Washington & Vermont Latest States to Regulate HFCs

US State leadership is keeping the HFC transition on track, and keeping the U.S. in sync with the global phase-down now underway under the Kigali Amendment. This past month, Washington State’s HFC phase down passed the legislature and Governor Jay Inslee signed bill HB 1112. Meanwhile, Vermont has announced that they are intending to phase down HFC refrigerants as well through their new bill ‘S. 30.’ The bill passed the legislature and is expected to have a signature from the governor soon. This adds to the ever growing list of states that have chosen to regulate HFCs.

So far all of these state planned phase downs have been modeled after the original Environmental Protection Agency’s SNAP Rule 20 and 21 from 2015. Vermont and Washington, along with twenty-three other states, are part of what’s known as the United States Climate Alliance. This alliance was formed when the Trump Administration pulled the United States out of the Paris Climate Accord. The goal of the alliance is to create a coalition of states that work together to fight Climate Change and Global Warming. If the Federal Government isn’t going to do anything then the states will get it done and regulate HFCs themselves. The other states in the Climate Alliance are all expected to follow suit in the coming years.

The Federal Government’s positions on regulating HFCs has been confusing for the industry. The EPA’s SNAP Rule was thrown out by the courts. The Kigali Amendment went into effect at the beginning of this year but the United States never ratified the treaty. As more states join the phase down, manufacturing companies are going to be forced to move away from HFCs even without a Federal mandate. If enough states choose to regulate HFCs then manufacturers will either have to produce two different models,one for HFC states and one for non-HFC states, or the they will have to do a complete transition to lower GWP refrigerants.

The bottom line is that HFCs are going to be replaced by either natural refrigerants, hydrocarbons, or HFOs. If the U.S. government doesn’t ratify the Kigali amendment and/or the EPA doesn’t take charge of HFC’s, the U.S. may end up with a haphazard set of rules varying from state to state leading to even more refrigerant confusion.

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It’s Time for the US to Ratify the Kigali Amendment

Time is running out! The US must make a decision on a key climate agreement that aims to reduce emissions of global warming-causing HFC’s. Industry leaders are doing what they can to convince Trump that ratifying the Kigali Amendment will create American jobs and benefit the US as a whole.

Trump’s decision will create one of two scenarios. If he chooses to ratify, the U.S. can remain a world innovator in HVACR technology. In this scenario, the US will continue the path to a low-GWP future by allowing  manufacturers to create sustainable, efficient equipment, and contractors will continue to install world-leading technology.

The alternative is not to ratify the Kigali Amendment. This creates a future where the U.S. gets out of step with the rest of the global market. In this scenario, U.S. manufacturers have to serve a domestic market with one type of equipment and the growing global market with another. Even worse, as we are already seeing, some states will decide to forger ahead on their own, creating multiple mini-markets that are impossible to satisfy. Smaller U.S. manufacturers will disappear and larger ones will lose much of their share of the global market.

A new report from AHRI and the Alliance for Responsible Atmospheric Policy, whose members include large US companies like Dow and Carrier, argues that the deal will “strengthen America’s exports and weaken the market for imported products”.

“Without Kigali ratification, growth opportunities will be lost along with the jobs to support that growth, the trade deficit will grow, and the US share of global export markets will decline,” the report says.

The report estimates the US would gain a total of 33,000 additional jobs by 2027 and 12.5 billion in annual economic output solely because of ratifying the deal. The report also states that US exports of products using refrigerants—such as HVACR equipment—are projected to fall as a share of the global market unless the Kigali Amendment is ratified. If it is, the US share of the global market will increase from 7.2 to 9.0%, helping reduce the overall trade deficit.

The amendment, already signed by 31 countries, will go into international force on January 1, 2019. In order to ratify, the US requires 67 Senate votes after the administration sends it to the upper chamber for their consideration. The result will impact all parts of the HVACR delivery channel: manufacturers, wholesalers, contractors, and users.

Now is the time to ratify. In the U.S., some states, such as California, are already transitioning to new, low-GWP technologies. Internationally, developing countries are quickly moving away from HCFCs. These countries, representing more than $1 trillion in HVACR sales in the next decade, are looking to see how their future technology needs can be met. In order to stay competitive in international markets, the US must ratify the Kigali Amendment now.

