Extended Producer Responsibility (EPR) Program for Refrigerants
Introduction
Senator Brian Kavanagh and Assemblymember Amy Paulin have introduced bills (S6105B/A10624) that will create extended producer responsibility (EPR) programs for refrigerants and for appliances, including refrigerant-containing appliances. New Yorkers for Cool Refrigerant Management supports both the refrigerant and the appliance portions of this EPR legislation. That said, because refrigerants are such intense greenhouse gases, the need to capture these emissions is urgent, not just because of their global warming potential, but also because the federal AIM Act phasedown of high GWP refrigerants is creating a pinch on the supply of virgin sources for these gases. This leaves reclaimed versions essential to service existing appliances that rely on them.
The need to channel appliances into an effective recycling system is important as well, but less urgently so. If it becomes difficult to pass both portions of this legislation in the 2025 session, we urge openness to dividing the two portions into separate bills with concerted effort made to ensure that at least a refrigerant EPR gets signed into law in 2025. We expect there to be less resistance to this portion, both because of the increasing scarcity of high GWP refrigerants as a result of the AIM Act, and because refrigerant EPRs are successfully in place elsewhere in the world, so the international businesses operating in NY are already experienced with them.
We point out that only 4% of New York's HFC emissions come from appliances with refrigerants, and this seems to be the only link between the two proposed EPR programs. Moreover, refrigerants are commodities that already have an established market for recovering and reclaiming refrigerants, while the appliances need to have facilities established to manage the physical handling of equipment. Thus, the targets are different enough to function better with separate bills. Whether the current legislation continues in its present form or is subsequently amended to create two programs, we compiled the following information because we believe it’s important for legislators and citizens to understand the powerful potential of an EPR for refrigerants.
Please email questions and suggestions for this overview to NY4Cool@gmail.com.
How an Extended Producer Responsibility Plan for Refrigerants Would Benefit New York
Hydrofluorocarbons (HFCs) are potent greenhouse gases that account for 6 percent of New York State’s annual emissions. Fortunately, it is possible to reduce these emissions at low cost, simply by handling them properly. It’s astonishing and exasperating that we have not been more aggressive in preventing these emissions.
HFCs are synthetic chemicals that are hundreds to thousands of times more potent than carbon dioxide on a ton-for-ton basis. For example, a common window air conditioner can have up to 2 pounds of a refrigerant known as R410A. Unless the refrigerant is released to the atmosphere, it does not contribute to heating the climate. But if the refrigerant is vented at the end of the air conditioner’s working life, those two pounds of R410A will have the same greenhouse gas impact as 9,430 pounds of CO2 over the next 20 years (R410A has a 20-year global warming potential of 4715). We can see from the EPA’s Greenhouse Gas Equivalencies Calculator, those 9,430 pounds of CO2e are similar to the emissions of driving the average car more than 10,900 miles, roughly what the average car drives in the course of a full year. When we recognize that a residential central air conditioning system or heat pump may have 10 to 20 pounds of refrigerant and a commercial air conditioning or refrigeration system could have up to 2,500 pounds of refrigerant, it becomes obvious that focusing on ensuring refrigerant is recovered, and not vented, will yield huge climate benefits.
Extended producer responsibility (EPR) programs are an economically efficient way to solve environmental problems without impacting governmental budgets.
An effective extended producer responsibility plan places the financial burdens of managing a product at the end of its life on the companies that profit from selling the product. These companies have the most expertise in handling their products, and they are best positioned to reach recycling or recovery targets at the least cost.
Besides having moral responsibility for the life-cycle impacts of their products, refrigerant producers have technical expertise and networking connections throughout the HVACR industry that give them the best position to establish an extended producer responsibility scheme for refrigerants.
Similarly, appliance manufacturers may be able to efficiently accept and offer rebates or bounties to customers for old appliances at the time they purchase new ones. The manufacturers of central air conditioning, heat pump, and commercial refrigeration systems all have databases with warranty information that will facilitate a return of equipment and recovery of refrigerants when those systems reach end of life.
EPR programs for refrigerants and refrigerant-containing appliances will help New York meet its obligation to reduce greenhouse gas emissions without requiring revenue from the state budget.
The proposed bills require industry participants to meet increasingly demanding targets for refrigerant recovery and appliance recycling rates. The refrigerant recovery rate conforms to the CLCPA Scoping Plan.
