subsector and for the reasons discussed in the proposed rule is
primarily using that approach in this final rule. Additionally, the GWP
listing approach is not a replacement for SNAP listings or reviews of
environmental, health, and safety impacts. Congress provided separate
authority under subsection (i)(5) of the AIM Act for EPA to evaluate
substitutes for HFCs in a sector or subsector, taking into account
technological achievability, commercial demands, safety, overall
economic costs and environmental impacts, and to make the evaluation
public, including the factors associated with the safety of those
substitutes. EPA intends to continue providing information on its
evaluation of alternatives to HFCs.
    Furthermore, contrary to commenter's suggestion, EPA continues to
promulgate rules under SNAP. Section 612(c) of the CAA requires EPA to
promulgate rules making it unlawful to replace ODS with any substitute
that it determines may present adverse effects to human health or the
environment where it has identified an alternative that (1) reduces the
overall risk to human health and the environment and (2) is currently
or potentially available. Section 612(c) further requires EPA to
``publish a list of (A) the substitutes prohibited under this
subsection for specific uses and (B) the safe alternatives identified
under this subsection for particular specific uses.'' Under SNAP, EPA
evaluates substances that can be used as alternatives based on multiple
criteria and accordingly lists them as acceptable, unacceptable,
acceptable subject to use conditions, acceptable subject to narrowed
use limits, or pending. See 40 CFR 82.180(a)(7) (listing criteria for
review) and 40 CFR 82.180(b) (describing types of listing decisions).
EPA has considered more than 500 alternatives for eight industry
sectors and more than 40 end uses since 1994.\38\ EPA will continue to
evaluate alternatives in the sectors and subsectors where ozone-
depleting substances have been and are being used.\39\ EPA recently
finalized SNAP Rule 25 listing lower-GWP alternatives as acceptable,
subject to use conditions, for chillers-comfort cooling, residential
dehumidifiers, residential and light commercial air conditioning and
heat pumps. SNAP Rule 25 also listed ethylene as acceptable, subject to
use conditions and narrowed use limits, in very low temperature
refrigeration. (88 FR 26382; April 28, 2023). EPA also recently
proposed SNAP Rule 26 which would list lower-GWP alternatives as
acceptable, subject to use conditions, for retail food refrigeration,
commercial ice machines, IPR, cold storage warehouses, and ice-skating
rinks. (88 FR 33722, May 24, 2023). As discussed in section VI.E.2 of
this preamble and the American Innovation and Manufacturing Act of
2020--Subsection (i)(4) Factors for Determination: Safety, referred to
in this preamble as the ``Safety TSD,'' assessments of safety and other
characteristics under SNAP are duly considered in our examination of
availability (as it relates to safety and other factors) under AIM Act
subsection (i)(4)(B).
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    \38\ As noted in section VI.A of this preamble, there is
significant overlap between the sectors and subsectors identified in
this proposal and how sectors and ``end-uses'' are categorized under
the SNAP program.
    \39\ After a court challenge, the D.C. Circuit partially vacated
SNAP Rule 20 (80 FR 42870, July 20, 2015) ``to the extent it
requires manufacturers to replace HFCs with a substitute
substance,'' and remanded to EPA for further proceedings. Mexichem
Fluor, Inc. v. EPA, 866 F.3d 451, 464 (D.C. Cir. 2017) (``Mexichem
I''). However, the court upheld EPA's decisions in that rule to
change the listings for certain HFCs in certain SNAP end-uses from
acceptable to unacceptable as being reasonable and not arbitrary and
capricious. Id. at 462-64. The same court later issued a similar
partial vacatur for portions of the SNAP Rule 21 (81 FR 86778,
December 1, 2016). See Mexichem Fluor, Inc. v. EPA, 760 Fed. Appx. 6
(Mem) (per curiam) (D.C. Cir. 2019) (``Mexichem II'').
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    Therefore, EPA is primarily finalizing the use restrictions in this
action by employing a GWP limit approach because this approach supports
innovation, transition, and compliance. Furthermore, for the reasons
discussed in the proposed rule and based on the comments received, EPA
is in most instances not employing a specific listing approach in its
use restrictions, except in limited circumstances. For example, we find
the specific listing approach can be preferable where the subsector has
not yet identified favored lower-GWP substitutes to transition to, but
is in a position, per subsection (i)(4), to transition away from using
the highest-GWP regulated substances. It

allows additional time before establishing a GWP limit (which, to serve
regulatory certainty and innovation, the Agency would prefer not to
repeatedly revisit) while still restricting those substances that have
the highest environmental impact. This approach would allow for the
adoption of multiple transitional substitutes and allow for the
development of additional substitutes before issuing a GWP-limit-based
restriction. As such, EPA is using both approaches in combination, with
some subsectors having a GWP limit and others where specific substances
are restricted.

C. Applicability

    HFCs are used in a wide variety of sectors, including refrigeration
and air conditioning, foams, aerosols, and fire suppression. In these
sectors, HFCs are used as a refrigerant, foam-blowing agent, solvent,
propellant, and fire suppression agent and may be contained within or
emitted from equipment such as a product or system. HFCs are also used
in processes such as semiconductor manufacturing and chemical
manufacturing. Subsection (i) of the AIM Act provides that the
Administrator may by rule restrict, fully, partially, or on a graduated
schedule, the use of a regulated substance in the sector or subsector
in which the regulated substance is used. EPA interprets its authority
under subsection (i) to cover a broad chain of sector and subsector
activities associated with equipment that uses regulated substances.
    EPA designed the restrictions of this rule to apply at certain
points in this chain of activities, consistent with the Act's direction
that EPA ``may by rule restrict, fully, partially, or on a graduated
schedule.'' In light of the fact that the restrictions in this final
action are the first to be issued under subsection (i), EPA views
restrictions on the incorporation of higher-GWP HFCs into new products
and systems and on the introduction and circulation of those products
in the market as the most efficient and effective way to encourage a
subsector to transition from the use of those HFCs. This rule therefore
(1) restricts the use of HFCs in the manufacture and import of new
products; (2) restricts the subsequent sale or distribution, offer for
sale and distribution, purchase or receipt for sale or distribution, or
export of those products; and (3) restricts the installation of new
systems and the significant modification of existing systems.
    In general, these restrictions apply primarily to original
equipment manufacturers (OEMs) and importers, as these are the entities
that introduce such products and components of such systems into the
U.S. market. The restrictions in this rule that apply to distributors
(including online platforms), retailers, and exporters are intended to
reinforce the manufacture and import restrictions, and to ensure that
incentives throughout the market chain are aligned toward transitioning
a subsector from regulated substances where available substitutes
exist. Entities that install new systems, including those that
assemble, contract for, or take possession of the system are also
subject to these restrictions.
    EPA is cognizant of the continued need in the covered sectors and
subsectors for components to service and maintain existing systems that
use higher-GWP HFCs. This rule therefore allows for the continued
manufacture, import, sale, distribution, and export of components,
subject to labeling, reporting, and recordkeeping requirements. EPA is
generally not applying restrictions on the use of HFCs in existing
products or systems or used products, except, for example, in limited
circumstances such as the import of used products or modification of a
system to the point that it constitutes replacement (see section VI.C.3
of the preamble). To that end, this rule does not restrict the use of
HFCs in ordinary repair and servicing of products or systems, nor is
EPA applying the restrictions to the use of HFCs in retrofit
applications.
1. What is EPA's statutory authority for this action?
Summary of the Proposed Rule
    Subsection (i) grants EPA authority to restrict the use of a
regulated substance in the sector or subsector in which the regulated
substance is used, and the Act does not define ``use.'' For several
reasons, summarized below, EPA proposed to define ``use'' in the
context of subsection (i) as including actions taken with respect to
regulated substances that occur at the market or industry level, such
as manufacture, distribution, sale, and offer for sale--i.e., to cover
the presence of HFCs in products and processes in the U.S. market--as a
way of addressing their use in sectors and subsectors. EPA's
interpretation of its authority under this section is grounded in the
statutory text and purposes.
    First, sectors and subsectors are not defined in the AIM Act, but
those terms suggest groupings or categories of related activity at an
industry level. EPA is defining ``sectors'' and ``subsectors''
consistent with historical usage of those terms in other programs--
grouping together similar or related industrial or market uses into
distinct sectors; for example, refrigeration and air conditioning,
foams, or aerosols. The AIM Act language, ``use of a regulated
substance in the sector or subsector in which the regulated substance
is used,'' makes plain that the grant of authority under subsection (i)
was intended to cover a sector or subsector's use of a regulated
substance. The inclusion of a regulated substance in a product \40\ or
system to achieve a particular purpose--e.g., using an HFC as a
refrigerant in a refrigerator or in an air conditioner--is a
prototypical use for sectors in which regulated substances are used.
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    \40\ Similarly, subsection (i)'s authority extends to regulated
substances contained in a blend and the use of that regulated
substance within a blend by the sector or subsector in a product or
process to achieve a particular purpose. To address the regulated
substance within a blend, it is appropriate to establish
requirements that apply to use of the blend, although the blend
itself is not a regulated substance.
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    Second, because subsection (i) and the subsection (i)(4) factors
are focused on broad, sector-level information, we proposed that it is
reasonable to interpret ``use'' broadly, in a way that would reach uses
on a sector-level basis. The subsection is titled ``Technology
Transitions,'' and in subsection (i)(4), the Act directs EPA to
consider certain factors, to the extent practicable, in issuing a
rulemaking or making a determination to grant or deny a petition
regarding use restrictions. The factors listed under subsection (i)(4)
task the Agency with examining information relevant to industry-level
sectors or subsectors that would inform consideration of the
feasibility and advisability of establishing requirements for a
transition away from the use of a regulated substance in that sector or
subsector, as well as consideration of whether that transition should
be full, partial, or on a graduated schedule. For example, subsection
(i)(4)(B) directs EPA to factor in ``the availability of substitutes
for use of the regulated substance that is the subject of the
rulemaking or petition, as applicable, in a sector or subsector, taking
into account technological achievability, commercial demands, safety,
consumer costs, building codes, appliance efficiency standards,
contractor training costs, and other relevant factors, including
quantities of regulated substances available from reclaiming, prior
production, or prior import.'' The various subfactors in (i)(4)(B) help
EPA to determine whether there are adequate available substitutes for a
regulated

