[Federal Register Volume 88, Number 246 (Tuesday, December 26, 2023)]
[Rules and Regulations]
[Pages 88825-88832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28500]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 84
[EPA-HQ-OAR-2021-0643; FRL-11594-02-OAR]
Phasedown of Hydrofluorocarbons: Technology Transitions Program
Residential and Light Commercial Air Conditioning and Heat Pump
Subsector
AGENCY: Environmental Protection Agency (EPA).
ACTION: Interim final rule and request for comments.
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SUMMARY: The U.S. Environmental Protection Agency is amending a
provision of the recently finalized Technology Transitions Program
under the American Innovation and Manufacturing Act (AIM Act). This
action allows one additional year, until January 1, 2026, solely for
the installation of new residential and light commercial air
conditioning and heat pump systems using components manufactured or
imported prior to January 1, 2025. The existing January 1, 2025,
compliance date for the installation of certain residential and light
commercial air conditioning and heat pump systems may result in
significant stranded inventory that was intended for new residential
construction. EPA is promulgating this action to mitigate the potential
for significant stranded inventory in this subsector. In addition, EPA
is clarifying
[[Page 88826]]
that residential ice makers are not included in the household
refrigerator and freezer subsector under the Technology Transitions
Rule and are not subject to the restrictions for that subsector. EPA is
requesting comments on all aspects of this rule.
DATES: This interim final rule is effective on December 26, 2023.
Comments on this rule must be received on or before February 9, 2024.
ADDRESSES: You may send comments, identified by docket identification
number EPA-HQ-OAR-2021-0643, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov
(our preferred method). Follow the online instructions for submitting
comments.
Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Air and Radiation Docket, Mail Code 2822T, 1200 Pennsylvania
Avenue NW, Washington, DC 20460.
Hand Delivery or Courier (by scheduled appointment only):
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution
Avenue NW, Washington, DC 20004. The Docket Center's hours of
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal
Holidays).
Instructions: All submissions received must include the Docket ID
number for this rulemaking. Comments received may be posted without
change to https://www.regulations.gov, including any personal
information provided.
You may find the following suggestions helpful for preparing your
comments: Direct your comments to specific sections of this rulemaking
and note where your comments may apply to future separate actions where
possible; explain your views as clearly as possible; describe any
assumptions that you used; provide any technical information or data
you used that support your views; provide specific examples to
illustrate your concerns; offer alternatives; and, make sure to submit
your comments by the comment period deadline. Please provide any
published studies or raw data supporting your position. Multimedia
submissions (audio, video, etc.) must be accompanied by a written
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (e.g., on the web, cloud, or other file sharing
system).
Do not submit any information you consider to be Confidential
Business Information (CBI) through https://www.regulations.gov. For
submission of confidential comments, please work with the person listed
in the FOR FURTHER INFORMATION CONTACT section. For additional
submission methods, the full EPA public comment policy, information
about CBI or multimedia submissions, and general guidance on making
effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Allison Cain, Stratospheric Protection
Division, Office of Atmospheric Programs (Mail Code 6205A),
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460; telephone number: 202-564-1566; email address:
[email protected]. You may also visit EPA's website at https://www.epa.gov/climate-hfcs-reduction for further information.
SUPPLEMENTARY INFORMATION: EPA is taking this action as an interim
final rule without prior proposal and public comment because EPA finds
that the good cause exemption from the notice and comment rulemaking
requirement of the Administrative Procedure Act (APA), 5 U.S.C. 551 et
seq., applies here.
Subsection (k)(1)(C) of the American Innovation and Manufacturing
Act (AIM Act) provides that Clean Air Act (CAA) sections 113, 114, 304,
and 307 apply to the AIM Act and any regulations EPA promulgates under
the AIM Act as though the AIM Act were part of title VI of the CAA.
However, section 307(d) does not apply to any rule referred to in
subparagraphs (A) or (B) of section 553(b) of the APA. See CAA section
307(d)(1). Section 553(b)(B) of the APA, 5 U.S.C. 553(b)(B), provides
that, when an agency for good cause finds (and incorporates the finding
and a brief statement of reasons therefor in the rule issued) that
notice and comment public procedures are impracticable, unnecessary or
contrary to the public interest, the agency may issue a rule without
providing notice and an opportunity for public comment.
