Updated: EPA Reconsiders Refrigerant Rule

U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin announced that the agency will undertake 31 actions as part of a significant day of deregulation aimed at advancing President Trump’s Day One executive orders and supporting economic recovery efforts.

One of the actions directly affecting the HVACR industry is the reconsideration of the Technology Transition rule, which Zeldin states, “forces companies to use certain technologies that increased costs on food at grocery stores and semiconductor manufacturing.”

The Technology Transition final rule, part of the AIM Act, was released by EPA in October 2023 (and revised in December 2023) and restricts the use of higher-GWP HFCs in new refrigeration, air conditioning, and heat pump (RACHP) equipment. For stationary air conditioning and heat pumps, the rule set a 700 GWP limit for most new comfort cooling equipment, including chillers, effective January 1, 2025.

The final rule effectively ended the production of most comfort cooling systems that use the high-GWP refrigerant R-410A. Since HVAC manufacturers have already transitioned their comfort cooling systems to A2L refrigerants like R-32 and R-454B, a return to R-410A is highly unlikely.

Reconsideration could potentially impact the timeline for equipment used in supermarkets and convenience stores, as the final rule imposes a GWP limit of 150 or 300 for most new commercial refrigeration systems, with compliance deadlines between 2026 and 2028. Several trade groups, including FMI – The Food Industry Association, filed a lawsuit challenging the final rule, arguing that the timeline for supermarket refrigeration equipment violated the AIM Act and was arbitrary and capricious, meaning the Agency failed to adequately consider key factors when developing the timelines.

“The EPA has agreed to reconsider the Technology Transitions Rule to allow EPA time to review the incredible burdens placed on the food industry and its unrealistically tight implementation timelines,” said Leslie Sarasin, president and CEO of FMI. “We thank EPA Administrator Lee Zeldin and President Trump for recognizing the need to reduce the regulatory burden on businesses and the cost of living for consumers. A thorough evaluation of the rule in its current form is critical to preventing grocery stores across the country from paying billions in unnecessary refrigeration premiums that would have further driven up food prices. A balanced approach will provide retail stores with much-needed assurance given the implementation challenges due to lack of available technology, installers, and other factors.”

The National Grocers Association (NGA), a trade association representing independent grocers and wholesale distributors, also welcomed the EPA’s reconsideration of the Technology Transition rule. According to Chris Jones, chief government relations officer at NGA, “Reducing unnecessary regulations, particularly those that impose significant financial and administrative burdens, is a crucial step toward leveling the playing field for independent grocers who are less equipped to deal with costly new compliance requirements.”

In a press release, NGA added that reconsidering the rule, “will provide much sought-after relief for independent supermarkets by:

• Rolling back burdensome restrictions on the manufacture, import, sale, and use of products that use higher-GWP HFCs; and
• Eliminating the requirement that low-GWP HFC refrigerants be used in the retail grocery sector.”

Reconsideration

Not everyone agrees that reconsideration will result in anything as dramatic as exempting a single subsector – such as supermarket refrigeration — from the transition to low-GWP refrigerants. In a blog, Alex Ayers, vice president of government affairs at HARDI, writes that EPA’s latest action only addresses a petition filed in June 2024 by HARDI, AHRI, and the Alliance for Responsible Atmospheric Policy. The petition asked the EPA to “limit future manufacturing of outdoor condensing units to prevent future market manipulation through imports of R-410A outdoor units far into the future.”

In an email, Ayers added that, “it’s important to note that EPA is using a regulatory term of art when it says reconsideration, it is answering petitions that have requested specific changes to the regulation, not large scale reconsideration of the overall rule.”

AHRI agreed that the reconsideration applies to the aforementioned petition and “does not materially change current expectations regarding EPA’s approach to the [Technology Transitions] rule.”

In its March 13 update, AHRI noted that “Any additional changes made through reconsideration must follow a rulemaking process. Under subsection (i) of the AIM Act, a revised [Technology Transitions] rule could not take effect until one year after the final rule is published. Therefore, even if the EPA initiated changes to the [Technology Transitions] rule or other regulations affected by [this] announcement, those changes would take considerable time to be implemented…Until the EPA provides further specifics, this announcement does not alter our near-term expectations for the [Technology Transitions] rule.”

It’s also important to note that the AIM Act does not preempt state laws or regulations, allowing individual states to implement more stringent HFC rules. As a result, EPA’s reconsideration of the Technology Transition rule may not affect states like California, Washington, and New York, which have already adopted stricter refrigerant regulations.

While the term “reconsideration” appears open to interpretation, Zeldin enthusiastically praised the EPA’s regulatory announcement, stating, “Today is the greatest day of deregulation our nation has seen. We are driving a dagger straight into the heart of the climate change religion to drive down cost of living for American families, unleash American energy, bring auto jobs back to the U.S. and more.” 

This article will be updated as new information becomes available.