Phasedown of Hydrofluorocarbons: Technology Transitions Program Residential and Light Commercial Air Conditioning and Heat Pump Subsector, 88825-88832 [2023-28500]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 88, Number 246 (Tuesday, December 26, 2023)]
[Rules and Regulations]
[Pages 88825-88832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28500]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 84

[EPA-HQ-OAR-2021-0643; FRL-11594-02-OAR]


Phasedown of Hydrofluorocarbons: Technology Transitions Program 
Residential and Light Commercial Air Conditioning and Heat Pump 
Subsector

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule and request for comments.

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SUMMARY: The U.S. Environmental Protection Agency is amending a 
provision of the recently finalized Technology Transitions Program 
under the American Innovation and Manufacturing Act (AIM Act). This 
action allows one additional year, until January 1, 2026, solely for 
the installation of new residential and light commercial air 
conditioning and heat pump systems using components manufactured or 
imported prior to January 1, 2025. The existing January 1, 2025, 
compliance date for the installation of certain residential and light 
commercial air conditioning and heat pump systems may result in 
significant stranded inventory that was intended for new residential 
construction. EPA is promulgating this action to mitigate the potential 
for significant stranded inventory in this subsector. In addition, EPA 
is clarifying

[[Page 88826]]

that residential ice makers are not included in the household 
refrigerator and freezer subsector under the Technology Transitions 
Rule and are not subject to the restrictions for that subsector. EPA is 
requesting comments on all aspects of this rule.

DATES: This interim final rule is effective on December 26, 2023. 
Comments on this rule must be received on or before February 9, 2024.

ADDRESSES: You may send comments, identified by docket identification 
number EPA-HQ-OAR-2021-0643, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov 
(our preferred method). Follow the online instructions for submitting 
comments.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, Air and Radiation Docket, Mail Code 2822T, 1200 Pennsylvania 
Avenue NW, Washington, DC 20460.
     Hand Delivery or Courier (by scheduled appointment only): 
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution 
Avenue NW, Washington, DC 20004. The Docket Center's hours of 
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal 
Holidays).
    Instructions: All submissions received must include the Docket ID 
number for this rulemaking. Comments received may be posted without 
change to https://www.regulations.gov, including any personal 
information provided.
    You may find the following suggestions helpful for preparing your 
comments: Direct your comments to specific sections of this rulemaking 
and note where your comments may apply to future separate actions where 
possible; explain your views as clearly as possible; describe any 
assumptions that you used; provide any technical information or data 
you used that support your views; provide specific examples to 
illustrate your concerns; offer alternatives; and, make sure to submit 
your comments by the comment period deadline. Please provide any 
published studies or raw data supporting your position. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (e.g., on the web, cloud, or other file sharing 
system).
    Do not submit any information you consider to be Confidential 
Business Information (CBI) through https://www.regulations.gov. For 
submission of confidential comments, please work with the person listed 
in the FOR FURTHER INFORMATION CONTACT section. For additional 
submission methods, the full EPA public comment policy, information 
about CBI or multimedia submissions, and general guidance on making 
effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Allison Cain, Stratospheric Protection 
Division, Office of Atmospheric Programs (Mail Code 6205A), 
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, 
DC 20460; telephone number: 202-564-1566; email address: 
[email protected]. You may also visit EPA's website at https://www.epa.gov/climate-hfcs-reduction for further information.

