Happy New Year! And welcome to the first stage of the HFC phasedown as mandated by the American Innovation and Manufacturing (AIM) Act. As of January 1, 2022, the production of HFC refrigerants, such as R-410A and R-404A, has been reduced by 10%, which will probably not have a significant effect on the HVACR industry. However, a steep cut comes in 2024, when production must be reduced to 60% of the baseline established by the Environmental Protection Agency (EPA). Everyone in the HVACR industry is going to feel the pain from that reduction.

So why are we phasing down an HFC such as R-410A, which has proven to be a reliable alternative to R-22? The reason HCFC refrigerants such as R-22 were phased out as of January 1, 2020 was because they were found to be damaging the ozone layer. While HFCs such as R-410A and R-404A don’t damage the ozone layer, they are considered to be contributing to global warming, which is why entities ranging from states to industry associations to environmental groups are calling for a reduction in their use.

California started the HFC phasedown trend a few years ago and was ultimately joined by about 20 other states. Then in December 2020, Congress passed the AIM Act, which gave the EPA the authority to phase down HFCs to 15% of their baseline levels by 2036. EPA recently delivered its final rule, which established those HFC production and consumption baselines, as well as outlined the phasedown schedule. EPA subsequently released the 2022 allowances for companies that produce and/or import HFCs in the U.S and also announced that it had granted multiple petitions that seek to further restrict the use of HFCs in air conditioning and refrigeration equipment.

These petitions are worth keeping an eye on, as they come from environmental groups, as well as those in the HVACR industry, who, among other things, seek to ban the use of R-410A in new residential and commercial air conditioning equipment starting January 1, 2025. That date aligns with California’s regulations, which require a 750 GWP limit for new air conditioning equipment starting in 2025, while VRF system manufacturers have until 2026 in order to comply with the new limit.

Granting these petitions is not the end of the process, as EPA now has two years to propose and finalize rulemakings addressing these petitions. After consulting with stakeholders, EPA expects its “forthcoming rules will provide a clear regulatory landscape that will help the transition” to low-GWP alternatives. It is important to note that if the petitions are accepted as is, then in just three short years, new R-410A air conditioners and heat pumps could no longer be legally manufactured (R-410A will still be available, either as virgin or reclaimed, to service existing equipment).

While many believe this transition will go as smoothly as the last one, there are some major differences between the two. To start, unlike the last transition, which moved from one non-flammable refrigerant (R-22) to another (R-410A), the two low-GWP alternatives currently under consideration to replace R-410A in air conditioning equipment – R-454B and R-32 – are mildly flammable (A2L). With the exception of a few states, most building codes do not allow the installation of comfort cooling equipment containing A2L refrigerants. Industry experts are hopeful that the next international building code update — which will be available in 2024 — will include the use of A2L refrigerants.

Until then, cooling equipment containing A2Ls will likely not be widely available in the marketplace, which means technicians will have little time to become comfortable with the new technology before EPA’s potential 2025 ban on R-410A in new equipment. This would also be very different than the last transition, as R-410A equipment was readily available for more than a decade before January 1, 2010, which is when R-22 equipment could no longer be manufactured (although the dry ship loophole extended that date for awhile).

Finally, unlike the last transition, technicians need to be trained on how to properly install and service systems containing A2L refrigerants, which takes time. While several entities are offering training — including ACCA and ESCO Group — some contractors are holding off until the dust settles on the EPA guidelines and/or the brands they carry make a decision about which A2L refrigerant they are going to use.

The bottom line is that the HFC phasedown has begun, and the industry will ultimately transition to air conditioning equipment that contains something other than R-410A. Hopefully the phasedown will follow the relatively smooth transition experienced last time, but there are obviously some concerns. In fact, to see how things could potentially go sideways, just look at Europe, whose phasedown resulted in a 1000% increase in the cost of HFCs, as well as a thriving black market for illegally imported refrigerants. Let’s hope that doesn’t happen here.