Enforcement of the American Innovation and Manufacturing Act of 2020

Hydrofluorocarbons (HFCs) are a class of potent greenhouse gases commonly used in refrigeration and air conditioning, aerosols, and foam products. Their climate impact can be hundreds to thousands of times greater than carbon dioxide. The American Innovation and Manufacturing (AIM) Act, enacted by Congress in 2020, authorizes EPA to phase down the production and consumption of HFCs by 85 percent in a stepwise manner by 2036 through an allowance allocation and trading program. The AIM Act also directs EPA to maximize reclamation of HFCs, minimize releases of HFCs from equipment, and facilitate the transition to next-generation technologies to replace HFCs.

The HFC Allocation Rule (40 C.F.R. Part 84) implements the congressional directive to phase down HFCs. It prohibits, starting on January 1, 2022, any person from importing “bulk regulated substances, except [b]y expending, at the time of import, consumption or application-specific allowance in a quantity equal to the exchange value weighted equivalent of the regulated substances imported . . . .” 40 C.F.R. § 84.5(b). In order to protect the program’s integrity, ensure mandated reductions of HFCs, and maintain a level playing field for regulated companies, EPA pursues entities that seek to import or produce HFCs without the required allowances, that submit false or misleading information, or that fail to report required information under the AIM Act and its implementing regulations.  Learn more about the AIM Act.

Tips

If you have information about violations of the AIM Act and its implementing regulations, please report it: https://echo.epa.gov/report-environmental-violations.

Enforcement

• Clean Venture Inc. (pdf) (614.17 KB)  (Expedited Settlement Agreement)
• Conformatic Corporation (pdf) (446.63 KB)  (Notice of Violation)
• Hanwha Cimarron LLC (pdf) (2.16 MB)  (Expedited Settlement Agreement)
• Highwood International, LLC (pdf) (235.16 KB)  (Notice of Violation)
• HVAC Services (pdf) (202.26 KB)  (Notice of Violation)
• HVAC Services (pdf) (399.89 KB)  (Consent Agreement and Final Order)
• Liferafts Incorporated of P.R. (pdf) (2.66 MB)  (Expedited Settlement Agreement)
• Little Leaf Farms, LLC (pdf) (457.29 KB)  (Expedited Settlement Agreement)
• Max Henry Group, dba Quantum Technology (pdf) (335.02 KB)  (Notice of Violation)
• Oldach Associates LLC (pdf) (204.72 KB)  (Notice of Violation)
• Open Mountain Energy LLC (pdf) (202.69 KB)  (Notice of Violation)
• Open Mountain Energy, LLC (pdf) (535.51 KB)  (Consent Agreement and Final Order)
• Parker Engineering and Mechanical Inc (pdf) (7.89 MB)  (Expedited Settlement Agreement)
• Phoenix Fire Systems, LLC (pdf) (363.86 KB)  (Notice of Violation)
• Resonac America, Inc. (pdf) (325.46 KB)  (Consent Agreement and Final Order)
• Sigma Air LLC (pdf) (1.15 MB)  (Expedited Settlement Agreement)

Applicable Enforcement Policies and Information

• Expedited Settlement Agreement Pilot for the HFC Allocation Regulation Import Enforcement Program (pdf) (468.84 KB)
• Extension of the Expedited Settlement Agreement Pilot for the Hydrofluorocarbon Allocation Regulation Import Enforcement Program (pdf) (204.15 KB)

EPA has established an expedited settlement agreement (ESA) pilot program for certain violations of the HFC Allocation Rule. Cases that meet certain criteria – violations of 40 C.F.R. § 84.5(b) that are easily detected and easily corrected, by a first-time violator, with harm that can be fully remediated, and a civil penalty of no more than $100,000, among other requirements – may be eligible for the ESA pilot program, which is intended to allow expedited resolution of claims and utilizes a standardized consent agreement and final order to resolve each case. These cases are an exception to the penalty policies described further below.

• Interim Penalty Policy Applicable To Certain Illegal Imports Of Bulk Regulated Substances Under 40 C.F.R. Part 84: Phasedown Of Hydrofluorocarbons, Appendix XII to the October 25, 1991 Clean Air Act Stationary Source Penalty Policy (pdf) (445.75 KB)

EPA calculates civil penalties for settlement purposes in cases involving violations of the HFC Allocation Rule at 40 CFR Part 84 by using the framework described in its Interim Penalty Policy Applicable to Certain Illegal Imports of Bulk Regulated Substances Under 40 CFR Part 84: Phasedown of Hydrofluorocarbons, Appendix XII to the October 25, 1991, Clean Air Act Stationary Source Penalty Policy.  

• Memo Designating HFC Program as Nationally Managed Program (pdf) (162.04 KB)

The EPA designated enforcement work associated with the AIM Act to be managed by the national Office of Enforcement and Compliance Assurance (OECA) until at least January 1, 2024, when it will re-evaluate the designation. This includes enforcement of the HFC regulations under 40 C.F.R. Part 84 and the greenhouse gas reporting requirements under 40 C.F.R. Part 98.