The refrigeration industry is facing a major shift as new EPA regulations demand a move from reactive leak management to proactive prevention. These changes will bring significant financial and legal challenges, especially for sectors previously unaffected by such regulations. With steep fines for non-compliance, the industry must adopt advanced technologies and proactive strategies to ensure compliance and sustainability. This shift represents both a challenge and an opportunity to redefine refrigerant management for the future.
by Basant Singhatwadia, Global Director of Customer Success & Strategy, Facilio
In the world of refrigeration, leaks have long been an accepted, albeit costly, reality. But that's all about to change. The new EPA regulations demand a shift in mindset - a move away from reactive firefighting towards proactive leak prevention.
The leaky status quo is no longer sustainable.
National expert on end-user refrigerant management and Principal at Refrigerant Management Solutions (RMS) Keilly Witman says, “We are facing the biggest change to refrigerant regulations in the United States since these regulations were created in the late ’80s. These changes will not only cost refrigerant end-users hundreds of millions of dollars, but entire sectors that haven’t had to worry about these regulations in the past - like c-stores - will suddenly be faced with unprecedented legal liability.”
With potential fines reaching up to $57,617 per violation per day, not to mention substantial legal fees, the stakes couldn't be higher. Remember the cautionary tales of giants like Costco, Safeway, and Trader Joe's, which have faced severe penalties?
The EPA's stricter regulations on refrigerant leaks are set to take effect, and the consequences of non-compliance could be disastrous. This isn't just about avoiding fines; it's about protecting your bottom line, ensuring the longevity of your equipment, and doing your part to safeguard the environment.
EPA regulations under Section 608 of the Clean Air Act address the handling, recovery and recycling of refrigerants used in refrigeration and air-conditioning equipment. The AIM Act Part III proposes expanding Section 608 requirements for appliances containing 15 pounds or more of HFC refrigerant or substitutes with a Global Warming Potential (GWP) higher than 53. GWP is a measure that allows for comparisons of the global warming impacts of different gases.
The proposed changes would include mandating regular leak inspections to quickly find and fix leaks, thereby minimizing refrigerant loss. Additionally, companies face requirements for annual reporting of chronically leaking appliances and detailed record-keeping to ensure compliance. The proposed regulations are expected to come into effect in the second half of 2024.
The revised EPA regulations continue to mandate specific leak repair requirements for various types of systems, reflecting existing standards:
For systems with more than 500 pounds of refrigerant, the owner or operator must conduct a leak inspection once every three months until they can demonstrate through leak rate calculations that the leak rate has not exceeded 20% (for commercial refrigeration) or 30% (for industrial process refrigeration) for four quarters in a row.
For systems with 50 to 500 pounds of refrigerant, leak inspection needs to be conducted once per calendar year to ensure leak rate has not exceeded 20% for commercial refrigeration or 30% for industrial process refrigeration (IPF) for one year.
For Comfort Cooling Systems (HVAC) with 50 pounds or more, leak inspections need to be conducted once per calendar year until the owner/operator can demonstrate through the leak rate calculations that the leak rate has not exceeded 10% for one year
Starting January 1, 2025, proposed regulations would include:
Appliances with a full charge of 15 pounds or more of a refrigerant containing an HFC or a substitute for an HFC with a GWP above 53 would be required to comply.
Commercial refrigeration or IPF appliances that contain 1,500 pounds or more of an HFC or a substitute with a GWP above 53 would be required to have an automatic leak detection system (ALD) installed on new and existing appliances.
Mandatory use of reclaimed refrigerant for servicing HFC systems starting Jan. 1, 2028
Disposable Cylinders must be sent to reclaimer for removal of refrigerant heel starting Jan. 1, 2025
These changes could classify many more systems as "chronically leaky," significantly increasing the risk to companies of penalties for non-compliance and potentially leading to significant fines if not addressed proactively.
The expanded regulatory scope under Part III of the AIM Act will lead to increased costs associated with more frequent and stringent leak inspections for handling refrigerants. To ensure compliance, companies should be proactive in adaptation to evolving regulations and implementing continuous monitoring, accompanied by timely adjustments.
This also involves dealing with complex state-specific reporting requirements. These tasks can be time-consuming and resource-intensive, requiring dedicated staff. The extra workload and resources needed may strain budgets and will require careful planning.
Rising refrigerant costs will directly impact financial planning and operations, forcing c-store managers to adjust budgets accordingly. This may involve exploring alternative refrigerants or investing in more efficient systems to manage long-term costs.
Existing refrigerant management tools are ill-equipped to address these new realities:
The proposed refrigerant regulations demand a proactive approach from refrigeration compliance and maintenance managers to ensure seamless compliance. To stay ahead of the curve, refrigeration compliance and maintenance managers must rethink their strategies across several key areas:
Retailers must conduct thorough audits and surveys at all stores to assess their readiness for the upcoming AIM Act Part III refrigerant regulations. These surveys should ensure proper tracking of all refrigeration units in management systems, including those with smaller 15-49 pound refrigerant charges.
Regular internal/in-store equipment inspections and audits allow retailers to identify any areas that need improvement before an external regulatory audit takes place. It's crucial to evaluate upfront how the new rules will impact a company’s staff workloads and processes, as there will undoubtedly be added complexities.
Keep a close eye on all newly installed appliances that have leaked and proactively monitor them. Assign an “investigative unit” to promptly identify the root cause of the leaks, perform the necessary repairs, and set up preventive measures. Staying on top of this keeps operations smooth and efficient, minimizes disruptions, and follows regulations.
Using an Internet-of-things (IoT) solution, you can detect leaks early. The software integrates with your existing sensors and other interconnected networks to remotely monitor refrigeration units and trigger automated alerts. These will aid in scheduling maintenance activities to prevent equipment breakdown and finding areas that need improvement. It also enables automatic compliance tracking by automating routine inspections for field service teams.
If the IoT sensors identify equipment as frequently leaking, the retailer must prioritize immediate repairs to avoid penalties under the new rules. Reviewing the complex state reporting requirements is crucial, as retailers must have clear processes for maintaining all required documentation.
Developing strict policies around obtaining complete, timely service and repair records from third parties is essential. In cases where repairs are delayed due to the availability of parts, maintaining additional records becomes critical. Preferably, store managers should implement IoT-led digital systems to collect and track this repair data, and centralize information like refrigerant charge sizes across all equipment. Such automated tracking systems often prove more accurate than traditional paper records or manual record-keeping methods.
The refrigerant regulations are a wake-up call for the industry. They highlight the limitations of outdated, reactive approaches to operations and maintenance.
Now, a fundamental question arises: Can the industry truly achieve compliance and sustainability by clinging to fragmented, manual processes? Or is this an opportunity to reimagine refrigerant management, leveraging technology to enable proactive, data-driven decision-making? The industry stands at a crossroads, and the choices made today will shape the future of refrigerant management.