Federal Register Date: 2026-05-27
Original Source: Read Full Notice
The Environmental Protection Agency (EPA) has announced the allocation of hydrofluorocarbon (HFC) allowances that were initially set aside for metered dose inhaler (MDI) end-users for the calendar year 2026. This action finalizes the distribution of these allowances, which were previously withheld from general pool production and consumption allowance holders.
The phasedown of HFCs is mandated by the American Innovation and Manufacturing (AIM) Act, which directs the EPA to significantly reduce HFC production and consumption in the United States. As part of this phasedown, the EPA establishes annual allowance allocation regulations, distributing allowances to entities that produce or import HFCs. These allowances represent the right to produce or consume a specific quantity of HFCs, contributing to the overall goal of reducing HFC emissions.
Recognizing the essential use of HFCs as propellants in MDIs, the EPA established a set-aside allowance pool specifically for this purpose. This set-aside was intended to ensure that MDI manufacturers had access to the necessary HFCs to continue producing these critical medical devices, even as the overall HFC supply decreases. The set-aside mechanism allowed MDI manufacturers to apply for these allowances if their existing allocations were insufficient to meet their needs.
The EPA stipulated that entities using HFCs in MDIs had until April 30, 2026, to submit applications for these set-aside allowances. The EPA received no applications by the deadline. This lack of applications suggests that either MDI manufacturers had sufficient existing allowances to meet their needs, or they had transitioned to alternative propellants with lower global warming potentials.
Given the absence of applications for the MDI set-aside allowances, the EPA has determined that the allowances are no longer needed for their originally intended purpose. Therefore, the EPA has allocated the entire set-aside pool pro rata among the general pool allowance holders. This means that each entity holding general pool production and consumption allowances received a portion of the set-aside allowances in proportion to their existing allowance holdings.
This pro rata allocation ensures that the allowances are utilized within the regulated HFC market, contributing to the overall phasedown goals. It also provides additional flexibility to general pool allowance holders, allowing them to adjust their production and consumption activities in response to market demands.
The EPA’s decision to allocate the MDI set-aside allowances pro rata among general pool allowance holders is consistent with the AIM Act’s objectives and promotes an efficient and orderly HFC phasedown. The agency believes that this approach balances the need to ensure the availability of HFCs for essential uses like MDIs with the overarching goal of reducing HFC emissions and mitigating climate change.
This action does not impose any new requirements on regulated entities. It simply redistributes existing allowances within the established regulatory framework. The allocation of these allowances has been incorporated into the EPA’s allowance tracking system, and allowance holders can view their updated allowance balances through the designated reporting platform.
The EPA maintains that this allocation decision is a reasonable and appropriate response to the specific circumstances of the 2026 allowance year. The agency will continue to monitor the HFC market and the needs of MDI manufacturers in future years, and it will adjust its allocation strategies as necessary to ensure the continued availability of these critical medical devices while adhering to the AIM Act’s phasedown requirements. This notice serves to inform all affected parties of the final allocation of the 2026 HFC allowances set aside for MDIs, providing clarity and certainty to the regulated community.