Current recovery rates for refrigerants may currently be around 20%, but the proposed legislation requires industry to come up with a plan that would boost the recovery rate to 50%, 75% and 90% by 2031, 2036 and 2041, respectively. Similarly, appliance recycling rates would need to attain: a 30% recycling rate (of which 10% must be closed loop recycling) by 2031; a 50% recycling rate (of which 20% must be closed loop recycling) by 2036; and a 75% recycling rate (of which 40% must be closed loop recycling) by 2041.
Appendix G, Integration Analysis Technical Supplement, of the Scoping Plan explains that a 90% recovery rate is one of the underlying assumptions of all the mitigation scenarios (Section I – Page 58):
HFCs are a potent greenhouse gas but a critical part of the building electrification transition in New York. All mitigation scenarios include maximum adoption of ultra-low-GWP technologies for all building, transportation, industrial HVAC and refrigeration systems and maximum possible service reclaim at product end of life (90% recover (sic) rates).
HFCs are a relatively small part of New York’s greenhouse gas inventory, but focusing on HFCs could help the State reach the goal for 2030 of reducing total emissions by 40% from its 1990 baseline.
New York’s greenhouse gas inventory for 2021 as published at the end of 2023 indicated 21.6 MMT CO2e emissions of HFCs, or 6% of gross greenhouse gas emissions. As of 2021, we were about 125 MMT CO2e away from the 2030 goal of 242 MMT CO2e, which means any emissions reductions from HFC refrigerants would help New York achieve its emissions reduction target.
An EPR for refrigerants would not only reduce emissions of HFCs, but would also reduce emissions of Hydrochlorofluorocarbon (HCFC) and Chlorofluorocarbon (CFC) refrigerants, which are not counted in GHG inventories but are still significant sources of greenhouse gases.
Beyond the portion of the inventory directly attributable to HFC refrigerants, ozone-depleting substances, particularly CFCs and HCFCs, are still in wide use as refrigerants, though they are not counted in the greenhouse gas inventories of New York or other national inventories. The 2022 Summary Report of the NYS Statewide GHG Emissions Report (page 9) explains this exclusion:
“Under the UNFCCC [United Nations Framework Convention on Climate Change], emissions of stratospheric ozone-depleting substances are not reported in national greenhouse gas inventories because they are already controlled under the 1987 Montreal Protocol (IPCC 2006).”
Using data from our national greenhouse gas inventory about CFC and HCFC emissions, we calculated that in 2019, for every 100 MTCO2e of HFC emissions, there were 13 MTCO2e of CFC emissions and 67 MTCO2e of HCFC emissions. Here’s the letter NY4Cool submitted in June 2022 to the Climate Action Council on this point. By also reducing these emissions, an EPR for refrigerants would have broader actual climate benefits than would be recognized in inventories.
Because most HFCs and HCFCs are Short-Lived Climate Pollutants, any reduction of their emissions would have a strong, immediate effect.
In a roadmap published in 2018, the United States Climate Alliance explained the logic behind quickly addressing Short-Lived Climate Pollutants (SLCPs) as a way of averting near-term climate chaos. Just like methane, most refrigerants are significantly stronger greenhouse gases over a 20-year period than over a 100-year period. By taking immediate actions that address SLCPs, we gain space for climate solutions that need longer time frames for implementation.
There is well established technology for recovering and reclaiming used refrigerants, which allows them to be used like new refrigerants.
Ever since the inception of the Montreal Protocol in 1987, there has been an industry for reclaiming refrigerants. Refrigerant reclamation is the process of refurbishing used, recovered refrigerants to virgin purity standard. The reclamation process often involves filtering out impurities from refrigerant, and increasingly, separating refrigerant blends into their constituent chemicals before recombining them to AHRI-700 specifications. These reclaimed chemicals are then tested for purity and resold.
Refrigerant reclaimers are certified by the EPA. The companies in this industry are already doing an outstanding job, and we can reduce our greenhouse gas emissions simply by recovering more refrigerants and ensuring they get to the reclaimers.
If everyone followed the rules and regulations that are already in place for handling refrigerants, we would not need an EPR.
According to Section 608 of the Clean Air Act, nobody is allowed to vent refrigerants when servicing or decommissioning equipment. This applies to technicians who maintain and/or decommission refrigeration or air condition equipment, as well as to scrap metal dealers who handle unwanted consumer appliances, like window air conditioners. The penalties include imprisonment up to 5 years and fines up to tens of thousands of dollars. HVAC technicians can lose their EPA certification for handling refrigerants if they are found to be violating this rule. This web page provides a partial list of EPA enforcement actions under Section 608; not all enforcement actions are listed, but in general they are quite rare.
