Company Accused of Greenhouse Gas Smuggling Hit with Record Fine

Company Accused of Greenhouse Gas Smuggling Hit with Record Fine

By Lesley Clark & E&E News

CLIMATEWIRE | EPA has reached a settlement with a company accused of importing greenhouse gases into the Port of Los Angeles, resulting in the largest-ever penalty for illegally bringing hydrofluorocarbons into the country.

Under the agreement — announced Thursday — Resonac America will pay a $416,003 penalty and destroy 1,693 pounds of hydrofluorocarbons (HFCs) for illegally importing the planet-warming chemicals on four occasions in 2023 and 2024.

“EPA continues to prioritize enforcement against companies that illegally import refrigerants that damage our climate and imperil future generations,” said David Uhlmann, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

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He noted that the case marks the largest penalty imposed to date as part of EPA’s National Enforcement and Compliance Initiative on Mitigating Climate Change — and the first to require the company to destroy the HFCs.

Resonac America, a subsidiary of Tokyo-based Resonac, did not immediately return a message left at the chemical manufacturer’s San Jose office.

The settlement comes weeks after a San Diego man became the first person prosecuted under a 2020 law that aims to slow climate change by prohibiting importation of HFCs without EPA permission. An indictment accuses the man of smuggling greenhouse gases into the United States from Mexico and selling them.

“HFCs are a powerful climate pollutant, so it’s imperative that companies importing them into our nation do so in strict accordance with environmental laws,” EPA Pacific Southwest Regional Administrator Martha Guzman said of the latest case.

Guzman said the case is the latest in a series of EPA HFC enforcement efforts nationwide, “which send a clear message that the federal government is vigilantly monitoring imports of HFCs and will hold illegal actors accountable.”

HFCs — chemicals made up of hydrogen, fluorine and carbon — are considered potent greenhouse gases and are used in refrigeration, air conditioning, foam insulation, fire extinguishing systems and aerosols. The global warming potential of an HFC can be hundreds to thousands of times stronger than carbon dioxide.

EPA says that on three separate occasions — in October, November and December 2023 — Resonac imported 6,208 pounds of illegal HFCs. The imports violated a prohibition on importing bulk regulated substances into the U.S. without possessing the required allowance, EPA said.

Resonac also failed to give EPA a required notice of planned shipments of HFCs for the 2023 shipments as well as for a February 2024 shipment. EPA said the company also failed to timely submit reports to the EPA with information on HFCs that the company imported in the first and second quarters of 2023.

The enforcement prevents approximately 6,208 pounds, or 2.816 metric tons, of illegal HFCs from being imported into the United States, EPA said. If released into the atmosphere, the HFCs are the equivalent of about 41,677 metric tons of CO2, the amount of emissions associated with powering 8,225 homes with electricity for a year.

Under the Montreal Protocol and its Kigali Amendment, developed countries have agreed to phase down the production and import of HFCs by 85 percent from historical levels by 2036.

EPA Administrator Michael Regan has warned that climate protections could be hindered by an HFC black market that has emerged as federal regulators have sought to cut the pollutants’ use. EPA says it has made enforcement of HFC laws a priority, working with U.S. Customs and Border Protection to deny entry to approximately 81 shipments of illegal HFCs since January 2022.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2024. E&E News provides essential news for energy and environment professionals.