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US EPA proposes 40% HFC phase down in 2024

USA: The US Environmental Protection Agency (EPA) has issued a proposed rule to implement the next step of the USA’s HFC phase down, a 40% reduction below historic levels starting in 2024.

The proposal follows the Senate’s bipartisan approval to ratify the Kigali Amendment to the Montreal Protocol, a global agreement to phase down HFCs.

The proposal establish the methodology for allocating HFC production and consumption allowances for 2024 and later years, similar to the methodology used for issuing allowances in 2022 and 2023—an initial step to achieve 10% of this phase down. Now, the number of available allowances in 2024 will be reduced significantly to 40% below historic levels. 

Today’s proposal would amend the historic consumption baseline level from which reductions are made to reflect corrected data submitted to EPA, as well as more precisely specify recordkeeping and reporting requirements, to help preserve the environmental and economic benefits associated with the HFC phasedown.

The EPA is proposing to base production allowance allocations on an entity’s market share derived from the average of the three highest years of production of regulated substances between 2011 and 2019.

Illegal trade

Since January 1 of this year, companies have needed allowances for producing or importing HFCs. In the first nine months of this year, the Interagency Task Force on Illegal HFC Trade, co-led by EPA and the Department of Homeland Security, claims to have prevented illegal HFC shipments equivalent to more than 889,000 tonnes of carbon dioxide at the border.

The EPA has also notified some companies that it intends to retire some of their allowances due to misreporting data.

EPA is planning to issue additional proposed rules regarding HFCs under the AIM Act. The next proposed rule will focus on transitioning away from HFCs in the refrigeration and air conditioning, foams, and aerosols sectors.

The full proposal document ban be found here.

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