substance that a sector or subsector could use, indicating feasibility,
readiness, advisability, and degree of a sector or subsector's
transition away from the regulated substances in use. Similarly, the
other factors in (i)(4)--to use best available data, to consider
overall economic costs and environmental impacts as compared to
historical trends, and to consider the remaining phasedown period for
regulated substances under the phasedown rule issued under subsection
(e), if applicable--also fit with this understanding of EPA's task: to
determine whether, when, and to what degree it is appropriate to
establish a use restriction to facilitate the transition of a sector or
subsector from the use of regulated substances.
    Third, we explained in the proposed rule that Congress provided EPA
authority to issue restrictions that are full, partial, or on a
graduated schedule. Fully restricting the use of a regulated substance
in the sector or subsector in which it is used, by its terms, implies a
full transition away from the use of that regulated substance in the
given sector or subsector. We therefore understand EPA's ability to
restrict ``use of a regulated substance in the sector or subsector in
which it is used'' to be broad enough to achieve a full transition such
that the regulated substance would no longer be present in any portion
of the sector or subsector. To effectuate a full transition, we would
have to be able to address all the aspects where the regulated
substance is present in that sector or subsector of the market. There
may be situations where a restriction is best targeted at points in the
life cycle or market chain of the regulated substance that are
subsequent to the incorporation of the regulated substance in a product
or process, as well as points in the chain that are proximate to
ultimate use. Thus, we interpret the term ``use,'' and EPA's authority
under AIM Act subsection (i), as being broad enough to reach points
such as transport or offer for sale.
    EPA therefore proposed to interpret use of a regulated substance in
the sector or subsector for purposes of subsection (i) as ``for any
person to take any action with or to a regulated substance, regardless
of whether the regulated substance is in bulk, contained within a
product, or otherwise, except for the destruction of a regulated
substance. Actions include, but are not limited to, the utilization,
deployment, sale, distribution, discharge, incorporation,
transformation, or other manipulation.'' EPA's proposed definition of
``use'' therefore covered all of the links on the chain representing
how regulated substances are introduced, incorporated into products or
processes, circulated, and made available in the U.S. market.
    We explained in the proposed rule that even though the Act grants
EPA broad authority to achieve a full transition from regulated
substances in a sector or subsector, there are many actions not
included within the scope of the restrictions covered by this final
rule, including actions associated with steps in the disposal chain
such as recovery, recycling, and reclamation of a regulated substance;
the ordinary utilization or operation of a system or product by a
consumer; \41\ and the six specific applications with a current
qualification for application-specific allowances under 40 CFR 84.13.
As explained in the proposed rule, given that we are at the outset of
the phasedown of regulated substances, the restrictions in this action
are aimed at limiting the introduction of new products that use
regulated substances to the market and restricting the circulation of
those products (e.g., sale or distribution) before they reach the
consumer. In that vein, the final rule includes ``offer for
distribution'' in addition to offer for sale in the definition of use.
Similarly, we proposed to restrict the installation of new systems
using HFCs under the proposal by defining manufacture to include the
installation of new systems. EPA is finalizing its definition of
``use'' under subsection (i), with these clarifications, consistent
with the interpretation of ``use in the sector or subsector in which
the regulated substance is used'' articulated in the proposed rule and
described above.
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    \41\ Noting, however, that in some cases the consumer may have
purchased a product where the first incorporation of the regulated
substance occurs when the product is in the consumer's ownership,
and in those cases that incorporation would be covered by the
requirements.
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    Comment: Most of the comments the Agency received in response to
its proposed interpretation of EPA's scope of authority under
subsection (i) and of EPA's definition of ``use of the regulated
substance in the sector or subsector in which the regulated substance
is used'' related to the proposed prohibition on the sale,
distribution, and offer for sale or distribution of many regulated
products that would go into effect on January 1, 2026 (i.e., the sell-
through period). Many commenters objected based on their view of the
practical consequences of a one-year sell-through period, raising
concerns about the economic harm of stranded inventory, and in
particular, the high likelihood of stranded seasonal inventory such as
air conditioners. Others commented on the difficulties of implementing
any prohibition on the sale of parts of equipment that contain
regulated substances, where those parts would continue to be needed for
servicing and repair of existing equipment. Another commenter argued
that prohibiting the sale of any inventory that was not sold by the
sell-through prohibition date would constitute a ``taking'' without
just compensation under the U.S. Constitution. These comments are
summarized and addressed in section VI.C.2.c of this preamble.
    A smaller subset of commenters alleged that EPA lacked statutory
authority to promulgate a sell-through limitation under the AIM Act.
One commenter claimed that the AIM Act only provides EPA with authority
to prohibit the ``manufacture'' of high-GWP equipment, and that had
Congress intended to allow EPA to have broader authority to regulate
under subsection (i), it would have employed the same language that is
used in subsection (h) of the AIM Act, which uses the terms ``any
practice, process, or activity.'' This commenter claimed that the
Agency had relied upon dictionary definitions of the word ``use'' and
that other dictionary definitions supported the commenter's preferred
interpretation of that word to be limited to acts or practices that
``employ, use, or put a regulated substance into service,'' and noted
that at least one dictionary definition indicated that ``use'' means
``long-continued possession and employment of a thing for the purpose
for which it is adapted.'' The commenter therefore asserted that the
Agency's regulatory definition should not include sale or distribution,
since in the commenter's view, neither action is the act or practice of
employing, using, or putting a regulated substance into service, nor is
sale or distribution ``the long-continued possession'' and ``employment
for the purpose for which it is adapted,'' which, the commenter stated
in the case of RACHP, is the transfer of heat.
    Specifically, the commenter urged EPA to adopt the following
definition of ``use'' under subsection (i): ``Use means the act or
practice of employing a product containing or designed to contain a
regulated substance. Use does not include the destruction of a
regulated substance.'' The commenter argued that its proffered
definition would still allow EPA to phase out the manufacture of
products made of or containing regulated substances without going
beyond, in its view, the authority of the AIM Act. Further, the
commenter claimed that a sell-through limitation, rather than a
regulation based only on

a product's date of manufacture, would be ``unique'' in comparison to
numerous other regulations on durable goods, including those
promulgated by the U.S. Department of Energy (DOE).
    Response: We disagree with commenters who allege that EPA does not
have authority under subsection (i) of the AIM Act to issue
restrictions on the sale or distribution of products that use regulated
substances. We do not agree with the commenter's reading of the
statute, and specifically, its views that subsection (i) the AIM Act
only provides EPA with authority to prohibit the ``manufacture'' of
higher-GWP equipment and that, in contrast to subsection (h), which
uses the language of ``any practice, process, or activity,'' EPA's
authority under subsection (i) is comparatively limited. In fact,
subsection (i) does not mention either manufacture or equipment, much
less contain any limitation that EPA may only address manufacture of
equipment under subsection (i). Subsection (i)(1) says, with respect to
EPA's authority, that ``[s]ubject to the provisions of this subsection,
the Administrator may by rule restrict, fully, partially, or on a
graduated schedule, the use of a regulated substance in the sector or
subsector in which the regulated substance is used.'' There is nothing
in this provision that suggests that EPA's statutory authority under
(i) is limited to issuing restrictions on manufacturing, nor does the
provision suggest that only higher-GWP equipment may be the target of
EPA's restrictions. To the contrary, this language broadly authorizes
EPA to restrict any use of a regulated substance in the sector or
subsector in which the regulated substance is used; there is no
limitation, express or implied, to certain types of use or users.\42\
These are assumptions that the commenter appears to have made without
any grounding in the text of the statute.
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    \42\ Congress included express limitations on the applicability
of the rules under AIM subsection (i) in a later part of the
subsection (see subsection (i)(7)), and neither of the limitations
in that provision mention a limitation to the manufacture of higher
GWP equipment. Had Congress intended the kind of restriction the
commenters suggest, it is reasonable to think they would have
included those restrictions in subsection (i)(7).
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    We also do not agree with the commenter's view that Congress'
decision to use different language than it did for subsection (h)
(i.e., its omission of the terms ``any practice, process, or
activity,'' which appear in subsection (h)) somehow narrows the scope
of subsection (i). The commenter appears to ignore the full context of
each provision. Subsection (h) and subsection (i) use different
language and are framed differently, but that does not mean that one is
narrower or the other broader. Rather, EPA interprets those differences
as conveying authority that is tailored to the respective area of focus
of these subsections so that EPA can establish regulatory regimes that
effectively achieve their respective purposes and complement one
another. Because EPA is establishing these provisions under subsection
(i), the critical question is whether they are within the authority
conveyed under subsection (i) as Congress drafted it, not whether they
would be authorized under some other language. When the statutory text
of subsection (i) is read in full context, it comfortably encompasses
restrictions on a range of entities that use regulated substances, not
just manufacturers of equipment. One authority EPA has under (i) can be
stated as follows: ``[t]he Administrator may . . . restrict fully . . .
the use of a regulated substance in the sector or subsector in which
the regulated substance is used.''
    Subsection (i)'s grant of authority to issue a full restriction
across use in a sector or subsector was a key rationale underlying
EPA's interpretation. As EPA pointed out at proposal, EPA interprets
the statute in a way that could give meaning to subsection (i)'s grant
of authority to effectuate a full restriction, and thus transition, of
all uses of a regulated substance in any given sector or subsector. As
we explained in the proposed rule, a narrower interpretation of EPA's
authority to exclude sale or distribution could circumvent the intended
full transition of a sector or subsector away from use of HFCs.
Consistent with these concerns articulated in the proposed rule, EPA
received a comment from a State that has restricted the manufacture of
products containing HFCs without a sell-through limitation, and that
State observed that such an ``approach can create challenges as it
relies on regulated entities to provide documentation as to manufacture
date,'' and that ``[n]ot all entities in the market chain can provide
such information for all products,'' noting that ``[t]hese factors are
further complicated when applied to international manufacturers and
retailers.'' These concerns lend further support to EPA's view that
covering all points in the market chain of ``use in the sector or
subsector'' ensures that the use restrictions we establish achieve
their intended purpose, where the intention is to fully restrict the
use of a regulated substance in a sector or subsector, or, as in this
case, to partially restrict the use of regulated substances before
those substances reach consumers. As discussed in the proposed rule,
even though EPA's definition of ``use'' is broad in order to enable the
Agency to fully exercise the subsection (i) authority under that
provision and to facilitate a full transition to HFC substitutes where
appropriate, that does not mean that in every instance the restrictions
promulgated under subsection (i) will exercise that full authority. In
many cases, as in this action, EPA may issue partial restrictions that
target only certain uses.
    The same commenter who asserted EPA has no authority to restrict
sale or distribution provided no rebuttal or engagement with the
reasoning EPA provided at proposal for its interpretation: namely, that
the express provision of subsection (i) is related to a sector or
subsector's use of a regulated substance, that the subsection (i)(4)
factors require EPA to analyze information related to a restriction's
feasibility and impact from a sector-level viewpoint, and that, as
stated previously, the authority to ``restrict fully'' means that EPA
has authority to restrict many activities in a sector- or subsector-
level chain where regulated substances are present, and therefore
``used'' in that sector or subsector. Instead, the commenter claimed
that EPA ``justified'' its interpretation by relying on dictionary
definitions of the word ``use.'' This is not accurate. We began the
proposed rule's preamble discussion with citations to the dictionary
definition of that word, but the reasoning for our proposed
interpretation and definition of the term did not rest solely on the
dictionary definitions.
    Nor do we agree with the commenter that their proffered definition,
which relies on the commenter's ``dictionary definition'' understanding
of the term ``use,'' is workable. The commenter suggests that EPA
should define ``use'' as ``the act or practice of employing a product
containing or designed to contain a regulated substance. Use does not
include the destruction of a regulated substance.'' We do not agree
with commenter's assertion that this definition ``would still allow EPA
to phase out the production of products made of or containing regulated
substances.'' Putting aside the commenters' confusing use of the term
``phase out'' in the context of subsection (i), which addresses use
restrictions, under the commenter's definition, EPA would only be
allowed to restrict the act or practice of employing a product
containing or designed to contain a

