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HVACR news, trends, and important 2023 discussions: Join “Refrigerant Roundup”

2023 is poised to be the end of “business as usual” in HVACR reporting

As we kick off 2023, we are excited to launch our monthly LinkedIn newsletter Refrigerant Roundup. Since 2017, Trakref has published more than 200 blogs, hosted 147 webinars, and produced 32 white papers — all of which is focused on HVACR (sometimes seen as HVAC/R in the media and other blogs), refrigerants, and F-gasses (fluorine gasses) in an effort to bring awareness to the impacts that refrigerants have on climate, the environment, and operations.  

Since 1994, we have been committed to reducing refrigerant losses and work hard to make the process of tracking refrigerants and F-gasses as simple as possible. During our 28 years, we have manufactured recovery equipment, were part of the team that developed the plastic cylinder, created the cylinder exchange program, and operated reclaim plants in the US, Europe, and Asia.

We pioneered software to track cylinders, gas, systems, and the people responsible for their success. We also participate in the regulatory process and have joined in almost every discussion on every continent related to refrigerant stewardship. Our team has helped to shape policies at the local, state, and federal level. Our activism and advocacy are focused on ways to improve best practices, engage the workforce in solution development, and to act as a conduit between operational success and policy development.  

2022 was an overwhelming year of updates to regulations related to refrigerants, F-Gasses, and the HVACR (ACR) industry. And although we knew the AIM act would be the catalyst for a process of change, we underestimated the speed and scope of changes to refrigerant awareness and management. Since 1987, the EPA was always at the epicenter of refrigerant management policy, but that is no longer the case.  Policies have become politicized at the federal level, and the EPA’s effectiveness is marginalized. So states and other groups have taken a more active role in participating in the governance process.  

2022 yielded the most updates to refrigerant awareness since the Montreal Protocol brought Ozone Depletion into focus 35 years ago. The reason that states and other groups have joined the effort to curb emissions is because even with all of the existing regulations in place, and more than 3 decades working to gain control over emissions, we now vent 4-5x more refrigerants in the US today than we did 30 years ago.  

There is more carbon equivalent impact from refrigerants than from all of the air travel in the US annually. Refrigerant emissions are part of the carbon balance sheet that is reported as part of Scope 1 emissions.

Traditional regulatory patterns are being enhanced, and our industry now includes oversight from Shareholders, Mechanical Code and Building Permitting, Energy Conservation, FTC, SEC, State Regulators, OSHA, Clean Air, GreenHouse Gas Program Offices at the State and Federal level, Regional GHG Programs, and numerous program Offices at EPA. 

And now, foreign regulations will soon have an impact on reporting, recordkeeping, registries, and recycling (end of life) as the EU works to establish a level playing field globally.    

The results from 2022 were more than a decade in the making, and 2023 will only build on that activity. Trakref’s passion for this topic inspires us to innovate and drives our commitment to being successful. We measure success one pound at a time, not one subscription at a time, and that makes us different. It is not enough for us to sell a subscription; our team is driven by a deeper commitment to be effective and relatable.  

Refrigerant Roundup is written by a small group of passionate refrigerant experts here at Trakref. Our intent is to champion the cause of refrigerant stewardship, foster a refrigerant geek community, and end the business-as-usual approach of “topping off” leaks in systems.

To put the scale of 2022’s impact in perspective and in order to provide some foreshadowing for 2023, here is a list of the top items impacting owners, operators, and the service teams that maintain, install, and decommission F-gas-containing appliances.

These are all things you can expect to see covered in Refrigerant Roundup newsletters with an overall focus on HVACR news, trends, compliance, and regulation.
 
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Federal issues currently impacting HVACR

The Inflation Reduction Act, dedicating more than $369 billion to cut US greenhouse gas emissions 40% below 2005 levels by 2030. Because the law works through tax incentives that are uncapped, the US could spend up to $800 billion to reduce carbon emissions while creating an estimated 9 million new jobs. Its immediate impact will increase demand for certain refrigerants, putting more pressure on already constrained supplies of refrigerants. Expect heat pumps, heat pump-driven water heaters, and more electric-oriented refrigerant-based systems to get subsidies and be deployed into service. 

