Hydrofluorocarbons (HFCs) were introduced to the commercial and industrial refrigeration market several decades ago, with the goal of replacing ozone-depleting refrigerants with a more environmentally friendly alternative. Unfortunately, as the use of HFCs grew exponentially, it became clear that these potent greenhouse gases are anything but environmentally friendly. They carry global warming potential (GWP) that can be hundreds or even thousands of times greater than that of carbon dioxide. As regulators now look to restrict the use of HFCs, corporations using commercial refrigeration systems must adapt.

Specifically, Congress enacted the American Innovation and Manufacturing (AIM) Act in December 2020, setting the goal of an 85% reduction in the production and consumption of HFCs by 2036. Noncompliance can result in the U.S. Environmental Protection Agency (EPA) imposing fines of up to $100,000, as well as other penalties.

Key Regulatory Changes
The AIM Act authorizes EPA to address HFCs through three initiatives:

Phasing down HFC production and consumption – This phasedown began in 2021, with the goal of cutting HFC production and consumption by 10% by 2024. The timeline for reaching an 85% reduction by 2036 is as follows.

  • 2021-23: HFC production and consumption should be no higher than 90% of 2020 levels
  • 2024-28: … no higher than 60%
  • 2029-33: … no higher than 30%
  • 2034-35: … no higher than 20%
  • 2036 and after: … no higher than 15%

Maximizing reclamation and minimizing releases from equipment – A comprehensive program to manage HFCs, including recovery, recycling, reclaiming and destruction practices, is being strengthened to minimize emissions and environmental impact.

Facilitating the transition to next-generation technologies through sector-based restrictions Targeting specific sectors for early compliance, EPA is setting GWP limits for refrigerants used in new and existing refrigeration and air conditioning equipment.

In addition, EPA has put enhanced reporting and recordkeeping rules into place—including a requirement for third-party auditing—for manufacturers, importers and certain users of HFCs, to facilitate the enforcement of phasedown provisions. Transparency is essential to the ongoing success of this program.

7 Actions You Can Take to Ensure Compliance and Sustainability

Here are some steps you can take now to prepare for what’s ahead:

  1. Engage with a refrigeration expert. If you don’t have your own in-house refrigeration team, then be sure to reach out to your commercial refrigeration partner to discuss these regulations and what they may require in terms of design, construction and maintenance. Even if you do have an in-house team, it may be wise to consult with a refrigeration partner to ensure you have all the bases covered.
  2. Familiarize yourself and your team with federal, state and local requirements for phasing down HFCs. The more you understand, the better you can prepare your company for this multiyear initiative.
  3. Conduct an audit of your current refrigeration systems, equipment and processes. Document the types and quantities of refrigerants in use today, so that you can assess the scope of your operation’s transition to lower-GWP alternatives and make plans for achieving your sustainability goals. As part of this check-in, make sure your current equipment is being properly maintained to minimize its potential for leaks and maximize its efficiency.
  4. Weigh your options in terms of new equipment vs. retrofitting. While it may be feasible to retrofit some or all your current refrigeration equipment to accommodate lower-GWP refrigerants, also consider whether replacing outdated equipment with new, compliant technologies may be a better path for your operation over the long haul.
    Factors to consider as you compare and contrast your alternatives should include cost, operational efficiency and your strategic plan for the short, medium and long terms. Keep in mind that the refrigerants you opt to use in place of HFCs will have their own toxicity and flammability properties; there may be additional capital costs in putting appropriate protections around them to ensure safety and compliance with local codes.
  5. Develop a refrigerant management plan. As you transition to lower-GWP refrigerants, you need to have a plan for responsible recovery, recycling and disposal, not only during the transition but also as you move forward. It’s important for safety and budgetary reasons to have an established set of rules around managing refrigerants across their lifecycle.
  6. Step up training and education. If you have an in-house team managing your refrigeration operations, mandate a training and education program that familiarizes them with the classification and safety requirements of new refrigerants, as well as new rules for reporting and recordkeeping. If you are working with a refrigeration partner, they should be able to provide information and insights about HFCs and your options as you transition to other refrigerants.
  7. Stay up to date on evolving regulatory requirements. For as long as environmental stewardship continues to be a priority across the refrigeration industry, regulations will change. Staying in compliance requires knowing, understanding and operating in accordance with the latest EPA and state-specific rules. Be diligent!
    EPA’s phasedown of HFCs represents a significant shift toward more environmentally sound refrigeration practices. Staying informed of the regulatory changes and timelines pertinent to your business can help you take proactive steps to adapt your operations, mitigate risks and embrace the opportunities presented by next-generation refrigerants. As the industry evolves, a strategic approach to refrigeration management and technology adoption is essential to achieving compliance, as well as your environmental sustainability goals.

Want more information about the HFC phasedown? EPA covers the basics and more through Frequently Asked Questions: https://www.epa.gov/climate-hfcs-reduction/frequent-questions-phasedown-hydrofluorocarbons

Want to discuss your specific concerns about compliance in the coming years? Contact our experts at ARI. We’re here to help!