EPA has determined there is good cause for promulgating this rule
without prior proposal and opportunity for comment. After signature of
EPA's October 2023 final rule that established, among other things, a
prohibition beginning on January 1, 2025, of the installation of new
residential and light commercial air conditioning and heat pump systems
using regulated substances with a global warming potential of 700 or
more, stakeholders brought to the Agency's attention that builders
order equipment in this subsector well in advance of installation,
often even before the installation date is known, and that the final
rule's compliance date would potentially strand a significant amount of
inventory. EPA is issuing this rule to address these concerns and to
mitigate the harm that would be caused by unintentionally stranding
inventory as a result of the January 1, 2025, compliance date for the
installation of certain air conditioning and heat pump systems.
Subsection (i)(6) of the AIM Act states that ``[n]o rule under this
subsection may take effect before the date that is 1 year after the
date on which the Administrator promulgates the applicable rule under
this subsection.'' In order to provide relief for entities subject to
the January 1, 2025, compliance date, and in light of subsection
(i)(6)'s one-year delay between promulgation and compliance date, EPA
is taking this rulemaking action prior to January 1, 2024, one year in
advance of the existing compliance date. It is impossible for the
Agency to conclude a notice-and-comment rulemaking to provide this
needed relief by January 1, 2024, and therefore EPA finds that this
impracticability constitutes good cause for dispensing with the
required procedures under 5 U.S.C. 553(b)(B). Nonetheless, EPA is
providing 45 days for submission of public comments following today's
action. EPA will consider all written comments submitted in the
allotted time period to determine if any change is warranted. Because
the rule revisions relieve a restriction and advance notice is not
needed, the rule is effective upon publication.
Throughout this document, whenever ``we,'' ``us,'' ``the Agency,''
or ``our'' is used, we mean EPA. Acronyms that are used in this
rulemaking that may be helpful include:
AC--Air Conditioning
AHRI--Air-Conditioning, Heating, and Refrigeration Institute
AIM Act--American Innovation and Manufacturing Act of 2020
APA--Administrative Procedure Act
CAA--Clean Air Act
EPA--U.S. Environmental Protection Agency
FR--Federal Register
HARDI--Heating, Air-conditioning & Refrigeration Distributors
International
HFC--Hydrofluorocarbon
OEM--Original Equipment Manufacturer
SNAP--Significant New Alternatives Policy
VRF--Variable Refrigerant Flow
I. Executive Summary
A. What is the purpose of this regulatory action?
The U.S. Environmental Protection Agency (EPA) is implementing
provisions of the American Innovation and Manufacturing Act of 2020,
codified
[[Page 88827]]
at 42 U.S.C. 7675 (AIM Act or the Act). Subsection (i) of the Act,
entitled ``Technology Transitions,'' authorizes EPA, by rulemaking, to
restrict the use of regulated substances (used interchangeably with
``HFCs'' in this document) \1\ in sectors or subsectors where the
regulated substances are used.
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\1\ The Act lists 18 saturated HFCs, and by reference any of
their isomers not so listed, that are covered by the statute's
provisions, referred to as ``regulated substances'' under the Act.
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On October 24, 2023, EPA's final rule establishing the Technology
Transitions Program was published in the Federal Register (88 FR 73098,
hereafter ``Technology Transitions Rule''). That rule restricted the
use of higher-GWP HFCs in over 40 subsectors in which they are used. It
also prohibited, among other things, the manufacture and import of
factory-completed products and the installation of certain
refrigeration, air conditioning, and heat pump systems using higher-GWP
HFCs. The compliance dates for these restrictions vary by subsector and
range from January 1, 2025, to January 1, 2028. The rule also
prohibited the sale, distribution, and export of factory-completed
products that do not comply with the relevant restrictions three years
after the prohibition on manufacture and import.
After issuance of the Technology Transitions Rule, manufacturers,
importers, and distributors of residential and light commercial air
conditioning and heat pump equipment informed EPA that the compliance
date for the restriction on installation will result in substantial
stranded inventory in that subsector for residential new construction,
including both single-family and multi-family dwellings, where builders
order heating and cooling equipment well in advance of knowing the
exact date of installation. This rule narrowly addresses the unique
circumstances of that particular subsector to prevent such equipment
from being stranded.
B. What is the summary of this regulatory action?
This interim final rulemaking provides one additional year for the
installation of new residential and light commercial air conditioning
and heat pump systems when using components that were manufactured or
imported before January 1, 2025. Specifically, this rule allows for
pre-2025 condensing units, evaporators, and air handlers using R-410A,
or other regulated substances and blends of regulated substances not
meeting the Technology Transitions Rule's restrictions, to be assembled
into new systems (i.e., installed), so long as those systems are
assembled prior to January 1, 2026.
