Despite Bipartisan Support, Some Still Resist HFC Phase-Out Bill

WASHINGTON — A House bill generally supported by congressional Republicans and manufacturers to phase out hydrofluorocarbons (HFCs) nevertheless raised a few red flags when it came up before a House subcommittee last week.

HFCs are a class of chemicals primarily used as refrigerants that gained widespread use in the 1990s as replacements for ozone-depleting substances, but HFCs have their own challenges.

Environmental and business interests are often at odds over regulations similar to those presented in the American Innovation and Manufacturing Leadership (AIM) Act of 2020, H.R. 5544, discussed at the hearing of the House Environment and Climate Change Subcommittee. 

Yet not only does H.R. 5544 have an equal number of Republican and Democratic co-sponsors, but the bill is also garnering the strong support of the National Association of Manufacturers.

Subcommittee Chairman Paul Tonko, D-N.Y., said it’s “unusual… to receive testimony from industry stakeholders asking for the creation of a new EPA program.” 

H.R. 5544, among other provisions, presents a fifteen-year phaseout of HFCs.  

Proponents of the bill claim that H.R. 5544 addresses an environmental concern in a manner that will spur innovation and make U.S. manufacturers more globally competitive. 

They claim H.R. 5544 offers an opportunity to ensure that the next generation of refrigerants is American-made and cite statistical research which shows that the bill could generate as many as 33,000 new manufacturing jobs and grow the U.S. share of the global export market for refrigerants by 25%. 

Rep. Nanette Diaz Barragán, D-Calif, boasted it as a “triple win” for jobs, for consumers, and for the environment. 

Not everyone agreed. 

“It’s probably not going to be 33,000, and they’re probably not going to be American,” said panelist Ben Lieberman, senior fellow at the Competitive Enterprise Institute. Lieberman was a staff member for the House Committee on Energy & Commerce from 2011 to 2018.

“The bill in its present form risks significant and unnecessary costs to homeowners, vehicle owners, and many small business owners, and promises more economic pain than environmental gain,” testified Lieberman.  “Make no mistake, this bill will impose costs, with higher repairs of existing equipment and higher purchase prices for new equipment.”

And it wasn’t just statistics that were challenged. It was suggested that there was a silencing of dissenting voices at the hearing, and that market actors may be using the bill’s provisions to gain competitive advantage at the expense of the American consumer. 

“I’m worried that small businesses and consumers are not being heard in this hearing,” said Rep. John Shimkus, R-Ill.

In addition to stakeholder involvement concerns, some Members expressed apprehension that the bill may actually constrain the U.S. market by restricting a low-cost option for American consumers.

While most Members of Congress admitted to having fairly limited experience with the topic of HFCs, Rep. Markwayne Mullin, R-Okla, has been in the HVAC business for 23 years. His was the strongest opposing voice to H.R. 5544 as currently presented. 

Despite testimony from industry representatives that a phase-out of HFCs would not force consumers to replace equipment before the end of its useful life, Mullin stated his belief that consumers will, in fact, have to replace equipment due to efficiency and capacity loss.

When Gary Bedard, president and chief operating officer of Lennox International, Inc., testifying on behalf of the Alliance for Responsible Atmospheric Policy, spoke in favor of the HFC phase-down because it “offers federal regulation that could provide for an efficient, cost-effective, and predictable transition… that creates regulatory certainty, stability, and predictability,” Mullin balked. 

“We talk about certainty inside the industry through regulation, but uncertainty for the consumer,” he said. 

Mullin further offered concerns about state preemption of federal regulations as well as the risk of flammability of current HFC alternatives. 

“I’m not saying that anybody is purposely deceiving or misleading,” he said.  “We just need to make sure the consumer is aware of what their choices are and what is the cost.”