The United States Court of Appeals for the D.C. Circuit has ruled EPA acted improperly when it suspended restrictions on the use of hydrofluorocarbons (HFCs) to replace ozone-depleting substances (ODSs).  Natural Resources Defense Council v. Wheeler, No. 18:1172 (D.C. Cir. April 2020).  EPA did this without going through notice-and-comment procedures, which is what the Natural Resources Defense Council challenged and won.

In 2015, EPA issued a regulation disallowing the use of HFCs as a substitute for ODSs.  That rule was challenged in the D.C. Circuit case Mexichem Fluor, Inc. v. EPA, 866 F.3d 451 (D.C. Cir. 2017).   The Court determined EPA could validly forbid current users of ODSs from switching to HFCs.  Concluding the EPA lacked authority to force users who had already switched to HFCs to make a second switch to a different substitute, the Court vacated the rule in part and remanded to EPA. 

On remand, EPA decided to stop applying the HFC restrictions in their entirety, rather than only with respect to users who had already switched to HFCs. According to the Court, the original Mexichem decision reinforced an intention only to forbid EPA from applying the 2015 Rule’s HFC listings to a discrete set of regulated parties (those that had already switched from ODSs to HFCs), not to set aside the 2015 Rule’s HFC listings in their entirety. As such, the 2018 Rule goes further than Mexichem by instituting a complete vacatur of the 2015 Rule’s HFC listings.  These issues led the Court of Appeals to rule against the EPA.

The impact of the decision on the HVACR industry is unclear.  The industry will look to EPA to promulgate a rule implementing the Mexichem decision.