We also clarify that residential ice makers are not included in the
household refrigerator and freezer subsector and are not subject to the
restrictions for that subsector under the Technology Transitions Rule.
The preamble to the Technology Transitions Rule incorrectly included
them as an example of a product in that subsector.
C. What is the summary of the costs and benefits?
This rule will reduce regulatory burden associated with the
Technology Transitions Program while having a negligible environmental
impact. Original equipment manufacturers (OEMs) have indicated that
collectively, over $1 billion of inventory could go unsold without an
extension of the installation date. Stranding significant amounts of
equipment that does not meet the new restrictions is counter to the
overall approach EPA has taken in the Technology Transitions Rule.
Extending the installation date for these systems will not have an
impact on the benefits modeled in the Technology Transitions Rule
because EPA is limiting the extension to equipment manufactured or
imported before the existing compliance date of January 1, 2025.
II. General Information
A. Does this action apply to me?
You may be potentially affected by this rule if you manufacture,
import, export, sell or otherwise distribute, or install residential
and light commercial air conditioning and heat pump equipment.
Potentially affected categories, by North American Industry
Classification System code, include:
Plumbing, Heating, and Air Conditioning Contractors (238220)
Air Conditioning and Warm Air Heating Equipment and Commercial
and Industrial Refrigeration Equipment Manufacturing (333415)
Major Household Appliance Manufacturing (335220)
Household Appliances, Electric Housewares, and Consumer
Electronics Merchant Wholesalers (423620)
Plumbing and Heating Equipment and Supplies (Hydronics)
Merchant Wholesalers (423720)
Warm Air Heating and Air Conditioning Equipment and Supplies
Merchant Wholesalers (423730)
Appliance Stores, Household-Type (449210)
Appliance Repair and Maintenance (811412)
This list is not intended to be exhaustive, but rather provides a
guide for readers regarding entities that EPA expects could potentially
be affected by this action. Other types of entities not listed could
also be affected. To determine whether your entity may be affected by
this action, you should carefully examine the regulatory text at the
end of this notice. If you have questions regarding the applicability
of this action to a particular entity, consult the person listed in the
FOR FURTHER INFORMATION CONTACT section.
B. What is EPA's authority for taking this action?
On December 27, 2020, the AIM Act was enacted as section 103 in
Division S, Innovation for the Environment, of the Consolidated
Appropriations Act, 2021 (codified at 42 U.S.C. 7675). Subsection
(k)(1)(A) of the AIM Act provides EPA with the authority to promulgate
necessary regulations to carry out EPA's functions under the Act,
including its obligations to ensure that the Act's requirements are
satisfied. Subsection (k)(1)(C) of the AIM Act also provides that CAA
sections 113, 114, 304, and 307 apply to the AIM Act and any
regulations EPA promulgates under the AIM Act as though the AIM Act
were part of title VI of the CAA.
The AIM Act authorizes EPA to address HFCs by providing new
authorities in three main areas: phasing down the production and
consumption of listed HFCs; managing these HFCs and their substitutes;
and facilitating the transition to next-generation technologies by
restricting use of these HFCs in the sector or subsectors in which they
are used. This rulemaking focuses on the third area: the transition to
next-generation technologies by restricting use of these HFCs in the
sector or subsectors in which they are used. Subsection (i) of the AIM
Act, ``Technology Transitions,'' provides that ``the Administrator may
by rule restrict, fully, partially, or on a graduated schedule, the use
of a regulated substance in the sector or subsector in which the
regulated substance is used.'' 42 U.S.C. 7675(i)(1). The Act lists 18
saturated HFCs, and by reference any of their isomers not so listed,
that are covered by the statute's provisions, referred to as
``regulated substances'' under the Act.\2\ (42 U.S.C. 7675(c)(1)).
Through this rule, EPA is amending recently finalized restrictions on
the use
[[Page 88828]]
of certain HFCs in the residential and light commercial air
conditioning and heat pump subsector.
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\2\ As noted previously in this notice, ``regulated substance''
and ``HFC'' are used interchangeably in this notice.
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C. How is EPA considering negotiated rulemaking?
