Proposed AIM Act Rule Had its First EPA Public Hearing

The Environmental Protection Agency (EPA) held a public hearing last week on their first rule to implement the phasedown of super climate pollutants known as hydrofluorocarbons (HFCs). The takeaway: There’s strong stakeholder support for phasing out HFCs but several technical aspects of the rule still need to be decided.

The hearing was the first opportunity for stakeholders to publicly provide input on the proposed regulation published last month, which kicked-off the implementation of the American Innovation and Manufacturing (AIM) Act. EPA was fast and thorough in addressing its new responsibilities under the Act. The 270-page rule sets up the framework for EPA’s new program to cap and reduce HFCs and it should come as no surprise that it’s, well, complicated.

And the prize is big. EPA anticipates that the HFC phasedown will avoid the equivalent of 4.7 billion metric tons of CO2 through 2050—equivalent to three years of today’s entire U.S. power sector emissions.

During the hearing, NRDC touched on the following five topics:

First, we generally support EPA’s calculation of baseline production and consumption levels but want to ensure companies aren’t rewarded for past bad behavior. We do not support including in the baseline any amounts that were imported in violation of applicable greenhouse gas reporting requirements. Further, companies that have been found to have engaged in illegal HFC dumping should not be allocated any HFC consumption allowances, even if Anti-Dumping/Countervailing Duties have been paid.

Second, we agree with EPA’s proposal to base allocations on the most recent market shares, specifically 2017-2019, rather than older periods. Doing otherwise would result in too many allocations going to companies whose market shares have declined.

Third, EPA should limit the amount of HFC allowances allocated for bear spray manufacture to an amount reflecting the volume of bear spray actually used for protection against bears encountered in the wild. The AIM Act carves out temporary allocations to six uses designated under subsection (e)(4)(B)(iv), including for defense sprays. NRDC is concerned by news reports of illegitimate use of bear spray against people. Bear spray is formulated to be very potent and to shoot far to defend against a charging bear. Allowances provided for defense sprays should be limited to an amount sufficient only for ‘appropriate uses.’

Fourth, we appreciate EPA’s consideration of the environmental justice and health implications of this rule, and encourage EPA to use AIM Act and other authorities to strengthen protections for communities near chemical production facilities. We are in the process of examining EPA’s Toxic Releases Inventory to evaluate evidence of toxic releases associated with HFC and HFO production. Preliminarily, at one facility in particular, we see a major increase in releases of several chemicals—including carbon tetrachloride (CTC), hydrogen fluoride (HF), hydrogen chloride (HCl) and ethylene—starting around the time major HFO-1234yf production capacity came online. These releases pose threats to neighboring communities and should be prevented. Communities around HFC and HFO production plants should not be put at risk. EPA has several authorities in its arsenal to help avoid risks to communities—from conditions on allowance allocations under the AIM Act and Clean Air Act Title VI to other Clean Air Act authorities such as Section 112. We’ll be providing EPA detailed recommendations on how to eliminate to the maximum extent feasible releases of these toxic substances.

Fifth and finally, we agree with EPA’s proposal that companies must be required to destroy HFC-23 byproduct emissions at all of their facilities in order to be eligible for HFC allowances. HFC-23 is a hydrofluorocarbon with more than 12,000 times the heat-trapping power of carbon dioxide. It’s a by-product from the production process of a commonly used refrigerant (HCFC-22) and its harmful emissions are growing globally. We encourage EPA to also consider penalties for facilities that have accidental HFC-23 emissions.

Several more topics were discussed during the hearing. Industry indicated a preference for multi-year allocations instead of EPA’s current approach to setting allowances annually. U.S. refrigerant producers raised concerns with EPA’s proposal to exempt import of equipment pre-charged with HFCs under the allocation framework, a concern NRDC shares. Another sticking point for industry stakeholders was EPA’s proposal to ban the use of disposable refrigerant cylinders. The proposed ban on disposable cylinders is an effort to reduce waste, protect against illegal imports, and avoid unnecessary emissions of residual HFC left at the bottom of the container, known as the “heel,” upon disposal.

EPA will have to consider these and many more during its rulemaking process. We will follow up with detailed comments to EPA. The deadline for written comments is July 6th which are submitted in the relevant public docket found here: https://www.regulations.gov/document/EPA-HQ-OAR-2021-0044-0039

We’ll keep working with all stakeholders and continue to advocate for robust rules that will ensure the timely phasedown of HFCs.