Federal Court Restores Some HFC Regulations

Yesterday a Federal Court of Appeals ruled against the Environmental Protection Agency. This is a bit different then what we have seen over the past few years. In previous rulings the courts have been ruling against the Obama Era regulations and policies. This time though the court’s ruling struck down a rule made by the EPA during the Trump Administration. The court restored a prohibition on switching from ozone depleting substances to HFCs in uses such as large refrigeration systems in supermarkets.

In other words, lets say you have a supermarket that is running an old HCFC R-22 system. It needs to be replaced and soon before a major failure occurs. During the Obama EPA and up until a few years ago you would NOT be able to replace your R-22 system with a high Global Warming Potential HFC refrigerant as this was seen as harmful to the environment. Instead business owners had to work with more climate friendly refrigerants such as R-744, R-717, hydrocarbons, and the newer HFO lines from Honeywell and Chemours. These refrigerants had a low GWP number and had no Ozone Depletion Potential.

As most of you know, in 2017 a federal court ruled against the EPA’s suggested HFC phase down plan. The plan, known as SNAP Rules 20 and 21 aimed at phasing down high GWP HFC refrigerants such as R-404A and R-134a. About a year after this ruling the Trump Administration’s EPA announced that they would be rescinding all HFC regulations in response to the previous year’s court ruling. We also just saw another ruling by the EPA similar to this a few months ago when they announced they were removing the HFC leak regulations. (Article can be found here on this.)

In reference to today’s court decision, the EPA’s actions in 2018 allowed business owners to move their R-22 HCFC system over to an R-404A HFC system. This is what the court restored yesterday. The courts ruled that the EPA acted illegally in 2018 when it vacated this particular rule. The reason for their ruling was that the EPA did not allow for a notice and a comment period on their 2018 announcement to rescind the HFC regulations.

The case itself was pushed shortly after the EPA’s announcement in 2018. It was brought by the National Resource Defense Council (NRDC) and a collection of states with New York leading the way.  Obviously, I have not ready every page of the documents but I was able to pull some excerpts from the document itself as well as from some of the key players.

The Mexichem court struck down (or, “vacated”) only part of the HFC rule. It upheld and left in place other parts of the rule. But the Administrator lifted the entire HFC rule – even the parts the court approved. And he did it with no rulemaking. No proposal, no opportunity to comment. This is doubly unlawful. ” – Lissa Lynch from NRDC

Another quote, this time from the court ruling document itself:

Notice and comment rule making is a central part of the administrative framework set forth in the APA and the Clean Air Act. When an agency issues a legislative rule by exercising its delegated authority to establish new obligations with the force of law, it must follow these procedures. In the 2018 Guidance, however, EPA simply interpreted the immediate and necessary consequences of our decision in Mexichem and left rewriting the regulatory framework for future notice and comment rulemaking. Because the 2018 Guidance advised the public of the EPA’s interpretation of legal obligations created by this court, it was an interpretive rule properly issued without notice and comment procedures. I respectfully dissent.” – Source

One more quote this time going into what the EPA did in 2018 and how it did not require comments or follow proper procedures:

In 2015, EPA issued a regulation disallowing the use of HFCs as a substitute for ozone-depleting substances. That rule was challenged in our court in Mexichem Fluor, Inc. v. EPA, 866 F.3d 451 (D.C. Cir. 2017). We determined that EPA could validly forbid current users of ozone-depleting substances from switching to HFCs. But we also concluded that EPA lacked authority to force users who had already switched to HFCs to make a second switch to a different substitute. We thus vacated the rule in part and remanded to the agency.

On remand, even though we had sustained EPA’s bar against use of HFCs with regard to entities who were still using ozone-depleting substances, the agency decided to implement our decision by suspending the rule’s listing of HFCs as unsafe substitutes in its entirety, meaning that even current users of ozone-depleting substances can now shift to HFCs. And EPA did so without going through notice-and-comment procedures.” – Official Court Document Source


So, what does all this mean? In the short term it means that business owners can no longer move their older CFC or HCFC systems over to HFC refrigerants. They will be forced to go with a lower GWP alternative. In the long term though it is quite uncertain. I was expecting a string of rulings in favor of the Environmental Protection Agency and the Trump Administration. I’m not advocating for that… it just the way the wind has been blowing lately.

Who knows though, maybe the winds have changed and we may begin to see a tighter grip on HFCs at a federal level.