SUPPLEMENTARY INFORMATION: EPA is taking this action as an interim 
final rule without prior proposal and public comment because EPA finds 
that the good cause exemption from the notice and comment rulemaking 
requirement of the Administrative Procedure Act (APA), 5 U.S.C. 551 et 
seq., applies here.
    Subsection (k)(1)(C) of the American Innovation and Manufacturing 
Act (AIM Act) provides that Clean Air Act (CAA) sections 113, 114, 304, 
and 307 apply to the AIM Act and any regulations EPA promulgates under 
the AIM Act as though the AIM Act were part of title VI of the CAA. 
However, section 307(d) does not apply to any rule referred to in 
subparagraphs (A) or (B) of section 553(b) of the APA. See CAA section 
307(d)(1). Section 553(b)(B) of the APA, 5 U.S.C. 553(b)(B), provides 
that, when an agency for good cause finds (and incorporates the finding 
and a brief statement of reasons therefor in the rule issued) that 
notice and comment public procedures are impracticable, unnecessary or 
contrary to the public interest, the agency may issue a rule without 
providing notice and an opportunity for public comment.
    EPA has determined there is good cause for promulgating this rule 
without prior proposal and opportunity for comment. After signature of 
EPA's October 2023 final rule that established, among other things, a 
prohibition beginning on January 1, 2025, of the installation of new 
residential and light commercial air conditioning and heat pump systems 
using regulated substances with a global warming potential of 700 or 
more, stakeholders brought to the Agency's attention that builders 
order equipment in this subsector well in advance of installation, 
often even before the installation date is known, and that the final 
rule's compliance date would potentially strand a significant amount of 
inventory. EPA is issuing this rule to address these concerns and to 
mitigate the harm that would be caused by unintentionally stranding 
inventory as a result of the January 1, 2025, compliance date for the 
installation of certain air conditioning and heat pump systems. 
Subsection (i)(6) of the AIM Act states that ``[n]o rule under this 
subsection may take effect before the date that is 1 year after the 
date on which the Administrator promulgates the applicable rule under 
this subsection.'' In order to provide relief for entities subject to 
the January 1, 2025, compliance date, and in light of subsection 
(i)(6)'s one-year delay between promulgation and compliance date, EPA 
is taking this rulemaking action prior to January 1, 2024, one year in 
advance of the existing compliance date. It is impossible for the 
Agency to conclude a notice-and-comment rulemaking to provide this 
needed relief by January 1, 2024, and therefore EPA finds that this 
impracticability constitutes good cause for dispensing with the 
required procedures under 5 U.S.C. 553(b)(B). Nonetheless, EPA is 
providing 45 days for submission of public comments following today's 
action. EPA will consider all written comments submitted in the 
allotted time period to determine if any change is warranted. Because 
the rule revisions relieve a restriction and advance notice is not 
needed, the rule is effective upon publication.
    Throughout this document, whenever ``we,'' ``us,'' ``the Agency,'' 
or ``our'' is used, we mean EPA. Acronyms that are used in this 
rulemaking that may be helpful include:

AC--Air Conditioning
AHRI--Air-Conditioning, Heating, and Refrigeration Institute
AIM Act--American Innovation and Manufacturing Act of 2020
APA--Administrative Procedure Act
CAA--Clean Air Act
EPA--U.S. Environmental Protection Agency
FR--Federal Register
HARDI--Heating, Air-conditioning & Refrigeration Distributors 
International
HFC--Hydrofluorocarbon
OEM--Original Equipment Manufacturer
SNAP--Significant New Alternatives Policy
VRF--Variable Refrigerant Flow

I. Executive Summary

A. What is the purpose of this regulatory action?

    The U.S. Environmental Protection Agency (EPA) is implementing 
provisions of the American Innovation and Manufacturing Act of 2020, 
codified

[[Page 88827]]

at 42 U.S.C. 7675 (AIM Act or the Act). Subsection (i) of the Act, 
entitled ``Technology Transitions,'' authorizes EPA, by rulemaking, to 
restrict the use of regulated substances (used interchangeably with 
``HFCs'' in this document) \1\ in sectors or subsectors where the 
regulated substances are used.
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    \1\ The Act lists 18 saturated HFCs, and by reference any of 
their isomers not so listed, that are covered by the statute's 
provisions, referred to as ``regulated substances'' under the Act.
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    On October 24, 2023, EPA's final rule establishing the Technology 
Transitions Program was published in the Federal Register (88 FR 73098, 
hereafter ``Technology Transitions Rule''). That rule restricted the 
use of higher-GWP HFCs in over 40 subsectors in which they are used. It 
also prohibited, among other things, the manufacture and import of 
factory-completed products and the installation of certain 
refrigeration, air conditioning, and heat pump systems using higher-GWP 
HFCs. The compliance dates for these restrictions vary by subsector and 
range from January 1, 2025, to January 1, 2028. The rule also 
prohibited the sale, distribution, and export of factory-completed 
products that do not comply with the relevant restrictions three years 
after the prohibition on manufacture and import.
    After issuance of the Technology Transitions Rule, manufacturers, 
importers, and distributors of residential and light commercial air 
conditioning and heat pump equipment informed EPA that the compliance 
date for the restriction on installation will result in substantial 
stranded inventory in that subsector for residential new construction, 
including both single-family and multi-family dwellings, where builders 
order heating and cooling equipment well in advance of knowing the 
exact date of installation. This rule narrowly addresses the unique 
circumstances of that particular subsector to prevent such equipment 
from being stranded.

B. What is the summary of this regulatory action?

    This interim final rulemaking provides one additional year for the 
installation of new residential and light commercial air conditioning 
and heat pump systems when using components that were manufactured or 
imported before January 1, 2025. Specifically, this rule allows for 
pre-2025 condensing units, evaporators, and air handlers using R-410A, 
or other regulated substances and blends of regulated substances not 
meeting the Technology Transitions Rule's restrictions, to be assembled 
into new systems (i.e., installed), so long as those systems are 
assembled prior to January 1, 2026.
    We also clarify that residential ice makers are not included in the 
household refrigerator and freezer subsector and are not subject to the 
restrictions for that subsector under the Technology Transitions Rule. 
The preamble to the Technology Transitions Rule incorrectly included 
them as an example of a product in that subsector.

