Hydrofluorocarbon Phasedown: Background and Issues Facing Congress

Updated June 30, 2026

Hydrofluorocarbon Phasedown: Background and Issues

Facing Congress

The United States is phasing down hydrofluorocarbons

(HFCs) under the American Innovation and Manufacturing

Act of 2020 (AIM; P.L. 116-260, Division S, §103;

codified at 42 U.S.C. §7675) and the Kigali Amendment to

the Montreal Protocol (MP). HFCs are greenhouse gases

(GHGs) used in refrigeration and air conditioning, aerosols,

foam blowing, fire suppression, solvents, semiconductor

manufacturing, and other applications. HFCs gained

widespread use as substitutes for ozone-depleting

substances (ODSs), which have largely been phased out

worldwide under the MP. According to scientists, HFCs

have a negligible impact on stratospheric ozone but are

potent GHGs. Their potency, measured as Global Warming

Potential (GWP), can be hundreds to thousands of times

greater than the equivalent mass of carbon dioxide (CO2)

when measured over near-term time horizons (e.g., 20 or

100 years).

Kigali Amendment to the Montreal

Protocol (MP)

Parties to the Vienna Convention for the Protection of the

Ozone Layer, including the United States, adopted the MP

in 1987 to set binding schedules for countries to phase out

listed ODSs, which were largely replaced by HFCs as

substitutes. The MP also provides for international

cooperation on ODS substitutes, research, and financial

assistance—including through its Multilateral Fund—and

trade restrictions with nonparties.

In 2016, MP parties agreed to phase down HFCs through

the Kigali Amendment. The Kigali Amendment requires

ratifying countries to phase down the production and

consumption of 18 HFCs. Nondeveloping (or non-Article 5)

countries, including the United States, must reduce HFC

production and consumption by 85% by 2036. Developing

(or Article 5) countries must reduce HFC production and

consumption to either 80% by 2045 or 85% by 2047. Most

Article 5 countries froze HFC consumption levels in 2024,

while a smaller group of Article 5 countries with high

ambient temperatures are to freeze consumption in 2028.

The Kigali Amendment updates the MP’s financial

mechanism to support Article 5 countries’ incremental costs

of compliance. It also sets a 2033 deadline for parties to ban

trade of HFCs with any country that has not ratified the

amendment. The Kigali Amendment entered into force in

2019. The United States ratified it in 2022. As of December

2025, there were 172 parties to the Kigali Amendment.

According to the National Oceanic and Atmospheric

Administration, scientists estimate that compliance with the

Kigali Amendment could avoid 0.3–0.5o Celsius of global

warming by 2100, relative to a scenario without controls.

American Innovation and Manufacturing

Act of 2020 (AIM)

AIM addresses domestic HFC use in three main ways: (1)

phasing down HFC production and consumption through an

allowance allocation program administered by the U.S.

Environmental Protection Agency (EPA); (2) facilitating

the transition to “next-generation technologies” by

authorizing EPA to restrict the use of HFCs in the sector or

subsectors in which they are used; and (3) directing EPA to

promulgate regulations for purposes of maximizing

reclaiming and minimizing releases of HFCs from

equipment. Examples of “next-generation technologies”

include hydrofluoroolefins (HFOs), which are sometimes

referred to as “natural refrigerants” (e.g., CO2, ammonia,

and propane), and lower-GWP HFC blends.

AIM establishes a 15-year timeline to reduce domestic HFC

production and consumption. AIM’s phasedown schedule

aligns with multiple aspects of international obligations to

phase down HFCs under the Kigali Amendment to the MP.

In AIM, production refers to the quantity of HFCs made in

the United States, while consumption refers to the HFC

domestic production plus imports minus exports. AIM

phases down the same 18 HFCs as the Kigali Amendment.

Benchmarking from a 2011-2013 baseline, AIM requires a

10% reduction in production and consumption within the

first time period, 2020-2023, and an 85% reduction by the

last, 2036 and beyond. AIM does not completely eliminate

HFCs (see Table 1) and allows limited exceptions such as

for essential uses, including for asthma inhalers and

military fire suppression.

Table 1. American Innovation and Manufacturing Act

of 2020 (AIM) Phasedown of HFCs

Percentage of

Reduction in

HFC

Production

Percentage of

Reduction in

HFC

Consumption

2020-2023

10%

10%

2024-2028

40%

40%

2029-2033

70%

70%

2034-2035

80%

80%

2036 and beyond

85%

85%

Time Period

Source: AIM, 42 U.S.C. §7675 (e)(2).

Note: The percentages shown are relative to production and

consumption baselines specified in 42 U.S.C. §7675 (e)(1). The United

States completed the initial 10% reduction phase and is currently

implementing the 40% reduction step.

