HFC Phasedown Schedule: Every Cap Reduction from 2022 Through 2036

The EPA's HFC phasedown under 40 CFR Part 84 reduces allowances for producing and importing hydrofluorocarbons in five discrete steps through 2036. Each step tightens refrigerant supply, raises costs for facilities that depend on virgin HFCs for equipment servicing, and accelerates the business case for switching to lower-GWP alternatives. This article gives facility planners and engineers the exact percentages, dates, and compliance obligations attached to each step.

Large industrial cooling system with metal pipes and heat exchanger grids installed outdoors at a commercial facility, representing HFC refrigerant equipment subject to the EPA phasedown schedule under 40 CFR Part 84.

Photo by Emmanuel Codden on Pexels

What the AIM Act Mandates and Why It Matters to Facility Operators

The American Innovation and Manufacturing (AIM) Act of 2020 authorizes EPA to phase down HFC production and consumption by 85 percent from historic baseline levels by 2036. The regulatory program rests on three pillars: the allowance allocation and reporting program (which controls how much can be produced or imported), technology transitions sector restrictions (which restrict HFC use in specific equipment categories), and the emissions reduction and reclamation program under Subpart C (which governs leak repair and refrigerant handling at the facility level).

HFCs carry global warming potentials hundreds to thousands of times higher than CO₂. R-404A, widely used in commercial refrigeration, has a GWP of 3,922. R-410A, dominant in commercial HVAC, sits at 2,088. These numbers are why the phasedown is one of the most consequential near-term climate regulations affecting HVAC and refrigeration operations — and why compliance planning cannot wait until a step-down year arrives.

For the full AIM Act legal framework and authority overview, including how EPA derived its rulemaking authority and how the three program pillars interact, see our dedicated article on that topic.

The Five Phasedown Steps: Exact Percentages and Dates

The phasedown schedule is codified at 40 CFR § 84.7. Allowances are issued annually in metric tons of exchange value equivalent (MTEVe), expressed as a percentage of the US baseline.

PeriodCap (% of Baseline)Reduction from Baseline
2022–202390%−10%
2024–202860%−40%
2029–203330%−70%
2034–203520%−80%
2036 and beyond15%−85% (final floor)

As of June 2026, facilities are operating under the 60 percent step — the largest single percentage cut in the schedule. The jump from 60 to 30 percent in 2029 will be the next major supply shock. Reclaimed refrigerant will need to fill an increasing share of servicing demand after that transition.

Note: Allowances expire on December 31 of the year issued and cannot be carried forward. Entities cannot stockpile allowances from a higher-cap year to offset reduced supply in a lower-cap year.

Understanding Baselines, Exchange Values, and Allowance Math

The US production baseline is approximately 382.5 million metric tons of exchange value equivalent (MMTEVe); the consumption baseline is approximately 302.5 MMTEVe. These figures were set using historical production and import data for the 2011–2013 period, as specified by the AIM Act.

Exchange values are drawn from the 2007 IPCC Fourth Assessment Report GWP figures. The exchange value converts kilograms of each specific HFC into a common CO₂-equivalent metric, allowing EPA to manage a single cap that covers the entire HFC family rather than separate caps per compound. One allowance equals authorization to produce or import one metric ton of exchange value equivalent.

For 2026, EPA set total production allowances at approximately 229.5 million MTEVe and consumption allowances at approximately 181.5 million MTEVe — both within the 60 percent step, per the Notice of 2026 Allowance Allocations (Federal Register, Nov. 20, 2025).

The methodology for how EPA distributes these totals among specific producers and importers is detailed in the Allowance Allocation Methodology Final Rule (Nov. 3, 2022).

Allowance Types That Affect Supply Planning

Not all allowances are interchangeable. Understanding which type applies to a given transaction matters for supply forecasting.

  • Consumption allowances govern HFC imports; production allowances govern domestic manufacture. Domestic producers must expend both types simultaneously for every ton they produce for the US market.
  • Application-specific allowances (ASAs) grant priority access to HFCs for qualifying uses such as metered-dose inhalers. Five ASA applications were renewed through 2030 by the August 2025 final rule, shielding those supply streams from the general cap pressure.
  • Production-for-export allowances, created in 2025, permit producing HFCs solely for export to semiconductor etching applications without drawing from the domestic cap — preventing export-oriented production from reducing refrigerant available for US facility servicing.
  • Allowance trading between allocated entities creates a secondary market. Facilities that anticipate tight supply in a given year can monitor this market as a buffer against price spikes during each step-down transition.

For current HFC allowance allocations and trading data, EPA maintains a public dashboard updated after each allocation notice.