Prior to proposing a rule, subsection (i)(2)(A) of the Act directs
EPA to consider negotiating with stakeholders in the sector or
subsector subject to the potential rule in accordance with negotiated
rulemaking procedures established under subchapter III of chapter 5 of
title 5, United States Code (commonly known as the ``Negotiated
Rulemaking Act of 1990''). If EPA makes a determination to use the
negotiated rulemaking procedures, subsection (i)(2)(B) requires that
EPA, to the extent practicable, give priority to completing that
rulemaking over completing rulemakings under subsection (i) that are
not using that procedure. If EPA does not use the negotiated rulemaking
process, subsection (i)(2)(C) requires the Agency to publish an
explanation of the decision not to use that procedure before
commencement of the rulemaking process.
EPA noted in the final Technology Transitions Rule that, where
appropriate, EPA will consider recent Agency actions and decisions
related to restrictions on the use of HFCs in sectors and subsectors
when considering using negotiated rulemaking procedures. EPA provided
the example of not issuing a separate notice to consider using
negotiated rulemaking for four petitions received after a first round
of petitions had received public notice. EPA's reasoning was that these
petitions were received well ahead of the final action and the
requested restrictions are in the same sectors and subsectors contained
in petitions for which a determination had already been made. EPA
stated that nothing in those four petitions caused EPA to reconsider
that decision and that it was unnecessary for the Agency to reconsider
whether to use negotiated rulemaking procedures.
Upon considering recent Agency action, specifically the Technology
Transitions Rule, today's interim final rulemaking does not merit a
reconsideration of the prior determination not to use negotiated
rulemaking procedures. This rule is a direct and immediate response to
a specific concern arising from the recent agency action to establish a
compliance date for the installation of certain systems within the
residential and light commercial air conditioning and heat pump
subsector. EPA is not addressing a new subsector nor even establishing
a new restriction. Instead, this rule provides targeted relief to
address concerns about stranded inventory in a particular subsector
subject to a recently finalized restriction.
Furthermore, this action has been requested through a November 13,
2023, letter signed jointly by the Air-Conditioning, Heating, and
Refrigeration Institute (AHRI), the Alliance for Responsible
Atmospheric Policy (the Alliance), and Heating, Air-conditioning &
Refrigeration Distributors International (HARDI), which together
represents a majority of the stakeholders in the subsector subject to
the rule.\3\ EPA does not believe that the rule would benefit from the
negotiated rulemaking procedure especially because timeliness is a
concern universally shared by stakeholders in this subsector.
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\3\ This letter can be found in the docket for this interim
final rule at EPA docket number EPA-HQ-OAR-2021-0643.
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III. Final Rule
A. Addressing Stranded Inventory
The November 13, 2023, letter to the EPA from AHRI, the Alliance,
and HARDI requested clarification of the provisions of the rule
regarding two categories of equipment: Residential and Light Commercial
Air Conditioning and Heat Pump Systems and Variable Refrigerant Flow
(VRF) Systems. The letter states that these organizations understand
that components for systems in these two categories manufactured or
imported before January 1, 2025, and January 1, 2026, respectively,
using a regulated substance with a GWP of 700 or more, cannot be
installed as new systems after each such compliance date. 40 CFR
84.54(a)-(c). They note that this would be ``particularly problematic
for residential new construction, including both single-family and
multi-family dwellings, where builders order heating and cooling
equipment well in advance of knowing the exact date of install. Such
equipment is not installed until construction is nearly complete, but
at time of order builders do not know when this date will be.'' The
letter further articulates that allowing the use of components
manufactured or imported prior to the compliance date to be installed
as part of new systems for one year after the compliance date would
provide some relief to the economic and practical burdens.
An important consideration in the final rule was avoiding the
stranding of inventory of existing equipment. This includes systems
that are already installed and operating as well as unsold equipment in
the manufacturing and distribution chain. EPA stated that ``[w]e
recognize that the production and purchase of products or components
that are unable to be sold to consumers is an economic and
environmental outcome no parties desire, and the proposed rule's
forward-looking compliance dates were intended to allow all parties in
the market supply chain sufficient time to avoid that outcome.'' 88 FR
73123. In response to concerns about stranded inventory raised during
the public comment period on the proposed rule, EPA made two
significant adjustments in the final rule.
First, EPA removed the applicability of the rule's use restrictions
to components. EPA explained that components are pieces of equipment
that, unlike factory-completed products, do not function independently
and must be assembled together in the field in order to function for
its intended purpose. Components are replaceable and a faulty component
can be swapped out to avoid replacing an entire system. Recognizing the
ongoing need for servicing and updating previously installed systems,
EPA allowed for the continued manufacture, import, sale, distribution,
offer for sale and distribution, and export of components that rely on
regulated substances, which would not meet the new restrictions.
