Mar 92023

EPA Announces Enforcement Actions to Control Hydrofluorocarbon Imports

Rob Abrams, Brittany A. Bolen, Hannah Posen and Samuel B. Boxerman
, , , , ,

On March 2, 2023, the U.S. Environmental Protection Agency (EPA or Agency) announced several enforcement actions that support reducing the use of hydrofluorocarbons (HFCs). These actions include the following:

  • EPA reached three settlements with HFC importers that allegedly failed to report their imported quantities of HFCs, in violation of the Clean Air Act’s (CAA) Greenhouse Gas Reporting Program, with penalties of $247,601, $275,000, and $384,473. Notably, EPA’s press release stated that the Agency was “aggressively pursuing similar actions against several other importers that failed to report their HFCs.” More information about the settlements is available on EPA’s website here.
  • EPA issued the first three notices of violation (NOVs) under the American Innovation and Manufacturing Act of 2020 (AIM Act) to alleged violators that imported HFCs without expending required allowances. Specifically, EPA’s AIM Act implementing regulations prohibit any person from importing “bulk regulated substances, except [b]y expending, at the time of import, consumption or application-specific allowance in a quantity equal to the exchange value weighted equivalent of the regulated substances imported…” (40 C.F.R. § 84.5(b)). Two of the NOVs were issued on January 26, 2023, and the third was issued on February 6, 2023. More information about AIM Act enforcement is available on EPA’s website here.

The high concentration of enforcement actions regarding the AIM Act prohibition on importing HFCs without expending the requisite allowances (the first three NOVs were issued within one month of one another) supports EPA’s assertion that the Agency is aggressively enforcing HFC import controls.

These announcements are consistent with EPA’s proposed change to the National Enforcement and Compliance Initiatives (NECIs), published  on January 19, 2023, which added as an EPA priority the enforcement of restrictions on HFC imports under the AIM Act. Sidley previously published a post about EPA’s proposed changes to its NECIs here. Comments on EPA’s proposed NECI changes are due by March 13, 2023, and can be submitted via the Federal eRulemaking Portal.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Rob Abrams

Brittany A. Bolen

Washington, D.C.

bbolen@sidley.com

Hannah Posen

Chicago

hposen@sidley.com

Samuel B. Boxerman

Washington, D.C.

sboxerman@sidley.com

You might also like
U.S. EPA Removes Regulatory Affirmative Defense Provision Against Alleged Violations of Oil and Gas Facility NESHAPs

On October 22, 2024, the U.S. Environmental Protection Agency (EPA) published a final rule removing an affirmative defense from Clean Air Act (CAA) National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations for the Oil and Natural Gas Production Facility and Natural Gas Transmission and Storage Facility Source Categories (Final Rule).[1] Prior to the Final Rule, owners or operators could assert an affirmative defense that alleged NESHAP standard violations were caused by an equipment malfunction.[2] A “malfunction” is defined as any sudden, infrequent, and not reasonably preventable failure of air pollution control and monitoring equipment, process equipment, or a process to operate in a normal or usual manner.[3]

District of North Dakota Halts Bureau of Land Management’s Venting and Flaring Rule

On Thursday, September 12, 2024, Judge Daniel Traynor of the U.S. District Court for the District of North Dakota granted a preliminary injunction sought by North Dakota, Montana, Texas, Wyoming, and Utah (the States) to halt the April 2024 “Waste Prevention, Production Subject to Royalties, and Resource Conservation” rule from the Bureau of Land Management (BLM), which mandates that oil and gas well operators on federal land flare rather than vent excess methane gas. The April 2024 rule revised a 2016 BLM rule that the District of Wyoming vacated in 2020. The States raised a number of challenges to the April 2024 rule, arguing that it exceeded BLM’s statutory authority under, or violated, the Mineral Leasing Act, Federal Oil and Gas Royalty Management Act, Clean Air Act, and Federal Land Policy and Management Act and was otherwise arbitrary and capricious under the Administrative Procedure Act.

EPA Issues Final Rule for Major Source Reclassification Under Clean Air Act Section 112

On Tuesday, September 10, the U.S. Environmental Protection Agency (EPA) issued a final rule establishing requirements for major sources of hazardous air pollutants — sources that emit or have the potential to emit 10 tons per year of a single hazardous air pollutant or 25 tons per year of a combination of hazardous air pollutants — that reclassify as area sources below these thresholds. Reversing a rule adopted during the Trump administration, the rule provides that sources emitting any of the seven persistent and bioaccumulative hazardous air pollutants listed under Section 112(c)(6) of the Clean Air Act must continue to comply with major source standards even if otherwise reclassified as area sources. As a result, reclassified sources will still be subject to maximum achievable control technology standards rather than less stringent standards applicable to area sources. In so doing, EPA maintains that at least 90% of the cumulative emissions of these pollutants will be subject to National Emission Standards for Hazardous Air Pollutants (NESHAP) regardless of future source reclassifications.