EPA Slashes 2027 HFC Allowances and Penalizes Rule-Breakers
Published Date: 10/6/2026
Notice
Summary
The EPA is setting limits for 2027 on how much hydrofluorocarbons (HFCs) companies can make and use, following the AIM Act’s phasedown plan to protect the environment. Some companies lost or had their 2027 allowances taken away due to rule violations. These changes affect producers and users of HFCs and help reduce harmful emissions while keeping the process fair and on schedule.
Analyzed Economic Effects
8 provisions identified: 5 benefits, 3 costs, 0 mixed.
Withheld and Revoked Allowances for Noncompliance
The EPA finalized administrative consequences that withheld or revoked portions of 2027 allowances for entities that failed to comply with auditing/reporting requirements or imported regulated HFCs without expending required allowances. Examples: Wolfspeed had 2,291.3 MTEVe withheld (effective September 30, 2026) for failure to submit an auditing report; FluoroFusion Specialty Chemicals had 1,841.2 MTEVe revoked (effective September 30, 2026); Solstice Advanced Materials US had 1,144,200.0 MTEVe revoked (effective August 7, 2026).
Major Producers and Distributors Received Large Allocations
The EPA allocated large, named production and consumption allowances for 2027 to specific firms. Examples include production allocations: Solstice Advanced Materials US 108,715,279.7 MTEVe, Chemours 48,023,780.9 MTEVe, Mexichem Fluor 32,034,436.3 MTEVe, Arkema 25,904,001.0 MTEVe; and consumption allocations: Solstice Advanced Materials US 50,422,000.5 MTEVe, IGas Holdings 15,986,181.2 MTEVe, National Refrigerants 12,127,686.5 MTEVe, Chemours 21,448,498.7 MTEVe.
2027 National HFC Caps Set
The EPA set the 2027 national caps for hydrofluorocarbon (HFC) allowances at 229,521,263 MTEVe for production and 181,522,990 MTEVe for consumption. These totals are the nationwide supply of allowances available for allocation for calendar year 2027.
Application-Specific Allowances Allocated
The EPA allocated 13,839,651.2 MTEVe of application-specific allowances for 2027 across specified end uses (propellants in metered dose inhalers (MDIs), structural composite preformed polyurethane foam for marine and trailer use, semiconductor etching/cleaning, and onboard aerospace fire suppression) and issued 9,070,115.2 MTEVe to the Department of Defense for mission-critical military end uses. These allowances are subtracted from both the production and consumption general pools.
1,000,000 MTEVe MDI Set-Aside and Application Deadline
The EPA established an MDI set-aside of 1,000,000 MTEVe from both the consumption and production pools to address unforeseen health-system needs (e.g., a pandemic). Entities that use HFCs as propellants in MDIs have until April 30, 2027 to apply; EPA expects to evaluate requests and issue allowances within 60 days and to distribute any remaining set-aside pro rata within 60 days after April 30, 2027.
Redistribution and Retirement of Allowances
For 2027, the EPA is redistributing 2,534,045.5 MTEVe of revoked and redistributed consumption allowances to eligible holders based on market share, and 61,751.9 MTEVe of 2027 consumption allowances were retired. These redistributed allowances are apportioned among eligible consumption allowance holders.
2027 Allowances Usable Only in 2027
Calendar year 2027 allowances may only be used for production and import of bulk HFCs between January 1, 2027, and December 31, 2027. Allowances cannot be carried forward to other calendar years.
Production-for-Export Allowance for Iofina
The EPA allocated Iofina Chemical 3,000.0 MTEVe of production-for-export allowances annually for a five-year period covering calendar years 2026 through 2030. These allowances were set aside and allocated prior to the general pool production allowances for 2027.
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