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.