The Phasedown of HFC Consumption and Production
How is the Phasedown of HFC Consumption and Production related to the AIM Act?
The AIM Act (American Innovation and Manufacturing Act) is a federal regulation enacted to reduce the global warming impact of hydrofluorocarbons (HFCs). The AIM Act authorizes the EPA to address HFCs through three main initiatives: the Phasedown of HFC Consumptions and Productions, the Emission Reduction and Reclamation (ER&R) Program, and the Technology Transition Program. As part of the AIM Act, the Phasedown of HFC Consumption and Production aims to eliminate 85% of the consumption and production of HFCs by 2036.
What is the HFC Phasedown and how does it impact the industry?
The HFC phasedown aims to reduce the consumption and production of HFCs to 15% of the baseline level by 2036. This reduction is achieved through a step-wise approach, with annual production and consumption allowances issued to importers, producers, manufacturers, and distributors. While the phasedown encourages the industry’s transition to more environmentally-friendly refrigerants, it also introduces volatility in the HFC market as the product becomes increasingly limited. Companies should stay on top of the market dynamics and adopt tech using alternative refrigerants to ensure compliance with evolving regulations and mitigate challenges posed by reduced HFC availability.
Phasedown Timeline of HFC Consumption and Production
Under the AIM Act, HFC production and consumption allowance will decrease to 15% of the historic baseline level by 2036. The EPA has set periodic goals for the following key years:
Phasedown Timeline
What is an allowance and how does it work?
During the Phasedown of HFC Consumption and Production, HFC allowances are allocated to importers and manufacturers in the form of carbon dioxide equivalent (CO2e). One unit of CO2e equals a unit of GWP. This means that HFCs with higher GWP would require more allowance to produce or import. For instance, a manufacturer with an allowance of 1,430 metric ton CO2e would be able to produce 1 metric ton of R-134a, which has a GWP of 1,430.
EPA allocates allowances to entities based on their market share from the average of the three highest years of HFCs produced between 2011 and 2019. By October 1 of each year, EPA issues allowances for entities to produce or import HFCs in the following calendar year.
What are the benefits of the Phasedown of HFC Consumption and Production?
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