Chemical Manufacturers, Importers, and Exporters: Frequent Questions

The following information can help manufacturers, importers, and exporters better understand their responsibilities in the phaseout of ozone-depleting substances ().

Q. Is reporting required for the import of halon fire extinguishers?

A. No. Importers are not required to report the import of fire extinguishers because they are classified as controlled products. However, halon aircraft bottles must be reported because they are considered to be bulk containers (i.e., in containers used for the transportation or storage of the substance). Learn more about the import of class I substances.

Q. Why is there a cap on production and import of hydrochlorofluorocarbons (HCFCs)?

A. HCFCs are substances that deplete the ozone layer. In 1992, the Parties to the on Substances that Deplete the Ozone Layer established a limit (cap) on the combined production and import of HCFCs for industrialized countries; this went into effect in 1996. The United States has used a "worst first" approach to phase out HCFCs with the highest s earliest.

Q. Why did EPA institute an HCFC allowance allocation system?

A. To ensure that the United States achieves the required reductions in production and consumption of HCFCs that were agreed to under the Protocol, EPA developed a marketable allowance system. The allowance system retains the flexibility for industry to continue to operate efficiently, while ensuring the United States does not violate the parameters agreed to as a Party to the Protocol.

Q. How does the allowance system work?

A. The allowance system is based on the need to ultimately balance the global output of hydrochlorofluorocarbons (HCFCs). In 2020 through 2029, the allowance system provides allowances for two HCFCs: HCFC-123 and HCFC-124.

There are two types of allowances: 1) production allowances and 2) consumption allowances. Each producer or importer of HCFCs is allocated allowances (one allowance per each kilogram of HCFC), based on historical production and import. A company expends one production allowance and one consumption allowance for each kilogram of HCFC produced. An importer expends one consumption allowance for each kilogram imported. If a producer expends allowances to make HCFCs, then exports those HCFCs, the producer can request additional allowances equal to the amount exported.

Learn more about the allocation system.

Q. Can a company transfer allowances?

A. Yes, a company can trade a consumption or production allowance for one kilogram of an HCFC to another company, which would then be eligible to consume or produce one kilogram of that same type of HCFC. Companies can conduct trades within its own company or between companies, and from one type of HCFC to another type, so long as the HCFC being traded into has not been phased out. For example, as of January 1, 2020, no one can trade HCFC-123 or HCFC-124 allowances for HCFC-22 allowances.

Because each HCFC in the allowance system has a different ozone-depletion potential (), each has its own ODP value. When trades occur between chemicals, they must be weighted by ODP.

To trade allowances, a company must submit a transfer request to EPA. EPA will determine if the transferor possesses enough unexpended allowances to cover the claim.

Learn more about allowance transfers and the specific provisions described in 40 CFR 82.23

Q. May I produce, import, and export HCFCs other than the ones that EPA has established allocations for?

A. Yes, but companies must report all HCFC transactions to EPA so that EPA can fulfill its reporting obligations under the . These transactions include quantities produced, imported, exported, transformed, and destroyed. Keep in mind that generally speaking, no person may introduce into interstate commerce or use any HCFC unless it is:

used, recovered and recycled;
for use as a refrigerant in equipment manufactured before January 1, 2020;
for use as a fire suppression streaming agent listed as acceptable by the SNAP program;
for use in a process resulting in its transformation or its destruction;
for export to Article 5 Parties; or
as a transhipment or heel

Q. What are the restrictions for importing virgin HCFC-22 or HCFC-142b in bulk?

A. As of January 1, 2020, production and import of HCFC-22 and HCFC-142b for use in servicing existing refrigeration and air-conditioning equipment, with a few limited exceptions was phased out. Imports of virgin HCFC-22 and HCFC-142b may only be imported for transformation. Reporting forms for transformation of Class II substances can be found here.

Q. What are the restrictions for importing virgin HCFC-123 or HCFC-124 in bulk?

A. An individual importing HCFC-123 or HCFC-124 must hold allowances to import virgin HCFC-123 or HCFC-124. Additionally, virgin HCFC-123 HCFC-124 imported after January 1, 2020 can only be used for servicing existing refrigeration and air-conditioning equipment and fire suppression equipment. The imports must be reported consistent with all recordkeeping and reporting provisions. Reporting forms for Class II substances can be found here.

Q. May I export virgin HCFC-22 or HCFC-142b in bulk?

A. Yes, you do not need allowances to export HCFC-22 or HCFC-142b in bulk, but some importing countries have their own restrictions and requirements. Check with the government representing the importing country for more information.

Also, you can only export HCFC-22 and HCFC-142b (and blends containing those compounds) to developed countries if the HCFCs 1) are used, recovered, and recycled, 2) will be used for transformation, or 3) will be used as a refrigerant in appliances manufactured before January 1, 2010.

Q. May I export virgin HCFC-123 or HCFC-124 in bulk?

A. Yes, if the material is:

used, recovered and recycled;
for use as a refrigerant in equipment manufactured before January 1, 2020;
for use as a fire suppression streaming agent listed as acceptable by the SNAP program; or
for use in a process resulting in its transformation or its destruction.

You do not need allowances to export HCFCs in bulk, but some importing countries have their own restrictions and requirements. Check with the government representing the importing country for more information.

Companies that provide verification to EPA on exported quantities of HCFC-123 and HCFC-124 that were originally produced or imported with proper allowances can request a refund of the allowances used to import or produce that quantity. Exporters need to follow the EPA recordkeeping and reporting requirements. Reporting forms are available here.

Q. May I import used HCFCs in bulk?

A. Yes, but you must first petition EPA for permission and receive a non-objection notice from EPA to import these HCFCs. There are two types of petitions: for reuse and for destruction. In evaluating a petition for reuse, EPA determines whether the Class II substance to be imported is, in fact, previously used. EPA requires information on a contact person in the foreign country, as well as a detailed description of the source facility and the specific equipment from which the Class II substance was recovered. This information ensures U.S. compliance under the Montreal Protocol. Information is also required when importing used (or virgin) HCFCs for destruction. EPA requires the submission of a certification of intent to import for destruction before a company may import HCFCs for destruction. Learn more about importing HCFCs.

Q. Do any import or export restrictions apply to HCFC substitutes that do not contribute to ozone depletion, such as hydrofluorocarbon (HFC)-134a or R-410A?

A. Yes. EPA has established an HFC allowance allocation and trading system to phase down the production and consumption (including import) of HFCs to 15% of their baseline levels in a stepwise manner by 2036. As of January 1, 2022, allowances are needed to produce or import bulk HFCs. Learn more about these restrictions.

EPA also requires reporting under the Greenhouse Gas Reporting program.