C. What is the summary of the costs and benefits?

    This rule will reduce regulatory burden associated with the 
Technology Transitions Program while having a negligible environmental 
impact. Original equipment manufacturers (OEMs) have indicated that 
collectively, over $1 billion of inventory could go unsold without an 
extension of the installation date. Stranding significant amounts of 
equipment that does not meet the new restrictions is counter to the 
overall approach EPA has taken in the Technology Transitions Rule. 
Extending the installation date for these systems will not have an 
impact on the benefits modeled in the Technology Transitions Rule 
because EPA is limiting the extension to equipment manufactured or 
imported before the existing compliance date of January 1, 2025.

II. General Information

A. Does this action apply to me?

    You may be potentially affected by this rule if you manufacture, 
import, export, sell or otherwise distribute, or install residential 
and light commercial air conditioning and heat pump equipment. 
Potentially affected categories, by North American Industry 
Classification System code, include:

 Plumbing, Heating, and Air Conditioning Contractors (238220)
 Air Conditioning and Warm Air Heating Equipment and Commercial 
and Industrial Refrigeration Equipment Manufacturing (333415)
 Major Household Appliance Manufacturing (335220)
 Household Appliances, Electric Housewares, and Consumer 
Electronics Merchant Wholesalers (423620)
 Plumbing and Heating Equipment and Supplies (Hydronics) 
Merchant Wholesalers (423720)
 Warm Air Heating and Air Conditioning Equipment and Supplies 
Merchant Wholesalers (423730)
 Appliance Stores, Household-Type (449210)
 Appliance Repair and Maintenance (811412)

    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities that EPA expects could potentially 
be affected by this action. Other types of entities not listed could 
also be affected. To determine whether your entity may be affected by 
this action, you should carefully examine the regulatory text at the 
end of this notice. If you have questions regarding the applicability 
of this action to a particular entity, consult the person listed in the 
FOR FURTHER INFORMATION CONTACT section.

B. What is EPA's authority for taking this action?

    On December 27, 2020, the AIM Act was enacted as section 103 in 
Division S, Innovation for the Environment, of the Consolidated 
Appropriations Act, 2021 (codified at 42 U.S.C. 7675). Subsection 
(k)(1)(A) of the AIM Act provides EPA with the authority to promulgate 
necessary regulations to carry out EPA's functions under the Act, 
including its obligations to ensure that the Act's requirements are 
satisfied. Subsection (k)(1)(C) of the AIM Act also provides that CAA 
sections 113, 114, 304, and 307 apply to the AIM Act and any 
regulations EPA promulgates under the AIM Act as though the AIM Act 
were part of title VI of the CAA.
    The AIM Act authorizes EPA to address HFCs by providing new 
authorities in three main areas: phasing down the production and 
consumption of listed HFCs; managing these HFCs and their substitutes; 
and facilitating the transition to next-generation technologies by 
restricting use of these HFCs in the sector or subsectors in which they 
are used. This rulemaking focuses on the third area: the transition to 
next-generation technologies by restricting use of these HFCs in the 
sector or subsectors in which they are used. Subsection (i) of the AIM 
Act, ``Technology Transitions,'' provides that ``the Administrator may 
by rule restrict, fully, partially, or on a graduated schedule, the use 
of a regulated substance in the sector or subsector in which the 
regulated substance is used.'' 42 U.S.C. 7675(i)(1). The Act lists 18 
saturated HFCs, and by reference any of their isomers not so listed, 
that are covered by the statute's provisions, referred to as 
``regulated substances'' under the Act.\2\ (42 U.S.C. 7675(c)(1)). 
Through this rule, EPA is amending recently finalized restrictions on 
the use

[[Page 88828]]

of certain HFCs in the residential and light commercial air 
conditioning and heat pump subsector.
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    \2\ As noted previously in this notice, ``regulated substance'' 
and ``HFC'' are used interchangeably in this notice.
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C. How is EPA considering negotiated rulemaking?

