HARDI Submits Comments to EPA Opposing Disposable Cylinder Ban and Cylinder Tracking

Today, HARDI submitted comments to the EPA regarding the allocation rule for the first step-down in production and consumption of HFC refrigerants in 2022 and 2023. Part of these comments addressed proposals to ban the use of disposable cylinders for regulated substances and to institute an electronic cylinder tracking system through the supply chain. In May, HARDI polled members following a briefing on the rule and both proposals were opposed 75 percent and 90 percent respectively.

Reminder: Distributors wishing to submit their own comments must do so by July 6. You can submit comments here.

For both proposals, HARDI made the case that EPA exceeded its authority to regulate distribution based on the statutory language included in the American Innovation and Manufacturing Act. HARDI also outlined the potential damage these proposals could cause to the industry, especially if it drives distributors away from carrying service gases.

The allocation rule is extremely important to the phasedown of HFCs over the next 15 years. This rulemaking determines which companies are allowed to produce or import HFCs and how much during 2022 and 2023 and this initial rule will help determine best practices for future decreases from the baseline. HARDI’s comments included: 

Supported components of the Allocation Rule

• We want a fair and equitable allowance system based on 2011-2019, open to the use of three-year average within that timeline, but adjustments must be made for dumping using figures from Department of Commerce

• A healthy reclaim market will be necessary for a smooth transition, granting reclaim a set-aside will help to ensure there is adequate supplies to maximize reclaim entering the market.

• Support for all refrigerants meeting AHRI 700-2016 purity standard (or any successor standard determined by EPA)

Ban on disposable cylinders

• EPA estimates of heel charge size left in disposable cylinders is larger than other studies and observations by industry professionals

• Banning disposable cylinders is costly to the supply chain

  • Storage costs of “empty” cylinders takes valuable floor space away from distributors

  • Additional shipments of empty cylinders will be required, the expense of shipping empty cylinders cross country will be expensive

• Costly changes will displace the market for refrigerant gases, possibly away from HVACR equipment distribution facilities

  • As distributors with training and expertise leave the market they will be replaced by companies without the proper knowledge or ability to ensure their customers are properly trained on new refrigerants

• No authority to ban cylinders

  • The proposal to ban disposable cylinders goes beyond the authority granted to the EPA by either the AIM Act or the Clean Air Act

• EPA does have authority on proper disposal of disposable cylinders

  • Better enforcement of evacuation and recycling requirements including improving take back programs will reduce the environmental impact of disposable cylinders

Tracking

• While HARDI agrees certification of legal HFCs is important to the supply chain, EPA is pursuing a misguided attempt to blend certification with tracking and the final rule should be limited to a certification program where end-users can verify their purchase was produced or imported with an allowance.

• Tracking will lead to many legal hurdles in maintaining confidential business information, nearly every part of the proposed tracking system would include information considered to be a trade secret under the Defend Trade Secrets Act.

• There is no practical purpose for tracking individual cylinders through the supply chain and with no way to release the information for transparency purposes there is no reason to track the information to begin with.

• Adding a tracking requirement to distributors would create another massive burden on the channel.

• CBI should be protected because it can be used to determine market share

• The AIM Act grants the authority to require disclosure of information for monitoring and reporting, however these requirements are limited to “each person who, within the applicable reporting period, produces, imports, exports, destroys, transforms, uses as a process agent, or reclaims a regulated substance”

Future Rules

• This rulemaking should focus exclusively on the allocation and allowance system, any examination of industry practices and methods for increasing compliance, decreasing venting, and prohibiting illegal imports needs to be done in a separate rule that looks the holistic evaluation of the HVACR industry, especially on recovery to increase reclaim.

• The lack of information on proposals to increase recovery, protect reclaim markets, or enforcement of venting regulations through new contractor certifications makes it impossible to adequately understand why EPA is pursuing cylinder tracking or ban on disposable cylinders

This is the first of many rulemakings that will be pursued by EPA as it works to enact the AIM Act and create the framework used to phasedown the use of HFCs by 2036.

You can view HARDI’s comments here.

We will continue to update you as the process continues.

Have questions about the HFC phase-down? Submit them here.