Components are therefore not subject to the restrictions in the
Technology Transitions Rule, except insofar as those components may not
be installed in new systems on or after the installation compliance
dates.
Second, the rule imposed a date by which factory-completed
products, more narrowly defined as an item that is functional upon
completion of manufacturing, could no longer be distributed, sold, and
offered for sale or distribution, and extended that date in the final
rule. EPA proposed that the ``sell-through'' limitation for such
products would be one year after the compliance date for manufacturing
and importing. The Agency received many comments on this topic,
including from those that considered one year to be insufficient
especially for certain seasonal products. In the final rule, EPA
provided a sell-through for factory-completed products for three years
after the manufacture and import compliance date.
Through these two modifications in the final rule, EPA believed it
had minimized the potential for stranded inventory. Specifically, with
respect to components, the Agency's view was that there would continue
to be a market for components not meeting the GWP limit thresholds for
new systems, because
[[Page 88829]]
those components could continue to enter the market to service existing
systems. However, since the rule's signature, stakeholders representing
the air conditioning and heat pump subsector have raised concerns
indicating that certain aspects of the rule's compliance date structure
may result in unintended stranded inventory. EPA has reevaluated the
specific circumstances for residential and light commercial air
conditioning and heat pumps, and for the reasons articulated below is
extending the installation compliance date for that subsector from
January 1, 2025, to January 1, 2026, when using components that were
manufactured or imported prior to January 1, 2025. In this interim
final rule, the Agency is not considering the January 1, 2026,
installation compliance date applicable to VRF systems; however, EPA
intends to consider VRF systems in a separate notice and comment
action.
EPA has evaluated the planning, purchasing, and installation
timeframes for residential new construction as referenced in the
November 13, 2023, letter from industry stakeholders. We recognize that
it is common in the residential new construction industry for
communities and dwellings to be planned well in advance, including
plans for the heating and cooling systems intended to be installed in
that new construction. Builders of residential new construction may
order those planned heating and cooling systems in concert with the
planning process without knowing when those systems will be installed.
As noted by stakeholders, installation of these systems is often one of
the final steps in residential construction. We acknowledge that it may
therefore be the case that for new residential construction planned to
occur in 2025, builders may have already taken action with respect to
the heating and cooling systems that are planned to be installed in
that new construction. Specifically, for construction occurring during
2025, components of residential and light commercial air conditioning
and heat pump systems may have already been ordered or purchased by
builders, such that leaving the January 1, 2025, installation
compliance date unaltered could result in builders of new residential
construction being left with stranded inventory--residential and light
commercial air conditioning and heat pump components--that could not be
used. In particular, because such equipment may already be well along
the distribution chain, including in the possession of the end-user
builder, it would be challenging to redirect that equipment to another
user who would be in a different segment of the market, such as those
servicing existing systems. As discussed, EPA made changes to the final
Technology Transitions Rule specifically to avoid stranding inventory,
as this outcome is undesirable economically and environmentally, and
the issue addressed in this rule was not brought to the Agency's
attention until after the final rule was signed. This action's
extension of the January 1, 2025, new installation compliance date to
January 1, 2026, for components that were manufactured or imported
prior to January 1, 2025, is intended to avoid stranding those
components in the distribution chain.
We also acknowledge that some areas of the residential and light
commercial air conditioning and heat pump subsector are experiencing
rapid growth. In 2022, sales of heat pumps in the United States
outpaced gas furnaces for the first time ever, following a 50% increase
from 2015 to 2020. For certain technologies with extremely limited
historic use in the United States, such as mini-split and multi-split
systems, the final Technology Transitions Rule's continued allowance of
high-GWP HFCs in components for repair and servicing only may be
insufficient to absorb projected inventory of those components.
Anticipated manufacture and import of mini-split systems, for example,
is much larger than the stock of installed systems that are old enough
to need components for repair or replacement. The nascent and rapid
expansion of certain subsets of the residential and light commercial
air conditioning and heat pump subsector therefore further supports the
extension of the January 1, 2025, compliance date to January 1, 2026,
for installation of components manufactured or imported prior to
January 1, 2025.
B. Limiting the Environmental Impact of This Action
EPA is narrowly tailoring this rule to respond to stakeholder
concerns about stranded inventory in this subsector while maintaining
the environmental benefits of the Technology Transitions Rule. To do
so, EPA is extending the installation compliance date only for new
systems installed from specified components (e.g., condensing units and
indoor evaporators) that were manufactured or imported prior to January
1, 2025. This restriction means that the total number of higher-GWP
systems installed in 2024 and 2025 would match what the Agency modeled
for installation in 2024. The extra year for installation would not
increase demand for HFCs in this subsector but rather could shift some
of the demand from 2024 into 2025.
