Our Insights

Upcoming Changes to EPA’s Refrigerant Management Rule

November 15, 2018

By Stephen J. Matzura, Scott A. Gould, and Errin T. McCaulley, Jr., Guest Writers
McNees Wallace & Nurick, LLC

This article was originally published in Currents, POWER’s quarterly Environmental newsletter.

On January 1, 2019, facilities using refrigerants and certain “substitutes” must begin complying with additional refrigerant management requirements, including leak detection standards, imposed by the Environmental Protection Agency (EPA). These requirements have been phased in under EPA’s 2016 final rule (Rule) and the Clean Air Act (CAA). While many requirements are already in effect, and additional requirements are slated to become effective at year-end, there is continued uncertainty. In the face of ongoing litigation, EPA issued a proposed rulemaking that would rescind portions of the Rule. This article briefly addresses some of these developments and key requirements.

Regulatory framework

In 1987, the U.S. signed the Montreal Protocol, an international agreement to regulate (and phase out) ozone-depleting substances. In 1990, the U.S. amended the CAA to include Title VI, which prohibits the ventilation or release of refrigerants, such as from refrigeration equipment or air-conditioning units. Pursuant to CAA Section 608, EPA implemented regulations addressing Class I and II ozone-depleting refrigerants at 40 C.F.R. Part 82, Subpart F. On November 18, 2016, EPA amended these regulations when it issued the Rule, extending regulation to refrigerants known more for their greenhouse gas potential than for ozone depletion (e.g., hydrochlorofluorocarbons [HFCs]).

The Rule expands regulation to non-ozone-depleting refrigerants, known as “substitutes.” Substitutes include numerous refrigerants, including HFCs, that were utilized across industry sectors to comply with earlier prohibitions and phase-outs for ozone-depleting refrigerants to meet the goals of the Montreal Protocol. The Rule does not apply to every substitute, however, as it provides a list of “exempt” substitutes.

Overview of the Rule

The Rule details various requirements for owners, operators, technicians, and others regarding refrigerants and appliances. It may affect anyone handling appliances containing Class I or II substances or non-exempt substitutes. Several provisions are already in effect concerning the technician certification, safe disposal and refrigerant evacuation requirements for substitutes, and recordkeeping. Beginning 2019, more requirements are scheduled to take effect.

The Rule prescribes management practices for three system types: industrial process refrigeration (IPR), commercial refrigeration, and comfort cooling. The heart of the Rule is the leak detection and repair practices for appliances with fifty or more pounds of regulated refrigerant. The Rule lowers the leak threshold rates for each system type. Currently, threshold rates are set at 35% for IPR and commercial refrigeration and 15% for comfort cooling. Beginning 2019, these are reduced to 30% for IPR, 20% for commercial refrigeration, and 10% for comfort cooling. Once a system surpasses its threshold, the Rule imposes a duty to repair the leaking appliances. Owners and operators of appliances must submit reports to EPA for appliances that leak 125% or more of a full charge in a calendar year.

The second set of new requirements addresses leak inspections, which also vary based upon system type. For IPR, appliances must be inspected every three months until leak rate calculations show that the appliances have not surpassed their thresholds for four quarters in a row. Commercial refrigeration and comfort cooling systems must be inspected once per calendar year until the appliances have not surpassed their thresholds for one year. Alternatively, owners and operators may utilize automatic leak detection systems. The Rule should be consulted for technical requirements, as these vary based upon the type of system.

The third notable change concerns recordkeeping. Generally, the Rule expands existing reporting and recordkeeping requirements to appliances containing non-exempt substitutes. These provisions impose a three-year record retention period.

Regulatory outlook

The Rule’s fate remains unclear. In response to litigation in the D.C. Circuit, EPA issued a proposed rulemaking in September 2018. The proposal would rescind those portions of the 2016 Rule that extended leak repair and maintenance requirements to substitutes. Additionally, EPA requested comments on whether the technician certification, evacuation, disposal, and reclamation requirements for substitute refrigerants should also be rescinded. The deadline for comments on the proposal is November 15, 2018. For the time being, however, the Rule remains in effect, and the next compliance date is quickly approaching at year-end.

There is another complicating factor that could impact EPA’s next steps in regulating refrigerants. On October 15, 2016, the U.S. signed the Kigali Amendment to the Montreal Protocol, which requires signatory countries to phase out HFCs over 35 years. The U.S. has yet to ratify the Kigali Amendment, and even if/when it does, EPA would ultimately be responsible for its implementation through additional regulation.

The regulated industry should remain attentive to additional developments and consult professionals who are familiar with these issues.

About the Authors:

Stephen J. Matzura advises industrial, commercial, and municipal clients on a broad range of environmental, health, and safety (“EHS”) issues, including water quality, stormwater, water use, wastewater, waste, hazardous materials and safety, and air quality. He works with clients in various industry sectors, such as energy, oil and gas (including pipelines), manufacturing, food and beverage, metals, construction and land development, auto dealerships, education, and healthcare. Steve helps clients with EHS compliance, permitting, auditing, self-disclosures, and enforcement actions, including addressing issues with environmental agencies, river basin commissions, and the Occupational Safety and Health Administration (“OSHA”). He also advises clients on the environmental implications of business and real estate transactions and litigates environmental matters before courts and administrative hearing boards, including the Pennsylvania Environmental Hearing Board.

Scott A. Gould is Chair of the Environmental Law and Toxic Tort Group, a position he has held since 1998. He is a lawyer based in Harrisburg, PA who focuses his practice entirely in the environmental law and toxic tort areas, and counsel business and industrial clients in all aspects of environmental law compliance. The scope of Scott’s practice includes compliance counseling, permitting, and compliance auditing under all regulatory programs, including water, waste, air, wetlands and encroachments, storage tanks, surface mining, and oil and gas exploration, production, and transportation.

While in school, Errin T. McCaulley, Jr worked at the Penn State Center for Agricultural and Shale Law focusing on food safety and environmental law developments affecting agriculture in Pennsylvania, such as the Food Safety Modernization Act and Clean Water Act. He also interned with the Rural Economic Development Clinic assisting clients with various legal issues including nonprofit formation, guidance concerning the National Flood Insurance Program, and farmland leasing. Errin was a co-founder and active member of Penn State Law’s Second Amendment Law Society, serving as Treasurer from 2016-2018. During his final year of law school, Errin helped organize a public forum to address the challenges facing a local watershed in Centre County.