Phasedown of Hydrofluorocarbons

Weaver can assist regulated parties with the annual third-party audit requirement under the Environmental Protection Agency’s Hydrofluorocarbon (HFC) phasedown program.

Hydrofluorocarbons are a class of potent greenhouse gases commonly used in refrigeration and air conditioning, aerosols, fire suppression, foam products and semiconductor manufacturing. Its climate impact can be hundreds to thousands of times greater than carbon dioxide. Consistent with the Kigali Amendment to the Montreal Protocol, a global agreement to phasedown HFCs, the American Innovation and Manufacturing (AIM) Act of 2020 mandates the phasedown of HFCs by 85% from historic baseline levels by 2036 and authorizes EPA to address the environmental effects of HFCs by pursuing:

• A phasedown of the production and consumption of HFCs
• Maximized reclamation and minimized release from equipment
• The transition from HFCs to next generation technologies through sector-based restrictions

Accordingly, the EPA has issued final rules under the AIM Act to phase down the production and import of HFCs in a gradual manner. These rules include reporting and recordkeeping requirements for entities that produce, import, export, destroy, use as a feedstock, reclaim, package or otherwise distribute HFCs.

Annual Third-Party Audit Requirement

To assure compliance with the regulations implementing the HFC phasedown, the EPA established a third-party audit provision in the Code of Federal Regulations Title 40, Chapter I, Subchapter C, Part 84, Section 84.33(a). The provision states:

“Any person producing, importing, exporting, reclaiming, or recycling for fire suppression a regulated substance, as well as any person receiving application-specific allowances, must arrange for annual third-party auditing of reports submitted to EPA except for persons receiving application-specific allowances for mission-critical military end uses.”

As stated in 40 CFR Section 84.33(e), the auditor performing the third-party attestation engagements must be a certified public accountant (CPA), or firm of CPAs, who must be independent of the regulated party. The EPA has published guidance for auditors which states agreed-upon procedures (AUP) engagements should be used to meet the audit requirement.  The audit requirement is annual and due by May 31 following the compliance year under review.

Weaver Has the Experience You Need

Weaver has performed AUPs under the EPA’s HFC phasedown program since its inception.  Our energy compliance services team has extensive experience working with HFC producers, importers, exporters, application-specific allowance holders and reclaimers.

For compliance year 2024, Weaver’s HFC AUP engagements covered 48% of all allowances (production, consumption and application-specific) issued by the EPA to regulated entities, including 63% of all production allowances.

In addition to working with regulated entities, Weaver has also collaborated with the EPA and the AICPA, providing feedback and suggestions on the framework of the audit requirement and the development of the agreed-upon procedures, and we are deeply familiar with these provisions.

Weaver is available to perform HFC AUPs for all types of regulated entities. Further, we are also well-positioned to provide general consulting services to assist regulated entities with understanding the reporting and recordkeeping requirements of the HFC phasedown program.

©2025