regulated substance. We fail to see how this definition of use would
allow EPA to restrict the manufacture of products containing HFCs,
because the creation of a product is not the act or practice of
employing that product, nor would EPA be permitted to restrict the
import of such products, because import also does not ``employ'' the
product. In fact, under the commenter's suggested definition, it would
appear that the only potential regulated parties under AIM Act
subsection (i) would be the consumers of products, as these are likely
the only parties that would be ``employing'' the products, as the
commenters seem to be using that term, and for the sector the commenter
represents (RACHP), the consumers are almost certainly the only parties
that are ``employing'' the products for ``the purpose for which it is
adapted, i.e., the transfer of heat'' (to quote the commenter's
understanding of and application of the dictionary definition of
``use''). We disagree that this is a reasonable reading of the AIM Act,
given the textual considerations that subsection (i)(4) sets the Agency
to consider when determining whether or not to restrict the ``use of a
regulated substance in the sector or subsector in which the substance
is used.'' (emphasis added).
    We also note that despite the commenter's observation that many
regulations on goods, including those promulgated by the U.S. DOE,
establish compliance based only on manufacture, that has little
relevance for EPA's interpretation of the term ``use'' in subsection
(i). EPA's action is governed by the authority grounded in the text of
the AIM Act, not the text of the statute providing DOE authority to
promulgate its regulations. In any case, designing a restriction that
regulates actions other than manufacture is not ``unique.'' In the
context of SNAP under CAA section 612, which evaluates alternatives to
ozone-depleting substances like chlorofluorocarbons (CFCs) (class I
substances) and HCFCs (class II substances), EPA has long defined
``use'' as ``any use of a substitute for a class I or class II ozone-
depleting compound, including but not limited to use in a manufacturing
process or product, in consumption by the end-user, or in intermediate
uses, such as formulation or packaging for other subsequent uses.'' 40
CFR 82.172. The Agency's interpretation of the scope of its authority
and its definition of the term ``use'' in the subsection (i) context
similarly conceives of this authority as including the introduction of
products containing regulated substances into what we consider to be
sector or subsector activity, and the full market chain of activities,
or ``intermediate uses,'' that follow, through to the consumer or end-
user.
2. What uses is EPA restricting in this rule?
a. Manufacture and Import of Factory-Completed Products
    This rule includes restrictions that apply to the manufacture of
certain factory-completed products by the dates specified in section
VI.F. As discussed in section VI.A on definitions, commenters were
generally supportive of EPA's proposal to establish use restrictions on
the manufacture of factory-completed products using regulated
substances. Many of the comments received on EPA's proposal to restrict
manufacturing related to EPA's proposed definition of ``manufacture''
to include the installation of field-assembled systems.
    EPA proposed to apply its restrictions equally as to domestically
manufactured products using HFCs and products using HFCs that are
imported. The AIM Act defines ``import'' as ``to land on, bring into,
or introduce into, or attempt to land on, bring into, or introduce
into, any place subject to the jurisdiction of the United States,
regardless of whether that landing, bringing, or introduction
constitutes an importation within the meaning of the customs laws of
the United States,'' and this rule follows that definition. Commenters
were supportive of EPA's equal application of the proposed restriction
to the manufacture of products using HFCs and to the import of products
using HFCs, noting that restricting both manufacture and import would
garner environmental benefits, meet industry expectations, and treat
all equipment equally regardless of location of manufacture and
availability of HFCs under the global phasedown. EPA is finalizing the
restriction on the import of products as proposed.
    While EPA is generally not regulating used equipment (see section
VI.C.b), the Agency proposed to restrict the import of all products
that do not meet the GWP limits, regardless of when the product was
manufactured and regardless of whether the product is used. The goal of
restricting the use of regulated substances (in this case, higher-GWP
HFCs) in the named sectors and subsectors would be undermined if those
sectors and subsectors could simply shift use to imported products
containing higher-GWP HFCs that were not subject to the Agency's
restrictions.
    AIM Act subsection (i)(7)(B)(ii) states that subsection (i) rules
shall not apply ``except for a retrofit application, [to] equipment in
existence in a sector or subsector before December 27, 2020.'' EPA
interprets this limitation with respect to ``equipment in existence in
a sector or subsector'' not to apply to equipment manufactured abroad
prior to the Act's date of enactment, because EPA interprets ``sector
or subsector'' in that provision to mean a sector or subsector in the
United States. In general, where those terms appear in subsection (i)
of the AIM Act, EPA understands them to mean the domestic sector or
subsector, not the sector or subsector as it exists, operates, and
functions in another country. For example, in assessing the
availability of substitutes for use in a sector or subsector under
subsection (i)(4)(B), EPA is generally analyzing the various
subfactors--consumer costs, building codes, appliance efficiency
standards, contractor training costs--vis-[agrave]-vis the domestic
impacted sector or subsector.\43\ Therefore, equipment that was
manufactured in another country and existed prior to December 27, 2020,
but was not imported to the United States until after that date is not
subject to subsection (i)(7)(B)'s limitation, because until it is
imported into the United States, it is not ``in existence in the sector
or subsector.''
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    \43\ EPA is examining international information for some of the
analyses, such as research from international organizations about
technological achievability, because such information has relevance
for the sector or subsector in the United States.
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    EPA received a number of comments related to its application of
restrictions on imports, and we summarize and respond to these comments
below.
    Comment: One commenter supported and one commenter opposed the
proposal to restrict the import of products not meeting the GWP limits,
regardless of when the product was manufactured and regardless of
whether the products are used. The commenter opposed to EPA's proposal
requested that EPA clarify that ``equipment in existence as of December
27, 2020'' applies to all equipment in existence up to the date of this
rule's proposal, wherever that equipment is located (i.e., whether in
the United States or elsewhere), at least for semiconductor
manufacturing equipment. The commenter asserted that semiconductor
manufacturers have been producing semiconductor manufacturing equipment
in the last two years that was designed well before the AIM Act was
enacted, and that such equipment was intended to operate for the next
10 to 25 years. The commenter argues that until EPA published its
proposed rule,

semiconductor manufacturers did not have ``actionable notice'' that
their products might be subject to the Agency's restrictions. The
commenter also states that complex semiconductor manufacturing
equipment may have been manufactured outside of the United States but
was intended for use in the U.S. semiconductor sector. The commenter
noted that the semiconductor industry has a global supply chain with
long production timelines and asserted that EPA's proposed distinctions
based on where equipment is located could impose significant
complications on the sector's supply chain management.
    Response: The Act's exception from applicability in AIM Act
subsection (i)(7)(B)(ii) plainly does not apply to any equipment
manufactured after December 27, 2020. We therefore do not agree with
the commenter that the exception in that provision could be interpreted
to apply to equipment manufactured between the date of the AIM Act's
enactment and the publication of EPA's proposed rule. The statute is
clear on its face, whether or not regulated entities were aware of
being potentially subject to regulation under these provisions of the
AIM Act until EPA issued its proposed rule.
    We also clarify that not all equipment that uses regulated
substances in the semiconductor manufacturing industry is subject to
these rules. The use of regulated substances in many semiconductor
manufacturing processes, such as etching and the use of HFCs as
solvents, is not restricted by this final action. EPA's restrictions
cover only the use of HFCs as they relate to semiconductor
manufacturing where those HFCs are used as a refrigerant in chillers
for IPR. As discussed in section VI.F.1.j, EPA is differentiating its
restrictions and the timing of those restrictions for this subsector
based on the temperature of the exiting fluid. To the extent that the
equipment cited by commenter has exiting fluid temperatures below -50
[deg]C (-58 [deg]F), the import of such new equipment is not restricted
by this rule. For equipment with exiting fluid temperatures above that
temperature, EPA has delayed the compliance date for installations of
new systems to either 2026 or 2028 (again differentiating based on the
temperature of the exiting fluid). Importing components of such systems
may continue after those compliance dates to allow servicing of
existing equipment in the U.S.
    Comment: One commenter opposed to EPA's proposal to apply its
restrictions to all imported products using HFCs above the GWP limits
requested that used semiconductor manufacturing and related equipment
(SMRE) that was designed to contain HFCs receive an exemption. The
commenter stated that there is a robust and active market for used
SMRE, and preventing the import of this used equipment could have
inadvertent supply chain disruption effects.
    Response: EPA understands the semiconductor manufacturing equipment
to fit within the IPR subsector, typically utilizing chillers, often
built into other non-refrigerant containing equipment, to cool
processes necessary to produce semiconductor chips and other
electronics. As such, we do not view such equipment differently from
other IPR systems, which likewise could conceivably integrate a chiller
into other equipment (e.g., a chiller integrated with a conveyor belt
intended to move food needing freezing along its production process).
As discussed in section VI.F.1.j, EPA is finalizing a compliance date
later than proposed based on our consideration of the subsection (i)(4)
factors. Specifically, EPA is establishing a compliance date of January
1, 2028, for IPR chillers where the fluid exiting the chiller is below
-22 [deg]F (-30 [deg]C), and a January 1, 2026, date for other such
equipment. And, consistent with the proposed rule, this final rule does
not restrict HFC use in such equipment where the fluid exiting the
chiller is below -50 [deg]C (-58 [deg]F). This additional time compared
to the proposal should assist in the commenter's ability to respond to
the restrictions in this rule; for example, by importing appropriate
equipment prior to the relevant compliance date and/or altering
manufacturing outside the United States to use refrigerants that meet
the restrictions for the United States (i.e., less than 700 GWP).
    Comment: Other commenters asked that EPA clarify how the import
restriction applies to existing intermodal containers that are engaged
in trade, refrigeration equipment in operation on ocean-going vessels,
and non-road motor vehicles temporarily deployed overseas. Commenters
stated that applying the GWP limit to all refrigerated containers is
infeasible and would be highly disruptive to trade. Commenters also
stated that such equipment should be allowed to be serviced in the
United States and not be subject to the recordkeeping and reporting
requirements.
    Response: EPA agrees that applying the restrictions to products
that are actively in use when travelling into U.S. jurisdiction could
be problematic. For example, a strict reading of the proposed
restrictions on import could have prevented a traveler from reentering
the United States from Canada or Mexico with their car if the MVAC uses
HFC-134a. As noted in the proposed rule, the Agency's intention is to
cover the activities of entities bringing large shipments of products
into the country, as well as activities of entities bringing smaller
volumes of products into the country (e.g., driving a truckload of air
conditioning units across the Canadian or Mexican border for sale in
the United States.). EPA therefore is distinguishing in this final rule
those products or systems that are actively in use when travelling into
U.S. jurisdiction from shipments of used products destined for resale
or further distribution. EPA is not intending that this aspect of this
rule restrict RACHP equipment in operation aboard marine vessels,
planes, motor vehicles, refrigerated transport trailers, or intermodal
containers. Likewise, foam or aerosol products that are in use (e.g.,
trailers) or in possession of a consumer when crossing the border are
likewise exempt from the import prohibition. However, EPA's intent is
to apply the use restrictions consistently for domestic manufacturers
and importers of products. As such, no person may sell new refrigerated
transport trailers or refrigerated intermodal containers in the United
States, whether manufactured domestically or abroad after the
manufacture/import compliance date, unless it complies with the HFC use
restrictions.
    Comment: One commenter expressed concern that prohibiting the
import of used, non-compliant products would also prevent the import of
products intended for recycling. The commenter contended that such a
regulated product is not `in the sector or subsector in which the
regulated substance is used' either outside or inside the United
States, and thus prohibiting the import is contrary to subsection
(i)(1) of the AIM Act.
    Response: EPA considers the disposal chain, which includes the
recycling of equipment, and not the use or reuse of the equipment in
the relevant sector or subsector in the United States, to be outside
the scope of the restrictions on distribution. This includes equipment
bound for disposal that was never used by a consumer, such as defective
components or products that were manufactured or imported illegally.
Allowing for disposal furthers the intent of removing equipment from
the market before it is used by the consumer.
b. Installation of Systems
    EPA is defining the term install/installation as ``to complete a
field-