    Prior to proposing a rule, subsection (i)(2)(A) of the Act directs 
EPA to consider negotiating with stakeholders in the sector or 
subsector subject to the potential rule in accordance with negotiated 
rulemaking procedures established under subchapter III of chapter 5 of 
title 5, United States Code (commonly known as the ``Negotiated 
Rulemaking Act of 1990''). If EPA makes a determination to use the 
negotiated rulemaking procedures, subsection (i)(2)(B) requires that 
EPA, to the extent practicable, give priority to completing that 
rulemaking over completing rulemakings under subsection (i) that are 
not using that procedure. If EPA does not use the negotiated rulemaking 
process, subsection (i)(2)(C) requires the Agency to publish an 
explanation of the decision not to use that procedure before 
commencement of the rulemaking process.
    EPA noted in the final Technology Transitions Rule that, where 
appropriate, EPA will consider recent Agency actions and decisions 
related to restrictions on the use of HFCs in sectors and subsectors 
when considering using negotiated rulemaking procedures. EPA provided 
the example of not issuing a separate notice to consider using 
negotiated rulemaking for four petitions received after a first round 
of petitions had received public notice. EPA's reasoning was that these 
petitions were received well ahead of the final action and the 
requested restrictions are in the same sectors and subsectors contained 
in petitions for which a determination had already been made. EPA 
stated that nothing in those four petitions caused EPA to reconsider 
that decision and that it was unnecessary for the Agency to reconsider 
whether to use negotiated rulemaking procedures.
    Upon considering recent Agency action, specifically the Technology 
Transitions Rule, today's interim final rulemaking does not merit a 
reconsideration of the prior determination not to use negotiated 
rulemaking procedures. This rule is a direct and immediate response to 
a specific concern arising from the recent agency action to establish a 
compliance date for the installation of certain systems within the 
residential and light commercial air conditioning and heat pump 
subsector. EPA is not addressing a new subsector nor even establishing 
a new restriction. Instead, this rule provides targeted relief to 
address concerns about stranded inventory in a particular subsector 
subject to a recently finalized restriction.
    Furthermore, this action has been requested through a November 13, 
2023, letter signed jointly by the Air-Conditioning, Heating, and 
Refrigeration Institute (AHRI), the Alliance for Responsible 
Atmospheric Policy (the Alliance), and Heating, Air-conditioning & 
Refrigeration Distributors International (HARDI), which together 
represents a majority of the stakeholders in the subsector subject to 
the rule.\3\ EPA does not believe that the rule would benefit from the 
negotiated rulemaking procedure especially because timeliness is a 
concern universally shared by stakeholders in this subsector.
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    \3\ This letter can be found in the docket for this interim 
final rule at EPA docket number EPA-HQ-OAR-2021-0643.
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III. Final Rule

A. Addressing Stranded Inventory

    The November 13, 2023, letter to the EPA from AHRI, the Alliance, 
and HARDI requested clarification of the provisions of the rule 
regarding two categories of equipment: Residential and Light Commercial 
Air Conditioning and Heat Pump Systems and Variable Refrigerant Flow 
(VRF) Systems. The letter states that these organizations understand 
that components for systems in these two categories manufactured or 
imported before January 1, 2025, and January 1, 2026, respectively, 
using a regulated substance with a GWP of 700 or more, cannot be 
installed as new systems after each such compliance date. 40 CFR 
84.54(a)-(c). They note that this would be ``particularly problematic 
for residential new construction, including both single-family and 
multi-family dwellings, where builders order heating and cooling 
equipment well in advance of knowing the exact date of install. Such 
equipment is not installed until construction is nearly complete, but 
at time of order builders do not know when this date will be.'' The 
letter further articulates that allowing the use of components 
manufactured or imported prior to the compliance date to be installed 
as part of new systems for one year after the compliance date would 
provide some relief to the economic and practical burdens.
    An important consideration in the final rule was avoiding the 
stranding of inventory of existing equipment. This includes systems 
that are already installed and operating as well as unsold equipment in 
the manufacturing and distribution chain. EPA stated that ``[w]e 
recognize that the production and purchase of products or components 
that are unable to be sold to consumers is an economic and 
environmental outcome no parties desire, and the proposed rule's 
forward-looking compliance dates were intended to allow all parties in 
the market supply chain sufficient time to avoid that outcome.'' 88 FR 
73123. In response to concerns about stranded inventory raised during 
the public comment period on the proposed rule, EPA made two 
significant adjustments in the final rule.
    First, EPA removed the applicability of the rule's use restrictions 
to components. EPA explained that components are pieces of equipment 
that, unlike factory-completed products, do not function independently 
and must be assembled together in the field in order to function for 
its intended purpose. Components are replaceable and a faulty component 
can be swapped out to avoid replacing an entire system. Recognizing the 
ongoing need for servicing and updating previously installed systems, 
EPA allowed for the continued manufacture, import, sale, distribution, 
offer for sale and distribution, and export of components that rely on 
regulated substances, which would not meet the new restrictions. 
Components are therefore not subject to the restrictions in the 
Technology Transitions Rule, except insofar as those components may not 
be installed in new systems on or after the installation compliance 
dates.
    Second, the rule imposed a date by which factory-completed 
products, more narrowly defined as an item that is functional upon 
completion of manufacturing, could no longer be distributed, sold, and 
offered for sale or distribution, and extended that date in the final 
rule. EPA proposed that the ``sell-through'' limitation for such 
products would be one year after the compliance date for manufacturing 
and importing. The Agency received many comments on this topic, 
including from those that considered one year to be insufficient 
especially for certain seasonal products. In the final rule, EPA 
provided a sell-through for factory-completed products for three years 
after the manufacture and import compliance date.
    Through these two modifications in the final rule, EPA believed it 
had minimized the potential for stranded inventory. Specifically, with 
respect to components, the Agency's view was that there would continue 
to be a market for components not meeting the GWP limit thresholds for 
new systems, because

