Update on HFC Regulations

From:             Paul Westbrook, Director of Sales and Marketing

To:                  HTPG, Russell, Witt, Kramer and ColdZone sales and customers

Date:              11/28/2018

Notice:           Update on HFC regulations

As many of you are aware, recent events have changed the national timeline for switching to lower Global Warming Potential (GWP) refrigerants. Below is a brief recap, new regulations in California for 2019 and beyond, proposed regulations from other states, and what our industry is doing moving forward.

In 2015, the EPA issued a rule that restricted manufacturers from making certain products that contain hydrofluorocarbons (HFCs), greenhouse gases known to create climate change. The EPA’s Significant New Alternatives Policy (SNAP) Rules 20 and 21 listed various HFCs and HFC-containing blends that were previously listed as acceptable alternatives that were then listed as unacceptable in various end-uses. Phase-out dates to lower GWP acceptable alternative refrigerants ranged from 2016 to 2020.

The August 2017 ruling by the U.S. Court of Appeals for the District of Columbia Circuit halted this phasedown. The ruling struck down an executive order that was part of President Barack Obama’s 2013 Climate Action Plan, which had indicated the EPA would use its authority through the SNAP program of Section 612 to reduce HFC emissions. The Natural Resources Defense Council (NRDC), Honeywell International, Inc. and Chemours Company, FC, LLC intervened for the EPA and filed an appeal to the U.S. Supreme Court.

In October 2018, the Supreme Court decided not to review the case, which leaves in place the August 2017 court ruling. This means that SNAP Rules 20 and 21 are not in effect for now. Many industry leaders hope the Supreme Court’s decision will convince the Trump administration to submit the Kigali Amendment to the Senate for ratification. In the November 19, 2018 ACHR NEWS article, “Supreme Courts Refuses HFC Refrigerant Case,” Francis Dietz, vice-president of public affairs of the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) stated, “We prefer, and have always preferred, a federal (and indeed a global) phasedown plan for HFCs. If states are going to act in the absence of a federal plan, which is certainly their right, we prefer that the individual state plans are coordinated so that the phasedown percentages and schedules are aligned.” In regards to global phasedown he continued, “Our industry has long advocated for a global phasedown structure for HFCs, and that is provided by the Kigali Amendment. The reason we have wanted one structure is to avoid a global patchwork of differing regulations that drive up costs for manufacturers and consumers alike.” See the article link below under “Resources.”

The EPA is considering a new policy on the use of HFCs. The EPA moved forward with notice-and-comment rule making this past Spring and held a broad stakeholder meeting in May and 7 sector-specific workshops in June and July. We may see a proposed rule in 2019. In response to the court’s decision and lack of EPA guidance, several states are moving forward with their own laws to reduce HFCs.

California is leading the nation on limiting powerful climate-changing chemicals. On March 23, 2018, the California Air Resources Board (CARB) adopted regulation prohibiting the use of specific refrigerants. The action was taken to preserve and continue in California some of the EPA’s SNAP rules to help meet California’s emission reduction goals for HFCs. The regulation prohibits certain high GWP HFCs in retrofit and new refrigeration equipment and foam and continues SNAP rules for Supermarket (retail food) refrigeration, remote condensing units, stand-alone (self-contained) units, refrigerated vending machines, and 5 of 17 foam end-use sectors. Also under the new regulations, manufacturers are responsible for a disclosure statement that must certify the product uses only complaint refrigerants or foam expansion agents. Product compliancerequirements for January 1, 2019, apply to the manufacturer.

On September 13, 2018, California Governor, Jerry Brown, signed into law Senate Bill 1013, the “California Cooling Act.” This bill adopted the EPA’s SNAP Rules 20 and 21 into state law, established an incentive program for low GWP refrigerants, and added chillers, residential refrigerator-freezers, 12 of 17 foam end-use sectors and aerosol propellants not previously covered under the CARB regulations (see Table 1).

Table 1 – California’s new laws for end-use of prohibited refrigerants

* Listed most common for commercial refrigeration 

The AHRI, NRDC, and 8 industry companies submitted a letter to CARB on Sept. 14, 2018, offering support of limiting HFCs, and asked CARB to modify some regulations (see below) to allow sufficient time for industry adoption of the new rules and recommended some additional measures (see AHRI, NRDC et. al letter to CARB under “Resources”).
CARB proposed rules to take effect January 1, 2022:

• No sales or installation of new systems containing a refrigerant with a GWP of 150 or greater for systems with a refrigerant charge of ≥ 50 lbs. 