assembled system's circuit, including charging with a full charge, such
that the system can function and is ready for use for its intended
purpose.'' As discussed in section VI.A (Definitions), many commenters
expressed concerns about EPA's proposed definition of ``manufacture,''
which would have included the installation and first charge of field-
assembled equipment. These included concerns that defining
``manufacture'' to include ``install'' of field-assembled systems
effectively accelerates the timeline of the prohibition and renders the
one-year sell-through moot. Commenters suggested different ways to
regulate the use of HFCs in field-assembled equipment, including
restricting the manufacture of components that would later be field-
assembled. In this final rule, EPA is restricting the installation of
field-assembled systems with additional clarifications. The definition
of install is virtually identical to the proposed definition of
manufacture for field-assembled systems. As with the term manufacture,
the definition of ``install'' serves as a distinct point in time by
which listed activities must be completed for purposes of meeting the
compliance date. By proposing in its prohibitions that ``no person''
may manufacture a product, EPA's intent was to capture any person who
is responsible for the manufacture (which, at proposal, included
installation of field-assembled equipment). EPA therefore does not
think that limiting the responsibility to only the technician who first
charges the system (and thus makes it ready for use for its intended
purpose) is an appropriate application of the restriction on
installation. Doing so would be equivalent to making the final
individual on a factory assembly line the ``manufacturer'' of a
refrigerator and not the OEM. Responsibility for installing a system
that improperly uses a higher-GWP HFC refrigerant after the compliance
date lies with multiple entities, including the designer, builder, and
owner/operator of that system, in addition to the entities that
assembled the components and got them into operating order on site.
    Therefore, any person who assembles, contracts for, takes ownership
of, or operates a system that is installed after the applicable
compliance date using regulated substances prohibited for that
subsector is in violation of this rule.
    Comment: Some commenters requested that EPA allow for installation
of a system if building permits have already been received to avoid the
re-design and permitting of buildings. Another commenter sought
flexibility in case there is a delay in receiving all the necessary
components or a delay in assembling and charging the system. The
commenter requested EPA allow appliances purchased under contract
before the compliance date to receive their field charge after that
date.
    Response: EPA recognizes that some facilities may have been
designed and permitted to specifically use systems with HFCs that will
be restricted by this final rule. We anticipate that such instances are
rare, especially because the final rule delays the compliance dates for
the installation of most field-assembled systems by at least one year
and sometimes longer depending on the subsector. However, systems using
HFCs within facilities needing such long lead-times that they have
approved building permits in place by the date of signature for this
final rule are likely to be highly complex and costly to redesign. EPA
previously granted additional time to install systems that have been
permitted under the HCFC use restrictions under section 605(a) of the
CAA. In those instances, EPA agreed to provide time if, among other
conditions, those appliances were specified in a building permit dated
before the compliance date (see 74 FR 66441, December 15, 2009) and in
a more recent action the date of signature of the relevant proposed
rule (see 85 FR 15267, March 17, 2020).
    Based on the comments received, similar flexibility may be needed
in this rule. Therefore, EPA is allowing one additional year for the
installation of systems in four subsectors if an approved building
permit issued before the date of signature of this final rule specified
the use of a system containing refrigerants with GWPs above the
relevant GWP threshold for the specified subsector. These subsectors
are: IPR systems with a January 1, 2026, compliance date; retail food
refrigeration--supermarkets; cold storage warehouses; and ice rinks.
This flexibility will prevent the need to redesign these systems, and
potentially the facility that houses these systems. EPA is not
including other subsectors in this provision as those systems are not
typically designed specifically for an individual facility and/or those
systems have a later compliance date and thus can make any necessary
changes with the GWP restrictions in mind.
    EPA disagrees with the suggestion to allow systems purchased under
contract prior to the compliance date to be field charged after that
date. Doing so would undermine the intent of the regulation and the
statute by incentivizing the finalization of numerous contracts in the
days preceding the compliance date, which could then potentially allow
for years of further installations using higher-GWP HFCs in sectors and
subsectors that EPA has already determined under subsection (i)(4) are
ready to transition to lower-GWP substitutes.
    Comment: Some commenters disagreed with the installation being the
point of compliance. One commenter stated that this broadens
responsibility for compliance from a relatively small number of
knowledgeable OEMs to a much broader group of distribution and
installation stakeholders who do not have the same level of awareness
of the regulatory requirements. Another commenter recommended that EPA
exclude ``purchaser and/or user'' and ``third party companies'' from
the definition of a ``manufacturer,'' (under the definition as
proposed) whether or not they are involved or provide support for
activities associated with field assembly or charging. The commenter
argued that the purchaser and/or user rarely, if ever, takes
``ownership'' of IPR equipment until it is fully charged and has been
demonstrated to run safely for the use for which it was designed and/or
intended, which is the responsibility of the manufacturer who designed
and fabricated the parts.
    Response: EPA disagrees with the comments that the Agency should
only restrict OEMs and not regulate installation of a field-assembled
system. Many commenters representing OEMs of components stated that
they do not control how their components are used after they are sold
to a distributor, and EPA agrees that with respect to restricting the
use of HFCs in installation of field-assembled systems, OEMs of
components used in those systems are not the appropriate entity to
regulate (unless the OEM is involved in the design or construction of
the system). While applying the restrictions on installations to the
parties other than OEMs results in more potentially regulated entities,
it appropriately places the restriction on the entities that can
control the use of HFCs in that system. While a broader group of
installation stakeholders may not be as accustomed to compliance issues
as the relatively smaller group of component OEMs that commenters
requested be subject to the restrictions, applying the restrictions for
installation of systems to the designer, builder, and owner/operator of
that system will help to ensure that there is a knowledgeable party
driving compliance.
    Comment: Many commenters requested that EPA provide a precise and
clear definition for when a field-erected and field-charged system
modified as part of a remodel or regular

maintenance is covered by the new GWP limit. They requested that EPA
allow for replacement of appliance components, including but not
limited to cases, compressors, valves, condensers, evaporator units,
piping and other components to keep that existing system running. They
also requested that EPA allow for remodels or retrofits to update the
look, improve the efficiency, or reduce leaks in a system. Other
commenters requested that EPA use California's definitions of new
refrigeration equipment, new air-conditioning equipment, and new
facility to demarcate which modifications to a system trigger the
requirements applicable to new systems. A State commenter noted that a
single, unified definition of `new' would be useful for States that
wish to establish controls that are aligned with EPA and in cases where
stakeholders require clarity on State versus national controls.
    Several commenters summarized California's regulations as an
example of how a previously installed refrigeration system could
trigger the use restriction through either of two methods. The first
method is when the compressor capacity of the refrigeration system is
increased or the cost of replacing components over a three-year period
exceeds 50 percent of the capital cost of replacing the entire system
(excluding display cases).\44\ The second method is when an existing
facility changes to a different end-use or when 75 percent of the
refrigeration system's evaporators (by number) and 100 percent of its
compressor racks, condensers, and connected evaporator loads have been
replaced. A previously installed air-conditioning system triggers the
use restriction depending on the size of the system. For systems with a
single condenser and single evaporator, the use restrictions are
triggered when replacing the exterior condenser, condensing unit, or
remote condensing unit. For systems having more than one condenser and/
or more than one evaporator, the use restrictions are triggered when 75
percent of the indoor evaporator units (by number) and 100 percent of
the air source or water source condensing units are replaced over a
three-year period.
---------------------------------------------------------------------------

    \44\ This is similar to the definition of ``new'' in New York
State. Specifically, new is defined as ``Products or equipment that
are manufactured after the effective date of this Part or installed
with new or used components, expanded by the addition of components
to increase system capacity after the effective date of this Part,
or replaced or cumulatively replaced after the effective date of
this Part such that the cumulative capital cost of replacement
exceeds 50% of the capital cost of replacing the whole system.'' 6
NYCRR 494.3(s).
---------------------------------------------------------------------------

    A commenter recommended EPA use the first method to avoid the
continuous replacement of parts indefinitely without ever triggering
any restriction on the use of controlled substances. An industry
commenter recommended the second method. A few commenters also
requested that EPA define the term ``new facility'' which is
substantively the same as the second method in the definition for new
refrigeration equipment. One such commenter that favored this approach
said it is clearer that components may be replaced and that restricting
``new refrigeration equipment'' would require establishing exceptions
for remodels and replacement for maintenance.
    Response: EPA's intention is to allow the ordinary servicing and
repair of equipment and not to apply restrictions in a way that would
prevent such maintenance. However, we are cognizant of the concern that
systems could be significantly modified or upgraded to the point that
such modification or upgrade should be considered a new installation
subject to the subsector GWP limits.
    The Agency has encountered the question of what modifications
constitute the installation of a new system during the phaseout of
HCFCs. Under section 605(a) of the CAA, EPA prohibited the use of
virgin HCFC-22 and HCFC-142b to charge new appliances assembled onsite
on or after January 1, 2010. (December 15, 2009; 74 FR 66437). In that
context, the Agency's interpretation was that there were two different
situations that could be equivalent to the manufacture (i.e.,
installation) of a new system. These are modifications to a system that
increase the total cooling capacity in BTU of the system or the
complete replacement of all components within a system at once or over
time. Based on commenters' requests for clarification on the issue, EPA
is adopting these two situations in the regulatory text. In addition,
after consideration of the public comments and its past experience
implementing similar restrictions, the Agency is providing more
specificity about which components must be replaced in order for a
replacement to qualify as ``new installation.''
    EPA noted in the proposed rule, in the context of what qualifies as
``equipment in existence,'' that ``in limited cases where every part of
a piece of equipment had been altered or replaced,'' such equipment
would fall outside the statutory and regulatory exemption in subsection
(i)(7)(B), and the alteration or replacement would be considered a new
installation subject to the restrictions under this section. In so
doing, we did not intend that ``every'' piece would include refrigerant
tubing, which is often very difficult to replace because the tubing may
be inaccessible. Even in major overhauls of systems, this tubing is
rarely replaced, and we therefore think replacements where this tubing
remains installed should still be considered new installations for
purposes of triggering these restrictions. Therefore, we are clarifying
in this final rulemaking and in the regulatory text which components
must be replaced, and at what percentages, to provide a precise, clear
standard that will ensure that major replacements and alterations are
properly subject to the restrictions and transition to lower-GWP
refrigerants. Specifically, when 75 percent of the refrigeration
system's evaporators (by number) and 100 percent of its compressor
racks, condensers, and connected evaporator loads have been replaced,
such replacement constitutes a new installation and is subject to the
restrictions on installation. EPA's approach in this final rulemaking
is also used by States that have adopted a definition of ``new
refrigeration equipment.''
    EPA disagrees with commenters' suggestion that the Agency adopt
other methods used in California for determining when an existing
refrigeration system is considered ``new.'' Those other methods, such
as including specific timeframes or assessing capital costs, deviate
from EPA's historical interpretations under title VI of the CAA and
raise additional questions about implementation. Nor is EPA adopting
the method for determining when an existing air-conditioning system
with a single condenser and single evaporator is considered ``new.'' In
implementing the use restriction on HCFC-22 under title VI of the CAA,
EPA has considered the replacement of the condensing unit to be a
repair and not the installation of a new system. EPA finds that it is
also reasonable to continue that interpretation under the use
restrictions in subsection (i) as it is the same type of equipment and
because the AIM Act is implementing a phasedown rather than a phaseout,
meaning there is no end date for the production and import of bulk
HFCs.
c. Sale or Distribution of Factory-Completed Products
    As discussed above, EPA interprets ``use'' to include activities in
the market chain that occur after the manufacture or import of a
product. As such, EPA is applying use restrictions to any person who
sells, distributes, offers for sale or

distribution, makes available for sale or distribution, purchases or
receives for sale or distribution, or attempts to purchase or receive
for sale or distribution, or exports any product using a regulated
substance in the sectors or subsectors controlled under subsection (i).
Applying the restrictions in this way ensures that the goal of
restricting the use of regulated substances in the sectors or
subsectors in which the regulated substances are used can be achieved,
because the sector and subsector's use of the regulated substance is
present in all these aspects of the market chain, and it is EPA's
intention to restrict use across that chain. Therefore, if a
manufacturer or importer improperly introduces into the U.S. market a
non-compliant product, distributors and retailers (including online
retailers) offering that product for sale are also restricted from
covered activities related to that product. Providing the means by
which individuals are able to list and sell prohibited products, or
exerting control over these sales, including operating platforms for
eCommerce transactions, will be considered use under this rule. EPA is
also applying the use restrictions to those entities who purchase or
receive for the purpose of further sale or distribution with the intent
to cover both sides of the transaction between distributors but not the
purchase by a consumer. The intent of this restriction is to ensure
that products that do not meet the limits do not enter the market and
are not circulated in the market, prior to sale to the consumer.
    EPA proposed to prohibit sale, distribution, offer for sale and
distribution, and export of products using regulated substances not
meeting the GWP limits one year after the proposed prohibition date for
manufacture and import of products using regulated substances over the
GWP limits in each subsector. EPA explained at proposal that limiting
the period of time when products that do not meet the GWP limits can
continue to be sold has advantages over indefinitely exempting the sale
of inventory that does not meet the established use restrictions. In
particular, we noted the advantage of having a date certain by which
all parties--e.g., the public, enforcement officials, and regulated
entities--know that there can legally be no new products on the market
that do not meet the GWP limits. This additional prohibition on the
activities subsequent to manufacture and import but prior to sale to
the consumer reinforces the sector or subsector's transition away from
use of HFCs in new products and, to the extent that it is a
possibility, prevents the stockpiling and continued sale of products
that do not meet the sector or subsector use restrictions from
continuing indefinitely into the future.
    EPA received many comments on this proposed prohibition on the sale
or distribution of products. Comments received on this aspect of this
rule and EPA's responses to those comments are summarized and discussed
in further detail below and in the response to comments document,
available in the docket.
    This final action retains a limited sell-through period on products
using a regulated substance that do not meet the sector and subsector
restrictions with key changes in response to concerns raised by the
commenters. First, EPA is limiting the prohibition on sale,
distribution, offer for sale and distribution, and export to factory-
completed products that use prohibited higher-GWP regulated substances.
As discussed in greater detail later in this section, EPA is excluding
components and allowing for their continued manufacture, import, sale,
distribution, offer for sale and distribution, and export, subject to
certain restrictions, including that these uses are for the purpose of
servicing existing equipment. Second, EPA is extending the compliance
date for the sales prohibition on factory-completed products from the
proposed one year to three years after the manufacture and import
compliance date. EPA provided the two additional years to address
commenters' concerns that a one year sell-through was potentially
insufficient to clear inventory, and in particular, seasonal products
such as window-unit air conditioners, which can experience variable
demand from year-to-year. This final approach ensures that sectors and
subsectors that use regulated substances will transition from the use
of those substances where such transition is appropriate and alleviates
the concerns raised by commenters.
    Comment: Several commenters voiced concern that the one-year
compliance deadline would create the risk of stranded inventory that
would not be able to be sold, which would cause economic harm to
manufacturers, distributors, retailers, and ultimately consumers.
Commenters representing distributors highlighted the many
considerations they must account for in determining the amount of
inventory to stock, citing the desire to carry amounts of inventory
large enough to maintain competitive pricing, against costs incurred
via storage space leasing, warehouse mortgages, building utilities, and
insurance on products stored in the warehouse. Other commenters,
particularly those in the heating and cooling sector, noted that many
factors, including the economy, weather, and demand for construction
impact sales and that in this sector particularly, it is already
difficult to forecast what amount of inventory will need to be carried
over year to year. Many commenters noted that the sell-through
limitation would exacerbate existing supply chain challenges,
particularly for small businesses. Commenters stated that the one-year
sell-through period would require distributors to either stock less
inventory, and therefore potentially fail to meet customer demand, or
to throw away inventory that would be prohibited by the sell-through
limitation, and that either of these outcomes would cause economic
harm. Commenters noted that the economic harm caused by the proposed
one-year sell-through period might cause them to reduce their labor
forces, and would require increased monitoring for compliance
throughout the supply chain.
    Many of these commenters also cited concerns about potential
adverse environmental impacts of stranding inventory. Others noted that
the environmental benefit of the AIM Act is from the phasedown of the
supply of HFCs, and that the HFC price increases and lack of
availability of regulated substances that will flow from the phase-down
will provide a market force to transition to lower-GWP substitutes,
making the sell-through limitation unnecessary as a backstop. Many
commenters requested that EPA eliminate the sell-through limitation
altogether, and instead permit unlimited sell-through of any product
labeled with a ``date of manufacture'' meeting the compliance date for
manufacture. Others requested that the Agency at least extend the
permissible limitation to multiple years, with some commenters
suggesting that two or three years would minimize the risk of stranded
inventory.
    EPA also received comments in support of its proposed prohibition
on sale, distribution, offer for sale and distribution, and export.
Some commenters stated that the compliance dates in the proposed rule
already provide sufficient time for manufacturers and distributors to
plan for the transition to lower-GWP substitutes and to sell existing
inventories, and that the compliance date for the sell-through
limitation should be one year at most. These commenters asserted that
allowing an indefinite period for sell-through of