[[Page 88829]]

those components could continue to enter the market to service existing 
systems. However, since the rule's signature, stakeholders representing 
the air conditioning and heat pump subsector have raised concerns 
indicating that certain aspects of the rule's compliance date structure 
may result in unintended stranded inventory. EPA has reevaluated the 
specific circumstances for residential and light commercial air 
conditioning and heat pumps, and for the reasons articulated below is 
extending the installation compliance date for that subsector from 
January 1, 2025, to January 1, 2026, when using components that were 
manufactured or imported prior to January 1, 2025. In this interim 
final rule, the Agency is not considering the January 1, 2026, 
installation compliance date applicable to VRF systems; however, EPA 
intends to consider VRF systems in a separate notice and comment 
action.
    EPA has evaluated the planning, purchasing, and installation 
timeframes for residential new construction as referenced in the 
November 13, 2023, letter from industry stakeholders. We recognize that 
it is common in the residential new construction industry for 
communities and dwellings to be planned well in advance, including 
plans for the heating and cooling systems intended to be installed in 
that new construction. Builders of residential new construction may 
order those planned heating and cooling systems in concert with the 
planning process without knowing when those systems will be installed. 
As noted by stakeholders, installation of these systems is often one of 
the final steps in residential construction. We acknowledge that it may 
therefore be the case that for new residential construction planned to 
occur in 2025, builders may have already taken action with respect to 
the heating and cooling systems that are planned to be installed in 
that new construction. Specifically, for construction occurring during 
2025, components of residential and light commercial air conditioning 
and heat pump systems may have already been ordered or purchased by 
builders, such that leaving the January 1, 2025, installation 
compliance date unaltered could result in builders of new residential 
construction being left with stranded inventory--residential and light 
commercial air conditioning and heat pump components--that could not be 
used. In particular, because such equipment may already be well along 
the distribution chain, including in the possession of the end-user 
builder, it would be challenging to redirect that equipment to another 
user who would be in a different segment of the market, such as those 
servicing existing systems. As discussed, EPA made changes to the final 
Technology Transitions Rule specifically to avoid stranding inventory, 
as this outcome is undesirable economically and environmentally, and 
the issue addressed in this rule was not brought to the Agency's 
attention until after the final rule was signed. This action's 
extension of the January 1, 2025, new installation compliance date to 
January 1, 2026, for components that were manufactured or imported 
prior to January 1, 2025, is intended to avoid stranding those 
components in the distribution chain.
    We also acknowledge that some areas of the residential and light 
commercial air conditioning and heat pump subsector are experiencing 
rapid growth. In 2022, sales of heat pumps in the United States 
outpaced gas furnaces for the first time ever, following a 50% increase 
from 2015 to 2020. For certain technologies with extremely limited 
historic use in the United States, such as mini-split and multi-split 
systems, the final Technology Transitions Rule's continued allowance of 
high-GWP HFCs in components for repair and servicing only may be 
insufficient to absorb projected inventory of those components. 
Anticipated manufacture and import of mini-split systems, for example, 
is much larger than the stock of installed systems that are old enough 
to need components for repair or replacement. The nascent and rapid 
expansion of certain subsets of the residential and light commercial 
air conditioning and heat pump subsector therefore further supports the 
extension of the January 1, 2025, compliance date to January 1, 2026, 
for installation of components manufactured or imported prior to 
January 1, 2025.

