EPA Targeting Illegal Imports of Hydrofluorocarbon Super-Pollutants to Combat Climate Change

The American Innovation and Manufacturing Act (AIM Act) authorizes the U.S. Environmental Protection Agency to address hydrofluorocarbons (HFCs) by providing new authorities in three main areas: to phase down the production and consumption of listed HFCs, manage these HFCs and their substitutes, and facilitate the transition to next-generation technologies through sector-based restrictions. The AIM Act directs the EPA to phase down production and consumption of HFCs to 15% of their baseline levels in a stepwise manner by 2036 through an allowance allocation and trading program. 

This Enforcement Alert emphasizes that the EPA is vigorously enforcing the AIM Act, using civil and criminal enforcement authorities, to prevent the illegal import, production, sale, or distribution, and/or offering for sale or distribution of the super-polluting greenhouse gases (GHGs) known as HFCs. This Enforcement Alert provides information to the regulated community on common compliance issues observed to date with the importation of bulk¹ HFCs to help ensure regulated entities can take the necessary steps to avoid potential EPA enforcement actions.  

Hydrofluorocarbons: Climate Impact and Importance of Phasing Down

HFCs are potent, super-polluting greenhouse gases. HFCs have a global warming potential that can be hundreds to thousands of times greater than carbon dioxide. The planet’s surface temperature is projected to increase by up to 0.5 degrees Celsius due to HFCs alone by 2100 if HFCs are not controlled. This is a significant portion of the current total projected climate warming of 1.2 to 4.1 degrees Celsius by 2100. A global HFC phasedown through the HFC Allocation Program is expected to avoid this warming and the climate ramifications that would come with an up to 0.5-degree Celsius increase.  

HFCs often serve as replacements for ozone-depleting substances (such as chlorofluorocarbons, or CFCs) and are commonly used in sectors such as refrigeration, air conditioning, aerosols, fire suppression products, and as foam blowing agents. Alternative options with lower global warming potentials (GWPs) than high-GWP HFCs are currently on the market, and the EPA expects their availability to continue to increase as HFCs are phased down.

National Enforcement and Compliance Initiative

The Mitigating Climate Change National Enforcement and Compliance Initiative (NECI) uses the EPA’s criminal and civil enforcement authorities to address three significant contributors to climate change:

1. Methane emissions from oil and gas facilities;

2. Methane emissions from landfills; and

3. The use, importation, and production of HFCs.

The EPA’s enforcement and compliance program has documented widespread noncompliance in all three of these areas, including the HFC sector. This NECI will help achieve the EPA’s goals to combat climate change while also addressing significant noncompliance in specific industry sectors that are sources of harmful pollution.

How Do Allowances Work?

Starting in January 2022, federal regulations have prohibited importing or producing bulk HFCs without sufficient valid allowances. All valid allowances are issued by the EPA to certain entities who may expend the allowances themselves or, subject to certain conditions, transfer their allowances to other entities. Bulk HFCs imported into U.S. Foreign Trade Zones (FTZs) are subject to the same AIM Act requirements as imports into U.S. ports. The AIM Act defines the term import “as to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into, any place subject to the jurisdiction of the United States, regardless of whether that landing, bringing, or introduction constitutes an importation within the meaning of the customs laws of the United States." 42 U.S.C. 7675(b).

More information on how allowances work is available on the EPA’s HFC Allowances web page, which includes lists of entities which have received allowances from the EPA to date.

Consequences of Noncompliance

HFCs are imported into the United States by land, sea, and air, and are routinely inspected by the U.S. Customs and Border Protection (CBP) and the EPA. Since January 1, 2022, when HFC phasedown regulations took effect,² the EPA has worked with the CBP to prevent the illegal entry of numerous shipments of bulk HFCs imported into the U.S. The EPA and CBP jointly have reviewed thousands of shipments since 2022.

Compliance with the allowance system is critical to assuring the success of the United States’ HFC phasedown program. Illegal imports of HFCs undermine the phasedown, disadvantage companies who follow the rules, and contribute to global warming. The EPA has made it a top priority to address the illegal import of HFCs under the current phasedown and has pursued a number of civil and criminal cases with multiple persons and companies that have imported HFCs without the required allowances.

Violations of the requirements established in the AIM Act may be subject to administrative, civil, or criminal enforcement actions. Criminal violations of the AIM Act and other applicable statutes including smuggling, conspiracy, money laundering, and false statements can result in criminal penalties, incarceration, restitution, negotiated and court ordered environmental projects. Currently, illegally importing HFCs may result in civil judicial penalties of up to $121,275³ per violation. For noncompliant allowance holders, the EPA may also apply administrative consequences to retire, revoke, or withhold allowances, or ban a company from receiving, transferring, or conferring allowances.

Recent Civil Enforcement Actions

Resonac America, Inc. (March 2024)

The EPA and Resonac America, Inc. reached a settlement agreement to resolve violations of the prohibition on importing bulk regulated substances into the United States without possessing sufficient allowances at the time of import. Resonac illegally imported over 2,800 kgs of HFC-23. As part of the settlement, Resonac agreed to pay a civil penalty of $416,003 and to destroy over 760 kgs of HFCs.

• Press Release: EPA reaches settlement with Resonac America for illegal import of super climate pollutant at Port of Los Angeles
• Consent Agreement and Final Order:  Resonac America, Inc. (pdf) (325.46 KB)

Open Mountain Energy, LLC (January 2024)