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Hydrofluorocarbons and the Kigali Amendment to the Montreal Protocol

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Quick Take

On Sept. 21, 2022, the US Senate ratified the Kigali Amendment by a vote of 69 to 27. The US joins 137 other nations that have agreed to reduce the production and use of hydrofluorocarbons under the pact. EPA finalized a rule in July 2023 to reduce US hydrofluorocarbon use 40% by 2028.

Why it Matters

Hydrofluorocarbons, or HFCs, are among the most potent greenhouse gases, causing thousands of times more warming than carbon dioxide over the short term. HFCs are also commonly used in refrigeration, air conditioning, building insulation, and aerosols. The 1987 Montreal Protocol, which was created to protect the diminishing ozone layer, led to a large increase in the use of HFCs. At the time of the Montreal Protocol’s adoption, HFCs were thought to be acceptable substitutes for ozone layer-depleting chlorofluorocarbons (CFCs). In 2016, the international community, led by the United States, adopted the Kigali Amendment to the 1987 Montreal Protocol, to phase out the use of HFCs. In Sept. 2022, the US Senate ratified the Kigali Amendment, which would help protect the ozone layer and could avoid up to 0.5 degree Celsius of global temperature rise by 2100.

Under Section 608 of the Clean Air Act, EPA regulates the management of appliances that use ozone-depleting refrigerants. Section 608 prohibits knowingly releasing ozone-depleting refrigerants into the air during the maintenance, repair, or disposal of appliances or industrial process refrigeration. Under the related regulations, HFCs are considered “substitute refrigerants,” because they were originally developed as a safer substitute to CFCs and other ozone-depleting refrigerants.

Prior to ratification of the Kigali Amendment, EPA used its Clean Air Act authority to regulate the use of HFCs during the Obama administration. However, the Trump EPA reversed these changes, weakening requirements restricting the release of HFCs and allowing the use of HFCs as an acceptable substitute for refrigeration, air conditioning, and fire suppression.

Current Status

The White House sent the Kigali Amendment to the Senate for ratification on Nov. 16, 2021, and the Senate Foreign Relations Committee sent the treaty to the full Senate on May 4, 2022It was ratified by the US Senate on Sept. 21, 2022 by a vote of 69 to 27.

Also, on Dec. 22, 2020, in a year-end omnibus bill, Congress agreed to phase down production and consumption of HFCs 85% by 2036. EPA issued a final rule on Oct. 5, 2021 implementing that mandate.

On July 11, 2023, EPA finalized a rule for the phase down of hydrofluorocarbon production and consumption allowances through 2028. The rule will reduce hydrofluorocarbon use by 40% through 2028. On July 12, EPA issued a final rule correcting the baseline figure for hydrofluorocarbon production downward by 0.005 percent.

obama administration
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July 20, 2015 EPA finalizes a rule to phase out certain uses of HFCs. In the rule, EPA reconsiders a list of acceptable substitutes for ozone-depleting chemicals, saying “Global warming potential (GWP) is one of several criteria EPA considers in the overall evaluation of the alternatives under the SNAP [Significant New Alternatives Policy] program.” Instead of only having an “acceptable” list, EPA will now designate substances as unacceptable; acceptable subject to use; or acceptable subject to narrow use, “based on information showing that other substitutes are available for the same uses that pose lower risk overall to human health and the environment.” The agency changes the status of many uses of HFCs from “acceptable” to “unacceptable.” Pursuant to a previous rule passed by EPA, the continued use of chemical substitutes on the unacceptable list is prohibited.

Sep. 17, 2015 Mexichem Fluor and Arkema, two private companies, sue EPA over the rule, saying the Clean Air Act program authorizing action is about ozone depletion, not climate change, and that EPA has therefore overstepped its authority. Mexichem Fluor v. EPA, No. 15-1328 (“Mexichem I”).

Oct. 15, 2016 The international community reaches agreement on the Kigali Amendment to the Montreal Protocol, to phase out HFCs because of their global warming potential.