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Hydrofluorocarbon Phasedown: Background and Issues Facing Congress

AIM directs EPA to administer an allowance allocation and

trading program to implement the HFC phasedown.

Pursuant to this mandate, EPA issues annual allowances for

the production and consumption of HFCs, as well as

application-specific allowances. AIM also addresses

international trade of HFCs. It provides for EPA to reduce

the number of U.S. production allowances when HFCs are

exported and bans the export of HFCs to any country that

has not enacted comparable requirements starting in 2023.

The U.S. Court of Appeals for the D.C. Circuit has twice

upheld EPA’s HFC allowance allocations and trading

regulations.

AIM authorizes EPA to evaluate petitions from any person

to accelerate the phasedown schedule after 2024. Under the

law, EPA must consider factors such as availability of

substitutes, costs, and environmental impacts when

deciding on petitions.

To support this HFC phasedown, EPA’s Technology

Transitions Program limits HFCs in specific sectors

including refrigeration, air conditioning, heat pumps,

foams, and aerosols. Technology Transition rules require

shifts to lower-GWP alternatives in particular equipment

and applications beginning in 2025, some of which EPA

announced in March 2025 that it would reconsider. As a

part of that reconsideration, in May 2026 EPA issued a final

rule extending the compliance deadlines and revising

certain GWP limits and other HFC requirements for

specific sectors and subsectors, including residential air

conditioning, retail food refrigeration, cold storage

warehouses, and semiconductor manufacturing.

In addition, EPA has established a program for managing

use and reuse of HFCs and substitutes, which regulates the

management of HFCs used in equipment, such as

refrigeration and air conditioning systems. As part of the

program, EPA has established requirements for the

installation, servicing, repair, and disposal of equipment

containing HFCs and their substitutes.

The FY2022 reconciliation law (P.L. 117-169), sometimes

referred to as the Inflation Reduction Act, appropriated

$38.5 million for EPA to implement AIM, including $15

million for small business grants and $22.5 million for

implementation and compliance. The FY2025

reconciliation law (P.L. 119-21), sometimes referred to as

the One Big Beautiful Bill Act, rescinded unobligated funds

previously appropriated under P.L. 117-169 to support

EPA’s implementation of AIM.

Considerations for Congress

Congress may consider several issues related to HFCs and

their phasedown:

• Congress may consider oversight of U.S. participation in

the international phasedown of HFCs under the Kigali

Amendment. Areas of oversight may include

compliance with international obligations, level of U.S.

engagement in international decisionmaking, scientific

and technical activities, and implementation-related

coordination. Changes in staffing levels, organizational

structure, or resource availability across agencies such

as the State Department and EPA may affect capacity

for U.S. participation in international cooperation to

phase down HFCs.

• Congress may consider oversight, including hearings or

legislation, regarding risks of illegal trade or

misreporting of bulk HFCs and pre-charged equipment,

such as air conditioning and refrigeration equipment,

and coordination among EPA, U.S. Customs and Border

Protection, and international partners. Oversight may

include implementation of reporting requirements,

enforcement activities, and federal monitoring programs

that support detection of illegal trade and global

compliance with HFC phasedown obligations.

• Congress may conduct oversight of domestic HFC

phasedown activities, including EPA’s allowance

allocation and trading program, Technology Transitions

rules and associated reconsiderations, and HFC

management and reclamation requirements. The

provisions in the rules—and the extent to which they are

reconsidered, implemented, and enforced—may affect

the pace of the U.S. phasedown of HFCs, its alignment

with Kigali Amendment obligations, and

implementation of the AIM Act. Some stakeholders

have raised concerns about the domestic implementation

of the phasedown, including potential consumer costs,

compliance burdens, and implementation challenges.

Others contend that these measures provide market

certainty and investment signals that support the

transition to lower-GWP alternatives and U.S. industry

competitiveness in emerging global markets as well as

facilitate progress toward phasedown requirements.

• Congress may also evaluate or appropriate additional

funding to support implementation of the HFC

phasedown under the Kigali Amendment and AIM. This

could include bilateral or multilateral international

support for HFC phasedown, such as U.S. contributions

to the Multilateral Fund of the MP. Congress could also

consider the role of domestic incentives—such as

rebates or grants—in supporting adoption rates, market

transitions, and consumer costs. For example, EPA has

administered grants to support small businesses. Future

appropriations could include similar programs or other

incentives supporting the HFC phasedown. For

example, programs could include federal grants and

incentive programs, such as grants for commercial and

industrial refrigeration or federal incentive programs for

air conditioning with lower-GWP refrigerants. Congress

also may determine that additional funding or incentives

are not needed to support implementation of the HFC

phasedown.

Kathryn G. Kynett, Analyst in Environmental Policy

Kristen Hite, Legislative Attorney

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IF11779

Hydrofluorocarbon Phasedown: Background and Issues Facing Congress

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