WASHINGTON—The U.S. Environmental Protection Agency is proposing rules to reduce the use of coolants from air conditioners and refrigerators that are potent greenhouse gases, fulfilling new mandates from Congress with regulations favored by large portions of U.S. industry, according to the agency.
The proposal would create a process for reducing the use of hydrofluorocarbons in cooling appliances, the first step toward meeting new mandates to cut their supply by 85% over 15 years, the EPA said. Congress passed that mandate in December in provisions included in a $2 trillion spending and Covid-19 aid package.
“EPA is taking a major action to help keep global temperature rise in check,” agency Administrator
said in a statement, adding that the action will spur “manufacturing of new climate-safe products.”
The effort has bipartisan support and backing from the industry. The Air-Conditioning, Heating and Refrigeration Institute, a trade group for equipment manufacturers, has said U.S. companies have spent billions of dollars developing alternative chemicals to sell globally, which would get a boost if the U.S. joins international efforts to eliminate hydrofluorocarbons, known as HFCs. The group says most of this equipment sold in the U.S. is manufactured in the U.S.
spinoff, said it has spent $1 billion developing new products for customers anticipating a phaseout of HFCs. It introduced its Opteon line in 2015, and produces the coolants in the U.S.
“Issues like global warming provide the US an opportunity to lead the world in research and technology,”
the company’s president and chief executive said in an email. “If done right, regulation could help to bring about additional investment.”
More on the EPA and Biden’s Climate Agenda
New EPA estimates in the proposal say it would produce a net gain for the economy of $284 billion from 2022 through 2050. Those gains come from reduced compliance costs for the industry and by reducing greenhouse-gas emissions into the atmosphere.
The rules would cut the equivalent of 4.7 billion metric tons of carbon dioxide emissions from 2022 through 2050, or almost three years of U.S. power-sector emissions at 2019 levels.
HFCs are synthetic, widely used coolants in refrigerators and air conditioners. They have long accounted for less than 2% of U.S. greenhouse-gas emissions. But they can also linger in the atmosphere for thousands of years, and their heat-trapping capacity can be hundreds or thousands of times that of carbon dioxide.
Companies with major U.S. operations, including
Honeywell International Inc.,
Johnson Controls International
PLC, are among the many that have surged into the potential new market. Some retailers like
have also been supportive of federal regulation, saying it would help them meet pledges to cut emissions by helping clean up their refrigerated sections.
The Association of Home Appliance Manufacturers had previously warned that putting these rules in place too quickly could rapidly raise costs. Consumer prices for appliances might eventually rise only as much as about 2%, as has been the case in previous coolant phaseouts, the industry group Alliance for Responsible Atmospheric Policy has said.
But it also took years longer than once anticipated for the EPA to start working on such rules. Chemical and manufacturing companies have made vast strides on replacement products in the meantime and now want to head off the possibility of many new, varying state-level regulations, trade group leaders said.
Nearly all refrigerators sold in the U.S. are likely by year’s end to be made without HFCs, said
the top lobbyist at the Association of Home Appliance Manufacturers. A phaseout for all home appliances is likely by 2024, he added.
“We just needed the time to do it,” Mr. Messner said. “Our hope is that we will get back to a national regulatory framework for refrigerants…and we won’t see a patchwork of a few states acting.”
Industry has been broadly supportive of the new mandates. But it has also warned that it would inherently be more expensive to create new alternatives and there may be problems, especially if change comes too quickly.
Industrial chillers, for example, have to run harder to provide the same level of refrigeration while using some of the new products, according to the Industrial Energy Consumers of America.
said in a letter to senators in March 2020 that some aerospace uses don’t yet have alternatives to HFCs, especially for fire-suppression agents on commercial and military aircraft.
The largest auto makers’ trade group in Washington, the Alliance for Automotive Innovation, sounded similar warnings about the short supply of alternatives. Its letter from April 2020 said the alternative refrigerant now common for light-duty vehicles, HFO-1234yf, costs roughly $42 a pound, compared with just $7 a pound for the product HFC-134a.
As they have phased out more pollutive products over decades, chemical makers and manufacturers have been creating an array of alternatives for the more universal coolants that were once prominent. It has been tricky for some industrial customers to navigate new products, and if their evolution slows, HFC imports and prices may rise, lobbyists said.
Amid that uncertainty, business demand has already been rising over the past three years, said
an executive at iGas USA Inc., a Tampa-based company that produces refrigerants from imported raw materials.
“The true replacement product has not been discovered yet,” Mr. Middleton said.
Some companies have been importing and storing more hydrofluorocarbons in anticipation of tighter restrictions on their production and use, said
vice president of Campbellsport, Wis.-based North American Refrigerants Inc.
Ms. Becker, whose company sells hydrofluorocarbons and helps reclaim the compounds from used gasses, said consumers and businesses will likely have to pay more to fix older refrigerators that use hydrofluorocarbons because the cost of the gasses will go up.
“You are going to have more conversations about whether it’s worth it to repair a refrigerator,” she said.
The Air-Conditioning, Heating and Refrigeration Institute said the price of the refrigerants amounts to less than 5% of the overall price of cooling equipment, even with rising costs. And it said some new alternatives do have a lower cost than coolants they’re replacing or work slightly more efficiently. Consuming industries can further reduce costs with more efficient equipment, the group said.
The main hydrofluorocarbon in question, known in the industry as R-410A, has been used for about a decade. As production of R-410A drops in the years ahead, equipment manufacturers say consumers shouldn’t notice any change in the performance of the new equipment or the availability of the old refrigerant.
What the EPA is doing now is just an early step, setting only the outlines of the program and how to enforce it.
It plans by Oct. 1 to set limits going into effect next year and will decide in future proposals how to keep lowering that limit, according to EPA officials. That puts it more in line with industry’s previous timeline requests. In 2016 the agency had initially set deadlines to phase out HFCs in new appliances such as refrigerators by 2021, while industry had requested that wait until 2024.
The new proposal also starts the U.S. on track to meet an international agreement to phase out hydrofluorocarbons. At a meeting in Rwanda in 2016, the U.S., China and India among nearly 200 countries agreed to aim for an 80% reduction in their use by 2045.
signed off on what is known as the American Innovation and Manufacturing Act of 2020 to implement that agreement.
The law’s phasedown is consistent with that deal, the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. The Wall Street Journal has previously reported that President Biden intends to seek its Senate ratification, even while the EPA moves forward based on the new law.
The EPA’s proposal also outlines how EPA will give some exemptions allowed under the law for things such as mission-critical military applications, the agency said. The agency plans to finalize this rule later this year after 45 days of collecting public comments and holding a public hearing.
Corrections & Amplifications
Johnson Controls International PLC is among the companies that have surged into the potential new market. An earlier version of this article incorrectly named the company Johnson Controls Inc. (Corrected on May 3)
—Austen Hufford contributed to this article.
Write to Timothy Puko at [email protected]
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