On February 26, 2020, the U.S. Environmental Protection Agency (EPA) Administrator signed the final rule, Protection of Stratospheric Ozone: Revisions to the Refrigerant Management Program's Extension to Substitutes. The rule rescinds the extension of the leak repair provisions to appliances using non-exempt substitute refrigerants, such as hydrofluorocarbons (HFCs) and hydrofluoroolefins (HFOs). The final rule took effect 30 days following its March 11, 2020 publication in the Federal Register (FR).
On November 18, 2016, EPA extended leak repair provisions and other regulatory requirements to substitute refrigerants other than those refrigerants specifically exempted by 40 CFR 82.154(a). These non-exempt substitute refrigerants affected by the 2016 rule include commonly used HFCs such as R-134a and R-410A. The leak repair provisions for these substitutes became effective on January 1, 2019. Trinity's article entitled Refrigerant Rule Revisions: Is Your Facility Prepared? in the Fall 2017 issue of Environmental Quarterly (EQ) details the expanded requirements associated with the 2016 rule.
Prior to the 2016 rulemaking, these non-exempt substitutes were subject only to the venting prohibition. At the time, the leak repair provisions were limited to equipment using a refrigerant containing an ozone depleting substance (ODS), which is a substance with an ozone depletion potential (ODP) greater than zero, such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs). Non-exempt substitutes, which do not have quantifiable ODPs, were subject only to the refrigerant venting prohibition.
The new 2020 rulemaking rescinds the extension of the leak repair provisions to non-exempt substitutes such as HFCs. Based on changes to EPA's legal interpretation that supported the 2016 rule, the recent regulatory action limits the applicability of the leak repair provisions to equipment using refrigerants containing ODSs such as CFCs and HCFCs.
Impact of Change on Refrigerant Management Requirements
As of the effective date of the 2020 rule, appliances containing at least 50 pounds of non-exempt substitute refrigerant in a single circuit are no longer required to comply with the provisions of 40 CFR 82.157. Specifically, as of April 10, 2020, these appliances are no longer subject to the following requirements:
- Calculating the leak rate each time refrigerant is added
- Repairing the appliance and conducting verification tests by the regulatory deadlines if the leak rate calculation exceeds the applicable threshold (i.e., 10%/year for comfort cooling/other appliances; 20%/year for commercial refrigeration; and 30%/year industrial process refrigeration)
- Completing periodic inspections to confirm that the appliance is not leaking if the leak rate threshold is exceeded
- Submitting a report to EPA for chronically leaking appliances by March 1 of the following year, if at least 125% of any appliance's capacity leaks in a calendar year
- Retrofitting or retiring appliances that cannot be repaired
- Maintaining records to document compliance with these requirements
These provisions remain applicable to appliances containing at least 50 pounds of Class I or Class II refrigerants such as CFCs and HCFCs; however, for substitute refrigerants, including HFCs, these requirements apply only from January 1, 2019 until April 10, 2020. EPA considered granting a retroactive extension to the January 1, 2019 compliance date for the application of these provisions to non-exempt substitute refrigerants; however, according to the 2020 rulemaking [emphasis added]: “With no information in the record to contradict the EPA's earlier findings that two years provided sufficient time to prepare for the January 1, 2019 compliance date, this final rule rescinds the leak repair requirements for appliances that contain non-exempt substitute refrigerants without any extension of that compliance date.”
Other portions of the 2016 rule applicable to non-exempt substitute refrigerants are still in effect, including sales restrictions, technician certification requirements, disposal requirements, evacuation requirements, reclamation standards, and the use of certified recovery equipment. In addition,, the venting prohibition remains in effect for all refrigerant types other than those specifically exempted by 40 CFR 82.154(a). This prohibition states that a person may not knowingly vent or otherwise release refrigerants to the atmosphere.
Impacts of Impending HCFC Phase-Out and Potential HFC Phase-Down
While non-exempt substitute refrigerants do not have quantifiable ODPs, most HFCs have substantial Global Warming Potential (GWP). The Montreal Protocol, which previously triggered the phase-out of CFCs and HCFCs, was recently amended to restrict refrigerants that are greenhouse gases (GHGs) but have no ODP. The Kigali Amendment to the Montreal Protocol involves the phase-down of HFC refrigerants by more than 80% over the next 30 years. Although the United States has not yet ratified the Kigali Amendment, several states have initiated or plan to initiate their own legislation to phase down HFC refrigerants. Information on EPA's website about the Kigali Amendment does not characterize plans for ratification and emphasizes private-sector commitments at this time.
