In his State of the Union address, President Obama pledged to fight climate change “with more urgency” than ever before. To that effect, the president directed his “administration to work with states, utilities and others” on reducing carbon pollution. The president expressed the same determination last summer in his Climate Action Plan. He said the U.S. government would begin tackling hydroflurocarbons or HFCs, gases that are mainly used in refrigeration and air-conditioning systems. The president realized that by controlling the emissions of these refrigerants and supporting the introduction of more climate-friendly alternatives, the United States could move back to the forefront of global action to mitigate climate change.
Against this backdrop of the highest levels of government promoting the use of climate-friendly refrigerants, a recent Environmental Protection Agency (EPA) action concerning another synthetic refrigerant, hydrochlorofluorocarbon-22 (HCFC-22), seems peculiar. HCFC-22 is both an ozone depleter and a greenhouse gas which is 1800 times more damaging to the global climate than carbon dioxide (CO2).
If all this HCFC-22 was needed, whether EPA should allow continued production at this level would be a more difficult question. At a hearing on EPA’s proposed rule in January 2014, however, industry and environmentalists were in agreement that much lower levels or even no new production is necessary.
EPA has seen firsthand what happens when the market is oversaturated with HCFC-22. In 2009, EPA began limiting production of the refrigerant and the market reacted accordingly. The price of virgin HCFC-22 climbed, reaching an all-time high in March 2013. The high price of virgin HCFC-22 caused the market for reclaimed and recycled HCFC-22 to grow dramatically and encouraged the sale of alternative refrigerants. It also led to grocery stores and other big users taking steps to control leaks and avoid venting to the atmosphere. The environment benefitted as a result of these changes.
Unfortunately, the thriving recovery and recycling industries collapsed when in April 2013 EPA released a regulation that dramatically increased the amount of virgin HCFC-22 available in 2013 and 2014. These overly generous allowances resulted in a glut of HCFC-22 in the market. This glut was devastating to the recycling and alternative-refrigerant industries, and will be just as devastating to the environment.
In response to EPA’s more recent call for comments on its proposal to allow production of HCFC-22 for the 2015-19 time period, industry and environmental groups asked EPA to allow much less HCFC-22 production. Many of these diverse stakeholders argued for no further production. No additional HCFC-22 production is necessary because there are massive stockpiles of HCFC-22 from previous production. These stockpiles should meet all reasonable servicing needs. But an oversupply of HCFC-22 will destroy the reclamation and alternative-refrigerant businesses. When new production is available at a lower price than reclaimed material, there simply is no market for reclaimed HCFC-22 or alternatives.
The course of action proposed by EPA is contrary to the president’s Climate Action Plan. It is time for EPA to stop permitting the production of HCFC-22. The government should listen to industry and environmental groups and bet on smart business for sustainable development. If President Obama is serious about combatting climate change and promoting environmentally-friendly refrigerants, he has to make sure that all of EPA’s actions are consistently positive for the environment. This requires that EPA stop the production of HCFC-22.
Von Bismarck is executive director of the Environmental Investigation Agency. Norman is a partner at Patton Boggs LLP.