equipment manufactured by the manufacture compliance date would
complicate enforcement and could provide an incentive for companies to
increase near term production of systems using HFCs before restrictions
come into effect. The Agency also received supportive comments on the
proposed sell-through limitation from States, including one that has
promulgated under State law a prohibition on manufacture but allows
unlimited sell-through of products manufactured prior to that
prohibition date. That State commenter noted that the unlimited sell-
through approach can create challenges because it relies on regulated
entities to provide documentation as to the manufacture date, and that
not all entities in the market chain can provide that information.
    Response: EPA acknowledges the input provided by commenters both in
support of and raising concerns with the limitation on sale,
distribution, and export of products regulated under these
restrictions. We recognize that the production and purchase of products
or components that are unable to be sold to consumers is an economic
and environmental outcome no parties desire, and the proposed rule's
forward-looking compliance dates were intended to allow all parties in
the market supply chain sufficient time to avoid that outcome. To that
end, after considering the concerns raised by various commenters, EPA
is extending the proposed one-year compliance date for the sell-through
limitation on products to three years after the manufacture and import
compliance date. The longer timeframe for a sell-through allows
regulated entities more time to manage inventory to avoid purchasing
products they will not be able to sell, reduce waste, and lessen the
impacts to the downstream channels and customers. While EPA recognizes
there will still be costs to establishing a sell-through limitation, we
expect that extending this timeframe to three years will mitigate the
costs of stranded inventory, storage, and product disposal that
commenters identified. As such EPA has not quantified these costs in
the RIA Addendum but describes them in qualitative terms. In addition,
EPA notes that such comments were based on the assumption that
components and repair parts would be subject to the sell-through, which
they are not.
    EPA anticipates that this extension will mitigate many of the
concerns raised by commenters regarding the difficulty of balancing
competing priorities and forecasting how much inventory to stock,
particularly for those sectors marketing seasonal products. Allowing
two additional years for the sale, distribution, offer for sale and
distribution, and export of products manufactured or imported before
the use restrictions will provide needed time for all parties to plan
for a smooth transition to meet the new limits. As pointed out by the
commenters, parties in these sectors and subsectors must already
balance many competing factors--costs of storage, projected demand,
weather, supply chain, demand for construction, and the economy--some
of which are known and some of which are beyond the parties' control.
Our intention in extending the compliance deadline for the sell-through
limitation is to provide regulatory certainty with respect to this
restriction to allow time for distributors and retailers to transition
their inventory from products using regulated substances that do not
meet the restrictions.
    EPA does not agree that dispensing altogether with a sell-through
limitation is appropriate in this case. This limitation reinforces the
Agency's restrictions on manufacturing and import by establishing a
bright line compliance date after which no products that do not meet
the new restrictions may be sold or distributed. Based on past
experience with the phaseout of ODS, EPA anticipates that the
availability and price difference between HFCs in the United States and
in countries with a later HFC phasedown schedule will create an
incentive to import non-compliant products into the United States. A
sales restriction eliminates that market. This is the intention of the
Agency's restrictions--that by a date certain, the sector or subsector
subject to the restriction will no longer be selling to consumers
products that use regulated substances where a substitute can be used
(per the Agency's determination under the (i)(4) factor analysis).
Enforcement of the manufacture and import restrictions are supported
because it is easier to identify non-compliant products within the
distribution chain or at the point of sale than it is to identify them
at a single moment in time when they cross the border. Ultimately the
sales restriction protects U.S. manufacturers that have transitioned
from being undercut by any foreign, non-compliant products that may
have been improperly imported after the import prohibition compliance
date. A ``date of manufacture'' label alone would not provide that same
protection.
    While some commenters stated that, in their view, a ``date of
manufacture'' label would be easier to implement and require less
compliance monitoring, we do not agree. Under that scenario, a product
containing HFCs or blends that had GWPs exceeding the limits could
permissibly be sold, distributed, or exported if the date of
manufacture met the proper compliance date, but would be impermissible
if manufactured after the compliance date. Also permissible for sale or
distribution would be products containing HFCs or blends that had GWPs
that met the new restrictions. The commenter's approach would require
regulated entities to segregate those products that were manufactured
or imported by the compliance date from those manufactured or imported
after the compliance date. Per EPA's final rule, regulated parties
would need only to discern whether the products met the limits by the
compliance date in order to ensure they were complying. The commenters'
preferred approach of focusing on the ``date of manufacture'' label
also puts the success of the transition squarely on proper labeling and
incentivizes inaccurate or fraudulent labeling. EPA is cognizant of the
comments from our State partners who have implemented their programs in
this way and faced these types of challenges.
    With respect to comments asserting that the sell-through limitation
is unnecessary because the environmental benefit of the AIM Act will
derive from the Act's phasedown of regulated substances, we do not
agree. Congress provided authority under subsection (i) separate from
the phasedown authority under subsection (e) to restrict use of HFCs in
particular sectors and subsectors, and it is the Agency's view that
these sector- and subsector-specific restrictions are an important
component to supporting the domestic phasedown of HFCs. As noted, the
sell-through provisions provide a backstop to the manufacture and
import restrictions by aligning incentives of all impacted users in the
sector or subsector (manufacturers, importers, distributors, retailers,
etc.), because all users will know that there will be no market for
noncompliant equipment after the extended sell-through compliance date.
We also note that even if commenters are correct that the phasedown's
impact on the prices of bulk HFCs will disincentivize domestic
manufacturers from generating large stockpiles of products in sectors
and subsectors that are ready to transition to lower-GWP substitutes,
this rule also restricts the import of products containing HFCs, the
benefits of which are not reflected in the

assessments of benefits in the phasedown.
    Comment: One commenter alleged that EPA's proposed limitation on
the sell-through of products not meeting the Agency's use restrictions
would constitute a regulatory taking without just compensation under
the U.S. Constitution. The commenter asserted that EPA's regulation of
their property would justify compensation under the legal tests
established by the Supreme Court in Penn Central Transportation Co. v.
New York City, 438 U.S. 104 (1978) and Lucas v. South Carolina Coastal
Council, 505 U.S. 1003 (1992). Specifically, the commenter stated that
under Penn Central, a court must determine ``the regulation's economic
effect on the owner, the extent to which the regulation interferes with
reasonable investment-backed expectations, and the character of the
government action.'' The commenter asserted that the test was met with
respect to EPA's proposed sell-through limitation because it ``has an
economic impact because of dead inventory; wholesale distributors used
capital to purchase inventory to sell, which interferes with reasonable
investment-backed expectations; and the government action is
intentional in its taking of property by rendering the property
valueless.'' Next, with respect to the Lucas test, which the commenter
articulated as an ``expanded definition of a per se taking and
established that a regulatory taking could exist when a regulation
results in the property becoming valueless,'' the commenter claimed
that the test was met because affected property cannot be sold or
exported, nor can it be donated to training facilities (as it will be
obsolete), removing the regulated substance before selling the property
for scrap will incur costs, and it has no value in retention (as was
true of the eagle feathers at issue in Andrus v. Allard, 441 U.S. 51
(1979)). The commenter further argued that even though Penn Central and
Lucas involved questions about government regulation of real property,
the cases were made equally applicable to personal property by virtue
of the Supreme Court's decision in Horne v. Department of Agriculture,
569 U.S. 513 (2013).
    Finally, the commenter claimed that in their view ``public benefit
[did not] outweigh the condemnation'' based on its reading of a
Prohibition-era case, Everard's Breweries v. Day, 265 U.S. 545 (1924),
which upheld the 18th Amendment's ban on the manufacture, sale, or
transportation of intoxicating liquors for beverage purposes, in spite
of Congress' exception for medically prescribed liquors. The commenter
then stated that the compensation plan for its asserted takings would
be the fair market value of equipment in the HVACR market.
    Response: We do not agree with the commenter that this final action
has resulted in any takings of private property under the Constitution.
Courts have summarily dismissed claims that a takings has occurred
prior to the application of a regulation to particular property. See,
e.g., Rybachek v. U.S. EPA, 904 F.2d 1276, 1300 01 (9th Cir. 1990)
(``[N]o takings claim here is ripe for judicial resolution. A taking
occurs in this context only when the EPA's regulations are applied to
particular property.''); Hodel v. Virginia Surface Mining & Reclamation
Ass'n, 452 U.S. 264, 293-97 (1981) (takings claim regarding surface-
mining statutes and regulations premature until those rules are
actually applied to particular property of which a taking is claimed).
As such, the comments articulating particular legal tests regarding
whether a taking has occurred and if so what compensation is required,
and the application of those tests, are beyond the scope of this
action.
    We also point out that even though no property, real or otherwise,
has been impacted by this action, which establishes compliance dates in
the future, the Supreme Court's takings jurisprudence makes clear that
``government may execute laws or programs that adversely affect
recognized economic values,'' and accordingly has issued ``decisions in
which [the Supreme Court] has dismissed `taking' challenges on the
ground that, while the government action caused economic harm, it did
not interfere with interests that were sufficiently bound up with the
reasonable expectations of the claimant to constitute `property' for
Fifth Amendment purposes.'' Penn Central, 438 U.S. at 124-25. In this
case, it is within commenter's control to manage its future investments
with the expectation of the regulation and its extended compliance
date. Relatedly, in the Horne decision cited by the commenter, the
majority and the dissent were in agreement that the means of the
government's action created a critical distinction for purposes of
evaluating whether a Fifth Amendment takings had occurred. 576 U.S. at
361-62. Namely, in that case all the litigants and both the majority
and dissent agreed that ``the government may prohibit the sale of
raisins without effecting a per se taking'' even when the Hornes
believed that the government's appropriation of raisins amounted to a
takings. See id. The majority for the court, finding in favor of the
Hornes, wrote, ``that distinction flows naturally from the settled
difference in our takings jurisprudence between appropriation and
regulation. A physical taking of raisins and a regulatory limit on
production may have the same economic impact on a grower. The
Constitution, however, is concerned with means as well as ends.'' Id.
    We therefore disagree with the commenter that any taking of
property has occurred, nor do we think that prospective government
regulation of the sale of products, such as the sell-through limitation
finalized in this rule, fits the established Fifth Amendment
jurisprudence of the type of regulation that would require just
compensation under the Constitution.
    Comment: Many commenters objected to the application of the
prohibition on sale or distribution to components using regulated
substances or intended to use regulated substances. These commenters
expressed the need to retain a large and varied inventory of components
to continue to service and repair existing equipment, and asserted that
as distributors and retailers, there is no way of knowing whether the
component is intended to be used in a newly installed system or in an
existing system. Other commenters emphasized the importance of stocking
parts for refrigeration systems and equipment. While commenters
acknowledged that the market for refrigeration is less seasonal than
for air-conditioning, they noted that it is critical that distributors
keep multiple years' worth of parts and equipment to ensure that
consumers can keep refrigeration systems running, because failure of
these systems can cause extreme economic harm--e.g., when hospitals are
forced to dispose of vaccines and medications, or when grocery stores
must throw away groceries.
    Response: EPA is finalizing its proposed restriction on the sale,
distribution, offer for sale and distribution, and export with respect
only to factory-assembled products using a regulated substance that
exceeds the GWP limit. As noted throughout this action, EPA's intention
is to restrict the use of HFCs in new products being introduced and
circulated in the sectors and subsectors subject to this rulemaking
that use HFCs; our intention is not to prematurely shorten the useful
life of existing products or systems that consumers have already
purchased and are employing. We recognize that, consistent with
commenters' concerns, use restrictions on the manufacture and import,
as well as sale, distribution, offer for sale and distribution, and
export, of components would restrict

