Title IV of the Dingell Boucher Bill, proposed last week, would amend the Clean Air Act to regulate Hydrofluorocarbons (HFCs) as greenhouse gases. In doing so, Title IV illustrates a recurring theme regulators face in addressing new environmental issues: Today’s solutions often become tomorrow’s problems.

HFCs are man-made chemicals, which originally came to prominence as alternatives to ozone-depleting substances (ODSs) like chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), used as coolants and propellants in many industrial and consumer products. Today, many HFCs are also being phased out as part of EPA’s program to implement the Montreal Protocol on Substances That Deplete the Ozone Layer, while others continue to be listed as alternatives to even more destructive substances. Indeed, HFCs have become even more important as alternatives after the US and other parties to the Montreal Protocol agreed to an accelerated phase out of HCFCs in late 2007.

HFCs are also potent greenhouse gasses (GHG), possessing global warming potentials ranging from 140 to 11,700 times that of carbon dioxide. Dingell Boucher initially proposes listing 18 specific HFCs as regulated greenhouse gases while directing EPA to review the global warming potential of other HFC substances for potential addition to the list. Using the Clean Air Act’s stratospheric ozone provisions as a model, the bill would subject regulated HFCs to monitoring and reporting requirements, recycling and emissions reduction requirements and product labeling requirements. The  Bill would prohibit the sale of regulated HFCs for non-essential uses by 2012 and, with the exception of certain essential uses like metered dose inhalers, aviation safety applications, explosion prevention and fire safety applications, establish a phase-down schedule for the domestic use of regulated HFCs between 2012 and 2040. The bill provides a range of possible phase-out milestones, but would reduce production of HFCs to 15 to 20 percent of the average annual HFC production between 2004 and 2006 (adjusted for global warming potential). It would also impose a tax on the use or sale of regulated HFCs based on the quantity and global-warming potential of the HFC in question.

The need to replace HFCs and other greenhouse gases will provide new opportunities for the chemical industry to innovate. The challenge for these innovators will not be limited to protecting against stratospheric ozone, climate and other commonly-known impacts, but also against those environmental impacts not yet determined.

For further information about this topic, please contact Akin Gump.