Key Takeaways

• What Happened: EPA proposed a new program that would impose leak detection obligations and requirements to use reclaimed hydrofluorocarbons (HFCs) for certain equipment. The proposed rule also includes new reporting and recordkeeping requirements as well as amendments to RCRA’s hazardous substance regulations.
• Who’s Impacted: The proposed rule will broadly impact entities in the fire suppression and refrigeration, air conditioning, and heat pumps (RACHP) sectors, as well as those involved in the recovery, recycling, or reclamation of HFCs or their substitutes.
• What Should You Do: Carefully review EPA’s proposal and submit comments by December 18, 2023.

On October 19, 2023, the U.S. Environmental Protection Agency (EPA) published a proposed rule to establish an Emissions Reduction and Reclamation Program to manage certain HFCs and their substitutes. The proposed rule, Phasedown of Hydrofluorocarbons: Management of Certain Hydrofluorocarbons and Substitutes under Subsection (h) of the American Innovation and Manufacturing Act of 2020, is the latest rule proposed to be promulgated under the American Innovation and Manufacturing Act of 2020 (AIM Act), 42 U.S.C. § 7675 et seq., and the first to address the AIM Act’s repair and reclamation requirements under subsection (h). EPA also released its final Technology Transition rule on the same day, which implements subsection (i) of the AIM Act. B&D’s summary of the Technology Transition Rule can be found here.

Additionally, the Proposed Rule also includes alternative standards for certain spent ignitable refrigerants recycled for reuse under the Resource Conservation and Recovery Act (RCRA). Further, the Proposed Rule seeks advanced comment on many topics, including the proposed applicable leak rates for appliances in the subsectors and applications noted in section IV.C.2.b., several aspects of setting a standard for the amount of virgin HFC refrigerant in reclaimed HFCs, and compliance dates for the requirements for initial charges of equipment for fire suppression.

Key Provisions of the Proposed Emissions Reduction and Reclamation Program

EPA proposes to implement several requirements to facilitate reclamation and reduce emissions from the use of HFCs. Notably, the proposed rule includes the following key provisions:

• Leak repair requirements for certain appliances;
• Use of automatic leak detection for certain new and existing equipment;
• A proposed reclamation standard;
• Requirements for the use of reclaimed HFCs for certain types of equipment in certain RACHP subsectors;
• Requirements for the use of recycled HFCs in fire suppression equipment;
• Certain provisions for equipment in the fire suppression sector, including technician training;
• Recovery of HFCs from disposable cylinders prior to disposal;
• Container tracking for HFCs that could be used in the servicing, repair, and/or installation of refrigerant-containing equipment or fire suppression equipment; and
• Recordkeeping, reporting, and labeling

Leak Repair Requirements

The proposed rule would include leak repair provisions for certain refrigerant-containing appliances with a refrigerant that contains HFCs or a substitute for an HFC with a global warming potential (GWP) greater than 53. Actions to repair the leak would only be required if an appliance is leaking above the applicable leak rate threshold, which is determined based on one of two potential calculation methods proposed by EPA – the annualizing method and the rolling average method. Under the proposed rule, owners or operators would be required to identify and repair leaks within 30 days (120 days if an industrial process shutdown is required) of when refrigerant is added to an appliance that has exceeded the applicable leak rate. The rule provides minimal extensions under certain circumstances. The proposed rule would also require verification testing and inspections. EPA also proposes requirements that certain equipment use automatic leak detection (ALD) systems to detect leaks.

Sets HFC Reclamation Standard

EPA proposes prohibiting the sale, distribution, or transfer to a new owner, or the offer for sale, distribution, or transfer to a new owner, any regulated substance used as a refrigerant in stationary refrigerant-containing equipment consisting in whole or in part of recovered regulated substances unless an EPA-certified reclaimer reclaims the recovered regulated substances and meets the required purity standard, or if the recovered regulated substance is being sold, distributed, or transferred solely to be reclaimed or destroyed. EPA also proposes to limit the amount of virgin HFC refrigerants that can be included in a reclaimed HFC refrigerant to 15% by weight. EPA’s reclamation standard would require reprocessing a recovered regulated substance to meet at least the purity described in standard AHRI 700–2016 (or an appropriate successor standard adopted by the Administrator).

Requirements for the Use of Reclaimed HFCs in Certain Equipment

EPA proposes that the initial charge of refrigerant-containing equipment must be with reclaimed HFCs starting January 1, 2028, for the following equipment in the Refrigeration, Air Conditioning, and Heat Pump sector (RACHP):

• residential and light commercial AC and heat pumps,
• cold storage warehouses,
• industrial process refrigeration,
• stand-alone retail food refrigeration,
• supermarket systems,
• refrigerated transport,
• and automatic commercial ice makers.

EPA is also proposing that starting January 1, 2028, reclaimed HFCs would have to be used for servicing and/or repairing the following RACHP equipment:

• Stand-alone retail food refrigeration,
• supermarket systems,
• refrigerated transport,
• and automatic commercial ice makers.

EPA proposes similar requirements for the fire suppression sector. The proposed rule indicates that starting January 1, 2025, recycled HFCs must be used for the initial charge of fire suppression equipment in the fire suppression sector where HFCs are used. The proposed rule would also require the use of recycled HFCs for the servicing and/or repairing of fire suppression equipment on January 1, 2025.

Recordkeeping, Reporting, and Labeling Requirement

EPA proposes standardized reporting for chronically leaking appliances, which would require owners and operators are required to submit reports describing efforts taken to identify leaks and perform repairs. Other recordkeeping and reporting requirements would apply to appliances subject to the proposed leak repair requirements. The proposed recordkeeping requirement includes maintaining records documenting the full charge of appliances, documenting where refrigerants are added or removed from an appliance, when a leak detection is performed, when a verification request is conducted, and when service or maintenance is performed. Additionally, the proposed recordkeeping requirements would encompass retrofit and/or retirement plans and extension requests. Similarly, the proposed reporting requirements include notifications to EPA when seeking an extension to complete repairs, retrofits, or retirement plans, among other things. On labeling, EPA proposes requirements for containers of reclaimed HFCs.

Proposed Amendments to RCRA Hazardous Substance Regulations

The proposed rule includes amendments to RCRA hazardous waste regulations; specifically, EPA proposes alternative standards for spent ignitable refrigerants when they are recycled for reuse. This change would require changes to 40 CFR parts 261-271 and separate from regulations under the AIM Act.

Next Steps and Opportunity for Comment

Those potentially affected by this proposed rule are encouraged to submit comments to EPA by the December 18, 2023, comment deadline. Affected parties can submit comments here. EPA will hold a virtual public hearing on or about November 3, 2023; information on the public hearing will be available here.

Beveridge & Diamond’s Air and Climate Change group helps clients in numerous industries achieve compliance with the ever-changing legislative and regulatory landscape thereby reducing cost and risk to operations. For more information, please contact the authors.