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December 20th, 2024 by Dakota Software Staff
The compliance deadline for the EPA phasedown of hydrofluorocarbons (HFCs) related to the installation, disposal, service and repair of equipment utilizing HFCs is fast approaching. Corporate Environmental, Health, and Safety (EHS) leaders and environmental managers should begin taking steps now to prepare for the requirements, some of which become effective January 1, 2026.
A 15-year phasedown of HFCs was the first proposed rule under the 2020 American Innovation in Manufacturing (AIM) Act, which authorized the EPA to phase down the production and consumption of HFCs by 85 percent in a stepwise manner by 2036 through an allowance allocation and trading program.
In 2023, the EPA issued a final rule restricting the use of HFCs in specific sectors that foreshadowed this current rulemaking focused upon the EPA HFC phasedown. In October 2023, the EPA proposed the establishment of an Emissions Reduction and Reclamation (ER&R) Program for the management of HFCs.
The AIM Act also directs the EPA to maximize reclamation of HFCs, minimize releases of HFCs from equipment, and facilitate the transition to next-generation technologies to replace HFCs.
“By phasing down HFCs, which can be hundreds to thousands of times more powerful than carbon dioxide at warming the planet, EPA is taking a major action to help keep global temperature rise in check,” said EPA Administrator Michael Regan in an Agency news release. “The phasedown of HFCs is also widely supported by the business community, as it will help promote American leadership in innovation and manufacturing of new climate-safe products. Put simply, this action is good for our planet and our economy.”
The purpose of this rulemaking is to create regulations regarding the service, repair, disposal or installation of equipment utilizing HFCs, HFC substitute substances or HFC blended substances. The goal is to maximize the reclamation of HFCs and to minimize releases of HFCs from equipment while ensuring the safety of technicians and consumers.
The main objectives of the EPA’s HFC phasedown rule include:
The establishment of an ER&R program for the management of HFCs that includes requirements for Leak repair and Installation and use of Automatic Leak Detection (ALD) systems for certain equipment using refrigerants containing HFCs and certain substitutes
The servicing and/or repair of certain refrigerant-containing equipment to be done with reclaimed HFCs
The initial installation and servicing and/or repair of fire suppression equipment to be done with recycled HFCs, technician training and recycling of HFCs prior to the disposal of fire suppression equipment containing HFCs
Removal of HFCs from disposable cylinders before discarding them
Additional recordkeeping, reporting, and labeling requirements
Establishment of alternative Resource Conservation and Recovery Act (RCRA) standards by EPA for certain ignitable spent refrigerants being recycled for reuse
This regulation will impact a wide array of industry types, including several who have not been previously impacted by the need for regulatory compliance. The final rule references more than 90 North American Industrial Classification System (NAICs) code types of industries that could be impacted, including those currently accustomed to compliance with HFC regulations:
Manufacturing
Cold Storage Warehouses
Air Conditioning
Refrigeration
Refrigerated Transport
Heat Pumps
Supermarkets
When these phasedown requirements become effective, industry should expect price fluctuations on HFC and HFC-substitute refrigerants. Companies should also budget for adding ALD systems and the potential retrofitting or retiring of equipment.
EHS professionals should prepare for extensive recordkeeping requirements by leveraging technology and designing processes to capture the required information.
This regulation includes requirements related to:
Leak Detection and Repair
The Use of Reclaimed and Recycled HFCs
The Recovery of HFCs From Disposable Containers
Recordkeeping, Reporting and Labeling
RCRA Standard for HFCs
Appliances containing over 15 pounds of HFC refrigerant or a minimum of 53 global warming potential (GWP) for appliances using refrigerants containing HFC substitutes must be repaired so that its leak rate does not exceed the regulatory thresholds. Equipment/appliances containing more than 50 pounds of HFC refrigerant or a substitute for an HFC must be repaired so that its leak rate does not exceed the regulatory thresholds.
Regulatory Thresholds:
Industrial process refrigeration subsector: 30%
Commercial refrigeration subsector: 20%
Comfort cooling, refrigerated transport, and other non-specified appliances subsector: 10%
Appliances meeting these thresholds must comply with the program’s leak repair requirements beginning January 26, 2026. The EPA did carve out one narrow exemption for the leak-repair requirement for refrigerant-containing appliances utilized in residential and light commercial air conditioning and heat pump industries.