EPA is not extending the original compliance date for new
installations in this subsector beyond January 1, 2025, when using
components manufactured or imported on or after January 1, 2025. These
components remain subject to the original restrictions of the
Technology Transitions Rule. Specifically, if they contain an HFC with
a GWP of 700 or greater their use is limited to servicing previously
installed systems. As elaborated on more below, all the existing
labeling, reporting, and recordkeeping requirements also continue to
apply to components using, or intended to use, any HFC. Extending the
compliance date for all installations in the subsector by one year is
not warranted based on EPA's prior analysis of the availability of
substitutes within this subsector, as described in the Technology
Transitions Rule and supporting documents in the docket for that rule.
EPA finds that this approach effectively responds to stakeholder
concerns about stranded inventory while remaining protective of the
environment. This approach was suggested by industry stakeholders in
their letter dated November 13, 2023, and it aligns with industry's
plans to transition in this subsector.
This interim final rule provides an additional year for
installation only if all ``specified components'' of that system are
manufactured or imported prior to January 1, 2025. The term ``specified
component'' is defined under the Technology Transitions Rule as
``condensing units, condensers, compressors, evaporator units, and
evaporators.'' Other components of an air conditioning or heat pump
system such as valves or refrigerant piping are not restricted by the
Technology Transitions Rule and can be installed regardless of
manufacture or import date.
C. How do the labeling, recordkeeping, and reporting provisions apply?
The Technology Transitions Rule requires labels on products and
certain components that use HFCs. The labeling requirement takes effect
for each subsector at the same time as the manufacture and import
prohibition for products or the installation prohibition for systems.
This timing reflects the primary purpose of the labels, which is for
assessing compliance of products and systems in sectors and subsectors
with active HFC restrictions.
[[Page 88830]]
This action does not require any specific labeling for components
that are manufactured or imported prior to January 1, 2025. Nameplates
typically include the date that a component is manufactured, which is
sufficient for the purposes of this rule. Furthermore, it would be
impractical to require entities that are not OEMs to relabel components
that are already within the distribution chain.
This action does not change the existing labeling requirements
related to components that are effective January 1, 2025. For specified
components of systems, the Technology Transitions Rule required labels
as of the applicable installation compliance date. This means that for
specified components manufactured or imported on or after January 1,
2025, the final Technology Transition Rule's requirements continue to
apply. These requirements include, among other things, that such
components must be labeled with the statement ``For servicing existing
equipment only.'' This labeling is particularly important to
distinguish components manufactured or imported before January 1, 2025,
from those that are not.
The Technology Transitions Rule established recordkeeping and
reporting requirements for any entity that manufactures or imports
products or specified components that use or are intended to use HFCs
in the sectors and subsectors covered in that rule. The reporting
period for all sectors and subsectors starts on January 1, 2025, and
the first reports must be submitted to the Agency by March 31, 2026.
This action does not add to nor modify the existing reporting and
recordkeeping requirements for specified components. EPA is not
establishing new reporting and recordkeeping requirements related to
the sale or installation of components manufactured or imported prior
to January 1, 2025. Reporting and recordkeeping is still required for
specified components that are manufactured or imported on or after
January 1, 2025.
D. Evaluation of the Subsection (i)(4) Factors
Subsection (i)(4) of the AIM Act directs EPA to factor in, to the
extent practicable and using best available data, various
considerations when carrying out a rulemaking under subsection (i). As
discussed in detail in the preamble to the final Technology Transitions
Rule, EPA views subsection (i)(4)(A) through (D) as providing
overarching direction for setting restrictions under subsection (i). 88
FR at 73129-73141. EPA is not in this rule reconsidering the
interpretations provided in the final Technology Transitions Rule
regarding how it considers the factors laid out in subsection (i)(4).
Nor is the Agency revisiting its analysis of the (i)(4) factors with
respect to the residential and light commercial air conditioning and
heat pump subsector as set forth in the final rule preamble. 88 FR
73177-73180. However, in issuing this narrow adjustment to the January
1, 2025, compliance date for the residential and light commercial air
conditioning and heat pump subsector, we have considered the (i)(4)
factors to the extent practicable, as applicable to the Agency's
adjustment of that compliance date.
