The U.S. Chamber of Commerce, the National Resource Defense Council, and multiple HVAC industry associations have long shared one wish: an organized, federally approved phasedown plan for HFC refrigerants. The AIM Act, written to do exactly that, muddled its way through hearings and other legislative limbo for over a year with no success.
So it might have felt like a holiday miracle for all involved when the House and Senate included the AIM Act’s language in the appropriations/COVID relief legislation passed by Congress on Dec. 21.
“We are gratified that negotiators included this bipartisan, jobs-promoting language in the Omnibus bill, and we are grateful to the Senate and House champions who worked so hard to see it accomplished, and to the House and Senate for passing the bill,” said AHRI President and CEO Stephen Yurek, who noted that the industry has worked toward this goal for more than a decade.
Marty Durbin, senior vice president of policy at the U.S. Chamber of Commerce, called the passage “truly historic — setting up the biggest action Congress has ever taken to address climate change, and the first energy bill in 13 years.
“Over the last few years,” he said, “we found a great deal of cynicism that a bill like this could actually get done. But passage of this bill will prove that there is common ground on which all sides of the debate can come together to begin to address climate change, promote American technological leadership, and foster continued economic growth.”
The previous most recent sighting of the AIM Act was as a bipartisan amendment to an energy bill that stalled last fall. That version is largely what will take effect as a result of this law.
The EPA will administer an 85% phasedown of HFC production and consumption of a 15-year timeframe. The bill is intended to allow consumers with HFC-based equipment to continue to use that equipment as they wish through its normal useful life. The Act ensures a continuing supply of HFC in largely non-HVAC applications where replacements will not do.
For the HVAC market, it authorizes the EPA to administer standards for HFC-related service and maintenance intended to both serve the environment and preserve more of the existing HFC supply via improved reclaim and reuse.
The international course toward phasing out HFCs has been settled ever since the 2016 passage of the Kigali Amendment to the Montreal Protocol on ozone-related policy. The lack of supporting ratification on the federal level led to individual states creating their own HFC laws and phasedown requirements.
That evolving patchwork of restrictions represented looming logistical and planning disaster for HVAC manufacturers who faced not only a significant refrigerant transition but the prospect of a host of equipment regulation instead of a single national plan.
In that context, one remaining key question was whether a final version would contain a federal preemption clause. That would allow the federal law to supersede existing state laws and remove a state's option to enact even stricter standards if it wished.
The final version does not include preemption for HVAC uses, only for select non-HVAC uses.
"ACCA's Chris Czarnecki posted that "ACCA is disappointed that HVAC uses were not included for preemption. We are hopeful, though, that the federal phasedown schedule established by the AIM Act will discourage individual states from moving forward" with their own HFC-related requirements and schedules.
Trucks, Service Calls, and More
While the AIM Act formalizes the gradual exit of the bulk of HFC use, it will also give the green light to the adoption of the next wave of refrigerants. At the forefront is the category of A2L mildly flammable options that have more of a track record elsewhere but are new to many uses in the U.S.
Previous ACHR NEWS coverage of what this transition and adoption may mean for HVAC contractors and technicians includes:
- A2L Refrigerant Integration and Its Impact on HVACR Service Calls
- The Burning Issues Involving A2L Refrigerants
- Understanding A2L Refrigerants for Air Conditioners (sponsored)
- A2L Refrigerants: Coming Soon to a Truck Near You
- Code Updates for Ammonia and A2L Refrigerants
On Dec. 17, ACCA announced its new A2L refrigerant training materials for contractors, delivered as an online course and digital workbook. ACCA has served with AHRI and other stakeholders on the safe refrigerant transition task force that contributed professional input toward the AIM Act’s contents before it was first introduced in Congress.
Tax Credits, Too
Supporters of a comprehensive HFC phasedown strategy were not the only ones to unwrap the large end-of-year bill and find some good news. The Energy Efficiency Property Tax Credit for geothermal heat pumps was also nestled into the legislation.
Geothermal tax credits have had an on-again, off-again existence over the last several years, but it appears they will be on again for a while. Once law, the current residential credit of 26% of total installation cost will extend for two more years. It will drop to 22% for 2023 before expiring in 2024, pending any further legislation.
On the commercial side, the Investment Tax Credit will maintain its current 10% level through 2023, according to the Geothermal Exchange Organization (GEO)
Doug Dougherty, president of GEO, said, “We are pleased that Congress was able to pull together and provide relief for struggling businesses and families in this extraordinary year. After the loss of the credits in 2017, it has been a long climb back, and the pandemic had major disruptions and impacts for geothermal professionals across the country. This extension provides the certainty we need to continue our efforts to promote geothermal heat pumps and advance the market.”
Of additional interest to contractors, the bill made room to address the Section 179D Energy Efficient Commercial Buildings deduction, granting it permanent status. Congress also extended its residential cousin, the Section 25C tax credits, offering up to 10% credit of $500 maximum credit for qualifying energy-efficient upgrades, through the end of 2021.