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.
The AIM Act is part of the Consolidated Appropriations Act, 2021, and the act authorizes EPA to regulate HFCs.
A 15-year phasedown of HFCs was the first proposed rule under the 2020 American Innovation in Manufacturing (AIM) Act. The AIM Act authorizes EPA to implement the phasedown schedule for HFCs, which includes a baseline year and stepwise reduction targets, ultimately phasing down the production and consumption of HFCs by 85 percent by 2036 through an allowance allocation and trading program. The phasedown schedule sets out the timeline and specific reduction targets over the 15-year period.
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 EPA’s action to phase down HFCs aligns with the Montreal Protocol, an international agreement established in 1987, and its Kigali Amendment, which set the stage for the U.S. phasedown. These agreements target the reduction of potent greenhouse gases like HFCs, which have high global warming potential, making their reduction critical for climate change mitigation.
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.”
Goals and Objectives
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 rule includes key provisions that address regulatory requirements, and certain provisions are specifically designed to ensure compliance with the AIM Act and to protect the environment.
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
- A petition process for technology transitions, allowing stakeholders to formally request the EPA to approve or require transitions to climate-friendly alternatives under the AIM Act
The EPA is implementing the phasedown of HFCs in three main ways: establishing a cap-and-trade program, facilitating technology transitions to lower GWP alternatives, and developing an HFC reduction and reclamation program. These efforts support the innovation and manufacturing aim of the AIM Act by promoting next-generation solutions and advancing sustainable manufacturing practices.
Impacted Industries
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
- Data Centers
- Refrigeration Industry
When these phasedown requirements become effective, industry should expect price fluctuations on HFC and HFC-substitute refrigerants. Companies should also budget for the costs associated with adding ALD systems, retrofitting existing systems, and upgrading refrigeration systems and air conditioners to ensure compliance with the new regulations. Companies with existing systems will need to evaluate and potentially retrofit their equipment to ensure compliance with the updated requirements.
EHS professionals should prepare for extensive recordkeeping requirements by leveraging technology and designing processes to capture the required information.
Key Elements of the EPA’s HFC Phasedown Rule
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
The allocation framework rule is a key mechanism for managing HFC production and HFC consumption, establishing a system of allowances to gradually reduce HFC use over time. The Environmental Protection Agency (EPA), under the authority of the American Innovation and Manufacturing Act (AIM Act), addresses HFCs by regulating HFC production, HFC consumption, and HFC use across various sectors.
The Environmental Protection Agency (EPA) implements these requirements as part of the broader American Innovation and Manufacturing legislative framework, with the manufacturing act providing the regulatory basis for phasing down HFCs and promoting environmentally friendly alternatives.
Leak Detection and Repair Requirements
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.
GWP limits are established to restrict the use of refrigerants with high respective GWPs, aiming to reduce environmental impact and greenhouse gas emissions. These regulatory measures build on the historical context of protecting the ozone layer from ozone-depleting substances (ODS) refrigerants, reflecting a shift toward safer alternatives.
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 System Requirements
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.
Use of Reclaimed and Recycled HFCs
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 is designed to maximize reclamation and minimize releases of HFCs, thereby protecting public health by reducing harmful emissions.
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. As part of its broader strategy, the EPA is also facilitating the transition to climate friendly alternatives to further reduce environmental impacts.
HFC Recovery from Disposable Cylinders
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.
Recordkeeping, Reporting, and Labeling
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.
RCRA standards
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.
Summary
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, EHS software and Dakota Software’s in-house regulatory experts are continually analyzing and translating the requirements.
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