Phasedown of Hydrofluorocarbons (HFCs): Issuing Allowance Allocations for 2024

On this page:

• Background
• Issuance of 2024 HFC Allowances

Background

What is the AIM Act?

The American Innovation and Manufacturing (AIM) Act was enacted on December 27, 2020. The AIM Act directs the U.S. Environmental Protection Agency (EPA) to address HFCs. Specifically, the AIM Act directs EPA to phase down production and consumption^[1] of HFCs to 15% of their baseline levels in a stepwise manner by 2036 through an allowance allocation and trading program. 

How do Allowances Work?

EPA uses an allowance as the unit of measure that controls production and consumption. EPA will issue allowances that will be valid between January 1 and December 31 of a given year, known as a “calendar-year allowance.” A calendar-year allowance represents the privilege granted to an entity to produce or import regulated substances in that year.

Entities will need to expend allowances in order to produce or import bulk HFCs. Producing HFCs will require expending both production allowances and consumption allowances. Importing HFCs will require expending only consumption allowances. A third category of allowances called “application-specific allowances” can be used to either produce or import HFCs for use in the six applications listed in the AIM Act.

EPA has developed a calculator to help allowance holders understand how allowances translate to quantities of various HFCs they intend to produce or import.

• HFC Allowance Calculator (xlsx) (103.41 KB)

Under the HFC Allocation Framework Rule, EPA can issue administrative consequences for activities including, but not limited to, submitting false, inaccurate, or misleading information; importing HFCs without expending the requisite number of allowances; and failing to report required information. Under these provisions (see 40 CFR 84.35), EPA may retire, revoke, or withhold the allocation of HFC allowances or ban a company from receiving future allowances.

Issuance of 2024 HFC Allowances

How do Entities Receive Allowances for 2024?

EPA issued allowances to entities that produced and/or imported HFCs in 2021 or 2022, or both 2021 and 2022, based on the three highest years of production or consumption between 2011-2019. EPA has also issued allowances to entities that were previously allocated allowances as new market entrants on March 31, 2022. EPA also issued “application-specific allowances” directly to the entities that operate within the six applications listed in the AIM Act. These entities will be able to confer their allowances to producers or importers to acquire needed HFCs.

EPA signed "Phasedown of Hydrofluorocarbons: Notice of 2024 Allowance Allocations for Production and Consumption of Regulated Substances under the American Innovation and Manufacturing Act of 2020," on September 29, 2023, to provide notice in the Federal Register of EPA’s allocation of calendar year 2024 allowances. When the notice is published in the Federal Register, the link will be updated.

• Federal Register link to HFC Allowance Allocations for 2024
• Overview of Allowances and Exchange Values (pdf) (171.22 KB)
• Prior year allocations

How Did the Administrative Consequences Affect the Number of Allowances Available?

EPA finalized a number of independent administrative consequences effective September 29, 2023 (see the full list of finalized administrative consequences). These are final agency actions subject to judicial review. In some instances, EPA revoked calendar year 2024 consumption allowances; when the Agency revokes an allowance, it is taken back from an allowance holder and redistributed to all other allowance holders. EPA redistributed consumption allowances that were revoked to consumption allowance holders that were not subject to a final administrative consequence effective September 29, 2023, or had an administrative consequence solely withholding allowances.

Accordingly, the Agency is also announcing the number of available consumption allowances as of September 29, 2023, for all eligible consumption allowance holders due to finalized administrative consequences. More information is also available in the Federal Register Notice to announce EPA’s issuance of calendar year 2024 allowances.

Application-specific Allowance Allocations for 2024

The figure and table below illustrate the application-specific allowances allocated to each entity for 2024. In the figure, click on an application (i.e., inner slice) to view all entities allocated allowances for that application along with their respective allowances. Click the inner circle again to return to the full figure. Hover over any slice to view the allowances allocated for that entity or application.

Distribution of Application-specific HFC Allowances for 2024

Application-specific HFC Allowances for 2024

Consumption Allowance Allocations for 2024

The figures and table below illustrate the consumption allowances allocated to each entity for 2024. The first figure shows allowances for entities receiving greater than 0.5% of all consumption allowances and aggregates those entities receiving fewer than 0.5% of all consumption allowances. The second figure shows allowances for entities receiving less than 0.5% of all consumption allowances (i.e., those aggregated in the first figure). In the figures, hover over an entity (i.e., slice) to view its allowances. In the legend, double click on an entity to show only that entity in the pie chart. Click on an entity in the legend to hide it from the pie chart, and click it again to add it back.

Distribution of HFC Consumption Allowances for 2024, with Entities Receiving <0.5% Aggregated

Distribution of HFC Consumption Allowances for 2024, Showing Only Entities Receiving <0.5%

HFC Consumption Allowances for 2024

¹ These values account for administrative consequences for certain entities that are effective on September 29, 2023. Additional details can be found in the Federal Register notice and on EPA’s administrative consequences webpage.
² Updated to reflect allocation of previously withheld allowances to Matheson Tri-Gas, Air Liquide USA, and Creative Solution, effective January 25, 2024.
³ Updated to reflect finalized administrative consequences for Tulstar Products and USSC Acquisition Corp effective March 31, 2024, and ChemPenn effective June 6, 2024.
⁴ For more details, see Application-specific Allowances allocated under 40 CFR 84.13.

Production Allowance Allocations for 2024

The figure and table below illustrate the production allowances allocated to each entity for 2024. In the figure, hover over an entity (i.e., slice) to view its allowances. In the legend, double click on an entity to show only that entity in the pie chart. Click on an entity in the legend to hide it from the pie chart, and click it again to add it back.

Distribution of HFC Production Allowances for 2024

HFC Production Allowances for 2024

¹ For more details, see Application-specific Allowances allocated under 40 CFR 84.13.