Regulatory Actions for Allowance Allocation and Reporting
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This final rule establishes the methodology for allocating HFC production and consumption allowances starting with calendar year 2024 allowances. Through this rulemaking, EPA will continue applying a similar methodology to allocate production and consumption allowances for calendar years 2024 through 2028 as the Agency did in the Framework Rule for calendar years 2022 and 2023. EPA also amended the consumption baseline to reflect corrected data submitted to the Agency and made other adjustments to the HFC phasedown implementation, compliance, and enforcement provisions. EPA will start using the approach established through this rulemaking to issue calendar year 2024 allowances by October 1, 2023.
Additional information on the final rule:
- Federal Register link to the HFC Allocation Rule for 2024 and Later Years
- Fact Sheet (pdf)
- Regulatory Impact Analysis Addendum
- Frequently Asked Questions About the HFC Phasedown Program
- Press Release
This rule amended the production baseline and associated phasedown schedule to reflect corrected data; specifically, EPA adjusted the baseline from 382,554,619 metric tons of exchange value equivalent (MTEVe) to 382,535,439 MTEVe to reflect additional destruction and transformation of HFCs that occurred during 2011–2013. This corrected production baseline begins applying to allowance allocations for calendar year 2024.
Final Rule - Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program under the AIM Act
This final rule is the first regulation under the AIM Act to address HFCs, which are potent greenhouse gases commonly used in refrigerators, air conditioners, and other applications. This final rule sets the HFC production and consumption baseline levels from which reductions will be made, establishes an initial methodology for allocating and trading HFC allowances for 2022 and 2023, and creates a robust, agile, and innovative compliance and enforcement system.
Update: In June 2023, the U.S. Appeals Court for the District of Columbia Circuit found that the EPA had not cited adequate authority for the QR code container tracking and refillable cylinder regulations in the 2021 HFC Allocation Framework Rule and thus vacated and remanded certain provisions of the rule to the agency. EPA is acting consistent with the decision and is not implementing or enforcing those provisions at 40 CFR 84.5(h), 40 CFR 84.23, and related auditing provisions in 40 CFR 84.33. EPA intends to undertake a rulemaking to formally remove these requirements from the Code of Federal Regulations. Separately, EPA has proposed requirements related to recovery of refrigerant from disposable cylinders and container tracking in the recent Emissions Reduction and Reclamation rule proposed under subsection (h) of the AIM Act.
Information on the final rule and allowance allocations can be found below.
- Federal Register link to HFC Allocation Final Rule
- HFC Allocation Final Rule Fact Sheet (pdf) (252.6 KB)
- HFC Allocation Final Rule FAQ
- Press Release on HFC Allocation Final Rule
- Regulatory Impact Analysis for Phasing Down Production and Consumption of Hydrofluorocarbons (HFCs) (pdf) (7.4 MB)
- Market Characterizations (updated 9/23/2021)
- Overview of Application-Specific Program Fact Sheet (pdf) (198.05 KB)
- Overview of Set-aside Allowances under the AIM Act (pdf) (149.35 KB)
- Overview of Allowances and Exchange Values (pdf) (171.22 KB)
- Overview of Requirements for Importers of Hydrofluorocarbons (HFCs) (pdf) (378.5 KB)
- Overview of Requirements for HFC Fire Suppressant Recyclers (pdf) (312.5 KB)