The issue being addressed by this interim final rule was brought to
the Agency's attention by stakeholders impacted by the Technology
Transitions Rule. As noted in EPA's discussion of subsection (i)(4)(A),
in addition to information generated by other governing bodies and
agencies, the Agency does also take into account information provided
by industry, environmental organizations, trade associations, and
academia, to name a few. See 88 FR 73129. We acknowledge that in some
cases, regulated entities may be best situated to identify best
available information regarding implementation challenges. We are as
part of this action providing an opportunity for comment and invite
stakeholders who may have information relevant to this action to weigh
in.
With respect to the Agency's evaluation of the availability of
substitutes under subsection (i)(4)(B), EPA previously determined that
substitutes with a GWP less than 700 are available effective January 1,
2025, for the residential and light commercial air conditioning and
heat pump subsector. EPA has not changed that determination and
continues to find that substitutes with a GWP less than 700 will be
available January 1, 2025, across this subsector. Manufacturers and
importers in this subsector are currently making air conditioning and
heat pump systems and components with lower-GWP refrigerants for other
markets and are prepared to meet the January 1, 2025, installation
compliance date for such systems. This action is not reconsidering the
Agency's prior evaluation of the availability of substitutes for
meeting the use restrictions issued in the final Technology Transitions
Rule for this subsector; rather, this action is narrowly tailored to
address the disposition of components manufactured or imported prior to
January 1, 2025.
EPA's action to adjust the installation compliance date for certain
installations within this subsector is motivated in large part by the
policy goal of avoiding stranding inventory where possible. We believe
this goal to be consistent with the direction in subsection (i)(4)(C),
which instructs the Agency to factor in, to the extent practicable,
overall economic costs and environmental impacts, as compared to
historical trends. As discussed in the Technology Transitions Rule, EPA
interprets (i)(4)(C) as purposefully accommodating different types and
degrees of analysis of economic costs and environmental impacts,
including costs and impacts that may be difficult to quantify. The
narrow adjustment made in this interim final rule reduces the potential
to unintentionally strand components. This action will not affect the
overall consumption of HFCs and thus is not anticipated to have
environmental impacts compared to the recently finalized Technology
Transitions Rule. Further discussion of environmental impacts can be
found in Section III.B.
EPA requests comment on the incremental costs and benefits
associated with this action, including avoiding impacts such as
stranded inventory (e.g., number and type of units affected) and on the
incremental impacts to regulated entities regarding compliance (e.g.,
avoiding redistribution of equipment, avoiding revisions or new permits
to replace previously secured building permits).
Finally, subsection (i)(4)(D) directs the Agency to factor in, to
the extent practicable, the remaining phasedown period for regulated
substances under the allowance allocation program. The reduction in the
supply of HFCs is an important factor supporting compliance dates and
GWP limits that are as stringent as feasible under the analysis of all
the (i)(4) factors. EPA finds that this rule will not materially affect
the demand for HFCs because it limits installations to components that
were manufactured or imported prior to January 1, 2025. The effect of
this rule is to extend the installations that EPA modeled to occur in
2024 over the two-year period of 2024 and 2025. EPA does not anticipate
an increase from the total number of installed systems modeled in the
Technology Transitions Rule's Regulatory Impact Assessment Addendum.
Were the Agency to allow for the installation of new systems using
components manufactured or imported through January 1, 2026, for
instance, EPA would then find an effect on the
[[Page 88831]]
number of new systems and increased demand for HFCs.
IV. Other Matters
This interim rule is also providing a clarification regarding the
scope of equipment within the household refrigerators and freezers
subsector. For the reasons discussed below, household ice makers are
not included within that subsector for purposes of the Technology
Transitions Rule.
The proposed Technology Transitions Rule provided a functional
description of the equipment found in each subsector and a non-
exhaustive list of examples. EPA did not list all of the applications
within a particular subsector given the variety of equipment types and
end-uses. The proposed rule listed residential refrigeration systems as
household refrigerators, freezers, and combination refrigerator/
freezers and described the subsector as follows: ``The designs and
refrigeration capacities of equipment vary widely. Household freezers
only offer storage space at freezing temperatures, while household
refrigerators only offer storage space at non-freezing temperatures.
Products with both a refrigerator and freezer in a single unit are most
common. For purposes of this proposed rule, other small refrigerated
household appliances such as chilled kitchen drawers, wine coolers, and
minifridges also fall within this subsector.'' 87 FR 76785.