the ability of consumers to service and repair their existing
equipment. Therefore, EPA is excluding components from the use
restrictions and allowing for their continued manufacture and import
subject to certain restrictions, including that they may only be used
to service existing equipment and are subject to labeling and reporting
requirements. Similarly, EPA is allowing for the continued sale,
distribution, offer for sale and distribution, and export of
components.
    Comment: Several commenters noted that users of field-assembled
products or systems do not get the advantage of a sell-through period
because under the proposed rule the system is not considered to be
manufactured until it is assembled in the field. One of these
commenters asserted that the result of these definitions is that larger
and more complex products (i.e., field-assembled systems) cannot be
sold and distributed by the proposed sell-through compliance deadline
of January 1, 2026, and in effect, will have a much earlier
manufacturing compliance deadline than the manufacturing compliance
deadline for smaller, self-contained products covered by this rule
(e.g., aerosol cans). One environmental group commented that the one-
year sell-through period is not needed for field-charged systems and
recommended that EPA remove it.
    Response: As discussed in the section VI.A (Definitions), EPA is
distinguishing factory-completed products from field-assembled systems
in this final rule. EPA agrees with comments that it does not make
sense to apply a sell-through limitation to such systems given that
field-assembled systems typically cannot be imported, nor can they be
sold or distributed absent the sale of the larger structure containing
them (i.e., building). Until the system is assembled and charged, it is
a collection of components, and EPA has determined for the reasons
discussed below not to restrict the use of HFCs in components at this
time.
d. Export of Products Containing HFCs
    EPA interprets a sector or subsector's ``use'' to cover not only
manufacture and import of a product, but also the subsequent activities
in the market chain related to products. Specifically, we interpret
export to be included in the meaning of ``use.'' Where EPA has
determined, consistent with consideration of the factors listed in
subsection (i)(4), that it is appropriate to restrict the use of HFCs,
it is reasonable for restrictions on domestically manufactured products
intended for the U.S. market to apply equally to domestically
manufactured products intended for export. Applying the restrictions to
all such equipment using a regulated substance treats materially
similar uses of HFCs in the same manner. Including a sector or
subsector's export of a product using HFCs as subject to the
prohibitions will prevent the limited supply of HFCs in the United
States from being exported in products that could otherwise have used
substitutes. A company cannot request additional consumption allowances
based on the export of products containing regulated substances;
requests for additional consumption allowances are limited to the
export of bulk HFCs. 40 CFR 84.17. As with products manufactured for
domestic use, one intent of this restriction is to ensure that sectors
and subsectors that are currently using HFCs and that are well-
positioned to transition to substitutes, per EPA's determination under
the (i)(4) factors, actually make that transition, leaving more of the
limited supply of HFCs for use in sectors and subsectors that have
fewer options. Including exports as a prohibited activity also supports
global efforts to reduce HFC use in light of the Kigali Amendment to
the Montreal Protocol.
    Comment: Many commenters representing trade organizations, OEMs,
and HFC distributors requested that EPA allow for the export of
equipment designed to use current refrigerants. Commenters stated that
prohibiting export would harm American manufacturing; cede foreign
markets to competitors; and perhaps lead other countries to use
equipment that is older, less energy efficient, and leakier.
    Response: EPA acknowledges that limiting sales to foreign markets
where higher-GWP HFCs are not yet prohibited could negatively impact
U.S. manufacturers. However, because of the global phasedown in HFCs,
this will be only in certain markets and only for a limited time. Many
major markets currently prohibit equipment using higher-GWP HFCs and
thus an export market for innovative American products currently
exists. Countries that have not yet transitioned to lower-GWP HFCs in
certain sectors and subsectors will do so as the global phasedown of
HFCs under the Kigali Amendment proceeds.
    The export prohibition in this rule is not unique. EPA has
historically prohibited the export of products using ODS in the sectors
and subsectors addressed in this rule when restricting their
manufacture, import, sale, offer for sale and distribution, or
distribution. Regulations implementing the nonessential products ban
\45\ and restrictions on pre-charged RACHP equipment containing HCFC-22
and HCFC-142b \46\ also prohibited export of domestically manufactured
products. EPA has consistently included export as a prohibited element
of distribution under regulations implementing title VI of the CAA.\47\
Similarly, EPA's limitations on the use of an alternative to ODS under
SNAP applies to products intended for export (59 FR at 13052; March 18,
1994; also see 40 CFR 82.174(e)). Therefore, EPA's application of its
restrictions to the export of products using HFCs is reasonable and
aligns with past practice and industry expectations. That being said,
this rule does not prohibit the manufacture and export of components
provided that labeling, reporting, and recordkeeping requirements are
met. EPA anticipates that such reporting will allow the Agency to
ascertain the impact of the global phasedown of HFCs on such equipment
and in those subsectors.
---------------------------------------------------------------------------

    \45\ 40 CFR part 82, subpart C.
    \46\ 40 CFR part 82, subpart I.
    \47\ The definition of distributor under 40 CFR 82.62 and 82.302
includes a person who sells or distributes a product for export from
the United States.
---------------------------------------------------------------------------

    Comment: Other commenters stated that countries should themselves
determine when to transition to next-generation alternatives and that
EPA should allow the export of equipment for as long as the importing
country allows its use. One commenter stated that EPA is effectively
legislating those jurisdictions worldwide that are refrigerant
agnostic.
    Response: EPA disagrees that this rule legislates the use of
substitutes in other countries. EPA is prohibiting the use of higher-
GWP HFCs in certain sectors and subsectors within the United States.
Prohibited use includes the domestic manufacturing of those products,
regardless of the market into which they are sold. Restrictions on sale
or distribution, offer for sale and distribution, and export are
intended to backstop the domestic manufacturing prohibition.
Furthermore, components may continue to be manufactured and imported
into the United States and may also be exported to jurisdictions that
are refrigerant agnostic. Finally, this rule will not prevent products
manufactured in one foreign country from being sold in another foreign
country.
    Comment: Many commenters noted that other jurisdictions may not
have building codes that allow for next-generation refrigerants.
Similarly, other commenters stated that other jurisdictions may not
have trained

technicians, recovery equipment, or other infrastructure necessary to
support alternative refrigerants in MVACs. One such commenter stated
that the primary substitute, HFO-1234yf, is not as effective in high
temperature, high-humidity environments such as the Gulf Cooperation
Council countries and that vehicles using HFO-1234yf will be at a
competitive disadvantage in those markets.
    Response: As discussed previously, EPA interprets ``sector or
subsector in which a regulated substance is used'' to be a domestic
sector or subsector which includes use by the manufacturer. The factors
under subsection (i)(4) of the AIM Act do not direct the Agency to
consider whether a substitute is available for use in a foreign market
for servicing the product. Nor is it practicable for the Agency to
identify whether substitutes are available in every country or consider
every country's import controls, building codes, or otherwise.
    On the technical point on use of HFO-1234yf in high ambient
temperature counties such as the Gulf Cooperation Council countries,
EPA notes that the TEAP has not indicated technical barriers that would
preclude the use of alternative refrigerants that meet the GWP
threshold for MVACs from being used in high ambient temperature
countries. EPA is making some revisions in the final rule based on
comments. For the reasons described in section VI.C.2.c, EPA is
extending the compliance date for restrictions on exports from one year
to three years. Thus, for example, light-duty (LD) passenger vehicles
manufactured before Model Year (MY) 2025 \48\ containing an HFC with a
GWP of 150 or greater may be exported until introduction of MY 2028
vehicles. This allows for flexibility past MY 2027, as suggested by
commenters. Moreover, because the transition to refrigerants with GWPs
below 150 in MVACs is well underway on a global basis, EPA does not
agree that there will be infrastructure barriers for this subsector.
---------------------------------------------------------------------------

    \48\ LD passenger vehicles that are manufactured in MY 2025 but
are manufactured less than one year after publication of this final
rule may also be exported until introduction of MY 2028 vehicles.
---------------------------------------------------------------------------

    Comment: Other commenters stated these export restrictions are
largely unnecessary, considering that the HFC allocation program
provides the appropriate market constriction and will discourage
unreasonable consumption of regulated substances for use in exported
products.
    Response: As discussed in response to similar comments regarding
restrictions on sale or distribution, EPA is exercising the separate
authority provided under subsection (i) of the AIM Act to restrict use
of HFCs in particular sectors or subsectors- where the subsection
(i)(4) factors are met. Establishing these sector and subsector
specific restrictions helps to support the domestic phasedown and
allocation program by ensuring that those sectors and subsectors that
have available substitutes for use in place of higher-GWP HFCs use
those substitutes.
3. What uses are not covered in the final rule?
a. Manufacture, Import, Sale, Distribution, and Export of Components
    Based on the comments received, EPA is excluding components from
the definition of product and is therefore not applying the final
rule's restrictions on manufacture, import, sale, distribution, offer
for sale or distribution, or export (all of which apply to products) to
components. EPA's exclusion of components from this rule's prohibitions
is premised on the continued need for components to service existing
systems.
    EPA is applying requirements to label, report, and keep records
related to the manufacture and import of certain specified components.
For purposes of this rule, these specified components are condensing
units, condensers, compressors, evaporator units, and evaporators. EPA
is separating out this subset of components found in an RACHP system
because these are refrigerant-specific (e.g., unlike piping) and may
contain significant amounts of regulated substances (e.g., unlike a
thermal expansion valve) when manufactured or imported. In some
instances, such as a display case in a supermarket, these specified
components may also be viewed as products or appliances themselves.
However, even though these specified components constitute the major
parts of a system, they still must be connected to a refrigerant
circuit in order to function, and we therefore think treating these
specified components as components is more appropriate at this time
than treating them as products under this rule's prohibitions. EPA also
considered that the same specified components (e.g., compressors) can
in some cases be used in systems in different subsectors, which may not
be subject to the same GWP limit restrictions. Until the specified
component is assembled in a system, it may not be clear what subsector
GWP limit would apply to that specified component.
    Labeling, reporting, and recordkeeping provisions are necessary to
ensure that components that continue to be manufactured or imported
containing higher-GWP HFC refrigerants are, in fact, used for the
repair and servicing of existing equipment.
    Replacement of certain percentages of these specified components is
also the type of modification that could constitute an installation of
a new system that is prohibited under these restrictions (see section
VI.C.2.b). We are requiring that manufacturers and importers of
specified components label these components, report to EPA, and
maintain the necessary records related to reporting, to help ensure
compliance with this prohibition. (see sections VII and VIII).
    Comment: Some commenters requested that EPA allow replacement
components to be manufactured, imported, exported, or installed after
the compliance date to maintain, service, or remodel an existing
system. One commenter urged that this be allowed until the time those
systems using high-GWP HFCs no longer exist in the field. One commenter
suggested that such components be labeled, ``For retrofit, replacement,
remodel, or maintenance only.'' Other commenters recommended that the
manufacture and import of components cease upon the compliance date for
that sector or subsector just as is required of the installation of the
system. These commenters stated that this would help to ensure that
components are used for repairs and not to construct new systems.
    Response: The repair and servicing of installed systems is crucial
for all the reasons described previously. Avoiding early obsolescence
due to the lack of a component is one reason EPA is not applying the
prohibitions on sale or distribution, or offer for sale or
distribution, to components.
    With respect to the comment recommending that EPA prohibit
manufacture and import of components upon the compliance date for the
installation of systems using those components, we do not agree that
this would accomplish the goal of ensuring supply of components to
service and repair existing systems. In addition, components may be
manufactured for use with multiple refrigerants, including potentially
blends that comply with the GWP limit and ones that do not. Until the
component is assembled into a system and charged, it would be unclear
whether the component, on its own, met a restriction. As noted above, a
component may also be used in multiple subsectors and thus could be
compliant for use in one subsector but