Nov. 18, 2016 EPA finalizes a rule that extends the Section 608 leak repair requirements beyond ozone-depleting refrigerants to HFCs and other commonly used substitute refrigerants. The duty to repair leaking appliances will now apply to most refrigerants. The rule also strengthens other provisions of the program, including: lowering the threshold at which leaks must be repaired, requiring regular leak inspections or continuous monitoring, and updating the disposal requirements for appliances containing refrigerants. EPA estimates that the final rule will reduce annual greenhouse gas emissions equivalent to taking 1.5 million cars off the road. While the regulation took effect on Jan. 1, 2017, some provisions had compliance dates in 2018 and 2019.

Trump Administration
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Jan. 24, 2017 Mexichem Fluor files an additional petition in the D.C. Circuit challenging the 2016 refrigerant management rule. Mexichem Fluor v. EPA, No. 17-1024 (“Mexichem II”). Arkema also files an additional petition on the 2016 rule on Jan. 27, 2017. The two petitions are consolidated into one case and court puts it on hold on March 13, 2017 pending the decision in Mexichem I.

April 3, 2017 Mali becomes the first country to ratify the Kigali Amendment. Over 50 countries have now ratified the amendment which means it can enter into force on Jan. 1, 2019. The United States has yet to ratify the amendment.

Aug. 8, 2017 The D.C. Circuit vacates (cancels) part of EPA’s HFC rule in Mexichem I on the grounds that Title VI of the Clean Air Act does not require or allow EPA to require replacement of non-ozone depleting substances such as HFCs. The court finds that once a manufacturer replaces a ozone-depleting substance with a substitute deemed to be safe by EPA (like HFCs which were once considered safe by EPA) the agency cannot later require the industry to replace that substitute if it has been removed from the safe list on the basis of its global warming potential and not on the basis of its ability to deplete the ozone layer.

Aug. 10, 2017 In response to requests by industry, EPA announces that it will revisit the 2016 extension of refrigerant management requirements to HFCs.

March 23, 2018 The California Air Resources Board adopts regulations prohibiting the use of HFCs “to preserve and continue in California some of the EPA’s prior prohibitions on HFCs.” New York, Maryland, and Connecticut have since proposed similar state-level regulations to phase out HFCs.

April 27, 2018 EPA publishes a Notice of Guidance regarding the Significant New Alternatives Policy (SNAP) Program to “dispel confusion and provide regulatory certainty for stakeholders affected by EPA’s Significant New Alternatives Policy program final rule” from July 2015, and says that EPA “will not apply the HFC listings in the 2015 Rule, pending a rulemaking.”

June 4, 2018 Thirteen GOP senators send a letter to President Trump urging him to send the Kigali Amendment to the Senate for its advice and consent. The letter notes that the Montreal Protocol “has enjoyed bipartisan support since its inception” and highlights that 589,000 U.S. employees would benefit from the Kigali Amendment.

June 25, 2018 Two chemical manufacturers and Natural Resources Defense Council file a petition for writ of certiorari in the U.S. Supreme Court seeking review of the D.C. Circuit decision in Mexichem I. The brief filed by the Department of Justice reveals that EPA has changed its stance and now believes that it lacks the authority to require a phase-out of HFCs.

July 9, 2018 The D.C. Circuit removes the hold on Mexichem II and orders parties to prepare for briefing and oral argument regarding the 2016 HFC rule. EPA and industry are asking the court to void the 2016 rule and send it back to the agency for reevaluation. Natural Resources Defense Council and two chemical manufacturers have intervened in the case to defend the 2016 rule.