B. Limiting the Environmental Impact of This Action

    EPA is narrowly tailoring this rule to respond to stakeholder 
concerns about stranded inventory in this subsector while maintaining 
the environmental benefits of the Technology Transitions Rule. To do 
so, EPA is extending the installation compliance date only for new 
systems installed from specified components (e.g., condensing units and 
indoor evaporators) that were manufactured or imported prior to January 
1, 2025. This restriction means that the total number of higher-GWP 
systems installed in 2024 and 2025 would match what the Agency modeled 
for installation in 2024. The extra year for installation would not 
increase demand for HFCs in this subsector but rather could shift some 
of the demand from 2024 into 2025.
    EPA is not extending the original compliance date for new 
installations in this subsector beyond January 1, 2025, when using 
components manufactured or imported on or after January 1, 2025. These 
components remain subject to the original restrictions of the 
Technology Transitions Rule. Specifically, if they contain an HFC with 
a GWP of 700 or greater their use is limited to servicing previously 
installed systems. As elaborated on more below, all the existing 
labeling, reporting, and recordkeeping requirements also continue to 
apply to components using, or intended to use, any HFC. Extending the 
compliance date for all installations in the subsector by one year is 
not warranted based on EPA's prior analysis of the availability of 
substitutes within this subsector, as described in the Technology 
Transitions Rule and supporting documents in the docket for that rule.
    EPA finds that this approach effectively responds to stakeholder 
concerns about stranded inventory while remaining protective of the 
environment. This approach was suggested by industry stakeholders in 
their letter dated November 13, 2023, and it aligns with industry's 
plans to transition in this subsector.
    This interim final rule provides an additional year for 
installation only if all ``specified components'' of that system are 
manufactured or imported prior to January 1, 2025. The term ``specified 
component'' is defined under the Technology Transitions Rule as 
``condensing units, condensers, compressors, evaporator units, and 
evaporators.'' Other components of an air conditioning or heat pump 
system such as valves or refrigerant piping are not restricted by the 
Technology Transitions Rule and can be installed regardless of 
manufacture or import date.

C. How do the labeling, recordkeeping, and reporting provisions apply?

    The Technology Transitions Rule requires labels on products and 
certain components that use HFCs. The labeling requirement takes effect 
for each subsector at the same time as the manufacture and import 
prohibition for products or the installation prohibition for systems. 
This timing reflects the primary purpose of the labels, which is for 
assessing compliance of products and systems in sectors and subsectors 
with active HFC restrictions.

[[Page 88830]]

    This action does not require any specific labeling for components 
that are manufactured or imported prior to January 1, 2025. Nameplates 
typically include the date that a component is manufactured, which is 
sufficient for the purposes of this rule. Furthermore, it would be 
impractical to require entities that are not OEMs to relabel components 
that are already within the distribution chain.
    This action does not change the existing labeling requirements 
related to components that are effective January 1, 2025. For specified 
components of systems, the Technology Transitions Rule required labels 
as of the applicable installation compliance date. This means that for 
specified components manufactured or imported on or after January 1, 
2025, the final Technology Transition Rule's requirements continue to 
apply. These requirements include, among other things, that such 
components must be labeled with the statement ``For servicing existing 
equipment only.'' This labeling is particularly important to 
distinguish components manufactured or imported before January 1, 2025, 
from those that are not.
    The Technology Transitions Rule established recordkeeping and 
reporting requirements for any entity that manufactures or imports 
products or specified components that use or are intended to use HFCs 
in the sectors and subsectors covered in that rule. The reporting 
period for all sectors and subsectors starts on January 1, 2025, and 
the first reports must be submitted to the Agency by March 31, 2026.
    This action does not add to nor modify the existing reporting and 
recordkeeping requirements for specified components. EPA is not 
establishing new reporting and recordkeeping requirements related to 
the sale or installation of components manufactured or imported prior 
to January 1, 2025. Reporting and recordkeeping is still required for 
specified components that are manufactured or imported on or after 
January 1, 2025.

