Phasedown of Hydrofluorocarbons and Establishing the Allowance Allocation and Trading Program

Did you know that on May 19, 2021, the EPA published a new proposed rule regarding the phasedown of hydrofluorocarbons (HFCs)? HFCs have a variety of uses, such as refrigeration, air conditioning, firefighting, and foam blowing. Unfortunately, HFCs are also potent greenhouse gases and are known for being ozone-depleting substances.

Overall, the EPA is proposing to address HFCs in three different areas.

• Phasedown production and consumption of HFCs,
• Maximize reclamation efforts, and
• Minimize releases.

This specific EPA rulemaking effort will concentrate on the phasedown of production and consumption of HFCs. The EPA is proposing to develop an allowance allocation and trading program, and the program is expected to result in an 85% phasedown over the next 15 years. To do this, the EPA will need to:

1. Establish a U.S. production and consumption baseline and
2. Issue production and consumption allowances for the following year relative to those baselines

The EPAs current estimate of the maximum number of allowances that may be allocated per year provided below.

The EPA will accept comments on this proposed rule through July 6, 2021; however, they suggest that comments regarding information collection provisions received by June 18, 2021 will have the best assurance of being considered. They will also hold a virtual public hearing on June 3, 2021.

Spirit will continue to track this proposed rule, and future EPA rulemaking efforts. Please reach out to our experts if you have any questions related to the proposed rule, or if you would like to learn more on how this rule may affect you.