Industry groups challenge EPA rule over threat of refrigerant price hikes

HVAC industry groups ACCA, HARDI, and PHCC on Thursday announced that they’ve filed a legal challenge to parts of an EPA rule finalized in late May, arguing that such parts violate the law and threaten to “destabilize the refrigerant market.” 

The backdrop: The 2020 American Innovation and Manufacturing (AIM) Act — which kicked off today’s HFC phasedown — directed the EPA to create an allowance system that limits the amount of HFC refrigerants entering the market, as well as a timeline for phasing them down. 

• It also enabled the agency to issue the Technology Transitions (TT) Rule, which set deadlines after which certain HVAC equipment could no longer be manufactured, imported, or installed, including a January 1, 2026, cutoff for installing most residential and light commercial R-410A systems.

Catch up quick: The EPA’s late-May rule officially removed the January 1, 2026, deadline, allowing existing R-410A inventory to continue to be installed indefinitely; however, it also pushed back — until 2032 — deadlines by which certain commercial refrigeration equipment must transition away from certain high-GWP refrigerants. 

• While the industry applauded the removal of the R-410A deadline, associations warned that allowing older, high-GWP commercial refrigeration equipment to continue to be sold while the associated refrigerants are still being phased down will raise refrigerant prices across the industry, as Homepros previously reported.  

What’s happening: ACCA, HARDI, and PHCC filed a petition for judicial review in the U.S. Court of Appeals for the D.C. Circuit, aiming to have the rule partially vacated.

• The petition rests on two arguments: “First, the AIM Act provides for a one-year waiting period before deadline changes take effect, which puts the [May] rule’s 60-day effective date at odds with the plain meaning of the statute,” ACCA noted. 
• “Second, EPA’s analysis was arbitrary and capricious,” it continued. “[T]he agency never clearly explained how it weighed the AIM Act’s statutory factors or why such a long delay [until 2032] is warranted for technologies it has already deemed acceptable.”

What they’re saying: “The problem is that the AIM Act’s statutory HFC phasedown continues regardless of what EPA does with this rule. Supply keeps declining,” HARDI wrote Thursday. 

• “But by allowing new commercial refrigeration systems to be built on legacy refrigerants, the rule artificially inflates demand and squeezes the entire market, including the residential AC segment,” it added.

State of play: U.S. refrigerant prices are expected to rise between 12 and 24 percent by 2029, according to an EPA analysis. 

What we’re watching: The downstream impacts of the rule’s current form — tighter supply and higher prices — also pose a bigger threat, the associations say: A rushed transition to A3 refrigerants, including propane. 

• While another national refrigerant transition “could be avoided under the prior rule,” ACCA wrote, “some industry experts believe these changes will make a national A3 transition inevitable as soon as 2032. That’s the outcome this petition is meant to head off.”

Looking ahead: A July 27 deadline is in place for other parties to file petitions. Once the deadline passes, “a briefing schedule will be set up,” HARDI’s Alex Ayers told Homepros in an email, enabling the associations to submit written arguments. 

• “Generally, the court will schedule oral arguments after briefing is complete,” he added; however, “there is no deadline for the release of opinions, so it can take a few to several months for the decision to be released. In the last HARDI v. EPA case, [the timeline] from petition to decision was about 19 months.”

The EPA declined to comment.