to ratchet up our attention to this topic because the center point of CARB is a periodic registry for certain assets. For instance, Washington State is in the process of expanding this rule to include even more asset registrations. So this is very possible.

Although some have been talked about lawsuits attempting to slow the EPAs engagement of these petitions, the EPA was given this authority by Congress. Consequently, unlike previous actions that were litigated, the EPA’s authority is nearly unassailable since all previous legal cases shaped both the EPAs authority to follow this process along with Congressional guidance as they crafted the AIM Act over the past two years.

What to expect:

The EPA will meet its deadline of publishing in the Federal Register, but first they will need to reconcile the dates. Most importantly, they will likely be addressing the start date to SNAP 20 and 21. If I had to guess, I would say that they will choose to quickly act to re-engage SNAP and will not delay more than one year. So expect to see SNAP rules back in place immediately.

The EPA’s toughest challenge is to align the types of systems with the limit to GWP. But there is a format for this in California (CARB) and AHRI has accepted the CARB format. This is why we expect this to be the guide for the EPA. This means you will need to know the GWP of refrigerants. Take a look at this article for a deeper dive into CARB’s New R4 Program because you will need to know what is soon to be allowable and what is not. Most of these rules will affect new equipment, but existing equipment owners must be aware that CARB has a rule for you as well, including a requirement to fix leaks.

Already, one of the petitions included specific wording asking the EPA:

“Restore Federal Section 608 refrigerant management program requirements as they pertain to HFCs”

What you should be doing:

Conduct an inventory, a complete inventory of all your systems and include three things in that inventory

1. Type of refrigerant presently in the system.

2. How much refrigerant is in the system? Include the capacity. Remember, a system that has 40 LBS of R-410 might need 50 LBS of some other type of refrigerant, so include capacity estimates where possible.

3. List out the cooling tonnage and list the cooling level. For instance, if you have an AC unit that is running at low temperatures (cooling data for instance), this will have different attributes than a system that is cooling people for comfort, even though they are the same unit.

Finally, choose a refrigerant management software solution that effectively helps you manage this entire process. Right now, you need to keep track of each type of refrigerant you have and how much you are using of each. Keep in mind that Phase 1 limits the supply, and those limits go into effect in less than three months!

Phase 2 is the beginning (not the end) of the regulatory process. These petitions indicate that we will all need to know the GWP of every system as well as limits on allowable refrigerants that we can be put in them. The EPA accepted the petitioners request to reinstate the 608 requirements for all HFC’s. This means that, as of today, you should be tracking periodic leak inspections, fixing leaks, performing and documenting the leak repair verifications, and leak rate calculations should be included for every transaction or on every invoice.

If you are just getting warmed up and starting to think about refrigerants, you are already too late. You cannot end 2021 the same way you began 2021. In that short time the rules have changed.

They will change again in 2022 and every year after that until refrigerant emissions are eliminated. As an industry we have accepted leaks as a necessary but unfortunate part of business for keeping things cold. The EPA has been given a new set of controls to ensure that this thinking process changes . . . and changes fast. The petitions as granted indicate the industry has accepted that challenge.

By now, you understand the importance of ensuring the performance of critical services and operations while operating within the compliance boundaries, whether for compliance reporting, ESG reporting, or answering sustainability audit questions – or all of the above.

Working with a software corporation like Trakref ensures your organizations doesn’t experience disruption or have to compromise. We’ve been in the regulatory compliance software and environmental compliance calendar software space for years, and we’re passionate about refrigerant tracking and being an environmental software provider. Don’t go it alone. These new regulations have serious consequences for the operation and viability of your company.