EPA Hydrofluorocarbon Rule Will Impact Builders, but Deadline May Be Extended

In a move potentially benefiting single-family and multifamily builders alike, the U.S. Environmental Protection Agency (EPA) recently announced it is considering delaying the effective date of a final rule seeking to reduce overall U.S. greenhouse gas (GHGs) emissions.

The rule would restrict the use of hydrofluorocarbon (HFCs) chemicals within products and equipment used across a number of industry sectors, including aerosols; foam insulation and packing materials; commercial refrigeration units; and commercial and residential (e.g., single-family and multifamily) heating, ventilation, and air conditioning (HVAC) systems, including heat-pumps.

EPA’s final rule seeks to reduce overall GHG emissions by requiring manufacturers and distributors to substitute HFCs within their products or equipment with HFCs with a lower global warning potential (GWP) rating by the rule’s proscribed deadlines.

EPA’s rule is in response to enactment of a federal law in 2020 called the American Innovation and Manufacturing (AIM) Act. Under the AIM Act, Congress sought to phase out HFC use across the U.S. economy by requiring manufacturers to shift to HFC substitutes with lower GHG warming potential.

For HVAC and heat pump equipment used by the residential and light commercial sectors, EPA’s final rule requires equipment using HFCs with a higher GWP to cease manufacturing and be fully installed by:

• Jan. 1, 2025, for commercial and residential air conditioning and heat pump equipment and systems, and
• Jan. 1, 2026, for HVAC equipment or systems utilizing variable refrigerant flow.

Extending the Implementation Deadline

Last month, after EPA had finalized this rule, but before the rule went into effect, major HVAC manufacturers and suppliers sent a letter to EPA expressing concerns with the final rule’s installation deadlines, given the typically long lead times involved in ordering, manufacturing, delivering and installing residential and light commercial HVAC and heat-pump equipment.

These HVAC manufacturers were specifically concerned about how the final rule’s installation deadline of Jan. 1, 2025, for HVAC and heat pump equipment could result in a significant amount of stranded inventory that was intended for new residential and light commercial construction.

But given the long lead time for the design and construction of multifamily buildings, many properties will not be completed prior to this deadline.

On Nov. 29, 2023, EPA acknowledged in a letter to HVAC manufacturers the potential impact upon the residential construction sector because of the final rule’s installation deadlines. EPA said it was considering extending the Jan. 1, 2025, compliance deadline for the installation HVAC and heat pump equipment.

This week, EPA released a pre-publication Federal Register notice stating it is accepting public comment for the next 45 days on extending the installation compliance deadline for HVAC and heat pumps equipment for one year until Jan. 1, 2026 from the final rule’s existing deadline of Jan. 1, 2025.

Finally, while EPA has not proposed at this time to extend the compliance deadline for installation of HVAC equipment or systems utilizing variable refrigerant flow technology, the agency recognizes similar implementation problems could exist, and is considering extending that compliance deadline as well.

More information on EPA’s final rule and proposed extension of the compliance deadlines can be found on EPA’s website.