D. Evaluation of the Subsection (i)(4) Factors

    Subsection (i)(4) of the AIM Act directs EPA to factor in, to the 
extent practicable and using best available data, various 
considerations when carrying out a rulemaking under subsection (i). As 
discussed in detail in the preamble to the final Technology Transitions 
Rule, EPA views subsection (i)(4)(A) through (D) as providing 
overarching direction for setting restrictions under subsection (i). 88 
FR at 73129-73141. EPA is not in this rule reconsidering the 
interpretations provided in the final Technology Transitions Rule 
regarding how it considers the factors laid out in subsection (i)(4). 
Nor is the Agency revisiting its analysis of the (i)(4) factors with 
respect to the residential and light commercial air conditioning and 
heat pump subsector as set forth in the final rule preamble. 88 FR 
73177-73180. However, in issuing this narrow adjustment to the January 
1, 2025, compliance date for the residential and light commercial air 
conditioning and heat pump subsector, we have considered the (i)(4) 
factors to the extent practicable, as applicable to the Agency's 
adjustment of that compliance date.
    The issue being addressed by this interim final rule was brought to 
the Agency's attention by stakeholders impacted by the Technology 
Transitions Rule. As noted in EPA's discussion of subsection (i)(4)(A), 
in addition to information generated by other governing bodies and 
agencies, the Agency does also take into account information provided 
by industry, environmental organizations, trade associations, and 
academia, to name a few. See 88 FR 73129. We acknowledge that in some 
cases, regulated entities may be best situated to identify best 
available information regarding implementation challenges. We are as 
part of this action providing an opportunity for comment and invite 
stakeholders who may have information relevant to this action to weigh 
in.
    With respect to the Agency's evaluation of the availability of 
substitutes under subsection (i)(4)(B), EPA previously determined that 
substitutes with a GWP less than 700 are available effective January 1, 
2025, for the residential and light commercial air conditioning and 
heat pump subsector. EPA has not changed that determination and 
continues to find that substitutes with a GWP less than 700 will be 
available January 1, 2025, across this subsector. Manufacturers and 
importers in this subsector are currently making air conditioning and 
heat pump systems and components with lower-GWP refrigerants for other 
markets and are prepared to meet the January 1, 2025, installation 
compliance date for such systems. This action is not reconsidering the 
Agency's prior evaluation of the availability of substitutes for 
meeting the use restrictions issued in the final Technology Transitions 
Rule for this subsector; rather, this action is narrowly tailored to 
address the disposition of components manufactured or imported prior to 
January 1, 2025.
    EPA's action to adjust the installation compliance date for certain 
installations within this subsector is motivated in large part by the 
policy goal of avoiding stranding inventory where possible. We believe 
this goal to be consistent with the direction in subsection (i)(4)(C), 
which instructs the Agency to factor in, to the extent practicable, 
overall economic costs and environmental impacts, as compared to 
historical trends. As discussed in the Technology Transitions Rule, EPA 
interprets (i)(4)(C) as purposefully accommodating different types and 
degrees of analysis of economic costs and environmental impacts, 
including costs and impacts that may be difficult to quantify. The 
narrow adjustment made in this interim final rule reduces the potential 
to unintentionally strand components. This action will not affect the 
overall consumption of HFCs and thus is not anticipated to have 
environmental impacts compared to the recently finalized Technology 
Transitions Rule. Further discussion of environmental impacts can be 
found in Section III.B.
    EPA requests comment on the incremental costs and benefits 
associated with this action, including avoiding impacts such as 
stranded inventory (e.g., number and type of units affected) and on the 
incremental impacts to regulated entities regarding compliance (e.g., 
avoiding redistribution of equipment, avoiding revisions or new permits 
to replace previously secured building permits).
    Finally, subsection (i)(4)(D) directs the Agency to factor in, to 
the extent practicable, the remaining phasedown period for regulated 
substances under the allowance allocation program. The reduction in the 
supply of HFCs is an important factor supporting compliance dates and 
GWP limits that are as stringent as feasible under the analysis of all 
the (i)(4) factors. EPA finds that this rule will not materially affect 
the demand for HFCs because it limits installations to components that 
were manufactured or imported prior to January 1, 2025. The effect of 
this rule is to extend the installations that EPA modeled to occur in 
2024 over the two-year period of 2024 and 2025. EPA does not anticipate 
an increase from the total number of installed systems modeled in the 
Technology Transitions Rule's Regulatory Impact Assessment Addendum. 
Were the Agency to allow for the installation of new systems using 
components manufactured or imported through January 1, 2026, for 
instance, EPA would then find an effect on the

[[Page 88831]]

number of new systems and increased demand for HFCs.

IV. Other Matters

    This interim rule is also providing a clarification regarding the 
scope of equipment within the household refrigerators and freezers 
subsector. For the reasons discussed below, household ice makers are 
not included within that subsector for purposes of the Technology 
Transitions Rule.
    The proposed Technology Transitions Rule provided a functional 
description of the equipment found in each subsector and a non-
exhaustive list of examples. EPA did not list all of the applications 
within a particular subsector given the variety of equipment types and 
end-uses. The proposed rule listed residential refrigeration systems as 
household refrigerators, freezers, and combination refrigerator/
freezers and described the subsector as follows: ``The designs and 
refrigeration capacities of equipment vary widely. Household freezers 
only offer storage space at freezing temperatures, while household 
refrigerators only offer storage space at non-freezing temperatures. 
Products with both a refrigerator and freezer in a single unit are most 
common. For purposes of this proposed rule, other small refrigerated 
household appliances such as chilled kitchen drawers, wine coolers, and 
minifridges also fall within this subsector.'' 87 FR 76785.
    The final rule incorrectly added ``household ice makers'' to the 
list of examples. 88 FR 73173. The functional description of this 
subsector in the Technology Transitions Rule remained the same between 
proposal and final and was equipment that offers storage space at 
freezing and non-freezing temperatures. Residential ice makers merit 
additional consideration because they are primarily designed to produce 
the ice in addition to providing storage for that ice at freezing 
temperatures. The types of ice and processes used to make them may 
differ from the other equipment covered by the restrictions for this 
subsector and additional analysis of available substitutes for 
household ice makers is warranted. As such, EPA does not consider 
residential ice makers to be within the scope of the household 
refrigerators and freezers subsector or the requirements of the 
Technology Transitions Rule.

