Hydrofluorocarbons (HFCs) are on again, and the HFC ban is off again — at least from a legal standpoint — as a U.S. court of appeals has ruled the Environmental Protection Agency (EPA) cannot ban their use under Section 612 of the Clean Air Act.  

The U.S. Court of Appeals for the District of Columbia Circuit has denied a petition filed by Honeywell, The Chemours Co., and the National Resources Defense Council (NRDC). The petition had asked the court to review its August 2017 decision in an appeal brought by Mexichem Fluor and Arkema (Mexichem Fluor Inc. vs. the Environmental Protection Agency). In that appeal, the court ruled 2-1 that the EPA cannot ban HFCs under Section 612 of the Clean Air Act because that provision was designed only to address ozone-depleting substances.

By denying the petition filed by Honeywell, Chemours, and the NRDC, the court upheld its ruling: no EPA ban under Section 612.   

A key to the court’s ruling was that although HFCs are among the greenhouse gases suspected of contributing to climate change, they do not deplete the ozone layer.

“EPA’s authority to regulate ozone-depleting substances under Section 612 and other statutes does not give EPA authority to order the replacement of substances that are not ozone depleting but that contribute to climate change,” the court ruled. “Congress has not yet enacted general climate change legislation. Although we understand and respect EPA’s overarching effort to fill that legislative void and regulate HFCs, EPA may act only as authorized by Congress.”

The court noted that EPA possesses other statutory authorities, including the Toxic Substances Control Act, to directly regulate non-ozone-depleting substances that are causing harm to the environment.

The ruling struck down an Obama administration executive order. The order, which was part of Obama’s 2013 Climate Action Plan, had indicated the EPA would use its authority through the Significant New Alternatives Policy (SNAP) program of Section 612 to reduce HFC emissions. To that end, in 2015, EPA issued a rule that restricted manufacturers from making certain products that contain HFCs

Mexichem and Arkema petitioned for review of the EPA’s 2015 rule. They raised two main arguments: First, the 2015 rule exceeded EPA’s statutory authority under Section 612, and, second, the EPA’s decision to remove HFCs from the list of safe substitutes was arbitrary and capricious because EPA failed to adequately explain its decision and consider several important aspects of the problem. The court agreed on the first point but dismissed the arbitrary and capricious argument.

After the court’s ruling, The Chemours Co., Honeywell, and NRDC filed the petition for rehearing.

Regardless of this ruling, HFCs are unlikely to experience a new surge in popularity. California has already said it plans to adopt the original EPA ruling, and the Kigali Amendment to the Montreal Protocol, which calls for a global phasedown of HFCs to about 15 percent of current levels of consumption, is slated to go into force January 1, 2019.

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) said it was not surprised by the court’s decision

“En banc review is a high bar,” said Francis Dietz, vice president, public affairs, AHRI. “This decision in no way alters our industry's commitment to the global phase down of HFCs, and we are confident that avenues other than Section 612 of the Clean Air Act exist to regulate them in the United States.”

Arkema said it was gratified by the court’s action.

“Arkema continues to be a strong supporter of reducing HFC emissions, which includes the development and use of low-GWP [global warming potential] HFCs and HFOs [hydrofluoroolefins],” said Anthony O’Donovan, regional president, Fluorochemicals, Arkema Inc. “We believe that any effort to require use of lower GWP alternatives should be global and should establish an overall cap while giving regulated persons the flexibility to pick the best products for an efficient and safe transition without market disruptions.”

“The recently negotiated Kigali Amendment to Montreal Protocol can achieve this goal,” he added. “It creates a clear framework of an international regulation rather than a patchwork of country or region-specific regulations and provides a cap and phase down for the marketplace.”

O’Donovan concluded that Arkema supports the Kigali Agreement and said the company believes the court’s action paves the way for a safe, practical, and efficient transition to the next generation of refrigerants that will benefit the HVACR industry and the environment.

Honeywell, meanwhile, said it was deeply disappointed in the court’s decision.

“We believe the court missed an opportunity to reverse its initial decision, which ignored the original intent of SNAP to direct the Environmental Protection Agency to replace ozone-depleting substances with safer alternatives,” said a Honeywell spokesperson. “We are considering an appeal to the Supreme Court to ensure that American companies continue to innovate, manufacture, and commercialize next-generation technologies that are better for human health and the environment.”

The spokesperson added that independent of the court’s decision, the transition from HFCs in favor of safer solutions such as HFOs that reduce the greenhouse gas impact of refrigerants, aerosols, solvents, and blowing agents is already well underway. As previously mentioned, California, for example, is implementing a program to reduce HFC emissions 40 percent by 2030, and has already begun to adopt phaseout requirements for some applications covered by SNAP.

“The 11 states that filed their support with the court for the continuation of the SNAP program have stated that they are seeking solutions to ensure that the transition to technologies that are safer for human health and the environment continues,” said the Honeywell spokesperson. “Honeywell is among a strong and growing coalition of industry, academia, and states that will actively participate in all efforts to ensure that HFC phase down continues in the United States and across the world.”

David Doniger, director of the NRDC's Climate and Clean Air program, actively addressed the situation on Twitter. “Disappointing decision from divided D.C. Circuit not to rehear case on the super climate damaging HFCs,” he tweeted. “This isn't over. There's the option to appeal to Supremes. And there are other ways to skin this cat. Ratification of Kigali HFC Amendment, for one. Rest of world going ahead. American industry doesn't want to fall behind. States also ready to act. California ready to adopt the EPA rules at issue and other climate leader states poised to follow.”

ACCA believes the transitions to new refrigerants, including flammable products, must not be done hastily.

“The EPA states that half of all HVAC systems in the U.S. are not installed correctly, and we know this field problem can contribute to refrigerant leaks,” said Glenn Hourahan, ACCA senior vice president for technical policy. “Professional HVACR contractors recognize addressing installation problems is paramount to safely transitioning to new products, including flammable refrigerants.

“ACCA encourages the HVACR industry, policy makers, and environmentalists to collectively promote sound installation and maintenance practices that are critical to minimizing refrigerant leaks and for protecting technicians and consumers,” Hourahan added.

Alex Ayers, director of government affairs Heating, Air-conditioning, & Refrigeration Distributors International (HARDI) said the decision will have an impact on what products HARDI members provide to customers and makes the timeline for possible future phaseouts uncertain.

“We have already seen a shift in the industry away from HFCs, and that will continue as we expect to see a replacement regulation in the future,” Ayers said. “We plan to work with the EPA to ensure any regulation on the phaseout of HFCs will meet the needs of our members and the requirements of the Kigali Amendment.”

Publication date: 1/30/2018

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