Key Insights
- The US Environmental Protection Agency is delaying compliance deadlines on phasing down hydrofluorocarbon use for supermarket, industry, semiconductor manufacturing, and other sectors.
- EPA head Lee Zeldin says the move will lower grocery costs for US consumers, with projected savings of $2.4 billion by 2050.
- Critics say there’s scant evidence that such a drop will occur and potential for the EPA’s moves to cause higher food costs.
In an effort to lower soaring grocery costs, US Environmental Protection Agency administrator Lee Zeldin last month announced two actions to extend the use of hydrofluorocarbon (HFC) refrigerants in the US. HFCs are sometimes called superpollutants, as their global warming potential (GWP) is hundreds to thousands of times greater than that of carbon dioxide.
The EPA says pushing back the dates for the planned phasedown of HFC use and removing HFC leak requirements from some types of refrigerated trucks could save US businesses and consumers more than $2.4 billion over the next 24 years.
“Our actions allow businesses to choose the refrigeration systems that work best for them, saving them billions of dollars. This will be felt directly by American families in lower grocery prices,” Zeldin says in the statement.
But critics of the changes say they won’t lower grocery prices and might even make food costs go up.
“The EPA has no analysis showing that delaying these dates will lower costs for consumers,” says Stephen Yurek, president and CEO of the Air-Conditioning, Heating, and Refrigeration Institute (AHRI), a trade association representing more than 300 heating, ventilation, and air-conditioning (HVAC) equipment manufacturers.
What’s more, he says the EPA’s changes will increase the demand for existing refrigerants. “So, instead of falling, refrigerant prices are likely to rise, resulting in higher service costs, and higher costs for consumers,” he says.
Rule changes put off compliance, increase emissions
The final rule published in the May 26 Federal Register changes certain requirements under the Technology Transitions Program. The program was issued by the Joe Biden administration in 2023 as a provision to the American Innovation and Manufacturing (AIM) Act, which gives the EPA the authority to manage HFC use and support alternatives.
The agency pushed back deadlines for a phasedown of HFC use for homes, supermarkets, cold-storage warehouses, industry, and semiconductor manufacturing by between 2 and 5 years. The final rule also allows refrigeration-equipment owners to use HFCs with higher GWP compared with the Biden-era regulations, at least until the new phasedown compliance dates. The limits then drop back down to the Biden-era limits.
The EPA is also proposing to remove HFC leak-repair requirements from transport refrigeration units—a type of refrigeration on a vehicle to cool its cargo—from the 2024 Emissions Reduction and Reclamation (ER&R) Program. This would remove limitations on the types of HFCs that can be used by the refrigerator units.
The agency estimates that its changes to the Technology Transitions Program would result in an additional 68.1 million metric tons of HFCs, in CO2 equivalents, being emitted between 2026 and 2050 due to the phasedown delay. It has not yet provided estimated environmental consequences from proposed changes to the ER&R Program.
Will the changes contribute to a drop in grocery prices?
Zeldin emphasized that the EPA was making these changes to help lower soaring food prices. “Together, the Biden-era rules significantly increased grocery prices and the transportation of refrigerated goods to grocery stores and restaurants, among other essential items,” the EPA statement says.
But according to the US Department of Agriculture’s latest food price outlook, grocery prices surged at the end of President Donald J. Trump’s first administration, and then through the Biden administration, because of effects from the COVID-19 pandemic, an avian-flu outbreak, and the start of the Russia-Ukraine war. And the USDA predicts that in 2026, grocery prices will rise faster than they have in the last 20 years. This is partially due to rising fuel prices as a result of the war in Iran, but Trump administration tariffs and extreme weather in the US have also caused food prices to shoot up.
Supermarket and food industry groups have lauded the HFC regulation changes. “Taken together, these actions preserve the agency’s goals without placing unnecessary financial burdens on the food industry and grocery shoppers,” Leslie G. Sarasin, president and CEO of FMI, The Food Industry Association, a trade association representing food retailers, wholesalers, and suppliers, says in a statement. But AHRI’s Yurek says the EPA’s action will hurt US refrigerant manufacturers and increase demand for refrigerants that were previously set to be phased down sooner.
“This rule works against basic supply and demand,” he says. By pushing back the HFC compliance deadlines, the EPA is maintaining or increasing demand for the higher-GWP refrigerants. But the parts of the AIM Act that limit production of these HFCs still apply, he says. So the availability of these HFCs will keep decreasing, leading to higher refrigeration costs. This could lead to more price increases at grocery stores, not less, he says.
Projected savings are to some businesses, not necessarily shoppers
The EPA’s estimate of $2.4 billion in savings is made up of $900 million from its finalized changes to the Technology Transitions Program and as much as $1.5 billion in savings for businesses that transport refrigerated goods, if the proposed ER&R change is finalized.
According to the EPA’s economic and environmental analysis (PDF), the $900 million is the total amount that supermarket, remote-condensing-unit, and refrigerated-transport HVAC owners are expected to save from 2026 to 2050, in 2024 dollars and adjusted to reflect a current lump sum.
The EPA’s cost-savings analysis for changing the ER&R leak-protection rule is still preliminary, but the agency estimates that refrigerated-trucking companies would save approximately $90 million per year between now and 2050. With economic adjustments, that’s a total of about $1.5 billion in 2024 dollars. But this number is for a scenario where all affected refrigeration trucks in the US exceed the leak threshold and require inspections, and it assumes that neither the refrigeration technology nor policy will change over time.
The EPA says in its analysis that it expects “almost all, if not all, of the cost savings for supermarkets will be passed onto customers.”
But like AHRI’s Yurek, David Doniger, climate senior strategist at the environmental advocacy group the Natural Resources Defense Council (NRDC), says the EPA’s actions will cause some businesses to lose money.
“The EPA is catering to a small group of straggling companies by derailing the shift away from these climate super-pollutants to safer alternatives,” he says in a statement. “The industry at large supports the HFC phasedown and has already invested in making new refrigerants and equipment, currently installed in thousands of stores.”
The EPA’s economic analysis mentions the potential for higher HFC prices as well as sunk costs for business that have already upgraded their equipment to comply with the Biden-era regulations but does not include these elements in its savings estimates.
The American Chemistry Council (ACC), a chemical-industry trade group, did not provide a comment on the EPA’s changes by publication time. But in 2021, the ACC spoke in favor of phasing down the production and use of HFCs. “The proposal will sharply reduce a sizable source of greenhouse gas emissions while creating new manufacturing jobs and growing our nation’s share of the global market for air-conditioning, and refrigeration products,” the ACC’s 2021 statement says.
The proposed changes to the ER&R Program are open for comment until July 10.
