The DC Circuit Court of Appeals this week, by a split three-judge panel, vacated part of a 2015 EPA rule intended to target greenhouse gas emissions, saying that while Section 612 of the Clean Air Act (CAA) does require manufacturers to replace ozone-depleting substances with safe substitutes, hydrofluorocarbons (HFCs) do not deplete ozone, so the agency never had the power to enforce the replacement provision of the rule. “The fundamental problem for EPA is that HFCs are not ozone-depleting substances, as all parties agree.” Mexichem Fluor, Inc. v. EPA, No. 15-1328, — F.3d —-, 2017 WL 3389376 (DC Cir. Aug 8, 2017).

This case was filed because in 2013, President Obama announced that EPA would work to reduce emissions of HFCs because HFCs contribute to carbon emissions. “Plan to Cut Carbon Pollution and Address Climate Change” (June 25, 2013). The Climate Action Plan indicated that “… the Environmental Protection Agency will use its authority through the Significant New Alternatives Policy Program” of Section 612 to reduce HFC emissions. Consistent with the Climate Action Plan, EPA promulgated its Final Rule in 2015 that moved certain HFCs from the list of safe substitutes to the list of prohibited substitutes (Change of Listing Status for Certain Substitutes Under the Significant New Alternatives Policy Program, 80 Fed. Reg. 42870, July 20, 2015).

Th DC Circuit Court concluded this week that “EPA’s novel reading of Section 612 is inconsistent with the statute as written. Section 612 does not require (or give EPA authority to require) manufacturers to replace non-ozonedepleting substances such as HFCs. We therefore vacate the 2015 Rule to the extent it requires manufacturers to replace HFCs, and we remand to EPA for further proceedings consistent with this opinion.”

For businesses and industries that had been impacted by the EPA’s HFCs rule, it is time to watch for what the Agency does in response to the Court’s opinion. Whether it appeals to the Supreme Court, or begins rulemaking to revise the current rules, you may wish to monitor this carefully.