Enforcement of the American Innovation and Manufacturing Act of 2020
Hydrofluorocarbons (“HFCs”) are a class of potent greenhouse gases commonly used in refrigeration and air conditioning, aerosols, and foam products. Their climate impact can be hundreds to thousands of times greater than carbon dioxide. The American Innovation and Manufacturing (AIM) Act, enacted by Congress in 2020, authorizes EPA to phase down the production and consumption of HFCs by 85 percent in a stepwise manner by 2036. It does so through three primary methods: 1) by establishing an allowance allocation and trading program for bulk HFCs; 2) by facilitating the transition to next-generation technologies to replace HFCs; and 3) by directing the EPA to maximize reclamation of HFCs and minimize releases of HFCs from equipment. Learn more about the AIM Act.
The HFC Allocation Regulations (40 C.F.R. Part 84, Subpart A) implement the congressional directive to phase down HFCs. They prohibit, starting on January 1, 2022, any person from importing “bulk regulated substances, except [b]y expending, at the time of import, consumption or application-specific allowance in a quantity equal to the exchange value weighted equivalent of the regulated substances imported . . . .” 40 C.F.R. § 84.5(b). In order to protect the program’s integrity, ensure mandated reductions of HFCs, and maintain a level playing field for regulated companies, the EPA pursues enforcement for the importation or production of bulk HFCs without the required allowances, the submission of false or misleading information, and/or the failure to report the required information, or improperly labeling bulk HFCs under the AIM Act and its implementing regulations. Learn more about the HFC Allocation Regulations.
The HFC Technology Transition Regulations (the “TT Regulations”) (40 C.F.R. Part 84, Subpart B) facilitate a transition to next generation technologies by restricting the use of certain HFCs with higher global warming potentials in new aerosol and foam items, as well as items in the refrigeration, air conditioning, and heat pump (“RACHP”) sectors. Restrictions apply to original equipment manufacturers, importers, product distributors, retailers, and entities that direct the installation of new RACHP systems and products. Similar to the enforcement of the HFC Allocation Regulations, the EPA will pursue enforcement against entities that manufacture, import, or install products or systems in violation of the HFC TT Regulations. The EPA will also pursue enforcement against entities that submit false or misleading information, that fail to report the required information, or that improperly label products or systems as required under the AIM Act and its implementing regulations. Learn more about the HFC TT Regulations.
The HFC Management Regulations (40 C.F.R. Part 84, Subpart C) aim to maximize reclamation and minimize the releases of HFCs and their substitutes from equipment during installation, servicing, repair, and maintenance. The first provisions of the Management Regulations are currently set to become effective January 1, 2026. Learn more about the HFC Management Regulations.
Tips
If you have information about violations of the AIM Act and its implementing regulations, please report it: https://echo.epa.gov/report-environmental-violations.
Enforcement
- Clean Venture Inc. (pdf) (Expedited Settlement Agreement)
- Conformatic Corporation (pdf) (Notice of Violation)
- Freezetone Products, LLC (pdf) (Expedited Settlement Agreement)
- Hanwha Cimarron LLC (pdf) (Expedited Settlement Agreement)
- Highwood International, LLC (pdf) (Notice of Violation)
- HVAC Services (pdf) (Notice of Violation)
- HVAC Services (pdf) (Consent Agreement and Final Order)
- Liferafts Incorporated of P.R. (pdf) (Expedited Settlement Agreement)
- Little Leaf Farms, LLC (pdf) (Expedited Settlement Agreement)
- Max Henry Group, dba Quantum Technology (pdf) (Notice of Violation)
- Oldach Associates LLC (pdf) (Notice of Violation)
- Oldach Associates, LLC (pdf) (Consent Agreement and Final Order)
- Open Mountain Energy LLC (pdf) (Notice of Violation)
- Open Mountain Energy, LLC (pdf) (Consent Agreement and Final Order)
- Parker Engineering and Mechanical Inc (pdf) (Expedited Settlement Agreement)
- Phoenix Fire Systems, LLC (pdf) (Notice of Violation)
- Phoenix Fire Systems, LLC (pdf) (Consent Agreement and Final Order)
- Resonac America, Inc. (pdf) (Consent Agreement and Final Order)
- Sigma Air LLC (pdf) (Expedited Settlement Agreement)
Applicable Enforcement Policies and Information
EPA has established an expedited settlement agreement (ESA) pilot program for certain violations related to importing hydrofluorocarbons and ozone-depleting substances. Cases that meet certain criteria – violations that are easily detected and easily corrected, by a first-time violator, with harm that can be fully remediated, and a civil penalty below a certain threshold, among other requirements – may be eligible for the ESA pilot program, which is intended to allow expedited resolution of claims and utilizes a standardized consent agreement and final order to resolve each case. These cases are an exception to the penalty policies described further below.
EPA calculates civil penalties for settlement purposes in cases involving violations of the HFC Allocation Rule at 40 CFR Part 84 by using the framework described in its Interim Penalty Policy Applicable to Certain Illegal Imports of Bulk Regulated Substances Under 40 CFR Part 84: Phasedown of Hydrofluorocarbons, Appendix XII to the October 25, 1991, Clean Air Act Stationary Source Penalty Policy.
The EPA designated enforcement work associated with the AIM Act to be managed by the national Office of Enforcement and Compliance Assurance (OECA) until at least January 1, 2024, when it will re-evaluate the designation. This includes enforcement of the HFC regulations under 40 C.F.R. Part 84 and the greenhouse gas reporting requirements under 40 C.F.R. Part 98.