The regulatory landscape for the HVACR industry is shifting rapidly, driven by evolving political priorities and regulatory agendas in Washington, D.C. Speaking at the recent International Institute of All-Natural Refrigeration (IIAR) conference in Phoenix, Arizona, Lowell Randal, senior vice president of government and legal affairs at the Global Cold Chain Alliance and president of The Randel Group in Alexandria, Virginia, provided a comprehensive outlook at the quickly evolving regulatory environment.
The fast-paced shift in regulatory priorities is being propelled by the 2024 election results, which saw Donald Trump win the presidency and Republicans win the House and Senate. As a result, Trump believes he’s been given a mandate from the American people to overhaul the way business is conducted in Washington, said Randal. He likened the pace of regulatory change to a “Fast and the Furious” movie scenario, where influential figures like Trump and Tesla CEO Elon Musk are racing to reshape the nation’s approach to governance.
“I feel like right now, Trump and Musk are on the road in some of those hot rods trying to race through the next year or two of working to make changes in how we do business as a government,” said Randal.
To that end, the Trump administration is implementing its agenda through hundreds of executive orders aimed at prioritizing U.S. interests over international agreements, noted Randal. This includes reversing former President Biden’s climate change initiatives and regulatory burdens, as well as deprioritizing or eliminating environmental justice, DEI, and foreign assistance programs, and focusing on deregulation.
EVOLVING REGULATIONS: At the IIAR Conference, Lowell Randal provided a comprehensive outlook at the regulatory environment. (Staff photo)
The Trump administration essentially believes that deregulation can unleash prosperity, paving the way to increased efficiency.
“Trump says he’s going to decrease how government is dictating what you do,” said Randal. “To do that, there was an immediate pause in rulemaking, which almost every new administration does when it comes into office. They will review the Biden-era rules that are in the pipeline, and most of those will be put to the side. As for new regulations, Trump is pursuing a 10-to-1 deregulation/new regulation ratio, so every one new regulation must be accompanied by 10 deregulatory actions.”
It is also important to note that government agencies will be evaluated on whether their regulations result in a net cost reduction, with the White House Office of Management and Budget annually assessing whether agencies like the EPA are reducing regulatory costs, said Randal. Demonstrating cost reduction is a priority, which could present opportunities for certain industries.
RMP Rollback?
One of those opportunities is the reconsideration of the risk management program (RMP), which requires facilities handling certain chemicals like ammonia to register with the EPA and submit a risk management plan in case of a leak. Under Biden, many new provisions were added to the RMP, said Randal, including:
- Incorporate natural hazards and facility siting into process hazard analysis (PHA);
- Provide backup power to release monitoring equipment;
- Third-party audits after a reportable incident;
- Root cause analysis after reportable incident;
- Enhanced employee participation;
- Enhanced community notifications and information availability;
- Field exercises every 10 years; and
- May 2027 compliance date for most provisions.
“My gut tells me that there is a very realistic opportunity to have this new administration take a hard look at the Biden-era RMP rule, and potentially go through a rulemaking process: proposed rule, notice, and comment, the whole process, because that’s what would be required,” said Randal.
Even if federal enforcement reduces or rolls back certain federal activities, states may step in to fill the void, said Randal.
“There are 22 states that have state plans, which can be stricter than federal regulations. If they feel like the federal side is getting too lax, they’re going to ratchet things up. So it wouldn’t surprise me if you see California say, ‘OK, they’re backing away, we’re going to lean in.’”
More Actions
While there has been no indication that the Trump administration will withdraw from the Montreal Protocol and/or Kigali Agreement, there are some efforts to rescind parts of the AIM Act, said Randal. To do that, Congress can use the Congressional Review Act (CRA) to nullify regulations finalized within the last 60 legislative days of a previous congressional session.
“A CRA was put forward by Representative Dunn from Florida and Senator Marshall from Kansas, and it would go after the management of certain HFCs and substitutes under the AIM Act of 2020,” said Randal. “It’s the latest of the AIM Act rules that deals with leaks, leak detection, ventilation, and management of refrigerants, but it wouldn’t touch the core framework of the Technology Transitions rule.” He added that this CRA has support from grocers who believe the leak and ventilation provisions are cost-prohibitive.
Trump is also aggressively using tariffs as a policy tool, said Randal, imposing stiff tariffs on Canada and Mexico. The stated justification for these tariffs is that those countries are not doing enough to secure their borders or curb the flow of fentanyl into the U.S. China and most other countries around the world have also received tariffs, with many announcing retaliatory measures.
“This is an unsettled situation, and more is to come, and reciprocal tariffs are on the docket,” said Randal. “The President has warned that U.S. agriculture should be ready, because we’re going to be tariffing more food and agriculture imports. … Eventually we’ll come to a new equilibrium, but what that looks like, nobody knows. It’s going to be a bumpy road.”