Challenges associated with recovery of refrigerants by field technicians, and also the scrapper valuing of metals but not refrigerants, has led to poor compliance with these rules and regulations.
The following quote is from “These Aren't Your Father's Reclaim Programs,” ACHR News, November 10, 2023, by Joanna R. Turpin:
Even though it's the law, there are lots of reasons why HVACR contractors and technicians may not recover refrigerant at a job site. Possible reasons include not having the necessary equipment on hand or lacking training on proper recovery procedures - or simply not understanding the regulations requiring refrigerant recovery. The most oft-cited reason for not recovering refrigerant, however, is that it takes too long. Technicians working on tight schedules may feel that the added time needed to recover refrigerant will affect their ability to finish the job quickly and move on to the next one.
There are time, materials, and cost challenges associated with properly recovering refrigerant, all of which have contributed to a cultural disengagement with complying with related rules and regulations. Properly recovering refrigerants in residential settings can add an additional hour or two to a technician’s job, which keeps the technician from moving on to their next client. In today’s HVAC trade, companies bill for the services of a technician at the rate of $50-$125 per hour to cover the cost of the labor plus vehicle and other expenses, so extra time to recover refrigerants also increases the cost to homeowners getting their systems serviced. Furthermore, until the last few years, technicians were required to pay a handling fee (say, $30) for each tank of refrigerant they returned for reclamation, and also could be fined for returning mixed refrigerant, even when they were not responsible for its being mixed. These circumstances were disincentives to return refrigerants.
In a typical day’s work, a technician can service systems with several different refrigerants, so to avoid mixing refrigerants, technicians need to carry a unique recovery tank for each kind of refrigerant they work with, requiring hauling in their work vehicle at least 3 recovery tanks, in addition to tanks of clean refrigerant to use to fill systems. A lack of adequate time or proper tanks or just eagerness to avoid fees could each conspire to reduce compliance with the venting ban. And the fact that refrigerants are colorless and odorless, and that systems leak during normal use, makes it very difficult to notice venting or prove that a lack of recovered refrigerant has been intentional.
Rates of refrigerant recovery from appliances collected by scrap metal jobbers are also low. Jobbers have earned more at recycling centers for disassembled metals than for returning intact appliances, incentivizing the pulling apart of appliances. This practice causes refrigerants to be lost. These workers are usually aware that they can be fined for not recovering the refrigerant, but usually there is no convenient way for them to take the step of recovering the refrigerants before disassembling the appliance and it is nearly impossible for regulators to enforce the law.
Increasing financial incentives for recovery of refrigerants can increase compliance with refrigerant recovery rules.
In 2024, some reclamation companies stopped charging fees for tanks of mixed refrigerants and started paying higher rebates for unmixed refrigerants, even sometimes modest rebates for mixed refrigerants. The change in practice is new enough that some technicians are unaware of the new incentives, but as word spreads, recovery rates will increase. Increasing incentives across the refrigerant reclamation industry and also incentivizing the return of intact appliances is needed to encourage changes in behavior.
The AIM Act grants the EPA expanded powers to regulate HFCs, but it does not grant the authority to incentivize refrigerant recovery or start a nationwide extended producer responsibility program.
The American Innovation and Manufacturing (AIM) Act was enacted at the end of 2020. It authorized the EPA to do many things that would align US regulations with the Kigali Amendment to the Montreal Protocol by phasing down HFC supply and demand, but it did not authorize the EPA to start a nationwide extended producer responsibility scheme. An EPR for refrigerants in New York would not duplicate any federal efforts, and would likely encourage other states to adopt similar measures.
The companies that manufacture refrigerants are multinational corporations that already participate in extended producer responsibility plans throughout the world.
Canada has had a product stewardship scheme known as Refrigerant Management Canada since 2000. The companies that fund this scheme include many that also sell refrigerants in New York: AGas Canada Inc.; Alltemp Products Ltd.; Arkema Canada Inc.; The Chemours Canada Company; Honeywell Limited; and Mexichem Fluor Canada. We believe it’s better late than never for them to start a similar program in New York. Other countries with extended producer responsibility programs include: Australia, Japan, Denmark and Norway.