If the US does not follow the Kigali Amendment, they will quickly find themselves out of sync with the rest of the developed world. The US would be unable to sell equipment even into Canada, as it would not meet their evolving standards. States like California and others, who are following their own rules to move away from HFCs, would look elsewhere for the equipment they need. Either that, or U.S. manufacturers would have the complicated challenge of supplying equipment for those states moving ahead with a phasedown and a different line of equipment for all others.

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HVACR Refrigerant News: The Future of HFC’s and the Kigali Amendment

The US refrigerant industry is once again in the dark as to the future of HFC’s. Last month, the D.C. Circuit Court denied to rehear its decision made earlier this year on HFC bans in the case Mexichem Fluor, Inc., v. EPA.  By denying the petition the court upheld its ruling: no EPA ban of HFC’s under Section 612.  Perhaps this ruling wouldn’t be a big deal if the US had ratified the Kigali Amendment. However, as revealed at a forum hosted by the Hudson Institute, President Trump is still undecided as to whether he will support the Kigali Amendment.

Next Moves

Honeywell has said it is turning to the US Supreme Court to push for a judicial review of the ruling. They are disappointed that the US Federal Appeals Court refused to order an en banc review of the earlier decision made by three judges.

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) said it was not surprised by the court’s decision.

“En banc review is a high bar,” said Francis Dietz, vice president, public affairs, AHRI. “This decision in no way alters our industry’s commitment to the global phase down of HFCs and we are confident that avenues other than Section 612 of the Clean Air Act exist to regulate them in the United States.” If by ‘avenues other than section 612’ he means the Kigali Amendment, he might want to think again.

George David Banks, White House international energy and environment advisor, spoke at an event at the Hudson Institute on Monday, February 5 stating “The president wants to make sure that any international environment agreement does not harm U.S. workers. If the president does decide to support Kigali … it will largely be because he wants to create U.S. jobs.”

The D.C. Court ruling against the EPA ban of HFC’s has the potential to affect implementation of the Kigali Amendment, should it be ratified. Because the court has decided to let the original decision stand, the ruling will go into effect immediately, SNAP Rules 20 and 21 will be vacated, and enforceable implementation of the Kigali Amendment may need another path for the regulation of HFCs in the United States.

Future of HFC’s

Regardless of this ruling, HFCs are unlikely to experience a new surge in popularity. The transition from HFCs in favor of safer solutions such as HFOs that reduce the greenhouse gas impact of refrigerants, aerosols, solvents, and blowing agents is already well underway. California, for example, is implementing a program to reduce HFC emissions 40 percent by 2030, and has already begun to adopt phase out requirements for some applications covered by SNAP.

AHRI has been researching alternative refrigerants since 2011 through their Low-GWP Alternative Refrigerants Evaluation Program. The final phase of the research program is flammable or mildly flammable low-global warming potential (low-GWP) refrigerants that are under consideration to replace those currently in use. The program is jointly funded at $5.6 million by AHRI, ASHRAE, the California Air Resources Board, and DOE.

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2018 Regulatory Priorities Released by HVACR Industry Alliance

The HVACR Industry Alliance announced its 2018 regulatory priorities at the Alliance’s quarterly meeting in Arlington, Virginia, on Dec. 14, 2017. The plan is to extend and build upon the Industry Consensus Agenda that was adopted and presented to the incoming Trump administration on Jan. 6, 2017.

 

The HVACR Alliance top 6 regulatory priorities for 2018 are:

•           Utilizing industry consensus standards
•           Tax reform and incentives
•           Energy Policy and Conservation Act (EPCA) reform
•           Refrigerants and ratifying the Kigali amendment
•           Energy-efficient and quality HVACR installations
•           Workforce development programs

Moving forward

Alliance members plan to meet on a regular basis with leaders of the Trump administration, members of Congress, and regulatory agencies throughout 2018. This will ensure their regulatory priorities wish list remains a top priority amongst policy makers.

“Alliance members had a tremendous impact on federal policies in 2017 because we were united and worked together where we have common policy goals,” said Paul T. Stalknecht, chairman, HVACR Industry Alliance. “The new tax reform law contains several priorities that many alliance members focused on, such as expensing of HVAC equipment for business owners, better tax rates for business owners, and reforms to the estate tax. Several alliance members also shared numerous workforce development initiatives with the Trump administration, such as the national focus on increasing the number of apprenticeship programs. We look forward to continued success as the alliance focuses on quality installation programs, refrigerant policies, and reforming the Energy Policy and Conservation Act in 2018.”