Organizations are required to track and calculate leak rates each time an appliance requires additional refrigerant to be added. Leak rates are to be calculated utilizing either an annualizing method of calculation or a rolling monthly average. When the calculated leak rate exceeds the EPA regulated threshold, appliances are generally required to be repaired within 30 days. Appliances that require an industrial shutdown are provided 120 days to complete repairs.
The EPA states the leak repair requirements in this regulation for calculating the leak rate, timing for repairs and verification tests are “identical or similar to” those utilized for ozone-depleting substances (ODS) refrigerants.
ALD systems are required to be installed and in use within 30 days of installation for Industrial Process Refrigeration (IPR) or commercial refrigeration appliances with a full charge at or above the 1,500-pound charge size threshold that are installed on or after January 1, 2026.
For existing IPR and commercial refrigeration appliances with a full charge at or above the 1,500-pound charge size threshold that were installed on or after January 1, 2017, and before January 1, 2026, EPA is requiring that ALD systems be installed and used by January 1, 2027.
Once an ALD detects a leak, operators are required to repair the leak or perform a leak rate test. Although preemptive repairs are not required, leak rates must be calculated when refrigerant is added so preemptive repairs will remove the requirement to perform initial and follow-up verification tests if the calculated leak rate is below the EPA-regulated threshold.
For existing industrial process refrigeration and commercial refrigeration appliances installed on or after January 1, 2017, and before January 1, 2026, the EPA is requiring that ALD systems be installed and in use by January 1, 2027.
Under the ER&R Program, the EPA has set refrigerant recovery rules that require the use of reclaimed HFCs for the service and repair of certain existing HVAC equipment. That obligation begins January 1, 2029.
The program also sets a 15% limit upon the amount of virgin HFCs (by weight) that can be mixed into reclaimed HFC refrigerants. The compliance date for these batch level standards begins January 1, 2026.
Requirements are included for fire suppression systems utilizing HFCs, which primarily include minimizing HFC releases during installation, disposal, repair and servicing. Technicians working with fire suppression systems will be required to complete a one-time training program.
Retrofitting equipment for the use of HFC-containing refrigerants is considered a service and repair activity under the requirements of the program. The EPA did not finalize requirements for the use of reclaimed HFCs when initially charging equipment with refrigerant.
EPA refrigerant recovery rules require disposables cylinders to be sent to one of the following for its remaining contents to be removed:
An EPA Clean Air Act (CAA) section 608 certified reclaimer,
A fire suppressant recycler,
A final processor, such as a landfill operator or scrap metal recycler, or a
Refrigerant supplier (including, but not limited to distributors and wholesalers)
Alternatively, technicians who are EPA CAA section 608 certified can evacuate the disposable cylinder to a vacuum level of 15 in-Hg and provide a certification statement to the final processor.
EPA CAA section 608 certified technicians or fire suppressant recyclers that receive disposable cylinders must remove all remaining contents from the disposable cylinder prior to disposal.
For equipment meeting the requirements of this regulation, records are required to be retained for a minimum of three years in either paper or electronic format and must contain the following information:
The full charge of appliances;
Invoices or other documentation showing when refrigerant is added or removed from an appliance, when a leak inspection is performed, when a verification test is conducted, and when service or maintenance is performed;
Retrofit and/or retirement plans;
Retrofit and/or extension requests submitted to EPA;
If a system is mothballed to suspend a deadline, records documenting when the system was mothballed and when it was brought back on-line (i.e., when refrigerant was added back into the appliance or isolated component of the appliance);
Records of purged and destroyed refrigerant if excluding such refrigerant from the leak rate;
Records to demonstrate a seasonal variance; and
Copies of any reports submitted to EPA under the reporting requirements in this action.
The regulation also establishes Resource Conservation and Recovery Act (RCRA) standards for recycling facilities working with lower flammability HFCs. Instead of utilizing the entire RCRA hazardous waste requirements, the alternate standards created in this regulation will apply for these Class 1, 2 and 2L substances.
The HFC emissions reduction program includes many new requirements related to the servicing and repair of equipment using HFC refrigerant, the addition of ALDs, the use of recycled HFCs, and extensive recordkeeping and reporting. HFC refrigerants are widely used, meaning any company with HVAC equipment should expect some operational impacts from this final rule.
The environmental compliance elements of this regulation are complex and will require EHS managers and staff to address and track numerous elements of the program. As EHS requirements change, Dakota Software’s in-house regulatory experts are continually analyzing and translating the requirements.
Visit our demo library to see how this regulatory expertise, delivered via our EHS compliance tools, can help you streamline compliance management and reduce your regulatory and operational risk.