Refrigerant Reclaim Australia was established in 1993. Not all financial records are available, but in 2019 and 2020 the average annual funding amounted to $US8.8 million of levies, which provided $US2.8 million of bounties to contractors and wholesalers. The population of New York is 28% smaller than the population of Australia, so a similar program in our state would presumably have provided approximately $US6.3 million of levies and $US2.0 million of bounties. If a similar program had been running for the last 30+ years in New York, certainly our recovery rates would be much higher than they currently are.
There is no way to verify whether specific individuals or companies are following the rules and regulations that prohibit venting refrigerants.
Throughout New York, hundreds of HVAC technicians work on HVAC systems every day. There’s no way to monitor that work force closely enough to determine which individuals are taking the shortcut of venting refrigerants when they could be recovering them. The refrigerants are odorless and colorless, and it’s always plausible that a system had leaked and was empty before the technician “tried” to recover any refrigerant. Likewise, when a scrap metal collector acquires an appliance at the end of its useful life, there are countless places where they could vent the refrigerant and never be caught doing this.
The EPA publishes a partial list of its enforcement actions, which includes occasional actions against HVAC companies for venting. But the big picture from these sparse instances of enforcement is that business as usual often means flouting the law.
Many participants in the HVAC industry are culturally opposed to following the conclusions of environmental scientists and EPA regulations.
We are all aware of the culture wars facing American society today. In the HVAC space there are some blue collar workers who have great expertise in handling refrigerants and working with equipment, yet they don’t respect scientific conclusions about climate and environmental matters. They may also tend to believe government regulation of their work is unnecessary. When the owner or manager of an HVAC shop has attitudes like this, the standard practices of all their employees may reflect these cultural attitudes. Beyond the financial headwinds that go against following best practices for handling refrigerants, there are also these cultural currents pushing against them. In the proposed EPR legislation, the producers are required to reach higher and higher rates of recovery, which means they will need to find a way to resolve these issues.
There needs to be a robust funding scheme for destroying refrigerants.
In some circumstances, there are recovered refrigerants that have no marketable future. While they can be stored indefinitely in pressurized tanks, there’s always the potential that they may leak. In order for their climate warming properties to be safely eliminated, such refrigerants need to be destroyed using appropriate technology.
Destroying refrigerants benefits everyone who is subject to climate change, but there is cost involved. In the past, HVAC technicians were charged fees for destruction of refrigerants they recovered, which had a dampening effect on their willingness to recover any refrigerant. Part of the funding received from an EPR should be devoted to funding refrigerant destruction and reducing related financial burdens for everyone in the industry.
While the AIM Act phases down HFC production, market forces are leading to higher prices for refrigerants, which leads to windfall profits for the producers, whose costs do not increase.
Under the AIM Act, the EPA has enacted regulations that phase down HFC production and consumption by reducing the total CO2e of all produced refrigerants over time. Currently, manufacturers are only allowed to produce 60% of the HFCs produced in 2019, and by 2036, only 10% will be allowed. This program follows the pattern used earlier for phasing out HCFCs, and over time incentivizes users to stop using the old refrigerants, which get increasingly expensive, and start adopting replacement refrigerants, which have environmental benefits for society. According to a long-time refrigerant industry observer: “When producers get allowances from the EPA under the AIM Act, it’s like a license to print money.” Some of the windfall profits for these companies could be spent on reducing refrigerant emissions.
A basic environmental principle of fairness is to “make polluters pay” for the damage done by their product. Refrigerant producers are responsible for a significant percentage of greenhouse gas emissions, but will not be obligated to purchase emissions allowances under New York Cap and Invest, nor will they be required to contribute to the proposed Climate Superfund Act.
The current proposal for New York Cap and Invest (NYCI) does not include refrigerant producers among the parties who will be obligated to purchase emission allowances. Nor does the proposed Climate Superfund Act, which focuses on fossil fuel companies. Yet producers of CFCs, HCFCs, and HFCs have collectively made a noticeable contribution to climate change; the chart below from the NOAA Annual Greenhouse Gas Index illustrates how CFCs, HCFCs and HFCs together account for about 10% of all greenhouse gases that are currently in the atmosphere:
After New York enacts an EPR for refrigerants, it will be much easier for surrounding states, all with smaller populations, to follow along. This cost-effective policy for reducing greenhouse gas emissions has the support of the United States Climate Alliance and will appeal to many other states.
Do you have questions or suggestions about this overview of why New York needs an EPR for refrigerants? Please email us and share your thoughts: NY4Cool@gmail.com