The AIM Act under the EPA engaged the second of three phases, with the planned obsolescence of traditional refrigerants:

• • 10% reduction in place – next phase down is in 24 months 
  • Phase out of high-GWP refrigerants established in December 2022, final comments are due by the end of January
  • Be on the lookout for the final leg of the EPAs obligations under this act. The EPA has signaled that it is considering a new branch of regulations to cover HFC maintenance actions and expect new associated licensing and training requirements.

The new US budget further accelerates climate action – the 4,000+ page budget includes $685 million for industrial decarbonization, $380 million for alternative fuels, $140 million for carbon removal technologies, and creates an Industrial Emissions Reduction Technology Development Program.

Federal contractors must also disclose Scope 1 emissions, which includes refrigerants. 
 

There’s also a state-by-state picture in the U.S. to consider in HVACR

• California, Washington, and New Jersey all enacted new regulations related to the responsibility to register HVAC/R appliances. 
• The US Climate Alliance is acting as a clearinghouse to help facilitate awareness and discussions between states.

European regulations impacting HVACR in 2023

• The new EU Corporate Sustainability Reporting Directive (CSRD) will require ~50,000 companies to disclose their carbon emissions and performance on other ESG issues. It is expected that EU disclosure standards and the standards from the newly formed International Sustainability Standards Board (ISSB) will converge.
• The EU Carbon Border Adjustment Mechanism (CBAM) – which was approved just before the holidays – will impose a new tariff on the carbon ‘intensity’ of products imported into the EU. As the world’s largest trading bloc with the largest carbon market, the new EU carbon tariff could help establish a global price on carbon emissions.

Big HVACR trend to watch: Shareholders, wanting answers

• Greenwashing won’t be tolerated by regulators in the US, UK, EU, Australia, and other countries that have enacted new policies to prevent companies from making false ESG claims. Last year, Deutsche Bank was raided by police for suspicion of greenwashing and millions in greenwash fines were collected. The new policies aim to provide investors with reliable, consistent, and comparable information about ESG factors. A new report demonstrated the need for these changes since less than one percent of ESG funds would meet the proposed EU ecolabel standard.
• Over 90% of companies plan to increase their sustainability budgets in 2023. Energy efficiency is ranked as the top priority for companies, followed by emissions reduction (Refrigerants), pollution prevention, circularity, and recycling (refrigerants). International Data Corporation forecasts that 75% of large enterprises will implement ESG data management and reporting software as a response to new legislation and stakeholder expectations. They also predict that 30% of organizations will advance beyond reporting capabilities to generate sustainably driven cost and competitive advantages.
• ESG is now heavily politicized in the US causing some firms to roll back their commitments, but that is prudent anyway since Net Zero is unachievable without a better grip on a firm’s refrigerant impact. In 2023, the Republican majority in the House will take on Wall Street, corporate America, and U.S. financial regulators. On January 4, 2023, the SEC updated its timeline for ESG-Related Actions Under RegFlex Agenda disclosure rule with an expected release date of April 2023 for its climate disclosure rule requirements.  Although the ruling will face opposition from the conservative majority in the House of Representatives and some business interests, there is overwhelming support for this action.

HVACR and mechanical code updates

• It appears that there are two versions of the A2L home comfort mechanical codes, the IAPMO (The International Association of Plumbing & Mechanical Officials) and the ICC (International Code Council) version. These codes are slightly different from each other. Both will reference ASHRAE Standard 15 and UL Standard 60335-2-40 for installation requirements providing a uniform set of requirements between all states. However, the IAPMO UMC coverage deviates from ASHRAE 15 in how an indoor DX unit will handle an A2L leak, in terms of where the leak can be discharged by the ventilation system. ASHRAE 15 allows for two options: either (a) discharge to indoor spaces provided that the refrigerant concentration will not exceed a specific calculated limit, or (b) discharge to the outdoors. Right now, the UMC version will only allow for condition “b.” In addition, the UMC Technical Committee is currently voting on whether to require brazing-only for A2L fittings or allow for press connects.
• The State of Washington is set to vote later this month on 60335-2-40, which will contain significant changes regarding A2L refrigerants used for comfort cooling. Equipment containing these mildly flammable refrigerants is already available in some states, and more states are amending their building codes to allow for their use. So, it is time to get ready, as A2Ls are coming, and contractors should be in front of this transition.

Ted Bauer

Managing and developing ESG and EHS content for Trakref since early 2023.