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Information on the R-22 Phaseout
and the new R-401A Refrigerant

The summers could get much more expensive for some homeowners. HCFC-22, also known as R-22 is currently the most commonly used refrigerant for residential and commercial heat pump and air conditioning systems. After 4 decades, it is being phased out slowly as part of an international agreement to cut back on hydrochlorofluorocarbons. As a result of dwindling supply, the price of refrigerant has spiked in recent months. This could leave millions of homeowners with a big surprise if their unit breaks down.

The EPA has issued “No Action Assurance” letters to importers and producers of R-22 that reduces the amount that can be manufactured and/or imported in 2012 by 45% from the amount allowed in 2011. The US has been phasing out R-22 since 2004. They have been cutting production yearly until Freon R-410A, which is a cleaner gas, replaces it by 2020. Under a proposal by the EPA, production of R-22 would be cut by a range of 11-47% in 2013 and 2014. Under this proposal, 2012 allowances would be reduced between 55 to 80 million pounds, 2013 allowances would be reduced to between 46 and 69 million pounds, and 2014 allowances would be reduced to between 36 to 58 million pounds. The Clean Air Act does not allow any refrigerant to be vented into the atmosphere during installation, service, or retirement of equipment. It must be recovered and recycled, reclaimed, or destroyed. After 2020, R-22 based cooling systems will rely solely on recycled or reclaimed refrigerants.

The price has tripled in the past year. The EPA has taken it off the market and it has been driving up the whole market. This means that the price of refrigerant has been rising and probably will continue to do so. Considering the rapid spike, there is virtually no way of predicting what prices will look like down the road. Most residential units use 6-12lbs but homeowners rarely need more than a few. Still, homeowners are now faced with the decision of whether to spend hundreds of dollars fixing a leaky coil or replace refrigerant, or consider the more expensive option of replacing older units. The price spike likely means that more people may have to opt for new units instead of simply replacing refrigerant.

Use of the new EPA approved R-401A Refrigerant will involve all of the same installation and service procedures your Air Conditioning technician has used on the older R-22 systems. As the refrigerant is kept under a high pressure, some modifications to their tools and equipment are necessary but, the impact on the consumer woul most likely involve only replacement of evaporator coils and replacement or extensive flushing of line sets.

What You Should Know About Refrigerants When Purchasing or Repairing a Residential A/C System or Heat Pump

A hydrochlorofluorocarbon (HCFC) known as R-22 has been the refrigerant of choice for residential heat pump and air-conditioning systems for more than four decades. Unfortunately for the environment, releases of R-22, such as those from leaks, contribute to ozone depletion. In addition, R-22 is a greenhouse gas and the manufacture of R-22 results in a by-product (HFC-23) that contributes significantly to global warming.

Phaseout Scedule of HCFCs including R-22

January 1, 2004
The United States is required to reduce it's consumption of R-22 by 35%. Reduction of cetain HCFCs are banned entirely. As of January 1, 2003, EPA banned production and import of HCFC-141b, the most ozone-destructive HCFC. This action allowed the United States to meet its obligations under the Montreal Protocol. EPA was able to issue 100% of company baseline allowances for production and import of HCFC-22 and HCFC-142b.

January 1, 2010
After 2010, chemical manufacturers may still produce R-22 to serve existing equipment, but not for the use of new equipment. System manufacturers will only be able to use already existing supplies of R-22 to produce new air conditioners and heat pumps. EPA requires the US to reduce it's comsumption of HCFCs by 75% below the US baseline.

January 4, 2012
EPA Publishes Proposed Rule to decrease annual HCFC-22 consumption allocations relative to the EPA's December 2009 final rule by a range of 11-47% for calendar years 2012, 2013, and 2014.

January 25, 2012
EPA issues "No Action Assurance" letters to importers and producers of R-22 reducing the amount that can be manufactured and/or imported in 2012 by approximately 45% from the amount allowed to be produced and/or imported in 2011 (between 55-80 million lbs).

January 1, 2015
The Montreal Protocol requires the United States to reduce its consumption of HCFCs by 90% below the U.S. baseline.

January 1, 2020
Use of existing refrigerant will be allowed to service existing systems, but chemical manufactures will no longer be able to produce R-22. The Montreal Protocol requires the United States to reduce its consumption of HCFCs by 99.5% below the U.S. baseline. Refrigerant that has been recovered or reclaimed/recycled will be allowed beyond 2020 to service existing systems, but chemical manufacturers will no longer be able to produce R-22 to service existing air conditioners and heat pumps.

Alternatives to R-22 in Residential Air Conditioning
As R-22 is gradually phased out, non-ozone-depleting alternatives are being introduced. Among alternatives approved by the EPA is R-401A. A blend of hydrochlorofluorocarbons, R-401A does also contribute to global warming but, does not deplete the ozone layer.

Recent actions by the U.S. Environmental Protection Agency (EPA) regarding HCFCs have led to uncertainty about the availability of R-22 in the coming months and years. In response, contractors have noticed a ramp-up in the chatter about R-22 and price changes as some manufacturers and importers have amended their sales policies.

This situation is the culmination of several factors, including the continued implementation of the federal government’s policies regarding HCFCs, current market conditions, and delays in the regulatory process.

As most contractors know, the EPA controls the production of HCFCs, including the refrigerant known as R-22, through allowances that limit how much each gas manufacturer and importer can produce or import in a given year. Under the implementation of the Montreal Protocol, the production and use of R-22 is slowly being phased out.

In August 2011, the EPA proposed to adjust the allocations in place for the years 2012-2014. This adjustment was necessary because of a lawsuit filed by two HCFC producers who had completed a legal trade of allocations that EPA had failed to recognize in its allocations released in 2009.

EPA consulted with industry stakeholders before proposing to reduce the annual allocations. In gathering information used to develop the August 2011 allocation adjustment, EPA found that there was an oversupply of R-22 in the marketplace, partly evident by a lack of demand, increased reuse of R-22, and low wholesale prices. In fact, in 2010, producers of R-22 only utilized 86% of their allocations. A trade organization representing the manufacturers and importers of R-22 supported these claims, and advocated for a 20% reduction in allocations for 2012-2014.

By the end of 2011, EPA had yet to finalize its adjustment proposal for the 2012-2014 allocations. But EPA did release a subsequent version of the August 2011 adjustment proposal on December 30, 2011, one that proposed to reduce the allocations for 2012-2014 between 11-47%.

Without a finalized adjustment rule, the producers and importers of R-22 were stuck in a legal limbo – on January 1, 2012, they did not have the authority to manufacture or import R-22. Recognizing this problem, on January 20, 2012, EPA sent “non-enforcement” letters to the producers and importers of R-22, alerting them that they could resume the manufacture and import of R-22 in the interim even though EPA had yet to set the new allocation amounts. The non-enforcement letter advised that production would be curtailed by 45% of their last allocation amount, the high end of the allocation adjustment proposal.

It is expected that the EPA adjustment proposal will take at least until the summer of 2012 to be completed. The end result could be a reduction in R-22 allocations somewhere between 11-47%, meaning it is likely the final adjustment proposal will be less than the interim 45% reduction and that more R-22 may be produced or imported.

ACCA has been following this issue to provide contractors with the most up-to-date and precise information available. We will continue to monitor the allocation adjustment rulemaking process and alert members of any progress or actions taken by EPA.

For more information, please visit the ACCA website.