November 10, 2021


As COP26 winds down in Glasgow, Scotland, significant commitments have been made by the business community to reduce greenhouse gas emissions and address the global challenge of climate change.

No issue underscores this leadership more than phasing down the production and use of hydrofluorocarbons (HFCs).

On November 9th at the U.S. Pavilion, the Chamber was on hand as Michael Regan, Administrator of the U.S. Environmental Protection Agency, headlined a panel of global leaders from the European Union, Canada, and Japan and representatives from business and NGOs, entitled Securing the Climate Benefits of the Global HFC Phasedown: Preventing Illegal Trade in HFCs . Administrator Regan warned that markets for illegally traded HFCs could undermine the significant climate benefits that accompany international regulatory progress. “Efforts to phase down HFCs in many countries have had the side effect of creating markets for illegal trade of these harmful chemicals,” Regan said.

He announced new steps the U.S. will take to detect and prevent illegal trade in HFCs through agile enforcement, including:

  • Promoting labeling, third-party auditing, and data transparency.
  • Utilizing QR codes to track legally traded products.
  • Banning single-use disposable cylinders that are often used for smuggling.
  • Launching an interagency task force “led by experts from U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, Homeland Security Investigations and EPA to detect, deter, and disrupt any attempt to illegally import HFCs into the United States.”

These short-term climate pollutants–primarily used as refrigerants, solvents, foams, etchants, and fire suppressants–remain in the atmosphere for a much shorter period of time than carbon dioxide, but their impact on increasing temperatures is substantially greater.

In 2016, 170 countries agreed to set reduction targets for HFCs. This agreement, known as the Kigali Amendment, will gradually phase down HFCs by approximately 85% over the next 15 years. They would be replaced with more environmentally friendly alternatives. A group of developed countries began the phasedown in 2019.

With strong support from the Chamber, the American Innovation and Manufacturing (AIM) Act was enacted in December 2020 to phase down HFCs in the U.S. and enable implementation of the Kigali Amendment.

EPA recently finalized its initial allocation rule and trading system for manufacture and import of HFCs for 2022 and 2023 under the new law.

Phasing down HFCs requires products manufacturers and OEMs to invest in the transition, and there are estimates that some sectors could directly add 33,000 U.S. manufacturing jobs over the next decade. In addition, this proposal is the first step in growing the U.S. share of the world market for some types of heating, air-conditioning, and commercial refrigeration equipment by 25%. U.S. companies are leading the way in developing low-Global Warming Potential (GWP) solutions to support the transition.

Implementing the HFC phasedown globally would reduce a significant source of emissions that contribute to climate change, avoiding up to 0.5° C in temperature increases by 2100. For the Biden administration to achieve its ambitious climate goals, continued collaboration with American businesses to phase down HFCs must be part of the solution, including efforts to prevent illegal trade of HFCs.

A critical next step is for the administration to submit the Kigali Amendment to the Senate for ratification, which was noted by Kevin Fay of the Alliance for Responsible Atmospheric Policy at the event.

The U.S. Chamber has been working with a coalition of companies and trade associations, including the American Chemistry Council, National Association of Manufacturers, the Air-Conditioning, Heating & Refrigeration Institute, and the Alliance for Responsible Atmospheric Policy to support implementation of the AIM Act and Kigali ratification.