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Environment & Energy Report

Trump Support Sought on Deal to Limit Climate-Warming Coolants

Oct. 31, 2017, 5:32 PMUpdated: Oct. 31, 2017, 9:50 PM

The refrigeration industry is hoping the Trump administration keeps intact the Obama-era commitment to phasing down refrigerant chemicals that are potent greenhouse gases.

For the most part, the refrigeration industry strongly backs the 2016 Kigali agreement as the preferred way to gradually reduce the refrigerants with high global warming potential known as hydrofluorocarbons (HFCs). The industry also argues U.S. participation is critical to maintaining global competitiveness for refrigerant gas makers as well as appliance manufacturers.

But it is unclear whether the Trump administration will back the agreement, which the White House would have to submit to the Senate for ratification.

Lobbying records show a quiet push by refrigeration industry trade groups and individual companies, including Ingersoll Rand Inc. and Rheem Manufacturing Co., in support of the global deal. Part of that effort has included providing “educational briefings” on the agreement to the White House and to senators, according to a Bloomberg Environment review of Senate data.

Joe Trauger, senior vice president of policy and government relations for the Air-Conditioning, Heating, and Refrigeration Institute, told Bloomberg Environment industry is having more conversations with Trump officials and lawmakers about the deal—though he said discussions are largely still at the initial stages.

Trauger has been part of the group’s team lobbying lawmakers, the White House, and federal agencies including the Environmental Protection Agency on the issue. Administration officials didn’t immediately respond to Bloomberg Environment’s request for comment.

First Indications

At stake is an amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer, the 1987 treaty created to eliminate chemicals that harm the ozone layer high in the atmosphere, and the only treaty to which every country in the world is a signatory. About 200 countries including the U.S. agreed to the Kigali Amendment in October 2016 at a meeting in Kigali, Rwanda. It would require the U.S. and other developed countries to begin limiting HFCs in 2019.

“The market momentum is unstoppable,” Durwood Zaelke, founder and president of the Institute for Governance and Sustainable Development, told Bloomberg Environment. He said the U.S. industry is the leading supplier of alternatives to HFCs and that U.S. companies “know how to use the treaty to their advantage, including to support jobs in the industry.”

A first indication of the Trump administration’s leanings could come next month when countries hold their latest formal meeting of the parties of the Montreal Protocol. On the agenda for the Nov. 20-24 meeting is the so-called “replenishment” by developed countries of the Multilateral Fund that provides money to developing nations to help meet the treaty’s requirements.

The actions of U.S. negotiators will be closely watched. Small U.S. delegations have attended interim meetings, including a working group meeting in July, but the upcoming meeting in Montreal would be the most high-profile gathering on the issue since the Kigali Amendment was agreed to last year.

Avipsa Mahapatra, climate change lead at the nonprofit Environmental Investigations Agency, told Bloomberg Environment that overall, a “robust” replenishment is “essential to show developing countries they will have adequate resources for the Kigali Amendment implementation.”

Though the upcoming replenishment will mostly provide money for developing countries to complete the phaseout of ozone-depleting chemicals, the protocol’s technology panel has estimated about 5 percent to 10 percent of the new funds could help enable activities to meet HFC limits.

Court’s Roadblock

But the U.S. may lack a regulatory plan to implement the Kigali deal after the U.S. Court of Appeals for the District of Columbia Circuit in August vacated the Obama-era EPA rules banning certain HFC refrigerants.

Arkema, one of the chemical companies that brought the lawsuit, has also been lobbying lawmakers, the White House, and federal agencies on issues related to domestic HFC regulation and the Kigali Amendment, according to Senate data. Despite its opposition to the EPA’s prior rules, Arkema has publicly supported the Kigali deal.

Major U.S. chemical companies Honeywell Inc. and Chemours Co. that backed the EPA rules, as well as environmental groups, are seeking a rehearing of the case. But if the ruling ultimately stands, the EPA may have lost a tool to phase down the global warming chemicals.

Trauger said his group is exploring other regulatory options to limit HFCs, including other Clean Air Act programs. But he said it is a “methodical” process, with “a lot of questions out there that have yet to be answered.”

Stephen Andersen, director of research at the Institute for Governance and Sustainable Development, suggested the U.S. industry might begin to set its own pace on HFC reductions consistent with the Kigali deal, both to ensure a clear future needed for long-term investment and to stay competitive with China, Japan, and European nations. But he told Bloomberg Environment that the “worst outcome” of the court’s ruling would be “an unorganized sector that just doesn’t get around to the conversation.”

Andersen, who worked on ozone and climate issues at the EPA for more than 20 years, said the agency already has the authority to take some steps to aid industry’s transition, including a quicker approval of climate-friendly substitutes for HFCs.

State Action On the Radar

Leadership could also come at the state level. California regulators are already working on a rule to adopt limits equivalent to the court-vacated Obama EPA rules, with plans to pursue stricter limits in a second phase of regulation.

Mahapatra said it is possible other states could put in place equal or more stringent limits, which she called “low-hanging fruit” to help states meet their climate goals.

But Trauger, though acknowledging states such as California are “anxious to move” on HFC reductions, said industry believes the phase-down is “more appropriately handled at the federal level.”

To contact the reporter on this story: Abby Smith in Washington at asmith@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com