Hydrofluorocarbon Phasedown: Issues for Congress

Hydrofluorocarbon Phasedown: Issues for Congress

March 3, 2021
Hydrofluorocarbon Phasedown: Issues for Congress
Congress enacted legislation—the American Innovation
including the United States, agreed to the 1985 Vienna
and Manufacturing (AIM) Act of 2020—to phase down
Convention for the Protection of the Ozone Layer.
hydrofluorocarbons (HFCs) domestically (P.L. 116-260,
Division S, §103). HFCs are potent greenhouse gases
Montreal Protocol (MP)
(GHGs) used in air conditioning, refrigeration, foam
Parties to the Vienna Convention adopted the subsidiary
blowing agents, insulation, and other applications. Multiple
MP in 1987 to set binding, quantitative schedules for
scientific assessments conclude that anthropogenic GHGs
countries to phase out listed ODS. The MP provides for
(e.g., carbon dioxide and HFCs) have been a major driver
international cooperation on ODS substitutes and research,
of observed climate change since 1950.
financial assistance, and trade restrictions with nonparties.
The United States is among the 197 parties to the Vienna
AIM establishes a 15-year timeline to reduce domestic HFC
Convention and the MP.
production and consumption and directs the U.S.
Environmental Protection Agency (EPA) to implement
Kigali Amendment to the MP
AIM’s requirements, including through regulations. AIM’s
As MP parties agreed to accelerate the phaseout of certain
phasedown schedule appears to align with international
ODS, discussions turned to the projected growth in HFCs as
commitments to phase down HFCs under the Kigali
ODS replacements. In 2016, MP parties agreed to phase
Amendment to the Montreal Protocol. The United States is
down HFCs and adopted the Kigali Amendment to the MP,
a party to the Montreal Protocol (MP). As of early March
its fifth amendment. The Kigali Amendment contains
2021, the United States is not a party to the Kigali
commitments to phase down HFC production and
Amendment. The Biden Administration has signaled its
consumption globally. One estimate suggests that the Kigali
interest in international efforts to reduce HFCs. For
Amendment HFC phasedown schedule could avoid as
example, Executive Order 14008 instructs the Secretary of
much as 0.5o Celsius of global warming by 2100.
State to submit within 60 days of January 27, 2021 (i.e.,
March 28, 2021), the Kigali Amendment for the Senate’s
The Kigali Amendment provides for an unspecified amount
advice and consent for ratification.
of “adequate financing,” through a Multilateral Fund, to
support HFC reductions in low-income countries and for
Emergence of HFCs as Pollutants
research and development of affordable alternatives. It also
HFCs were first manufactured in the context of efforts to
contains HFC trade restrictions that are to go into effect on
reduce damage to the earth’s stratospheric ozone layer.
January 1, 2033, with parties that have not ratified the
HFCs are referred to as “substitute refrigerants” under the
Kigali Amendment.
Clean Air Act (CAA), because EPA approved HFCs as
replacements for ozone depleting substances (ODS).
The Kigali Amendment entered into force on January 1,
2019, having been ratified by at least 20 countries. As of
Although scientists say HFCs would not significantly
early March 2021, there are over 100 parties to the Kigali
deplete stratospheric ozone, HFCs are GHGs. Their
Amendment. Developed countries began to phase down
potency, measured as Global Warming Potential, ranges
HFCs in 2019. Most low-income countries are to freeze
from about 150 to 8,000 times more than the equivalent
HFC consumption levels in 2024, while certain low-income
mass of carbon dioxide (CO2), the principal human-related
countries are to freeze consumption in 2028. Parties to the
GHG. Absent mitigation actions, global HFC emissions and
amendment agreed to reduce HFC use by 80%-85% of their
consumption are projected to increase, especially in
respective baselines by the late 2040s.
developing countries as demand rises for cooling services
using HFCs. As discussed below, over 100 countries have
Clean Air Act (CAA)
committed to phase down HFCs under the Kigali
Title VI of the 1990 CAA Amendments addresses
Amendment.
stratospheric ozone depletion by manufactured chemicals. It
also implements the U.S. international responsibilities
From Protecting Stratospheric Ozone to under the MP. Under Title VI, EPA allocated production
Phasing Down HFCs
and consumption tradable allowances for ODSs equal to the
In the 1970s, scientists expected but had little evidence that
amounts accepted by the United States under the MP.
certain manufactured chemicals would damage the Earth’s
Additional Title VI requirements include labeling ozone-
protective stratospheric ozone layer. Discussions about the
depleting products and a program to approve safer
stratospheric ozone depletion began internationally. In
substitutes.
response to new scientific evidence in 1985 of the
springtime “ozone hole” over Antarctica, 20 nations,
In the 1990s and early 2000s, EPA approved certain HFCs
and HFC-containing blends as acceptable substitutes for
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link to page 2 Hydrofluorocarbon Phasedown: Issues for Congress
ODSs. Years later, EPA concluded that other ODS
