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AIM Act Targets Harmful HFCs and Highlights the Need for Asset Tracking Software

May 15, 2024 by Angela Toland

If you’re in the refrigerant industry, you’ll more than likely be aware of the Montreal Protocol, the subsequent Kigali Amendment, or the more recent American Innovation and Manufacturing (AIM) Act.

Put simply, they all look to limit the impact of greenhouse gases (GHGs) on the earth’s atmosphere.

With the AIM Act, the U.S. Environmental Protection Agency (EPA) is targeting harmful hydrofluorocarbons (HFCs) and pushing to significantly reduce their use in the coming years.

HFCs are common components in a variety of applications including air conditioning, refrigerants, solvents, and aerosols. Problem is, they’re also powerful GHGs – recognized as being far more damaging for global warming than carbon dioxide.

The AIM Act has three key priorities: to phasedown production and the uptake of HFCs; to ensure they’re being adequately captured and reclaimed; and to oversee the swift transition to new technologies that are less damaging to the environment.

The HFC Allocation Program is forecast to achieve emissions reductions of 4.6 billion metric tons of carbon dioxide from 2022-2050 – equivalent to about three years of U.S. power sector emissions at 2019 levels.

The rules mean industry is expected to comply with a strict phasedown schedule through to 2036, by when it’s expected that HFCs will see a reduction of 85%.

In the U.S., the phasedown started from January 1, 2022, with a targeted reduction of 10%. This year, that rises to a 40% cut. In practical terms, this has all kinds of implications.

While it's a move that’s expected to have a positive effect on the environment and ozone layer, it poses more than a few challenges for manufacturers and distributors of refrigerants.

 

Keeping Track of Assets

Among the changes is the requirement for users to demonstrate they have adequate measures in place to monitor, track, and document the use of these HFCs.

We spoke to one source at the chemical division of a major US-headquartered technology firm who said businesses will be expected to track every single pound of product they handle to ensure they know what's coming into the country and what's left the country – even down to the small amounts of residual product left in an ISO tank or cylinder. cylinder2

Not only will this make it possible for all traces of these HFCs to be reclaimed, but tracking product from cradle to grave will also help to prevent counterfeit products being imported into the United States, says the source. That means bad actors won’t be able to bring in legacy products such as R-22 that are no longer allowed to be manufactured or sold in the country.

Failure to adhere to these strict tracking requirements could result in significant penalties, he adds, while also affecting future quotas for the quantity of refrigerants that can be imported or exported.

 

Complex and Challenging

Several elements of the AIM Act have seen significant pushback from the industry. There had, for example, initially been a desire to move away from disposable single use cylinders towards returnable containers. However, there were widespread concerns about the resulting cost of the switch. Our source’s company currently sells around 500,000 disposable jugs annually. If this business were expected to replace those with returnable versions, the costs could easily run into the tens of millions of dollars.

The requirement to start tracking is planned for 2025, says the source. Right now, it’s necessary to provide data about the true net weights of residues to the federal government 10 days prior to a vessel reaching port of entry or five days if it's crossing by land. Problem is, the information requested includes details about both the carrier and driver – and carriers are usually unable to name a driver five days in advance. Without paying a specific driver to sit idle for a few days before crossing a border, it makes compliance tricky.

“I also don’t think they’ve thought out this process for small cylinders,” notes the source.

Companies need to document and verify how many pounds of residue remains within the container and what the specific molecule is. With an ISO that's not so difficult. After all, a typical vessel holds around 30,000 lbs and is often received one at a time. It’s feasible for it to be taken to a scale for a ticket to be printed as proof of its weight. However, having to do the same with a container full of several hundred individual cylinders is something else entirely.

Asking clients to record the individual tare weights (the weight of the vessel when empty) of all those containers, provide a total net weight, and document everything is quite a task – and that’s assuming your clients have scales and printers at each of their locations, or the inclination to take on all this extra work.

Something else to bear in mind, adds the source, is that the tare weight marked on a cylinder should not include hoods or attachments. If you're trying to get the true net weight, your clients will first have to disassemble and remove everything – and how can you really be sure they’re doing that hundreds of times before they record the serial numbers and weights? The time, cost, and effort to do this for each delivery would be significant.

“One of the things we're looking at doing is creating a central hub in different regions that will receive these containers, weigh them, and then provide the true net weights so we can then import them into the United States – but all of this increases the cost exponentially,” notes our source.

“We’ll have to transport that container somewhere to be offloaded, weighed, recorded, and then reloaded back into a sea container to board another vessel to come back into the U.S. That’s going to really delay the number of cylinders coming back, which means that we've got to purchase more cylinders to make up for the dwell time.”

“Don’t forget we’ve also got to set up that hub in the first place, which means additional costs and training. Inevitably, the consumer is going to end up eating those bills and the market is going to see prices increase because of this.”

Clearly, the scale of the challenge is huge. Besides the cost implications, likely shipment delays, and impact on workflows, there are the additional training requirements, set up costs, and other factors like sourcing a reclaimer capable of extracting the remnants of product from the containers to consider as well.

Certainly, manufacturers, suppliers, and distributors will all need to be on point and have a firm understanding of exactly what's in their containers and cylinders, where they are, and when they’re being returned.

Tracking, traceability, and transparency are essential to enforcing the AIM Act – and that's where trusted solutions such as TrackAbout’s asset management software will really come into their own.

 

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Market Leading Software

In the current regulatory climate with more rules inevitably coming, tools such as TrackAbout are used to help manage, control, and maintain returnable assets and provide a documented chain of custody.

Users have immediate access to accurate, real-time data – and they can instantly respond to cylinder1 requests from the EPA about their shipments when required.

Software not only ensures users always know the precise location of their cylinders and containers but it allows them to collect important data about their contents, maintenance schedules, customer information, as well as where they’ve been and where they’re going. All it takes is a quick scan of a barcode, which immediately imports and logs the required data into the system and provides a permanent and accurate record. 

 

Want to learn more about how TrackAbout's software can help you elevate your asset tracking strategy, request a free demo with one of our industry experts.

 

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Helpful resources 

 

Topics: Asset Management, Refrigerants


Written by Angela Toland