Technology Transitions: Sector-Level Restriction Deadlines Layered on Top

The allowance caps reduce total HFC supply. The technology transitions program — a separate but complementary regulatory track — restricts which refrigerants can be used in specific equipment sectors, regardless of allowance availability. The two programs compound each other.

Key deadlines currently in effect or approaching:

  • January 1, 2025 (in effect): New stationary comfort-cooling chillers, residential heat pumps, mini-splits, and ice rinks must use refrigerants with GWP at or below 700.
  • January 1, 2026 / 2027 / 2028: Variable refrigerant flow (VRF) systems have staggered installation extensions depending on component manufacture date and project permitting timelines.
  • July 27, 2026: Cold storage warehouses face an interim GWP 700 limit for new equipment, stepping down to GWP 150 or 300 by January 1, 2032, depending on charge size.

A May 2026 final reconsideration rule adjusted certain sector deadlines. Before finalizing equipment procurement for industrial process refrigeration, retail food, or semiconductor chiller applications, verify current status against the EPA Technology Transitions restrictions by sector.

Subpart C Compliance Obligations Triggered by the Phasedown

As of January 1, 2026, owners and operators of refrigerant-containing appliances with a charge size of 15 pounds or more containing a regulated HFC or a substitute for a regulated substance with a GWP greater than 53 must comply with leak repair requirements under 40 CFR § 84.106. These obligations sit on top of — and are aggravated by — the tightening allowance caps.

  • Leak rates must be recalculated each time refrigerant is added to a regulated appliance. The calculation determines whether the appliance has exceeded its applicable leak rate threshold and whether repair or retirement timelines are triggered.
  • Owners must submit reports to EPA when specific repair-failure scenarios occur — for example, when a leak is not repaired within the required 30- or 120-day window.
  • Records under Subpart C must be retained for a minimum of three years in electronic or paper format and must be made available to EPA upon request.
  • Automatic leak detection system requirements under 40 CFR § 84.108 apply to applicable equipment classes — a compliance area that pairs directly with the tightening allowance caps, since undetected leaks waste increasingly scarce and expensive refrigerant.

The connection between the phasedown schedule and Subpart C is direct: as virgin HFC supply shrinks, leaked refrigerant becomes more expensive to replace, and the cost of a repair-schedule violation (which may require emergency refrigerant procurement) rises in parallel with the allowance cap reductions.

Planning Ahead: What the 2029 and 2036 Caps Mean for Facilities Today

The 2029 drop to 30 percent of baseline is less than three years away for facilities making equipment decisions today. EPA projects that reclaimed refrigerant will need to fill a growing share of servicing demand after that transition. Facilities that rely on R-410A or R-404A equipment through the 2029 step-down face escalating refrigerant cost and availability risk. Retrofit and retirement decisions made before 2029 avoid the premium pricing that will follow the supply shock.

Lower-GWP alternatives are commercially available for new equipment procurement cycles:

  • R-454B (GWP 466) — direct replacement candidate for R-410A in many applications
  • R-32 (GWP 675) — widely deployed in residential and light commercial
  • R-290 (propane, GWP 3) — used in smaller commercial refrigeration charges
  • R-744 (CO₂, GWP 1) — applied in transcritical systems for cold storage

Climate benefits are substantial. EPA projects up to 876 million metric tons of CO₂-equivalent reductions from 2025 through 2050, worth up to $50.4 billion in avoided climate damages.

Automatic milestone tracking tools like RefriTrak™ map each piece of equipment to its applicable thresholds, surface upcoming step-down dates, and alert teams before a repair or retirement decision point is triggered by tightening supply.

The Kigali Amendment Connection and US Ratification

The United States ratified the Kigali Amendment to the Montreal Protocol in October 2022, binding the country to international HFC reduction commitments. The AIM Act and 40 CFR Part 84 translate those international obligations into domestic law. For a complete treatment of the Kigali Amendment context and international phasedown obligations, see our dedicated article on that framework.

Under the Kigali Amendment framework, developed nations — including the US — committed to the 85 percent reduction trajectory through 2036. Most developing (Article 5) countries began their consumption freeze in 2024 and face a longer phase-down timeline extending to the late 2040s. Full global implementation is projected to avoid up to half a degree Celsius of warming by 2100, per the UNEP Ozone Secretariat.

US ratification reinforces the permanence of the AIM Act phasedown schedule. The 15 percent floor at 2036 is not a regulatory preference subject to reversal in the next rulemaking cycle — it is a treaty-level commitment. Facility capital planning should treat the phasedown schedule as a fixed constraint, not a contingent one.

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