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.
Latest from NAHBNow
Jan 29, 2026
Fed Hits Pause on Easing as Inflation and Labor Risks BalanceThe Federal Reserve paused its easing cycle at the January meeting of the Federal Open Market Committee and held the short-term federal funds rate at a top rate of 3.75%.
Jan 28, 2026
NAHB Expands Member Savings Program with New Partners and Big Benefits in 2026NAHB members saved a total of more than $40 million in 2025 through a variety of member-exclusive offers. And in 2026, the portfolio of partners and programs within the NAHB Member Savings Program continues to grow.
Latest Economic News
Jan 28, 2026
Holding Pattern for the FedThe Fed paused its easing cycle at the conclusion of the January meeting of the Federal Open Market Committee, the central bank’s monetary policy body. The Fed held the short-term federal funds rate at a top rate of 3.75%, the level set in December. This marked the first policy pause since the Fed resumed easing in September of last year.
Jan 27, 2026
State-Level Employment Situation: December 2025With few exceptions, year-over-year nonfarm employment levels were relatively stable across states at the end of 2025, ranging from a decline of 4.2 percent to a gain of 1.8 percent. Construction employment, however, showed considerably greater dispersion, with declines of up to 9.3 percent in some states and gains approaching 9.0 percent in others.
Jan 26, 2026
Pool Permitting Falls Lower in 2025After a rapid expansion of residential swimming pool and spa construction following the pandemic, permit levels in the latest monthly index for December fell to their lowest level since 2020.