Sep. 18, 2018 EPA issues a proposed rule, Protection of Stratospheric Ozone: Revisions to the Refrigerant Management Program’s Extension to Substitutes. The agency is proposing to rescind a 2016 modification of provisions that regulate repair, maintenance, and disposal of appliances containing ozone-depleting substances. The 2016 modification extended the regulations to cover appliances using substitute refrigerants, such as HFCs. EPA is now taking the position that it does not have the legal authority to extend these provisions to substitute refrigerants. This proposal will not affect the requirements for ozone-depleting refrigerants. The proposed rule also requests public comment on rescinding other provisions that were extended to substitute refrigerants.

Oct. 9, 2018 The Supreme Court declines to hear the appeal of Mexichem I. This action makes final the D.C. Circuit’s decision in Mexichem I.

March 8, 2019 The D.C. Circuit hears oral argument in Mexichem II. EPA and Mexichem argue that the court has jurisdiction over the case and should void the 2016 rule based on the decision in Mexichem I. Natural Resources Defense Council and two chemical companies argue that the court does not have jurisdiction over the case, alleging that Mexichem is actually challenging a 1994 EPA rule that prohibits the use of alternative substances not listed as “acceptable,” rather than the 2016 rule transferring certain uses of HFCs off the acceptable list.

April 5, 2019 The D.C. Circuit Court of Appeals rules in Mexichem II to “…vacate the 2016 rule only to the extent it requires manufacturers to replace HFCs that were previously and lawfully installed as substitutes for ozone-depleting substances.” The court decides it is required to vacate this rule without further review of the arguments due to the similarity between the Mexichem I and Mexichem II cases, according to a judicial doctrine called “issue preclusion.”

May 7, 2019 Washington State Governor Jay Inslee signs a package of four clean energy bills into law, including HB 1112, a bill that phases down HFC use for new equipment based on equipment category (e.g., commercial refrigeration) beginning in 2020. This makes Washington the second state to enact such legislation, after California.

Oct. 30, 2019 Senators John Kennedy (R-La.) and Tom Carper (D-De.) introduce the American Innovation and Manufacturing Act of 2019 which would require the United States to phase down HFCs by 2036 on a schedule consistent with the Kigali Amendment.

Feb. 24, 2020 The governors of Rhode Island, Massachusetts, and Maine say they are planning new regulations for HFCs.

Feb. 26, 2020 EPA Administrator Andrew R. Wheeler signs the final ruleProtection of Stratospheric Ozone: Revisions to the Refrigerant Management Program’s Extension to Substitutes. The final rule rescinds requirements for leak repair and maintenance of appliances using 50 or more pounds of substitute refrigerants, such as HFCs. These appliances, which include medium- and large-scale refrigeration and air-conditioning equipment, are no longer subject to rules requiring: repair for leaks above a certain level; periodical inspection for leaks; reporting of chronic leaks to the EPA; retrofitting or retiring appliances with chronic leaks; or maintaining records. EPA estimates the rule will generate an increase of 2.9 million metric tons of carbon dioxide equivalent (MMTCO2) emissions annually. The rule went into effect on April 10, 2020.

March 17, 2020 EPA publishes a final rule in the Federal Register allocating production and consumption allowances for specific HFCs for 2020-2029. In the final rule, EPA also updates other requirements under the program for controlling production and consumption of ozone-depleting substances.

April 7, 2020 The D.C. Circuit rules that EPA did not properly implement its 2017 decision in Mexichem Fluor, Inc. v. EPA, 866 F.3d 451 (D.C. Cir.). In that case, the court determined that EPA could forbid companies using ozone-depleting substances from switching to HFCs as a substitute. The court also determined that EPA did not have the authority to make companies switch a second time if they had already switched to using HFCs as a replacement before the agency realized the harmful effects of HFCs. The D.C. Circuit now decides that EPA’s response to that 2017 decision went too far by entirely removing HFCs from the list of unsafe substitutes, thereby allowing current users of ozone-depleting substances to now switch to HFCs. The D.C. Circuit vacated EPA’s guidance because it was made without notice to the public or an opportunity for comment. The court remanded to EPA for further proceedings. Nat. Res. Def. Council v. Wheeler, No. 18-1172 (D.C. Cir.).