not another. Applying this rule's prohibitions on manufacture, import,
sale, distribution, offer for sale or distribution, and export on
components would be difficult to enforce.
    EPA agrees with the commenter that there is a compliance risk that
components manufactured or imported for repairs could be used to
install a new prohibited system. EPA is mitigating that risk of
noncompliance through labeling that a specified component is for repair
and servicing only, as one commenter recommended, and reporting and
recordkeeping requirements.

b. Used Equipment

    EPA is not applying the GWP limit restrictions or other
restrictions to the sale, distribution, offer for sale or distribution,
or export of used equipment. By used, the Agency means products,
components, or systems that have been in the ownership of someone other
than a manufacturer, importer, or distributor, and have experienced
ordinary operation or utilization by a consumer. Some equipment, such
as air-conditioning and refrigerated appliances, are often conveyed
with the sale of a building and could not reasonably be excluded from
that conveyance. Other products subject to these restrictions may be
incorporated into a larger good, such as an MVAC in a motor vehicle,
which may be sold multiple times during the useful life of the good.
Restricting the sale of used equipment that use HFCs would
significantly decrease the value of those goods and impact the market
for used products (e.g., trading in a used motor vehicle during the
purchase of a new one). Restricting the sale of used products could
also have overall detrimental environmental effects by requiring
consumers to discard products or equipment before the end of the
product's useful life and could negatively impact affordability for
consumers by eliminating options to purchase used products. Under title
VI of the CAA, EPA typically has not restricted the sale of used
appliances containing ODS and is maintaining a similar approach for
this rule.
    EPA intends that this exemption for used equipment cover both
individuals selling products they themselves have used as well as
entities that do volume business in used products (e.g., stores selling
second-hand goods or car-dealerships selling pre-owned vehicles).
However, this used products exemption is not intended to cover entities
that purchase new equipment, which is subject to the restrictions on
manufacture and import, hold that equipment for a period of time, and
then re-sell it. We have accordingly specified that equipment must have
experienced ordinary operation or utilization by a consumer to qualify
for the used equipment exemption.
    EPA received one comment on its proposal not to restrict the sale,
distribution, or export of used products. The commenter found the
description of a used product to be problematic as it could restrict
the recycling of an unsold defective unit, for instance. EPA does not
seek to restrict the movement of equipment, used or new, for disposal,
including recycling.
c. ``Equipment in Existence''
    Under subsection (i)(7)(B)(ii) of the Act, ``a rule promulgated
under this subsection shall not apply to, . . . except for a retrofit
application, equipment in existence in a sector or subsector before
December 27, 2020.'' As such, EPA's restrictions do not apply to the
sale or distribution, offer for sale or distribution, or export of any
equipment that was in existence in the sector or subsector prior to
December 27, 2020.
    Comment: Multiple commenters representing a range of stakeholders
recommended that EPA consider all equipment that was manufactured prior
to the compliance date for that subsector be considered ``equipment in
existence'' for purposes of subsection (i)(7)(B). The commenters stated
that doing so would provide necessary certainty that equipment
manufactured between December 27, 2020, and the compliance date for
that subsector (e.g., January 1, 2026) could be serviced, repaired, and
have components replaced as needed throughout its useful life. Another
commenter similarly advocated that EPA should not mandate replacement
of any equipment that has a date of manufacture of the compressor-
bearing equipment prior to the effective compliance date.
    Response: The Agency does not agree that equipment that was
manufactured prior to a future compliance date for a subsector fits
under subsection (i)(7)(B)'s ``equipment in existence in a sector or
subsector before [December 27, 2020].'' Any equipment manufactured or
installed after December 27, 2020, plainly does not meet the statutory
exemption. Nonetheless, all equipment--regardless of the date of
manufacture or installation--may be serviced, repaired, and have
components replaced as needed throughout its useful life. Under this
rule as finalized, servicing, repair, or maintenance of equipment that
was in existence in the sector or subsector prior to December 27, 2020,
would generally not render that equipment newly subject to EPA's
restrictions on use of HFCs, except in those instances where such
actions constitute a new installation (see section VI.C.2.b).
    The Agency is also not mandating the replacement of any equipment
that is currently in use, regardless of the date of manufacture or
installation of that equipment. This rule's restrictions apply to the
manufacture, import, sale, distribution, offer for sale or
distribution, and export of new products and the installation of new
systems. Only where an existing system is modified to the point that
the cooling capacity is increased or a threshold percentage of
specified components is replaced, is it considered an installation of a
system subject to these restrictions.
d. Repair and Servicing
    This rule does not impose restrictions on the repair and servicing
of products or systems that are currently in use.
    Comment: Many commenters expressed concern about the loss of
significant capital investment and economic harm should EPA restrict
the ability to repair existing systems. Distributors were also
concerned about the cost of discarding components that could not be
sold to service or repair a system. Some commenters noted the social
and economic costs associated with the loss of food, vaccines, and
other commodities that would spoil if a refrigeration system fails and
cannot be quickly repaired. Some commenters noted the impact on low-
income communities if supermarkets or other retail food facilities
close. Some commenters were concerned for their customers if equipment
warranties could not be honored or if they had to buy a new system for
the failure of a single component.
    Response: EPA acknowledges the concerns noted by commenters
regarding the need to service and repair existing systems. Under this
final rule, a product or system may be serviced and repaired throughout
its useful life, including the replacement of components.
e. Retrofit Applications
    Under the AIM Act subsection (i)(7)(B)(ii), EPA has authority to
apply restrictions to ``retrofit applications,'' where existing
equipment is upgraded by changing the regulated substance used (see AIM
Act subsection (i)(7)(A)). The Act specifies that ``retrofit'' is where
upgrades are made to existing equipment where the regulated substance
is changed and which ``(i) include the conversion of equipment to

achieve system compatibility and (ii) may include changes in
lubricants, gaskets, filters, driers, valves, o-rings, or equipment
components for that purpose.''
    EPA did not propose to address retrofits in this rulemaking,
although the Agency issued in conjunction with the proposed
restrictions an advanced notice of proposed rulemaking seeking
information regarding certain retrofitted equipment. As stated at
proposal, EPA is not addressing retrofit applications in this final
rulemaking.
    Comment: One commenter urged EPA to adopt separate GWP limits for
retrofits as was done in SNAP rules 20 and 21, and another recommended
that EPA mandate the use of reclaimed refrigerant in existing
retrofitted equipment, noting that EPA does not need to wait for a
rulemaking under subsection (h) of the AIM Act to do so, and that some
reclaimed feedstock is available now or could be made available by
future compliance dates. Other commenters supported EPA's decision not
to regulate retrofits of existing equipment as part of this rulemaking,
citing concerns that replacement refrigerants for high-GWP substances
for retrofit equipment are not yet available.
    Response: As discussed in the proposed rule and in the Agency's
request for information about refrigerants used in retrofitted
equipment and the prevalence of that equipment in certain sectors and
subsectors, the Agency is still gathering information about retrofit
applications. While we recognize the Agency's authority to issue
restrictions on retrofit applications in subsection (i)(7)(B)(ii), we
do not view, and commenters did not suggest, that EPA has an obligation
to issue such restrictions at this time. Those commenters who
recommended that EPA regulate retrofit applications in this rulemaking
did not provide information that altered EPA's assessment that for this
set of restrictions issued under subsection (i), given the early stages
of implementing the AIM Act overall and of the phasedown under
subsection (e), it is efficient and effective to focus on transitioning
sectors and subsectors at this first step through prohibitions on the
introduction of higher-GWP HFCs in new products and systems.

D. How is EPA addressing restrictions on the use of HFCs requested in
petitions granted?

    EPA is addressing three sets of petitions in this action: the 11
petitions granted or partially granted on October 7, 2021; additional
petitions submitted by the Air-Conditioning, Heating and Refrigeration
Institute (AHRI) which updated previously submitted petitions; and two
petitions granted by EPA on September 19, 2022. EPA is addressing these
granted petitions in a single rulemaking rather than through separate
rulemakings. In some instances, particularly where the petitioned
sectors and subsectors overlap, responding through a single rulemaking
allows for a complete analysis in a single location. Consistent with
EPA's authority under subsection (i)(1) of the AIM Act, EPA is also
establishing restrictions on the use of HFCs in certain sectors and
subsectors that were not included in petitions received by the Agency
to date.
    Several commenters supported EPA's decision to address the granted
and partially granted petitions together in one rulemaking. These
commenters noted that addressing the petitions together allows for
timely action and will provide consistency and transparency for
regulated entities.
1. Petitions Granted on October 7, 2021
    On October 7, 2021, EPA granted ten petitions and partially granted
one petition under subsection (i) of the AIM Act (86 FR 57141, October
14, 2021). Copies of petitions granted (including the full list of
petitioners and co-petitioners), a detailed summary of each petition,
and EPA's rationale for granting these petitions are available under
Docket ID EPA-OAR-2021-0643. Five of the granted petitions specifically
requested that EPA replicate, in varying degrees, certain restrictions
on use of HFCs based on the changes of status contained in SNAP Rules
20 and 21. These five petitions were received from the Natural
Resources Defense Council et al. (hereby, ``NRDC''); DuPont (two
petitions); American Chemistry Council's Center for the Polyurethanes
Industry (hereby, ``CPI''); and the Household & Consumer Product
Association and National Aerosol Association (hereby, ``HCPA''). These
petitions requested restrictions on the use of specific HFCs or blends
containing HFCs in refrigeration, air-conditioning, and heat pump,
foams, and aerosols sectors.\49\ Another five petitions requested that
EPA establish GWP limits for HFCs used in certain stationary AC and/or
refrigeration subsectors. These petitions were received from the
Environmental Investigation Agency et al. (hereby, ``EIA''), AHRI (two
petitions), Association of Home Appliance Manufacturers (hereby,
``AHAM''), and International Institute of Ammonia Refrigeration et al.
(hereby, ``IIAR''). The one partially granted petition, submitted by
California Air Resources Board et al. (hereby, ``CARB''), requested two
types of restrictions: (1) Certain restrictions on the use of HFCs
contained in SNAP Rules 20 and 21 in the RACHP, foams, and aerosols
sectors and (2) restrictions on the use of HFCs based on GWP limits in
certain stationary AC and refrigeration subsectors. CARB also requested
EPA regulations should not limit States' ability to further limit or
phase out the use of HFCs in their jurisdictions.
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    \49\ EPA notes that while these petitioners requested that EPA
establish restrictions on the use of HFCs by restricting specific
HFCs or blends containing HFCs, it does not necessarily mean that
these petitioners preferred this restriction format over
establishing restrictions on the use of HFCs by establishing GWP
limits. EPA believes that these petitioners requested restrictions
on the use of specific HFCs and blends containing HFCs in this way
to replicate the format presented in SNAP Rules 20 and 21.
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2. How is EPA addressing additional petitions that cover similar
sectors and subsectors?
    EPA received two additional petitions from AHRI on August 19, 2021,
and October 12, 2021. The first petition requested that EPA establish
transition dates for ``New Refrigeration Equipment'' \50\ for certain
commercial refrigeration subsectors listed, along with the associated
maximum GWP. AHRI requested that the transition dates be at least two
years after the adoption of safety standards and building codes.\51\
AHRI's second petition in this category requested that EPA establish
transition dates for ``New Refrigeration Equipment'' for specific
chiller applications listed, along with the associated maximum GWP.
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    \50\ AHRI suggests a definition for ``New Refrigeration
Equipment'' as follows: equipment built with new components and
equates to a nominal compressor capacity increase across the
refrigeration appliance or an increase of the CO2
equivalent of the refrigerant in the refrigeration appliance. Under
this suggested definition, the replacement of components in Existing
Refrigeration Systems would be permissible if the nominal compressor
capacity is not increased across the refrigeration appliance or the
CO2 equivalent of the refrigerant in the refrigeration
appliance is not increased.
    \51\ A discussion on the status of safety standards and building
codes that may impact compliance dates is in section VI.E.2 of this
preamble.
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    EPA is treating these two AHRI petitions as addenda to their
October 7, 2021, granted petitions, and not as separate petitions,
since the subsectors listed in these petitions are contained in the
granted AHRI petitions and AHRI refers to these as further steps in the
transition for these uses. The main difference between the requested
action in these two petitions and the granted