chemical substitutes for the HFCs used in these
substitutes posed lower overall risks to the environment
applications. AIM specifies conditions under which EPA
than did HFCs.
may designate other essential uses.
To address HFC emissions and their projected effect on
AIM authorizes EPA to grant petitions to accelerate the
climate change, EPA promulgated two rules under CAA
phasedown schedule after 2024. Under the law, EPA must
Title VI in 2015 and 2016. These rules were partially
consider factors, such as availability of substitutes, costs,
vacated by the court. For more information, see
and environmental impacts, when deciding on petitions.
Also, AIM’s “technology transitions” provisions specify
 CRS In Focus IF11541, Hydrofluorocarbons (HFCs):
conditions under which EPA can restrict HFC use on a
EPA and State Actions; and
sector or subsector basis.
 CRS Legal Sidebar WSLG1868, D.C. Circuit Rejects
AIM requires EPA to set rules for the management of
EPA’s Efforts to Ban Hydrofluorocarbons: Part I; and
equipment containing HFCs and their substitutes. For
CRS Legal Sidebar WSLG1869, D.C. Circuit Rejects
example, EPA is to establish regulations to maximize
EPA’s Efforts to Ban Hydrofluorocarbons: Part II
reclamation of HFCs used as refrigerants—e.g., removing
(available to congressional clients upon request).
refrigerants and reprocessing them for future use—to
minimize releases, and to ensure safety of technicians and
Given that AIM establishes a separate legal authority to
consumers. AIM also authorizes small business technology
phase down HFCs, EPA is expected to shift its regulation of
grants: $5 million per fiscal year for FY2021 through
HFCs from CAA Title VI to AIM.
FY2023. Subject to appropriations, EPA is to award grants
to small businesses for purchase of equipment for the
American Innovation and Manufacturing
recycling, recovery, or reclamation of HFC substitutes.
Act (AIM)
Congress in AIM set a schedule to reduce domestic HFC
AIM also addresses international trade of HFCs. It specifies
production and consumption. AIM identifies a list of nearly
how EPA should reduce the number of U.S. production
20 HFCs subject to the phasedown schedule; these are the
allowances when HFCs are exported. It also prohibits the
same HFCs identified in the Kigali Amendment. The AIM
export of HFCs to a foreign country after January 1, 2033,
schedule begins with a 10% reduction in HFC production
if that country has not, among other things, “enacted or
and consumption compared to a 2011-2013 baseline. The
otherwise established ... the same or similar requirements”
reductions increase until reaching 85% in 2036. AIM does
as AIM (§103(j)).
not completely eliminate HFCs (see Table 1).
Issues for Congress
Table 1. AIM Phasedown of HFCs
Congress may face several issues related to HFCs:
Percentage of
Percentage of
 If, as directed under E.O. 14008, the Secretary of State
Reduction in
Reduction in
submits the Kigali Amendment to the Senate, the Senate
Time Period
Production
Consumption
may provide its advice and possible consent to the
President to ratify it. Some view ratification as
2020-2023
10%
10%
important to U.S. participation in international climate
2024-2028
30%
30%
change negotiations and suggest it may encourage other
major HFC users, such as China and India, to ratify the
2029-2033
70%
70%
Kigali Amendment. Others have questioned the need for
2034-2035
80%
80%
ratification, given that AIM authorizes a domestic HFC
phasedown. Some are wary that any treaty infringes on
2036 and beyond
85%
85%
U.S. sovereignty or are wary of environmental treaties
Source: AIM, Section 103(e)(2).
or regulation in particular.
 If the United States joins the Kigali Amendment,
AIM authorizes an allowance allocation and trading
Congress may consider appropriations for the U.S.
program to implement the phasedown. It requires each
contribution, if any, to international “adequate
“person” to hold allowances for the HFCs produced and
financing” of HFC reduction efforts by low-income
consumed, respectively, in a given year. The total number
countries.
of annual allowances must correspond to the phasedown

schedule. EPA is to promulgate regulations for the
Should the United States not join the Kigali
allocation and trading program by September 23, 2021.
Amendment, Congress may consider whether adverse
trade conditions may emerge under restrictions on trade
AIM identifies essential uses of HFCs for which EPA must
with nonparties.
allocate the “full quantity of allowances necessary, based
 As EPA implements AIM, Congress may conduct
on projected, current, and historical trends” for the first five
oversight on topics such as allowance allocation and
years of the phasedown (§103(e)(4)(B)(iv)). Essential uses
trading and requirements to manage equipment
include inhalers for asthma, propellants for defense sprays,
containing HFCs. Congress may also consider
foams for marine and trailer use, and military and aerospace
appropriations for the small business technology grants.
fire suppression. Stakeholders have reported a lack of
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Hydrofluorocarbon Phasedown: Issues for Congress

IF11779
Kate C. Shouse, Analyst in Environmental Policy

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