The ruling conceptually overturns a 2015 EPA proposal by former president Barack Obama’s administration to phase out the use of hydrofluorocarbons (HFCs) in retail food refrigeration HVACR applications.

HFC PHASEOUT TIMELINE

Obama’s HFC phasedown was first proposed in his 2013 Climate Action Plan, which had indicated the EPA would use its authority through the Significant New Alternatives Policy (SNAP) Program of Section 612 to reduce HFC emissions. To that end, in 2015, the EPA issued a rule that restricted manufacturers from making certain products containing 38 HFCs or HFC blends.

Refrigerant manufacturers Mexichem Fluor and Arkema Inc. petitioned the court for a review of the EPA’s 2015 rule in August of 2017. They raised two main arguments: First, the 2015 rule exceeded the EPA’s statutory authority under Section 612, and, second, the EPA’s decision to remove HFCs from the list of safe substitutes in the 2015 rule was arbitrary and capricious because the EPA failed to adequately explain its decision and failed to consider several important aspects of the problem.

The court ruled in favor of the first argument but rejected the arbitrary and capricious arguments.

In October 2017, the Chemours Co. and Honeywell Intl. Inc. filed a petition asking for a rehearing of an appeals court’s decision concerning the HFC phasedown.

At the time of the filing, representatives from Chemours said they believe the legal basis of the rule was well-founded, and the court's ruling exceeded its jurisdiction, effectively invalidating a decades-old EPA regulation and failing to take into account the EPA's original directive to ensure that safer alternatives are used to replace ozone-depleting substances. 

In the filing, Honeywell representatives said the court’s decision ignored the original intent to direct the EPA to replace ozone-depleting substances with the safest alternatives for various uses and undermines the innovation and private sector investment that American businesses have made to create and transition to safer alternative chemicals.

INDUSTRY REACTS

Many in the HVACR industry shared their thoughts and opinions following Judge Kavanaugh’s opinion.

Anthony O’Donovan, regional president, fluorochemicals, Arkema Inc., said the company is gratified by the court’s action.

“Arkema continues to be a strong supporter of reducing HFC emissions, which includes the development and use of low-GWP HFCs and HFOs [hydrofluoroolefins]. We believe that any effort to require use of lower GWP alternatives should be global and should establish an overall cap while giving regulated persons the flexibility to pick the best products for an efficient and safe transition without market disruptions.

“The recently negotiated Kigali Amendment to Montreal Protocol [the Kigali Agreement] can achieve this goal. It creates a clear framework of an international regulation rather than a patchwork of country or region-specific regulations and provides a cap and phasedown for the marketplace,” O’Donovan continued. “Arkema supports the Kigali Agreement and believes the court’s action paves the way for a safe, practical, and efficient transition to the next generation of refrigerants and foam-blowing agents that will benefit our industry and the environment.”

Honeywell representatives stated they are deeply disappointed in the court’s decision not to review the August D.C. Circuit Court of Appeals’ ruling regarding the EPA’s Significant New Alternatives Policy (SNAP) program.

“We believe the court missed an opportunity to reverse its initial decision, which ignored the original intent of SNAP to direct the Environmental Protection Agency to replace ozone-depleting substances with safer alternatives,” said Honeywell in statement. “We are considering an appeal to the Supreme Court to ensure that American companies continue to innovate, manufacture, and commercialize next-generation technologies that are better for human health and the environment.”

Alex Ayers, director of government affairs, Heating, Air-conditioning & Refrigeration Distributors International (HARDI), said the decision will have an impact on what products HARDI members provide to customers. The ruling also brings uncertainty to the timeline for any future potential phaseouts.

“We have already seen a shift in the industry away from HFCs, and that will continue as we expect to see a replacement regulation in the future,” he said. “We plan to work with the EPA to ensure any regulation on the phaseout of HFCs will meet the needs of our members and the requirements of the Kigali Amendment.”

Francis Dietz, vice president of public affairs, Air-Conditioning, Heating, and Refrigeration Institute (AHRI), said AHRI is not surprised by the decision.

“En banc review is a high bar,” he said. “However, this decision in no way alters our industry's commitment to the global phasedown of HFCs, and we are confident that avenues other than Section 612 of the Clean Air Act exist to regulate them in the U.S.”

Glenn Hourahan, ACCA’s senior vice president for technical policy, said ACCA believes the transitions to new refrigerants, including flammable products, must not be done hastily.

“The EPA states that half of all HVAC systems in the U.S. are not installed correctly, and we know this field problem can contribute to refrigerant leaks,” he said. “Professional HVACR contractors recognize addressing installation problems is paramount to safely transitioning to new products, including flammable refrigerants. ACCA encourages the HVACR industry, policy makers, and environmentalists to collectively promote sound installation and maintenance practices that are critical to minimizing refrigerant leaks and for protecting technicians and consumers.”

David Doniger, director of the Natural Resources Defense Council’s (NRDC's) Climate and Clean Air program, issued several tweets addressing the situation: “Disappointing decision today from divided D.C. Circuit not to rehear case on the super climate damaging HFCs. Last year [the] Trump EPA defended Obama EPA's HFC rules, supported by nearly [the] entire industry and environmentalists. HFCs are thousands of times more powerful heat-trapping pollutants than CO₂. Continued growth could cause 0.5°C more warming. Nearly 200 countries agreed in October 2016 to phase them down under Ronald Reagan's Montreal Protocol. Nearly [the] entire industry supports [an] HFC phasedown, as do environmentalists. Bipartisan support even in today's tribal world. Trump administration announced support last November for Obama's amendment to Reagan's treaty — Kigali HFC amendment to Montreal Protocol. Kumbaya? But two companies [Mexichem & Arkema] broke from [the] pack and sued to block limits on HFC uses, called SNAP rules. [A] conservative panel of D.C. Circuit [judges] voted 2-1 against EPA. NRDC, Honeywell, and Chemours asked [for a] full court rehearing. [The] full D.C. Circuit rarely grants [a] rehearing — even less often than Supreme Court takes cases.  Here, [the] D.C. Circuit was divided, but denied rehearing. This isn't over. There's the option to appeal to Supremes. And there are other ways to skin this cat. Ratification of Kigali HFC Amendment, for one. Rest of [the] world [is] going ahead. American industry doesn't want to fall behind. States also ready to act. California [is] ready to adopt the EPA rules at issue and other climate leader states poised to follow. On HFCs, we’re still in.”

ACHR NEWS refrigeration editor, Ron Rajecki, contributed to this article.