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EPA proposes trading program to phase out climate-warming refrigerants

03 May 2021 Amena Saiyid

Production and use of climate-warming refrigerator coolants known as hydrofluorocarbons (HFCs) will be phased down over the next 14 years through a trading scheme the US Environmental Protection Agency (EPA) proposed 3 May in line with a congressional directive.

HFCs are a synthetic class of chemicals that were initially promoted and used as alternatives to ozone-depleting substances to meet the Montreal Protocol of 1987. Since then, scientists have noted that these chemicals have very high global warming potential and pushed for their replacement as well.

Describing HFCs as "highly potent greenhouse gases" that are commonly used in refrigerators, air conditioners, foam insulation, and fire aerosols, EPA said, "This phasedown will decrease the production and import of HFCs in the United States by 85% over the next 15 years."

The proposal to phase out HFCs, which is the among the first few actions taken by EPA under the leadership of Administrator Michael Regan to address global warming pollutants, complies with the bipartisan American Innovation and Manufacturing (AIM) Act of 2020 that was folded into the omnibus federal spending bill (H.R. 133) that Congress approved at the end of 2020.

The agency on 23 April also approved the use of several low global warming potential refrigerants for use in split-system air conditioners and heat pumps as an alternative to HFCs.

"By phasing down HFCs, which can be hundreds to thousands of times more powerful than carbon dioxide at warming the planet, EPA is taking a major action to help keep global temperature rise in check," Regan said in a statement accompanying the proposal.

Seeking Comment

The AIM Act directed EPA to issue a final rule on an allowance allocation and trading program by 23 September.

To meet the congressionally mandated deadline, EPA is seeking comment for 45 days on the baseline, which it has created based on historical emissions, against which the agency plans to make allocations, no later than 1 October, so that trading can begin in earnest in 2022.

EPA said its proposal is time-limited to 2023, and it will revisit its allowance allocation for 2024 based on how the trading program proceeds over the next two years.

President Joe Biden announced 22 April a goal to halve GHGs across the US economy by 2030. EPA said the rule could help the US meet this climate goal, though the contribution of HFCs to total US GHGs is small in comparison to CO2 releases. In 2019, EPA reported HFCs as well as other chlorinated hydrocarbons represented 2.8%, or 170.6 million mt CO2-equivalent, of total US GHGs.

Nonetheless, EPA said the phasedown of these chemicals would eliminate three years of US power sector emissions, or 4.7 million mt CO2e, based on 2019 levels because of the high global warming potential.

Global and local support

David Doniger, senior strategic director with the nonprofit Natural Resources Defense Council Climate & Clean Energy Program, credit EPA for "wasting no time implementing bipartisan legislation that won support ranging from NRDC and other environmental and public health advocates to industry and the Chamber of Commerce."

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI), the main trade association in Washington DC representing manufacturers of air conditioning, heating, and commercial refrigeration, and water heating equipment, that had been urging the EPA as recently as 13 April for a rulemaking, did not respond to calls seeking a comment, but reportedly has called the proposal a "welcome" start."

In a May 3 email, Durwood Zaelke, president of the Washington D.C.-based nonprofit Institute for Governance & Sustainable Development (IGSD), said the EPA rule "is another down payment on his promise to keep warming to below 1.5C and to make 2030 the decade of action."

EPA said the rule is consistent with the global phasedown of HFCs through trading as outlined in the 2016 Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer, an international agreement ratified by more than 115 countries.

In his 27 January executive order to tackle climate crisis at home and abroad, Biden directed the Secretary of State Anthony Blinken to submit the treaty to the Senate for ratification within 60 days of signing the order. That order is yet to be fulfilled.

"The US, China, France, Germany and Japan have all indicated support for the Kigali Amendment to the Montreal Protocol, and are moving forward with domestic policies to meet its requirements to phase down this class of chemicals," Kristen Taddonio, IGSD senior climate and energy advisor, told IHS Markit.

At the Leaders Summit on Climate on 22 April, Chinese President Xi Jinping also announced that China will "accept the Kigali amendment to the Montreal Protocol" and "to strengthen the control of non-CO2 greenhouse gases" He reaffirmed the acceptance of the international treaty following his joint announcement with French President Emmanuel Macron and German Chancellor Angela Merkel of Germany on 16 April. All three leaders said they would accept the treaty.

In a 27 April press conference, the Chinese Ministry of Ecology and Environment said it was taking measures to set up inventories of other GHGs, such as the HFCs, to get a better handle on emissions. The ministry said although it hasn't included any specific plans for phasing out these chemicals in its current 14th five-year plan, but it already is taking steps on how it will do so in the next five-year plan.

"We are confident that all countries will ratify Kigali because every other past amendment to the Montreal Protocol has been ratified by every country to the U.N. and the Montreal Protocol is the only treaty in the world that has achieved universal ratification," Zaelke said.

Bipartisan backing

Although the US Senate has not formally ratified the Kigali Treaty, it is not expected to get as much pushback. The AIM Act, which implemented the treaty's provisions including the trading program, had the backing of both Democrats and Republicans alike in Congress, including Senators Thomas Carper, Delaware-Democrat, who chairs the US Senate Environment and Public Works Committee that oversees the EPA, and John Barrasso, Republican-Wyoming, the committee's former chairman.

This is despite Barrasso making no bones about his opposition to Biden's decision to join the Paris Agreement, and the president's decision to announce a climate goal that sets what Barrasso sees as "punishing targets" even as China and Russia "continue to increase emissions at will."

Posted 03 May 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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