HCFC Allowance System

EPA developed a marketable allowance system to help the United States phase out its production and consumption of hydrochlorofluorocarbonshydrochlorofluorocarbonsCompounds containing hydrogen, fluorine, chlorine, and carbon atoms. Although ozone depleting substances, they are less potent at destroying stratospheric ozone than chlorofluorocarbons (CFCs). They have been introduced as temporary replacements for CFCs and are also greenhouse gases. See ozone depleting substance. (HCFCs), as agreed to under the Montreal Protocol. The allowance system provides flexibility for industry to operate efficiently while ensuring the United States meets its agreements under the Montreal Protocol.

Producers and importers are allocated HCFC allowances based on historical production and import activity. Allowances can be traded between producers and importers. A company expends one allowance for each kilogram of HCFC it produces or imports. If a producer or importer expends its allowances to make HCFCs and then exports those HCFCs, the producer or importer may request additional allowances equal to the amount exported. The system aims to balance the global output of HCFCs.

HCFC Allowance Allocations

EPA has allocated annual allowances for HCFC production, import, and export several times since the system was established in 2003. These allowance allocations have allowed the United States to over-comply with its commitments under the Montreal Protocol's HCFC phaseout schedule. The most recent allowance allocation rule, published in 2019, finalized HCFC allocations for 2020 through 2029.

• Final HCFC Allocation Rule for 2020-2029
• Final Rule 2020 HCFC Allocation Fact Sheet

Persons Holding Allowances for Class II Substances

Persons that hold baseline allowances to produce and/or import HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 are listed in 40 CFR 82.19. The table below lists these persons as of October 2014.