ACR Policy Change: Methodologies Related to HFCs

Date: February 11, 2021

Subject: ACR Policy Change for Methodologies Related to HFCs 

Background

The American Innovation and Manufacturing Act of 2020 (AIM), a part of the Consolidated Appropriation Act, 2021, was signed by President Trump on December 27, 2020. AIM authorizes the following:

-A phase down the production and consumption of HFCs through an allowance program.

-That the EPA establish standards for the management of HFCs used as refrigerants through recovery, reclamation and improved servicing, repair, and disposal practices.

-The creation of a three-year grant program for small businesses, allocating $5 million annually toward increasing recovery and reclamation of refrigerants at end of life.

-That the EPA establish sector-based use restrictions, facilitating the transition to next-generation technologies.

The AIM Act requires the Environmental Protection Agency (EPA) to implement a phase down of the production and consumption of HFCs in order to reach approximately 15% of their 2011-2013 average annual levels by 2036, consistent with the phase down schedule in the Kigali Amendment[1]. Per the HFC phase-down schedule of the Kigali Amendment, Non-A5 countries shall achieve a 40% reduction below 2011-2013 consumption by 2024[2]. On January 27, 2021 President Biden issued an executive order seeking U.S. Senate consent to ratify the Kigali Amendment to the Montreal Protocol.

ACR’s plans for addressing the impact of AIM on project crediting under three HFC-associated methodologies are described below. For additional information contact acr@winrock.org.

1. Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from Certified Reclaimed HFC Refrigerants (v.1.1) 

ACR’s Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from Certified HFC Refrigerants, has a single reporting period and a 10-year crediting period. In light of recent regulatory activity, effective immediately, ACR will:

-Suspend  listings  for project activities that have occurred in 2021. Project listings for which  the project activity occurred prior to December 27, 2020 will be accepted and eligible for the full crediting period. Please contact ACR regarding 2020 projects that are not already listed.

-Review the AIM Act, rollout schedule and other relevant data in consultation with stakeholders before making a final policy decision on an appropriate, conservative milestone for determining crediting and regulatory additionality.

2. Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from the Transition to Advanced Refrigeration Systems

ACR’s Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse  Gas Emissions Reductions and Removals from the Transition to Advanced Refrigeration Systems credits the installation of new refrigeration systems that can use low or no GWP refrigerants such as ammonia, hydrocarbons and carbon dioxide in lieu of higher GWP HFC systems. Eligible sectors are large commercial refrigeration and stand-alone commercial refrigeration systems. The AIM Act of 2020 does not mandate the installation of advanced refrigeration systems, but it does require the phase down of the production and consumption of HFCs that are commonly used as refrigerants in the baseline. ACR’s Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions, Reductions and Removals from the Advanced Refrigeration Systems has a single reporting period and a 10-year crediting period.  In light of recent regulatory activity, effective immediately, ACR will:

-Suspend  listings for all project activities that have occurred in 2021.  Project listings for which  the project activity occurred prior to December 27, 2020 will be accepted and eligible for the full crediting period. Please contact ACR regarding 2020 projects that are not already listed.

-Review the baseline assumptions, practice-based performance standard, regulatory outlook for SNAP regulations and updated market assessments for potential methodological updates in consultation with stakeholders.

3.          Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from the Transition to Advanced Formulation Blowing Agents in Foam Manufacturing and Use 

ACR’s Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from the Transition to Advanced Formulation Blowing Agents in Foam Manufacturing and Use credits the use of a low GWP foam blowing agent (FBA) in lieu of an FBA with higher GWP. The AIM Act of 2020 requires the phase down of the production and consumption of HFCs that are commonly used as FBA in the baseline. ACR’s Methodology for the Quantification, Monitoring, Reporting and Verification of Greenhouse Gas Emissions Reductions and Removals from the Transition to Advanced Formulation Blowing Agents in Manufacturing and Use relies on a practice-based performance standard and a regulatory surplus test for the assessment of additionality. The practice-based performance standard references SNAP rules 20 and 21 as well as a market assessment completed in 2017. The methodology has a single reporting period and a 10-year crediting period.  In light of recent regulatory activity, effective immediately, ACR will:

-Suspend  listings  for all project activities that have occurred in 2021. Projects for which  the project activity occurred prior to December 27, 2020 will be accepted and eligible for the full crediting period. Please contact ACR regarding 2020 projects that are not already listed.

-Review the baseline assumptions, practice-based performance standard, regulatory outlook for SNAP regulations and updated market assessments for potential methodological updates in consultation with stakeholders.

[1] https://www.congress.gov/bill/116th-congress/house-bill/5544/text

[2] https://eia-international.org/wp-content/uploads/EIA-Kigali-Amendment-to-the-Montreal-Protocol-FINAL.pdf