Who are the HVACR Industry Alliance?

Ten years ago, the HVACR Industry Alliance was formed to act as the “unified voice of the North American heating, ventilation, air-conditioning, and refrigeration industry.”

“Our mission is to have an open and frank discussion within the HVACR industry association community on matters of importance and seek consensus positions whenever possible,” said Paul Stalknecht, president and CEO, ACCA, and HVACR Industry Alliance chairman. “At times, we are in 100 percent agreement; other times, we may have only a few members in agreement. When we are 100 percent united, we act accordingly and issue statements advocating the united position of the entire HVACR industry.”

The HVACR Industry Alliance is comprised of: the Sheet Metal and Air Conditioning Contractors National Association; Air Conditioning Contractors of America; Air-Conditioning, Heating & Refrigeration Institute; Air Movement and Control Association InternationalASHRAE; Heating, Air-conditioning & Refrigeration Distributors International; Heating, Refrigeration and Air-Conditioning Institute; National Air Filtration Association; North American Technician  Excellence; Plumbing, Heating and Cooling Contractors-National Association; and the Refrigeration Service Engineers Society.

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Montreal Protocol 30th Anniversary Meeting & the Ratification of the Kigali Amendment

Last month, the Canadian Minister of Environment and Climate Change, Catherine McKenna, welcomed colleagues from around the world for the 30th anniversary of the Montreal Protocol, and to celebrate the historic ratification of the Kigali Amendment by over 20 countries.

The Montreal Protocol is a landmark treaty credited with saving the ozone layer and preventing even greater global warming by phasing out most emissions from ozone-destroying substances. Unfortunately, HFC’s, the product designated as a suitable alternative coolant, has a warming potential of hundreds, even thousands of times greater than carbon dioxide. What’s worrying about these substances, is that as the greenhouse effect heats up the world, demand for air conditioners will rise. If the world doesn’t change the technology used to cool ourselves, we are in danger of cooking the planet and creating a vicious cycle.

Created in 2016, the Kigali Amendment addressed the climate impact of chemicals used in fridges and air conditioners. It aims to set a phasedown path for HFCs and is estimated that it will prevent up to 0.5 degrees Celsius in global warming above pre-industrial levels by the end of the century. As of last month, 22 countries had ratified the agreement and so it will come into force on January 1st 2019. However, universal ratification by all countries is needed for the impact to be felt around the world.

A key part of the agreement is a fund to assist in financing the transition in poorer countries to help them catch up with the latest technology. Developing countries will receive $540 million to speed up the phase out in the places that need it most and where the greatest benefit to the global climate can be delivered.

Canada’s Minister of Environment and Climate Change Catherine McKenna said: “The Montreal Protocol is an example of how we can come together, that we can do what naysayers think is impossible, that we can heal our planet.”

During the meeting, the countries requested the Technology and Economic Assessment Panel of the Montreal Protocol evaluate the options for enhancing energy efficiency of appliances and equipment in the refrigeration and air-conditioning industry while phasing down HFCs under the Kigali Amendment.

They also requested regular updates on the safety standards relevant to the use of flammable low-global warming potential alternatives to HFCs. This is crucial for ensuring the safe market introduction, manufacturing, operation, maintenance and handling of low GWP refrigerants that are used in many sectors.

The Kigali deal establishes a clear HFC phase-down schedule. The HVAC&R sector must now deliver the technology solutions – including natural refrigerant-based equipment – that will help achieve the Kigali targets. For now, contractors can continue their installation and maintenance work as before but will need to make sure their technicians have the information they need to install new equipment safely while using alternative refrigerants.

Quick Facts

·         To date, the Montreal Protocol has phased out almost 100 of the most ozone-depleting substances; it reduced emissions equivalent to over 135 billion tons of carbon dioxide; and it continues to help the recovery of the hole in the Earth’s protective ozone layer.

·         Here is a list of countries that have ratified the amendment.

·         As the most successful international environmental agreement, the Montreal Protocol  has eliminated over 99 percent of substances that were thinning the Earth’s protective ozone layer.

·         Canada published new regulations that will reduce its annual consumption of hydrofluorocarbons by 85 percent, by 2036. HFCs are powerful greenhouse gases used in commercial, industrial, and residential applications such as refrigeration, air-conditioning, foam insulation, and aerosols.

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