Court Scraps EPA Cylinder Rule
Decision is a win for HVACR groups, refrigerant cylinder manufacturer.
INDUSTRY WIN: A federal court on June 20 threw out an Environmental Protection Agency rule that would have required the use of refillable refrigerant cylinders and the use of QR codes to track them. The decision is a win for three HVACR trade organizations and Worthington Industries, which makes the cylinders. COURTESY OF WORTHINGTON INDUSTRIES
A federal appeals court on June 20 struck down an Environmental Protection Agency (EPA) rule that would have banned the use of non-refillable refrigerant cylinders and required reusable cylinders be tracked with the use of QR codes.
The 2-1 decision by a panel of judges at the U.S. Court of Appeals for the District of Columbia Circuit is a win for three HVACR trade organizations and Worthington Industries Inc., the only domestic manufacturer of refrigerant cylinders, all of which had challenged the rule in federal court. Opponents argued that the EPA lacked the authority to mandate the use of refillable cylinders and QR codes, and that the rule would place an undue burden and expense on the HVACR industry.
“We applaud the D.C. Circuit’s decision, which ensures that Worthington can continue to provide American-made, reliable, safe, and affordable cylinders that are critical to the domestic refrigeration industry, while recognizing EPA’s authority to advance our shared goal of phasing out certain potent greenhouse gases,” said Andy Rose, Worthington president and CEO, in a press release. “We encourage EPA to accept the decision and quickly take steps to comply with the Court’s directive.”
The cylinder rule, which was to take effect in 2025, was part of the EPA’s plan for phasing down the use of HFC refrigerants, greenhouse gases that contribute to global warming. The EPA had relied on the American Innovation and Manufacturing (AIM) Act of 2020, which authorized an HFC phasedown, as its authority for making the rule.
However, two of the three judges on the D.C. Circuit panel that heard the case agreed with the plaintiffs.
“The EPA has not identified a statute authorizing its QR-code and refillable-cylinder regulations,” wrote Judge Justin R. Walker in the majority opinion. “We therefore vacate those parts of the Phasedown Rule and remand to the agency.”
Judge Karen Lecraft Henderson concurred with Walker, while Judge Cornelia T.L. Pillard dissented.
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“The rule under review falls squarely within EPA’s congressionally delegated authority: The agency determined that, to accomplish the HFC phasedown, it was necessary to require refillable cylinders with unique, trackable QR codes, so it promulgated a final rule to that effect,” wrote Pillard.
The EPA had issued the cylinder tracking system part of the rule as a way of guarding against the smuggling of HFC refrigerants as their permitted quantities are reduced during the phasedown.
Asked for a reaction, the EPA issued a statement saying only that the agency was reviewing the decision.
Like Worthington’s Rose, Alex Ayers, director of government affairs at the Heating, Air-Conditioning & Refrigeration Distributors International (HARDI), praised the ruling.
“HARDI is happy to see the court agree that the EPA exceeded its authority in banning non-refillable cylinders and requiring the tracking of every cylinder used at consumers’ homes and businesses,” Ayers said in a prepared statement. “HARDI and the entire HVACR industry remain supportive of the HFC phasedown, and we look forward to continuing to work with the EPA in achieving the goals of the AIM Act.”
The EPA has been “diligently working” to implement regulations to guide an HFC phasedown, but “with the speed of these regulations comes bad ideas that will damage our members,” Ayers wrote.
“We continue to fight back with all of our available resources to stop these bad ideas from being implemented,” he continued.
With HARDI, the Plumbing-Heating-Cooling Contractors-National Association (PHCC) and ACCA were also plaintiffs in the case.
“With this big win, contractors will not have to wastefully spend money on new equipment when there is already an option available that works with their current setup,” said Barton James, ACCA president and CEO.
“PHCC appreciates the thoughtfulness of the ruling from the D.C. Circuit and is thankful for the recognition of the rule’s regulatory burden that would ultimately have been paid by consumers,” said Chuck White, the PHCC vice president of regulatory affairs.
In another facet of the decision, all three judges rejected arguments by chemical manufacturer Choice Refrigerants that the EPA lacks the authority to regulate HFCs within refrigerant blends, and that Congress was wrong to give the agency the power to set HFC allowances under its cap-and-trade program, part of the HFC phasedown.
“Choice Refrigerants is disappointed that the appeals court did not directly address the fundamental problem of Congress giving EPA life-and-death power over entire industries through undefined cap-and-trade programs,” said Choice president and owner Ken Ponder when asked for a reaction.
But, Ponder added, the company is encouraged that the judges suggested an appeals process in the Clean Air Act, under which Choice had filed its suit, is poorly designed. The company is reviewing its legal options, Ponder said.
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