Phasedown of Hydrofluorocarbons (HFCs): Issuing Allowance Allocations for 2022
What is the AIM Act and the HFC Phasedown?
The American Innovation and Manufacturing (AIM) Act was enacted on December 27, 2020. The AIM Act directs the U.S. Environmental Protection Agency (EPA) to address HFCs. Specifically, the AIM Act directs EPA to phase down production and consumption[1] of HFCs to 15% of their baseline levels in a stepwise manner by 2036 through an allowance allocation and trading program.
How do Allowances Work?
EPA uses an allowance as the unit of measure that controls production and consumption. EPA will issue allowances that will be valid between January 1 and December 31 of a given year, also known as a “calendar-year allowance.” A calendar-year allowance represents the privilege granted to an entity to produce or import regulated substances in that year.
Entities will need to expend allowances in order to produce or import bulk HFCs. Producing HFCs will require expending both production allowances and consumption allowances. Importing HFCs will require expending only consumption allowances. Additionally, a third category of allowances called “application-specific allowances” can be used to either produce or import HFCs for use in the six applications listed in the AIM Act (see Application-specific Allowance Allocations).
EPA has developed an HFC allowance calculator to help allowance holders understand how allowances translate to quantities of various HFCs they intend to produce or import.
Additionally, under the HFC Allocation Rule, EPA can issue administrative consequences for activities including, but not limited to, submitting false, inaccurate, or misleading information; importing HFCs without expending the requisite number of allowances; and failing to report required information. Under these provisions (see 40 CFR 84.35), EPA may retire, revoke, or withhold the allocation of HFC allowances or ban a company from receiving future allowances. To view administrative consequences EPA has issued, click the following link: https://www.epa.gov/climate-hfcs-reduction/administrative-consequences-under-hfc-allocation-rule
How are Entities Receiving Allowances for 2022?
EPA issued allowances to entities that produced and/or imported HFCs in 2020, based on the three highest non-consecutive years of production or import between 2011-2019. EPA also issued “application-specific allowances” directly to the entities, including the U.S. Department of Defense, that operate within the six applications listed in the AIM Act. These entities will be able to confer their allowances to producers or importers to acquire needed HFCs.
The following notice, "Phasedown of Hydrofluorocarbons: Notice of 2022 Allowance Allocations for Production and Consumption of Regulated Substances under the American Innovation and Manufacturing Act of 2020," was published in the Federal Register on October 7, 2021.
- Federal Register link to HFC Allowance Allocations for 2022
- Read the Allowance Allocation Methodology for 2022 (for allowances issued October 1, 2021)
As described under 40 CFR 84.15, EPA also issued allowances to eligible applicants from a set-aside pool. After issuing set-aside allowances, there were 2,198,889.9 Metric Tons Exchange Value Equivalent (MTEVe) of production allowances and 482,646.5 MTEVe of consumption allowances remaining in the set-aside pool. In accordance with 40 CFR 84.15(e)(4), those allowances have been distributed to the October 1, 2021, general pool allowance holders on a pro rata basis.
Distribution of Set-aside Allowances Issued for Consumption, Including Application-specific Allowances (Total = 7,500,000 MTEVe)
Distribution of Set-aside Allowances Issued for Production, Including Application-specific Allowances (Total = 2,500,000 MTEVe)
The following notice, “Phasedown of Hydrofluorocarbons: Notice of 2022 Set-Aside Pool Allowance Allocations for Production and Consumption of Regulated Substances under the American Innovation and Manufacturing Act of 2020,” was published in the Federal Register on April 5, 2022.
- Federal Register Notice announcing Set-Aside Allowance Allocations for 2022
- Overview of Set-aside Allowances under the AIM Act (pdf)
The entities receiving application-specific allowances, consumption allowances, and production allowances are shown below, along with their allowance allocation in MTEVe. [2]
Application-specific Allowance Allocations
The figure and table below illustrate the application-specific allowances allocated to each entity for 2022, including allowances allocated through the set-aside pool. In the figure, click on an application (i.e., inner slice) to view all entities allocated allowances for that application along with their respective allowances. Click the inner circle again to return to the full figure. Hover over any slice to view the allowances allocated for that entity or application.