The final rule incorrectly added ``household ice makers'' to the
list of examples. 88 FR 73173. The functional description of this
subsector in the Technology Transitions Rule remained the same between
proposal and final and was equipment that offers storage space at
freezing and non-freezing temperatures. Residential ice makers merit
additional consideration because they are primarily designed to produce
the ice in addition to providing storage for that ice at freezing
temperatures. The types of ice and processes used to make them may
differ from the other equipment covered by the restrictions for this
subsector and additional analysis of available substitutes for
household ice makers is warranted. As such, EPA does not consider
residential ice makers to be within the scope of the household
refrigerators and freezers subsector or the requirements of the
Technology Transitions Rule.
V. Statutory and Executive Order Review
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action'' under Executive
Order 12866, as amended by Executive Order 14094. Nevertheless, the
Office of Management and Budget waived review of this action. The EPA
prepared an analysis of the potential impacts associated with this
action. This analysis, Regulatory Impact Analysis of the Proposed Waste
Emission Charge, is available in docket EPA-HQ-OAR-2023-0434 to this
rulemaking and is briefly summarized in Section V of this preamble.
B. Paperwork Reduction Act (PRA)
This action does not impose an information collection burden under
the PRA because it does not contain any information collection
activities.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, EPA concludes that the impact of concern for
this rule is any significant adverse economic impact on small entities
and that the agency is certifying that this rule will not have a
significant economic impact on a substantial number of small entities
because the rule relieves regulatory burden on the small entities
subject to the rule. This rule prevents the stranding of components
used to install residential and light commercial air conditioning and
heat pump systems. We have therefore concluded that this action will
relieve regulatory burden for all directly regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any state,
local or tribal governments or the private sector.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments, on the relationship between the Federal government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal government and Indian tribes, as specified in
Executive Order 13175. Thus, Executive Order 13175 does not apply to
this action.
G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that EPA has reason to believe may disproportionately affect children,
per the definition of ``covered regulatory action'' in section 2-202 of
the Executive Order. This action is narrowly tailored to prevent the
stranding of certain air conditioning and heat pump equipment while not
affecting the demand for HFCs. Therefore, this action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk. Since this action does not concern human
health, EPA's Policy on Children's Health also does not apply.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy. This action applies to certain regulated
substances and certain applications containing regulated substances,
none of which are used to supply or distribute energy.
I. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations and
Executive Order 14096: Revitalizing Our Nation's Commitment to
Environmental Justice for All
The EPA believes that this type of action does not concern human
health or environmental conditions and therefore cannot be evaluated
with respect to potentially disproportionate
[[Page 88832]]
and adverse effects on communities with environmental justice concerns.
This action is narrowly tailored to prevent the stranding of inventory
of air conditioning and heat pump equipment while not affecting the
demand for HFCs.
Although this action does not concern human health or environmental
conditions, the EPA identified and addressed environmental justice
concerns within the Technology Transitions Rule (88 FR 73098; October
24, 2023).
K. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. The CRA allows the issuing agency to make a rule
effective sooner than otherwise provided by the CRA if the agency makes
a good cause finding that notice and comment rulemaking procedures are
impracticable, unnecessary or contrary to the public interest (5 U.S.C.
808(2)). The EPA has made a good cause finding for this rule as
discussed in the supplementary information section of the preamble
where this is discussed, including the basis for that finding.
List of Subjects in 40 CFR Part 84
Environmental protection, Administrative practice and procedure,
Air pollution control, Chemicals, Climate change, Emissions, Imports,
Reporting and recordkeeping requirements.
Michael S. Regan,
Administrator.
For the reasons stated in the preamble, EPA amends 40 CFR part 84
as follows:
PART 84--PHASEDOWN OF HYDROFLUOROCARBONS
0
1. The authority citation for part 84 continues to read as follows:
Authority: Pub. L. 116-260, Division S, Sec. 103.
0
2. Amend Sec. 84.54 by revising paragraph (c)(1) as follows:
Sec. 84.54 Restrictions on the use of hydrofluorocarbons.
* * * * *
(c) * * *
(1) Effective January 1, 2025, residential or light commercial air-
conditioning or heat pump systems using a regulated substance, or a
blend containing a regulated substance, with a global warming potential
of 700 or greater, except for variable refrigerant flow air-
conditioning and heat pump systems. New residential and light
commercial air-conditioning and heat pump systems using a regulated
substance, or a blend containing a regulated substance, with a global
warming potential of 700 or greater may be installed prior to January
1, 2026, where all specified components of that system are manufactured
or imported prior to January 1, 2025.
* * * * *
[FR Doc. 2023-28500 Filed 12-22-23; 8:45 am]
BILLING CODE 6560-50-P