petitions is the lower-GWP limits with later compliance dates. Since
EPA considers these two petitions as addenda to petitions granted on
October 7, 2021, this rulemaking addresses these requests.
3. Petitions Granted on September 19, 2022
    On September 19, 2022, EPA granted two additional petitions that
requested EPA establish restrictions on the use of HFCs in certain
commercial refrigeration subsectors based on GWP limits. These
petitions were received from AHRI and IIAR and covered similar
commercial refrigeration subsectors contained in petitions granted on
October 7, 2021. One difference to note is that both the AHRI and IIAR
petitions requested restrictions on the use of HFCs for equipment types
beyond what was covered in many of the petitions granted on October 7,
2021 (i.e., all equipment with a refrigerant charge less than 200 lb)
in listed subsectors. EPA granted these petitions based on its
consideration of the (i)(4) factors in light of the information then
available. Given the Agency was already developing the proposed
rulemaking which addresses restrictions on the use of HFCs in the
sector and subsectors contained in these newer petitions, recognizing
the extensive overlap with the petitions granted on October 7, 2021,
and in an effort to streamline rulemakings, EPA is addressing these
newer petitions in this rulemaking. Copies of the AHRI and IIAR
petitions can be found in the docket.

E. Subsection (i)(4) Factors for Determination

    Subsection (i)(4) of the AIM Act directs EPA to factor in, to the
extent practicable, various considerations when evaluating petitions
and carrying out a rulemaking. EPA is not establishing regulatory text
regarding these factors at this point; however, this section summarizes
the Agency's interpretation and application of the (i)(4) factors.
EPA's consideration of the (i)(4) factors served as the basis for the
restrictions (for additional discussion see section VI.F of this
preamble).
1. How is EPA considering best available data?
    Subsection (i)(4)(A) of the AIM Act directs the Agency to use, to
the extent practicable, the best available data in making a
determination to grant or deny a petition or when carrying out a
rulemaking under subsection (i). In this context, EPA interprets the
reference to best available data as an instruction with respect to the
other factors under (i)(4) rather than as an independent factor. Best
available data may not always mean the latest data. For example, the
latest data may not have yet had time to be peer reviewed and might
benefit from peer review. This should not be interpreted as meaning EPA
would only consider best available data to be peer-reviewed data, but
that peer review is one consideration that could inform our
understanding of what are the best available data in particular
situations.
    The best available data that the Agency has considered in
determining the availability of substitutes under (i)(4)(B) includes,
but are not limited to: SNAP listing decisions; Montreal Protocol
reports by the TEAP and its Technical Options Committees and Temporary
Subsidiary Bodies (e.g., Task Forces); \52\ TSDs from States with HFC
restrictions; \53\ information from other Federal agencies and
departments (e.g., DOE); proceedings from technical conferences; and
journal articles. For some of the factors and subfactors, EPA developed
TSDs that provide information from these sources and others that EPA
believes to be the best available data. Furthermore, EPA considered
information provided to the Agency from industry, trade associations,
environmental non-governmental organizations, academia, standard-
setting bodies, petitioners, in public comments and in stakeholder
meetings that the Agency hosted, and other sources in response to EPA
making the petitions publicly available through Docket ID No. EPA-HQ-
OAR-2021-0289, to the extent that such information represented best
available data.
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    \52\ The Technical Economic Assessment Panel is an advisory body
to the parties to the Montreal Protocol and is recognized as a
premier global technical body; reports available at: https://ozone.unep.org/science/assessment/teap.
    \53\ An example is CARB's Initial Statement of Reasons and
Standardized Regulatory Impact Assessment report. Available at:
https://ww2.arb.ca.gov/rulemaking/2020/hfc2020.
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    Comment: Two commenters stated that information contained in
petitions is not ``best available data,'' given the petitions are in
the self-interest of the petitioners and that the petitioners are
incentivized to downplay any adverse consumer impacts.
    Response: EPA considered information from petitioners (among other
sources) to the extent that such information represented best available
data. EPA is cognizant of the potential biases in the petitions and
stated in the proposed rule that the petitions formed merely the
starting point of the Agency's analysis.
    Comment: One commenter stated that WMO and the IPCC are cited
throughout the proposed rule but were not included as sources of best
available data despite being the most authoritative resource for
information on the environmental impacts of HFCs. The commenter also
stated that the 2007 IPCC's AR4 values for the GWPs of HFCs are not
best available data, as the IPCC has updated these values in 2013 and
2021. The commenter stated that EPA is understating the effects of HFCs
and any person who attempts to gather GWP information from the
authoritative source (such as the IPCC) will not come to the same
conclusions regarding compliant products.
    Response: EPA agrees that the IPCC and WMO are sources of best
available data, especially for the environmental impacts of HFCs and
other greenhouse gases. EPA's non-exhaustive list of data sources
referred to by the commenter were in the context of the subsection
(i)(4)(B) factors for which other data sources are more relevant. EPA
disagrees that the policy decision to use AR4 GWP values is a failure
to use best available data. As the commenter noted, the exchange values
for HFCs used in the AIM Act are the same as the AR4 GWP values. Use of
AR4 values ensures consistency between the different regulations issued
by EPA under the AIM Act, including the production and consumption caps
and the issuance of allowances. Using different values would make the
program harder to implement, confuse the body of stakeholders required
to comply with the regulations, and prevent the Agency from evaluating
the benefits of this rulemaking within the context of the different
regulations issued by EPA under the AIM Act.
2. How is EPA considering the availability of substitutes?
    Subsection (i)(4)(B) of the AIM Act directs EPA to factor in, to
the extent practicable, the availability of substitutes for use of the
regulated substance that is the subject of this rulemaking or petition,
as applicable, in a sector or subsector. Several factors inform the
availability of substitutes for use in a sector or subsector, based on
the statutory language in subsection (i)(4)(B). As part of EPA's
consideration of availability of substitutes, the AIM Act directs the
Agency to take into account the following subfactors: technological
achievability, commercial demands, affordability for residential and
small business consumers, safety, consumer costs, building codes,
appliance efficiency standards, contractor training costs, and other

relevant factors, including the quantities of regulated substances
available from reclaiming, prior production, or prior import.
    EPA has considered the subsection (i)(4)(B) subfactors
collectively, with no one subfactor solely governing the restrictions
for any sector or subsector. EPA is not required to weigh all
subfactors equally when considering the availability of substitutes.
Subsection (i)(4) directs the Agency to consider the factors listed in
(i)(4), including availability of substitutes, ``to the extent
practicable.'' EPA interprets this phrase to extend to its
consideration of the subfactors in (i)(4)(B), given that these
subfactors are to be taken into account in considering the availability
of substitutes ``to the extent practicable.'' EPA anticipates that in
most situations, no single subfactor will be dispositive of its
consideration of the availability of substitutes under subsection
(i)(4)(B). In many instances, a particular characteristic of a
substitute may be considered under multiple factors. For example, the
use of a lower flammability refrigerant could have implications for
commercial demands, safety, building codes, and contractor training
costs. Likewise, the timing of a restriction's compliance deadline
could be affected by multiple factors such as commercial demands,
affordability for residential and small business consumers, safety,
building codes, and appliance efficiency standards. Furthermore, not
all the subfactors in (i)(4)(B) may be applicable to each sector or
subsector. For example, appliance efficiency standards are not
applicable to aerosols. Lastly, it may not be practicable to consider
some subfactors in some situations such as when there are not
sufficient available data regarding a specific subfactor. EPA did not
receive comment on its methodology to weigh the factors collectively
and to the extent practicable and therefore is finalizing restrictions
in this rule using that approach.
    Substitutes for higher-GWP HFCs have been the subject of evaluation
for decades. EPA, State and foreign governments, industry standards
organizations, and international advisory panels have long been
identifying and assessing substances that can be used in lieu of
higher-GWP HFCs and their predecessors, often for uses within the
sectors and subsectors subject to this rule. EPA has drawn upon
information generated by these efforts in considering the subsection
(i)(4) factors in the context of this rulemaking, and in particular, in
considering the availability of substitutes under subsection (i)(4)(B).
    While these entities have evaluated substitutes for HFCs in other
contexts, the information generated by these efforts provides a useful
starting point. For example, in the SNAP program under section 612 of
the Clean Air Act, EPA identifies and evaluates substitutes for ODS in
certain industrial sectors, including RACHP, aerosols, and foams. To a
very large extent, HFCs are used in the same sectors and subsectors
where ODS historically have been used. Under SNAP, EPA evaluates
acceptability of alternatives for ODS based on the potential human
health and environmental risks, relative to other substances used for
the same purpose. In so doing, EPA assesses atmospheric effects such as
ozone depletion potential and global warming potential, toxicity and
exposure data, flammability, and other environmental impacts. These
assessments under SNAP are relevant to some of the subsection (i)(4)
factors, particularly with respect to safety (and the resultant impact
on availability of a substitute under (i)(4)(B)) and environmental
impacts. We have therefore considered SNAP assessments and listings of
acceptable substances in our consideration of the (i)(4) factors and
establishment of use restrictions under subsection (i). Further, the
fact that manufacturers and formulators have submitted substitutes to
EPA for evaluation under SNAP can indicate to the Agency that the
substitute is technologically achievable for a given sector and that
there is (or will be) commercial demand for it. A substitute listed by
EPA as acceptable for a given end-use under SNAP would most likely have
been submitted by industry where the submitter thought that the
substitute was technologically achievable and that there could be a
market for such substitute.
    EPA has also considered in this rulemaking the work undertaken by
the TEAP. The TEAP analyzes and presents technical information and
recommendations when specifically requested by parties to the Montreal
Protocol. It does not evaluate policy issues and does not recommend
policy. Such information is related to, among other things, substitutes
that may replace the substances controlled under the Protocol and
alternative technologies that may be used without adverse impact on the
ozone layer and climate. The TEAP assesses the technical and economic
feasibility of substitutes for sectors and subsectors that use HFCs and
publishes various technical reports through different technical
committees, such as the Refrigeration, Air Conditioning, and Heat Pumps
Technical Options Committee.\54\ In the TEAP's evaluation of HFC
substitutes, subfactors such as technological achievability and
affordability have been considered to some extent. For this rulemaking,
EPA considered technical and economic information from the TEAP's 2018
Quadrennial Assessment Report and the recent 2022 Progress Report,
including the response to ``Decision XXXIII/5--Continued provision of
information on energy-efficient and low-global-warming-potential
technologies'' found in Volume 3 of the Progress
Report.55 56 57
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