Distribution of Application-specific HFC Allowances for 2022
Application-specific HFC Allowances for 2022
| Entity | Application | Number of Allowances Issued (MTEVe) |
|---|---|---|
| Total | All | 5,859,934.4 |
| Analog Devices | Semiconductors | 19,652.6 |
| Applied Materials | Semiconductors | 65,378.3 |
| Armstrong Pharmaceuticals* | Metered Dose Inhalers | 111,059.3 |
| AstraZeneca Pharmaceuticals* | Metered Dose Inhalers | 2,122.7 |
| Aurobindo Pharma USA* | Metered Dose Inhalers | 71,177.4 |
| Boehringer Ingelheim | Metered Dose Inhalers | 27,789.0 |
| Broadcom | Semiconductors | 4,232.3 |
| Compsys | Structural Composite Foam | 35,931.9 |
| Cree | Semiconductors | 36,956.0 |
| GE Global Research Center | Semiconductors | 184.6 |
| GlaxoSmithKline | Metered Dose Inhalers | 414,448.2 |
| GlobalFoundries | Semiconductors | 216,735.8 |
| Guardian Protective Devices | Defense Sprays | 66,639.5 |
| IBM Corporation* | Semiconductors | 1,440.0 |
| Intel Corporation | Semiconductors | 679,471.5 |
| Invagen Pharmaceuticals* | Metered Dose Inhalers | 28,121.3 |
| Jireh Semiconductor | Semiconductors | 5,628.6 |
| Kindeva Drug Delivery | Metered Dose Inhalers | 541,146.0 |
| Lupin | Metered Dose Inhalers | 30,224.8 |
| Micron Technology | Semiconductors | 54,598.3 |
| Newport Fab DBA TowerJazz | Semiconductors | 9,190.9 |
| NXP Semiconductor* | Semiconductors | 61,951.4 |
| Odin Pharmaceuticals* | Metered Dose Inhalers | 9,473.8 |
| Polar Semiconductor | Semiconductors | 13,192.0 |
| Proteng Distribution* | Onboard Aerospace Fire Suppression | 12,075.0 |
| Qorvo Texas | Semiconductors | 9,706.4 |
| Raytheon Technologies | Onboard Aerospace Fire Suppression | 44,105.4 |
| Safariland | Defense Sprays | 19,404.6 |
| Samsung Austin Semiconductor | Semiconductors | 260,269.0 |
| Security Equipment Corporation | Defense Sprays | 262,946.7 |
| Semiconductor Components Industries DBA ON Semiconductor | Semiconductors | 11,502.5 |
| Shamrock Filling | Defense Sprays | 138,559.0 |
| SkyWater Technology* | Semiconductors | 15,689.3 |
| Skyworks Solutions* | Semiconductors | 6,978.5 |
| Texas Instruments | Semiconductors | 73,345.6 |
| The Research Foundation for The State University of New York OBO SUNY Polytechnic Institute* | Semiconductors | 1,245.4 |
| Tower Semiconductor San Antonio | Semiconductors | 9,836.6 |
| U.S. Department of Defense | Mission-critical Military End Uses | 2,300,000.0 |
| UDAP Industries | Defense Sprays | 116,029.3 |
| Wabash National Corporation* | Structural Composite Foam | 48,003.3 |
| WaferTech | Semiconductors | 21,733.9 |
| X-FAB Texas | Semiconductors | 1,757.7 |
* Entity received allowances from the set-aside pool allocated on March 31, 2022.
Note: Numbers may not sum due to rounding. EPA has not adjusted allowances to reflect expenditure, conferral, or transfer of allowances, or requests for additional consumption allowances for exports of HFCs, so these numbers reflect allowances that were issued on October 1, 2021, plus any set-aside allowances issued on March 31, 2022.
Consumption Allowance Allocations
The figures and table below illustrate the consumption allowances allocated to each entity for 2022, including allowances allocated through the set-aside pool and allowances allocated pro rata from those remaining in the set-aside pool. The first figure shows allowances for entities receiving greater than 0.5% of all consumption allowances and aggregates those entities receiving fewer than 0.5% of all consumption allowances. The second figure shows allowances for entities receiving less than 0.5% of all consumption allowances (i.e., those aggregated in the first figure). In the figures, hover over an entity (i.e., slice) to view its allowances. In the legend, double click on an entity to show only that entity in the pie chart. Click on an entity in the legend to hide it from the pie chart, and click it again to add it back.