V. Statutory and Executive Order Review

    Additional information about these statutes and Executive Orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 14094: Modernizing Regulatory Review

    This action is a ``significant regulatory action'' under Executive 
Order 12866, as amended by Executive Order 14094. Nevertheless, the 
Office of Management and Budget waived review of this action. The EPA 
prepared an analysis of the potential impacts associated with this 
action. This analysis, Regulatory Impact Analysis of the Proposed Waste 
Emission Charge, is available in docket EPA-HQ-OAR-2023-0434 to this 
rulemaking and is briefly summarized in Section V of this preamble.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under 
the PRA because it does not contain any information collection 
activities.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, EPA concludes that the impact of concern for 
this rule is any significant adverse economic impact on small entities 
and that the agency is certifying that this rule will not have a 
significant economic impact on a substantial number of small entities 
because the rule relieves regulatory burden on the small entities 
subject to the rule. This rule prevents the stranding of components 
used to install residential and light commercial air conditioning and 
heat pump systems. We have therefore concluded that this action will 
relieve regulatory burden for all directly regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local or tribal governments or the private sector.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the Federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal government and Indian tribes, as specified in 
Executive Order 13175. Thus, Executive Order 13175 does not apply to 
this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that EPA has reason to believe may disproportionately affect children, 
per the definition of ``covered regulatory action'' in section 2-202 of 
the Executive Order. This action is narrowly tailored to prevent the 
stranding of certain air conditioning and heat pump equipment while not 
affecting the demand for HFCs. Therefore, this action is not subject to 
Executive Order 13045 because it does not concern an environmental 
health risk or safety risk. Since this action does not concern human 
health, EPA's Policy on Children's Health also does not apply.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution or use of energy. This action applies to certain regulated 
substances and certain applications containing regulated substances, 
none of which are used to supply or distribute energy.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations and 
Executive Order 14096: Revitalizing Our Nation's Commitment to 
Environmental Justice for All

    The EPA believes that this type of action does not concern human 
health or environmental conditions and therefore cannot be evaluated 
with respect to potentially disproportionate

[[Page 88832]]

and adverse effects on communities with environmental justice concerns. 
This action is narrowly tailored to prevent the stranding of inventory 
of air conditioning and heat pump equipment while not affecting the 
demand for HFCs.
    Although this action does not concern human health or environmental 
conditions, the EPA identified and addressed environmental justice 
concerns within the Technology Transitions Rule (88 FR 73098; October 
24, 2023).

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. The CRA allows the issuing agency to make a rule 
effective sooner than otherwise provided by the CRA if the agency makes 
a good cause finding that notice and comment rulemaking procedures are 
impracticable, unnecessary or contrary to the public interest (5 U.S.C. 
808(2)). The EPA has made a good cause finding for this rule as 
discussed in the supplementary information section of the preamble 
where this is discussed, including the basis for that finding.

List of Subjects in 40 CFR Part 84

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Climate change, Emissions, Imports, 
Reporting and recordkeeping requirements.

Michael S. Regan,
Administrator.

    For the reasons stated in the preamble, EPA amends 40 CFR part 84 
as follows:

PART 84--PHASEDOWN OF HYDROFLUOROCARBONS

0
1. The authority citation for part 84 continues to read as follows:

    Authority:  Pub. L. 116-260, Division S, Sec. 103.


0
2. Amend Sec.  84.54 by revising paragraph (c)(1) as follows:


Sec.  84.54  Restrictions on the use of hydrofluorocarbons.

* * * * *
    (c) * * *
    (1) Effective January 1, 2025, residential or light commercial air-
conditioning or heat pump systems using a regulated substance, or a 
blend containing a regulated substance, with a global warming potential 
of 700 or greater, except for variable refrigerant flow air-
conditioning and heat pump systems. New residential and light 
commercial air-conditioning and heat pump systems using a regulated 
substance, or a blend containing a regulated substance, with a global 
warming potential of 700 or greater may be installed prior to January 
1, 2026, where all specified components of that system are manufactured 
or imported prior to January 1, 2025.
* * * * *
[FR Doc. 2023-28500 Filed 12-22-23; 8:45 am]
BILLING CODE 6560-50-P