Importers who use Foreign Trade Zone (FTZ) sites to store regulated hydrofluorocarbons (HFCs) may be interested to learn the EPA has clarified that HFCs will be treated the same whether the cargo is entering/exiting an FTZ or if a consumption entry is being filed.[1] The HFC Phasedown went into effect November 2021.
Background: With the enactment of the American Innovation & Manufacturing (AIM) Act at the end of 2020, there is increased pressure on the EPA to address HFCs, which are highly potent greenhouse gases, from three different angles. Section 103 of the AIM Act puts forth guidance on requirements for the EPA to provide new authorities to phase-down production and consumption of regulated HFCs, manage the listed HFCs and their alternative substances, and facilitate the transition to next-generation substitutes. The timeline for this phasedown allows for a gradual reduction year over year until 2036 is reached, when it is expected that the production and consumption of HFCs will have cumulatively decreased by a total of 85% over 15 years.[2]
What makes these HFC requirements different than other EPA regulations? In Part 84, the Agency shifted the language used to define “import” so that it matched the verbiage statutorily provided in the AIM act:
“Import means to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into, any place subject to the jurisdiction of the United States, regardless of whether that landing, bringing, or introduction constitutes an importation within the meaning of the Customs laws of the United States.” [1]
Because of the way “import” is now defined, the scope expands to include FTZs. This could have a significant impact for affected importers as they will now be required to implement new record-keeping and reporting processes and utilize tools such as DIS and ACE to satisfy these requirements.
FTZ World Services is here to help you navigate these regulation changes – give Arcelio Gerardo a call today at (305) 481-2467 to set up a consultation!
[1] (“Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing Act”, 86FR55201, EPA, 2021)
[2] (“American Innovation and Manufacturing Act of 2020”, 2020)