May 11, 2020 coalition of states and the Natural Resources Defense Council file two separate petitions in the D.C. Circuit for review of EPA’s 2020 refrigerant management rule. Nat. Res. Def. Council v. Wheeler, Docket No. 20-01150 (D.C. Cir.).

Dec. 10, 2020 California sets new limits on HFCs in refrigeration, air-conditioning, chillers, ice rinks, cold storage, aerosols-propellants, and foam end-uses.

Dec. 11, 2020 EPA finalizes a rule expanding the list of acceptable substitutes in the Significant New Alternatives Policy (SNAP) Program and includes an HFC substance as an acceptable substitute. 

Dec. 22, 2020 In a year-end omnibus bill, Congress agrees to phase down production and consumption of HFCs 85% by 2036.

Biden Administration
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Jan. 27, 2021 President Biden issues an Executive Order requiring the Secretary of State to seek the Senate’s advice and consent to ratify the Kigali Amendment within 60 days.

March 26, 2021 The State Department sends a transmittal package for the Kigali Amendment to the White House. Under President Biden’s Executive Order on the Climate Crisis, the Secretary of State had to prepare the package by March 28, 2021.

April 13, 2021 Environmental and industry groups submit five petitions to EPA to reinstate parts of its 2015 and 2016 HFC regulations under the American Innovation and Manufacturing (AIM) Act.

May 3, 2021 EPA issues a proposed rule to phase down the production and use of HFCs by 85% over the next 15 years. The rule seeks to implement provisions of the American Innovation and Manufacturing Act. EPA publishes the proposed rule in the Federal Register on May 19, 2021.

Oct. 5, 2021 EPA publishes a final rule implementing provisions of the American Innovation and Manufacturing (AIM) Act to reduce HFCs by 85 percent over the next 15 years, starting with a 10 percent reduction in the next year. The rule goes into effect on Nov. 4, 2021.

Oct. 8, 2021 EPA announces it is granting or partially granting 11 petitions submitted under the AIM Act to restrict HFCs in the refrigeration and air conditioning, aerosols, and foam sectors. EPA will now have two years to propose and finalize rules to address these petitions.

Nov. 16, 2021 The White House submits the Kigali Amendment to the Senate for ratification. Two-thirds of the Senate (67 Senators) is required to ratify the Treaty.

Dec. 6, 2021 Refrigerant makers and contractors file a petition for review challenging EPA’s final rule phasing down the use of HFCs. RMS of Georgia, LLC v. EPA, No. 21-1253 (D.C. Cir.); Heating, Air-Conditioning, & Refrigeration Dist. Intl.(HARDI) et al., v. EPA, No. 21-1251 (D.C. Cir.); Worthington Ind. Inc. v. EPA, et al, No. 21-1252 (D.C. Cir.). The D.C. Circuit consolidates the cases on Dec. 9, 2021 under Docket No. 21-1251.

April 1, 2022 Refrigerant makers and contractors argue in opening briefs that EPA’s rule implementing the congressionally mandated phasedown of HFCs is unlawful. Heating, Air-Conditioning, & Refrigeration Dist. Intl.(HARDI) et al., v. EPA, No. 21-1251 (D.C. Cir.) (consolidating 21-1251, 21-1252, 21-1253). One refrigerant company in the consolidated suit submits a brief arguing that Congress illegally delegated legislative power to EPA to determine which companies should receive allowances. RMS of Georgia, LLC v. EPA, No. 21-1253 (D.C. Cir.).

April 6, 2022 The Senate Foreign Relations Committee holds a hearing on ratifying several treaties, including the Kigali Amendment. Republican and ranking member Jim Risch says he supports the Amendment and expects the Amendment to be ratified later this year.

May 4, 2022 The Senate Foreign Relations Committee votes to send the Kigali Amendment to the Senate for a floor vote. It is not clear when the vote will be scheduled.