• No sales, distribution, or import for use in California, of virgin refrigerants with a GWP of 1500 or greater (Potential exemption for reclaimed refrigerants)

The USCA is pushing for a global response to climate change to drastically reduce short-lived climate pollutants (SLCPs), which include methane, HFCs, and black carbon (soot). On June 1, 2018, the USCA issued a SLCP challenge to comprehensively address SLCP emissions as a critical component of meeting the goals of the Paris Agreement, and developed a roadmap offering a menu of options supporting ambitious goals to drive down SLCPs, and offering examples of leadership already demonstrated by states.

•            January 1, 2020 – Supermarket systems, remote condensing units, stand-alone units, vending machines.

•            January 1, 2021 – Household refrigerators and freezers, refrigerated food processing and dispensing equipment.

•            January 1, 2023 – Cold storage warehouses.

On September 10, 2018, New York Governor, Andrew M. Cuomo, announced he was directing the New York State Department of Environmental Conservation to publish regulations to phase out the use of HFCs. The regulations would adopt the 2015 and 2016 changes to the EPA’s SNAP policy. Below are the proposed regulations for Food Refrigeration Equipment:

The Maryland Department of the Environment issued a press release on September 11, 2018, stating it intends to develop regulations similar to those in development in California, which would phase out the use of certain HFCs in foam products and in refrigeration equipment in retail establishments, such as supermarkets. Maryland is joining other USCA states in moving to phase out the use of HFCs. This action will help Maryland meet its requirements under the state’s Greenhouse Gas Emissions Reduction Act.

Connecticut Governor, Daniel Malloy, announced on September 13, 2018, that he directed the Connecticut Department of Energy and Environmental Protection (DEEP) to develop regulations that will phase out the use of HFCs. Over the next few months, DEEP will begin the rulemaking process to develop regulations to adopt the 2015 and 2016 changes to the EPA’s SNAP policy.

In the coming months, we anticipate other states in the USCA to announce their own policies on the reduction of HFCs. While the EPA’s policies are in flux, it’s clear that many states, our industry, and other countries are determined to phase down the use of HFCs. As mentioned previously, the AHRI is a strong proponent of adopting the Kigali Amendment to the Montreal Protocol.

Heat Transfer Products Group continues to move forward with designing products that can be used with low GWP alternatives. We recommend that our customers continue working towards compliance with the SNAP 20 and 21 regulations and check with their state government on new HFC regulations. 

We’ll keep you informed of future EPA and state regulations as those are made public. If you have questions, please contact your local Russell, Witt, Kramer or ColdZone brand sales representative. To find your local sales representative, please use our online tool, https://www.htpg.com/sales-representatives/.

Resources

The NEWS – “Supreme Court Refuses HFC Refrigerant Case”

https://www.achrnews.com/articles/140101-supreme-court-refuses-hfc-refrigerant-case

California Air Resources Board

https://ww2.arb.ca.gov/ 

California Senate Bill 1013 – Text of bill approved by the California Legislature

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB1013

California Governor Jerry Brown Signs SB 1013

https://www.gov.ca.gov/2018/09/13/aboard-hybrid-electric-ferry-on-the-san-francisco-bay-governor-brown-signs-bills-to-promote-zero-emission-vehicles-reduce-carbon-emissions/

AHRI, NRDC et. al letter to CARB

http://www.ahrinet.org/Portals/_Appleseed/documents/news/AHRI_NRDC_CARB_Letter_regarding_SLCP_HFC_measures.pdf

Governor Cuomo Directs DEC to Phase-out Use of Hydrofluorocarbons in New York State

https://www.governor.ny.gov/news/governor-cuomo-directs-dec-phase-out-use-hydrofluorocarbons-new-york-state

Maryland to Phase Out Hydrofluorocarbons

https://news.maryland.gov/mde/2018/09/11/maryland-to-phase-out-hydrofluorocarbons/

Gov. Malloy Joins Connecticut in Coalition Committed to Phasing out Coal Power in Favor of Clean Energy/ Also Orders the Development of Regulations to Eliminate the Use of Certain Greenhouse Gases

https://portal.ct.gov/Office-of-the-Governor/Press-Room/Press-Releases/2018/09-2018/Gov-Malloy-Joins-Connecticut-in-Coalition-Committed-to-Phasing-out-Coal-Power