The implementation of phase-down programs is expected to result in a reduced refrigerant supply within the marketplace and increased refrigerant prices. Facility managers could be faced with unexpected costs for replacement refrigerants and acceleration of appliance obsolescence due to increased overall costs. For example, R-22 costs have already increased by an order of magnitude since 2006. Any remaining production and import of R-22 ended on January 1, 2020. Consequently, the servicing of systems containing R-22 will rely on reclaimed or stockpiled quantities moving forward, which means that prices will likely continue to increase.
For transparency, EPA's rulemaking estimates the incremental costs and benefits associated with rescinding the extension of leak repair provisions to non-exempt substitute refrigerants. Specifically, the rule considers two economic impacts: (1) the calculated cost savings associated with reducing the regulatory burden on facilities using non-exempt substitute refrigerants; and (2) the additional expenses associated with facilities purchasing non-exempt substitute refrigerants for leaking appliances (i.e., those appliances that would otherwise be promptly repaired if subject to the leak repair provisions). Table 2 of the preamble (see below) estimates the difference between these impacts, which corresponds to a net savings of $20-$24 million; however, this evaluation does not monetize the climate change impacts associated with eliminating the GHG emissions reductions achieved by the implementation of leak repair provisions for non-exempt substitute refrigerants.
EPA's Responses to Comments
EPA received many comments on the proposed rule revisions, both in favor of maintaining the regulations as they apply to non-exempt substitutes and against continuing to regulate those substances. The main point of contention and the reason EPA ultimately removed leak repair requirements for substitutes is a difference between its interpretation of section 608(a) and section 608(c) of the Clean Air Act.
Section 608(a) requires EPA to develop regulations addressing the use and disposal of Class I and Class II substances with regard to “service, repair, or disposal of appliances and industrial process refrigeration.” No mention of substitute refrigerants is made in this section, which serves as the basis for EPA's leak repair provisions. Conversely, section 608(c) clearly spells out the venting prohibition for Class I or Class II substances and further requires EPA to apply the venting prohibition to “any substitute substance for a Class I or Class II substance.”
EPA weighed the comments and language of the rule to determine that Congress intended for substitute refrigerants to be subject only to the venting prohibition, not to the leak repair provisions. Additionally, Congress gave EPA the authority to determine whether substitute refrigerants pose a “threat to the environment” and should be subject to the venting prohibition promulgated per section 608(c). In its response, EPA contended that global warming constitutes a “threat to the environment” and therefore maintained the extension of the rule to substitute refrigerants only under the authority granted by section 608(c) (i.e., the venting prohibition). In response to multiple commenters who contended that Congress did not intend for Title VI to address GHGs, EPA explained that it did not decide to regulate substitute refrigerants based on their GWP, but rather based primarily on the requirements of section 608(c) noted above.
The proposed rule also requested comments regarding whether EPA should return to its pre-2016 interpretation of “topping off.” In the 2016 Rule, EPA changed its interpretation to suggest that the addition of refrigerant to an appliance would constitute knowing venting if the addition occurred for reasons other than the original charging or a seasonal variance. EPA received multiple comments both for and against discarding the 2016 interpretation as it applies to the venting prohibition. In the end, EPA decided to revert to the earlier interpretation that “topping off” of an appliance does not constitute knowing venting for purposes of the prohibition. EPA acknowledged that all appliances leak, and many leaks occur during normal operation and not necessarily during servicing events themselves. EPA's updated interpretation also clarifies that “it is not the quantity of refrigerant released, but rather the circumstances of the release that determine whether the venting prohibition applies.” [85 FR 14162] Therefore, EPA essentially reverted to the pre-2016 interpretation of this issue.
Helpful Strategies for Compliance Management
Trinity's Fall 2018 EQ article entitled Refrigerant Management Rule - Ready or Not identifies key compliance components and reviews available refrigerant management compliance tools that may be used to track appliance inventories and leak rates. Although maintaining these records is no longer necessary to satisfy the rescinded leak repair requirements for non-exempt substitute refrigerants, these tools remain useful for demonstrating compliance with the expanded requirements for Class I and Class II refrigerants. Furthermore, maintaining leak records for non-exempt substitute refrigerants may help facility managers make budgetary decisions related to the repair and replacement of leaking appliances.
To fully understand their site's exposure to the limited availability and rising prices of refrigerants, facility managers are urged to develop a complete inventory of appliances that contain refrigerants, and document the full refrigerant charge (pounds of refrigerant), refrigerant type, leak history, and age. These records will allow a facility to identify chronically leaking appliances and to evaluate the economic benefit of repairing or replacing them, particularly if the U.S. eventually ratifies the Kigali Amendment or if applicable state requirements include a phase-down program for HFCs. Facility managers can then determine how potential refrigerant price increases may impact future maintenance budgets.
For a consultation to discuss the impacts of this rulemaking or for assistance with refrigerant management requirements and associated compliance strategies, please call 800.229.6655.