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NGA - National Grocers Association

05/07/2021 | News release | Distributed by Public on 05/07/2021 13:24

HFC Phase Down: What You Need to Know About the EPA’s New Refrigerant Rule

Background:
The U.S. Environmental Protection Agency (EPA) has proposed a rule to phase down the production and import of a refrigerant known as hydrofluorocarbons (HFCs) by 85 percent over a 16-year period. The proposed rule stems from legislation passed by a bipartisan majority on Capitol Hill and signed by former President Donald Trump last December. While the rule has not been officially published, it is likely to impact most grocers.

The EPA plans to determine a baseline for HFC production and consumption, and then set limits on companies making and importing HFCs which would become stricter over time. NGA awaits the final rule text and will advocate for financially realistic refrigerant regulations for independent community grocers - who survive on 1-2 percent net profit margins - when the public comment period opens.

What are HFCs?
Hydrofluorocarbons (HFCs) are a greenhouse gas used in commercial refrigerants and air conditioning systems and many grocery stores use these chemicals to chill their perishable foods. Unfortunately, HFCs have what climate scientists refer to as high global warming potential (GWP), meaning they are easily trapped in the earth's atmosphere and are prone to leak through cracks in refrigeration systems. Once in the atmosphere, HFCs trap heat and accelerate climate change.

What's Next?
The proposed rule would set annual allocations that gradually decline for each HFC producer and importer in the US. HFC replacements, like HFOs, are likely to remain more expensive in the short term but eventually the rule change will accelerate demand and reduce prices - all good news for grocers looking to eliminate HFCs from their stores.

Also, refrigerants generally need to be replaced only when there is a leak or faulty system. As currently proposed, the new rule would cut HFC production and imports by 85 percent, leaving enough HFCs on the market to service old equipment even under the new regulatory regime.

However, it is important for the independent grocery sector to lead on this issue as the rule is here to stay. NGA is committed to advocating for smart policies to make the transition easy and cost effective for community grocers. There are several potential transition models on the state level that could be replicated in some form on the national stage.

Delaware is one such state that has a generous incentive program to assist with HFC transition. Known as the 'Cool Switch Program', the state offers participants grants for replacing existing refrigerants with low GWP refrigerants or installing new systems that use low GWP refrigerants. This includes paying HFC users $25 per ton of avoided emissions. Delaware also offers funding from their Energy Efficiency Investment Fund to complement Cool Switch Program grant funding.

While we await the publication of the final text of the proposed rule, NGA is working with other industries affected by the HFC phase-out to advocate for federal policies to best assist independent grocers comply with the proposed regulation. If you have any questions or comments regarding the HFC phase out, please contact Terence Huie at [email protected].