Sept. 21, 2022 The US Senate ratified the Kigali Amendment by a vote of 69 to 27. The US joins 137 other nations that have agreed to reduce the production and use of hydrofluorocarbons under the pact.

Oct. 20, 2022 The EPA announces a proposed rule to further reduce emissions from hydrofluorocarbons by cutting the number of available allowances for production and use to 40 percent below historical levels, starting in 2024. The proposal sets the US on track to meet its commitment under the Kigali Amendment, ratified by the Senate in Sept. 2022.

Nov. 18, 2022 The DC Circuit hears oral argument on the question of whether EPA overstepped in its HFC allowance allocation and trading rules. Industry groups challenged EPA’s 2021 regulatory framework developed under the American Innovation and Manufacturing Act. Heating, Air-Conditioning, & Refrigeration Dist, et al v. EPA, et al, Docket No. 21-01251 (D.C. Cir.) 

Dec. 9, 2022 EPA releases a draft proposal to cut the use of HFCs and transition to more efficient, climate-friendly heating and cooling technologies. This proposal builds on EPA’s work on HFCs, including setting allocations for HFC consumption and its proposed rule reducing the supply of HFCs in the near term to reach the US goal of 85% reduction by 2036. There will be 45 days to comment once the proposed rule is published in the Federal Register.

Apr. 13, 2023 The Eleventh Circuit rules that a challenge to hydrofluorocarbon credit allocations by Choice Refrigerants is “nationally applicable” under the Clean Air Act and should therefore be heard in the Court of Appeals for the D.C. Circuit and transferred the petition. RMS of Georgia v. EPA, 11th Cir., No. 21-14213.

Jun. 20, 2023 The DC Circuit holds that the transport and tracking provisions in the EPA’s hydrofluorocarbon rule exceed its authority, including required certain QR-code tracking devices and banning refillable containers in transport. The court remands those parts of the rule to the agency. The court rejects claims challenging EPA’s authority to regulate HFCs more broadly. Heating, Air-conditioning & Refrigeration Distributors International v. EPA , D.C. Cir., No. 21-01251; Worthington Industries Inc. v. EPA , D.C. Cir., No. 21-01252;  RMS of Georgia, LLC v. EPA , D.C. Cir., No. 21-01253.

Jul. 11, 2023 EPA finalizes a rule for the phase down of hydrofluorocarbon production and consumption allowances through 2028. The rule will reduce hydrofluorocarbon use by 40% through 2028. On July 12, EPA issues a final rule correcting the baseline figure for hydrofluorocarbon production downward by 0.005 percent.

Oct. 24, 2023 EPA finalized a rule to further restrict the use of certain hydrofluorocarbons under the 2020 American Innovation and Manufacturing Act. The rule restricts the use of HFCs within the refrigeration, air conditioning, and heat pump, foam, and aerosol sectors and 40 subsectors. It establishes a process for submitting technology transitions petitions, recordkeeping and reporting requirements, and addresses petitions granted in 2021 and 2022. The rule is effective beginning December 26, 2023.

December 26, 2023: Semiconductor Equipment & Materials International and Chemours Co. challenged EPA’s final rule restricting the use of HFCs in approximately 40 refrigeration, air conditioning, insulation, and aerosol subsectors. The petitions for review were filed in the D.C. Circuit Court of Appeals and consolidated under Docket Number 23-01345. Semiconductor Equip. and Materials Int’l v. EPA, No. 23-01344 (D.C. Cir.). Chemours Co. v. EPA, No. 23-01345 (D.C. Cir.).

December 26, 2023: EPA issued a an interim final rule, effective immediately, to amend the Technology Transitions Program under the AIM Act extending  the compliance deadline for installing new residential and light commercial air conditioning and heat pump systems using components manufactured or imported prior to January 1, 2025. The  one-year extension, until January 1, 2026, aims to limit stranded inventory intended for new residential construction.  EPA also requested comments on the interim final rule, due Feb. 9, 2024.