Background

A proposed rule from the Environmental Protection Agency aims to decrease the importation and production of hydrofluorocarbons in the U.S. by 85 percent over the next 15 years.

HFCs are gases used as replacements for ozone-depleting substances in a variety of applications. Companies that import, export, produce, destroy, reclaim, or otherwise distribute HFCs may be affected by this rule. Companies using HFCs to manufacture refrigeration and air-conditioning equipment, foams, aerosols, and fire suppressants may also be affected.

Specific provisions of this proposed rule include the following.

- set HFC production and consumption baseline levels from which reductions will be made

- require allowances to import or produce HFCs

- establish an initial methodology for allocating allowances for 2022 and 2023 for companies that imported and/or produced HFCs in 2020

- set aside some allowances for small importers

- allow the transfer of allowances between companies and internationally

- establish an electronic tracking system for the movement of HFCs through commerce

- establish administrative consequences (e.g., revocation or retirement of allowances) for noncompliance that would be in addition to any civil and criminal enforcement action

- establish recordkeeping and reporting, third-party auditing, and data transparency requirements

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