AMAC Joins Coalition to Oppose United Nations Energy Treaty Amendment

The Kigali Amendment places limits on future production of hydrofluorocarbons (HFCs). These HFCs are used by millions of large and small American businesses. Repair/replacement costs for business, home, and vehicle air conditioners with non-HFC refrigerants will be significantly costlier and stands to hit seniors living on fixed incomes the hardest.

May 3, 2022

United States Senate
United States Capitol
Washington, DC 20510

Re: Kigali Amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer

Dear Senator:

The undersigned organizations strongly urge you to vote against ratification of the Kigali
Amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer (Kigali
Amendment). This United Nations treaty provision would impose costly restrictions on the
American people and serve as a consumer tax on air conditioning and refrigeration. It would also
give an unfair advantage to China and other industrial competitors of the United States.

The Kigali Amendment places limits on future production of hydrofluorocarbons (HFCs) on the
grounds that they contribute to climate change, though the Environmental Protection Agency
estimates they represent only 3 percent of current greenhouse gas emissions. HFCs are the class
of refrigerants used in hundreds of millions of American home and vehicle air conditioners as
well as home refrigerators. They are also used by millions of American businesses both large and
small, from the refrigerators and freezers in restaurant kitchens to the industrial process
refrigeration systems used by manufacturers.

Repair costs for this equipment, particularly replacing refrigerant lost from a leak, will rise as
supplies of HFCs dwindle and prices rise. New air conditioning and refrigeration systems will
also become more expensive as they will have to be redesigned to use one of the non-HFC
refrigerants, many of which are significantly costlier than HFCs. Low-income households,
including seniors on fixed incomes, stand to be hardest hit by the cost increases. In addition,
some of the alternative refrigerants are classified as flammable and thus raise safety concerns.

In December of 2020, Congress passed domestic limits on HFCs, called the American
Innovation and Manufacturing Act (AIM Act), as part of the massive Consolidated
Appropriations Act, and the Environmental Protection Agency began implementing them on
January 1, 2022. These provisions, inserted without debate before the full Senate, were actively
supported by the makers of HFC-substitute refrigerants and equipment. In contrast, most
American consumers and businesses who rely on existing HFC-dependent systems had no idea
what was being proposed nor the impact it will have on them. The air conditioning/refrigeration
sector is the only beneficiary of HFC restrictions, and they gain at the expense of their customers
that use this equipment.

Even Senators who supported these domestic HFC restrictions should oppose ratification of the
Kigali Amendment because doing so would cede Congressional authority over HFC policy to the
United Nations. As it is, Congress could consider modifications to the law if implementation
costs prove high (prices for some HFCs have already quadrupled since the AIM Act was passed)
or if unanticipated problems arise, but adopting any such relief measures would be much more
difficult if the United Nations is placed in charge.

We are entering the first air conditioning season under the AIM Act, after which we will know a
great deal more about the actual cost impacts of these HFC restrictions. It seems particularly
foolish to rush into ratification of the Kigali Amendment beforehand.

Make no mistake – when it comes to United Nations environmental treaties, it is never a question
of whether America gets the short end of the stick, it is only a question of how. The Kigali
Amendment is no exception. Our global competitors see it as a way to gain an advantage, and
developing nations see it as a rationale for additional aid. China sees it as both.

China is classified as a developing nation under the Kigali Amendment, which allows it to
benefit from highly favorable treatment as compared to the U.S. and other developed
nations. Developing nations were granted an extra decade to phase down their HFC production,
so China will still have plentiful supplies for domestic use long after the U.S. Also, China and
other developing nations will be eligible for financial assistance from the United Nations through
a special multilateral fund set up under the Montreal Protocol and applicable to the Kigali
Amendment. The U.S. is the single largest contributor to that fund.

Thus, under the Kigali Amendment China gets the best of all worlds – it can continue mass
producing and using cheaper HFCs domestically for years after supplies begin to dry up in the
U.S., including their use in industrial processes that give it an unfair advantage over American
competitors. At the same time, China will be receiving millions of dollars in financial assistance
from the U.S. and other developed nations to help it comply with the Kigali Amendment.

The most sensible course of action for the Senate is not to entangle the U.S in another costly and
unfair United Nations mandate. Instead, you should focus on oversight of the domestic HFC
provisions and consider remedies to emerging problems with them.

We again urge you to preserve America’s sovereign authority and vote against ratification of the
Kigali Amendment. If you have any questions, please contact Ben Lieberman of the Competitive
Enterprise Institute at [email protected]. Thank you.

Sincerely,

Bob Carlstrom
President
AMAC Action