Why This Matters to Distributors: The lawsuit challenges an Environmental Protection Agency refrigerant rule that industry groups say could tighten supplies of hydrofluorocarbon refrigerants, raise prices and complicate inventory planning for distributors and contractors as the industry transitions to lower-global-warming-potential alternatives.
Heating, Air-conditioning & Refrigeration Distributors International, the Plumbing-Heating-Cooling Contractors, the National Association and the Air Conditioning Contractors of America have filed a legal challenge to portions of the Environmental Protection Agency’s Technology Transitions Reconsideration Rule, arguing the regulation violates federal law and could disrupt refrigerant supplies across the HVACR industry.
The petition challenges provisions that extend compliance deadlines for new commercial refrigeration equipment using legacy hydrofluorocarbon refrigerants in supermarkets, retail food stores, and cold storage facilities. The organizations argue the rule allows continued production of systems using older refrigerants even as the American Innovation and Manufacturing Act requires a phased reduction in hydrofluorocarbon production and consumption.
According to the petitioners, extending the use of legacy refrigerants while federal law continues reducing supply will create an imbalance in the market, driving higher prices and increasing uncertainty for distributors, contractors, and equipment owners.
“The final reconsideration rule’s treatment of commercial refrigeration is legally flawed, economically reckless, and directly at odds with the AIM Act,” HARDI Chief Executive Officer Talbot Gee said in a statement. “The EPA ignored industry data and more than a decade of industry work to prepare for this transition.”
The organizations also cited the EPA’s own economic analysis, which they said projects U.S. refrigerant prices could increase 12% to 24% by 2029 as supplies of legacy refrigerants continue to decline.
PHCC CEO Cindy Sheridan said extending the use of older refrigerants in new commercial refrigeration equipment creates unnecessary confusion for contractors and customers while increasing costs.
The groups also argue the rule could reduce refrigerant availability for other markets, including residential air conditioning and heat pumps, by increasing demand for a shrinking supply of hydrofluorocarbons.
ACCA interim president and CEO Martin Hoover said the rule could accelerate pressure on contractors to transition to A3 refrigerants while creating the potential for inconsistent state regulatory requirements.
The organizations are not challenging the rule in its entirety. They said they support the EPA’s decision to eliminate installation deadlines for existing R-410A split-system residential and light commercial air conditioners and heat pumps; a change they said prevents stranded inventory and reduces disruption for distributors, contractors, builders, and consumers.
The petitioners also dispute the EPA’s conclusion that the original Technology Transitions Rule contributed to higher grocery prices. They argue the commercial refrigeration provisions had not yet taken effect when the agency proposed the reconsideration rule and applied only to newly manufactured equipment, not existing refrigeration systems already in operation.
The lawsuit comes as the HVACR industry continues its multiyear transition to lower-global-warming-potential refrigerants under the AIM Act. Manufacturers, distributors, and contractors have invested heavily in new equipment, technician training, and inventory management to prepare for the phasedown of hydrofluorocarbons. The outcome of the case could influence the pace of that transition and the availability and pricing of refrigerants across multiple end markets.
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