Distribution of HFC Consumption Allowances for 2022,
with Entities Receiving <0.5% Aggregated
Distribution of HFC Consumption Allowances for 2022,
Showing Only Entities Receiving <0.5%
HFC Consumption Allowances for 2022
| Entity | Number of Consumption Allowances Issued (MTEVe) |
|---|---|
| Application-specific allowancesa | 5,859,934.4 |
| Total | 273,498,315.0 |
| Honeywell International | 82,360,553.5 |
| Chemours | 33,327,301.0 |
| Arkema | 31,023,931.5 |
| IGas Holdings | 25,901,569.7 |
| Mexichem Fluor DBA Koura | 25,437,610.7 |
| National Refrigerants | 19,773,949.5 |
| Weitron | 6,327,828.6 |
| ICool USA | 3,401,343.4 |
| A-Gas | 3,203,908.1 |
| Daikin America | 3,115,754.2 |
| Hudson Technologies | 2,983,100.1 |
| Altair Partners | 2,913,887.9 |
| FluoroFusion Specialty Chemicals | 2,548,297.7 |
| AutoZone Parts | 2,482,538.7 |
| Walmart | 2,276,799.3 |
| RMS of Georgia | 1,618,586.9 |
| Combs Gas | 1,285,781.5 |
| Lenz Sales & Distribution | 1,108,477.1 |
| Solvay Fluorides | 1,100,630.1 |
| Artsen | 1,025,866.3 |
| Technical Chemical | 972,523.8 |
| Nature Gas Import and Export | 818,264.6 |
| First Continental International | 768,560.8 |
| Harp USA | 764,303.8 |
| Tulstar Products | 732,893.0 |
| Waysmos USA | 633,451.9 |
| GlaxoSmithKline | 535,478.0 |
| Linde | 531,619.8 |
| Air Liquide USA | 497,703.2 |
| ComStar International | 373,443.3 |
| Mondy Global | 318,178.2 |
| Advanced Specialty Gases | 284,841.1 |
| AW Product Sales & Marketing | 194,183.0 |
| Electronic Fluorocarbons | 104,116.0 |
| Showa Chemicals of America | 73,344.7 |
| Wilhelmsen Ships Service | 40,325.5 |
| Bluon | 33,404.3 |
| Refrigerants, Inc. | 26,506.8 |
| Iofina Chemical | 1,262.8 |
| Transocean Offshore Deepwater Drilling | 16.7 |
| ACT Commodities* | 77.8 |
| SynAgile Corporation* | 1,125.1 |
| Sciarra Laboratories* | 8,700.0 |
| Perfect Score Too DBA Perfect Cycle* | 37,876.0 |
| USSC Acquisition Corp* | 131,451.0 |
| Metalcraft* | 161,000.0 |
| Advance Auto Parts* | 190,699.1 |
| AFK & Co.* | 193,335.9 |
| CC Packaging* | 194,000.0 |
| RTR Suppliers* | 198,000.0 |
| Fireside Holdings DBA American Refrigerants* | 199,978.5 |
| Ability Refrigerants* | 200,000.0 |
| A.C.S. Reclamation & Recovery (Absolute Chiller Services)* | 200,000.0 |
| AFS Cooling* | 200,000.0 |
| AllCool Refrigerant Reclaim * | 200,000.0 |
| American Air Components* | 200,000.0 |
| Automart Distributors DBA Refrigerant Plus* | 200,000.0 |
| Certified Refrigerant Services* | 200,000.0 |
| Chemp Technology* | 200,000.0 |
| Creative Solution* | 200,000.0 |
| Cross World Group* | 200,000.0 |
| EDX Industry* | 200,000.0 |
| Freskoa USA* | 200,000.0 |
| Golden Refrigerant* | 200,000.0 |
| Hungry Bear* | 200,000.0 |
| Kidde-Fenwal* | 200,000.0 |
| Lina Trade* | 200,000.0 |
| Meraki Group* | 200,000.0 |
| North American Refrigerants* | 200,000.0 |
| O23 Energy Plus* | 200,000.0 |
| Reclamation Technologies* | 200,000.0 |
| Saalok* | 200,000.0 |
| SDS Refrigerant Services* | 200,000.0 |
| Summit Refrigerants* | 200,000.0 |
| TradeQuim* | 200,000.0 |
| Tyco Fire Products* | 200,000.0 |
| USA United Suppliers of America DBA USA Refrigerants* | 200,000.0 |
| Wesco HMB* | 200,000.0 |
* Entity received allowances from the set-aside pool allocated on March 31, 2022. There were 482,646.5 MTEVe of consumption allowances remaining in the set-aside pool. In accordance with 40 CFR 84.15(e)(4), those allowances have been distributed to the October 1, 2021, general pool allowance holders on a pro rata basis.
a See Application-specific Allowance Allocations.
Note: Numbers may not sum due to rounding. EPA has not adjusted allowances to reflect expenditure or transfer of allowances, or requests for additional consumption allowances for exports of HFCs, so these numbers reflect allowances that were issued on October 1, 2021, plus any set-aside allowances issued on March 31, 2022.
Production Allowance Allocations
The figure and table below illustrate the production allowances allocated to each entity for 2022, including allowances allocated pro rata from those remaining in the set-aside pool. In the figure, hover over an entity (i.e., slice) to view its allowances. In the legend, double click on an entity to show only that entity in the pie chart. Click on an entity in the legend to hide it from the pie chart, and click it again to add it back.
Distribution of HFC Production Allowances for 2022
HFC Production Allowances for 2022
| Entity | Number of Production Allowances Issued (MTEVe) |
|---|---|
| Application-specific allowancesa | 5,859,934.4 |
| Total | 344,299,157.0 |
| Arkema | 40,821,168.5 |
| Chemours | 75,606,548.8 |
| Honeywell International | 171,527,851.5 |
| Iofina Chemical | 1,756.3 |
| Mexichem Fluor DBA Koura | 50,481,897.5 |
a See Application-specific Allowance Allocations.
Note: Numbers may not sum due to rounding. There were 2,198,889.9 MTEVe of production allowances remaining in the set-aside pool. In accordance with 40 CFR 84.15(e)(4), those allowances have been distributed to the October 1, 2021, general pool allowance holders on a pro rata basis. EPA has not adjusted allowances to reflect expenditure or transfer of allowances, so these numbers reflect allowances that were issued on October 1, 2021, plus any set-aside allowances issued on March 31, 2022.