Hudson Technologies Comments on the EPA’s Issuance of Final Refrigerant Management Rule

Rhea-AI Summary

Hudson Technologies commented on the EPA's Final Rule under the American Innovation and Manufacturing Act, which establishes the Emissions Reduction and Reclamation Program. The rule aims to reduce emissions of climate-damaging HFCs from air conditioning and refrigeration systems and maximize HFC reclamation. Key provisions include:

• Leak repair for certain appliances
• Automatic leak detection systems
• Standards for reclaimed HFC refrigerants
• Mandatory use of reclaimed HFCs for servicing certain equipment
• Recovery of HFCs from disposable cylinders
• Recordkeeping, reporting, and labeling requirements

Hudson's CEO, Brian F. Coleman, expressed support for the rule, highlighting its potential to promote reclamation growth and reduce leak rates. The company sees this as an opportunity to advance environmentally and economically beneficial refrigerant emission control practices.

Positive

• EPA's final rule promotes the use of reclaimed refrigerants, potentially increasing demand for Hudson Technologies' services
• The rule establishes standards for reclaimed HFC refrigerants, which may benefit Hudson as a leading refrigerant reclaimer
• Mandatory use of reclaimed HFCs for servicing certain equipment could drive business growth for Hudson Technologies
• The rule aligns with Hudson's business model and environmental goals, potentially strengthening its market position

Negative

• None.

Insights

Environmental Policy Analyst

The EPA's final rule on refrigerant management marks a significant shift in the HVAC&R industry. It mandates stricter leak repair protocols, promotes reclamation and encourages the use of recycled HFCs. This is a positive development for Hudson Technologies, as a leading refrigerant reclaimer. The rule's emphasis on reclamation and recycling aligns perfectly with Hudson's business model, potentially increasing demand for their services. The standardized definition of reclaimed refrigerants and sector mandates for their use could expand Hudson's market opportunities. Long-term, this regulation may accelerate the transition away from virgin HFCs, benefiting companies like Hudson that are well-positioned in the reclamation space. However, the full impact will depend on enforcement and industry adoption rates, which may take time to materialize fully.

HVAC Industry Specialist

This EPA rule represents a paradigm shift in refrigerant management practices. The requirements for leak repair, automatic leak detection and use of reclaimed HFCs in servicing will likely boost demand for specialized equipment and services. For Hudson Technologies, this presents a significant growth opportunity in their core business areas. The mandate for recovery of HFCs from disposable cylinders also opens up a new potential revenue stream. However, the industry may face initial challenges in adapting to these new requirements, potentially leading to increased costs and operational adjustments. Companies that can provide comprehensive solutions for compliance, like Hudson, stand to gain a competitive advantage. The long-term impact could see a more sustainable HVAC&R industry with reduced environmental impact, aligning with global climate goals.

WOODCLIFF LAKE, N.J., Sept. 24, 2024 (GLOBE NEWSWIRE) -- Hudson Technologies, Inc. (NASDAQ: HDSN), a leading provider of innovative and sustainable refrigerant products and services to the Heating, Ventilation, Air Conditioning, and Refrigeration industry – and one of the nation’s largest refrigerant reclaimers, commented today on the Final Rule under Section (H) of the American Innovation and Manufacturing Act, which establishes the Emissions Reduction and Reclamation Program.

A link to the press release from the EPA can be found here and the complete pre-publication of the rule can be found here. The final rule will become effective on the date of publication in the Federal Register.

The final rule, under subsection (h), “Management of Regulated Substances” establishes an Emissions Reduction and Reclamation Program to reduce emissions of climate-damaging HFCs from air conditioner and refrigeration systems and maximizes the amount of HFCs that can be reclaimed. The EPA has been authorized by the AIM Act (enacted on December 27, 2020) to address hydrofluorocarbons (HFCs) in three main ways: 1) phasing down their production and consumption; 2) promulgating certain regulations for purposes of maximizing reclamation and minimizing releases of HFCs from equipment and ensuring the safety of technicians and consumers; and 3) facilitating the transition to next-generation technologies through sector-based restrictions.

Among its provisions, the final rule requires:

• Leak repair for certain appliances,
• Use of automatic leak detection systems for certain new and existing appliances;
• A standard for reclaimed HFC refrigerants;
• Servicing and/or repair of certain refrigerant-containing equipment with reclaimed HFCs;
• Initial installation and servicing and/or repair of fire suppression equipment with recycled HFCs;
• Recovery of HFCs from disposable cylinders prior to disposal; and
• Recordkeeping, reporting, and labeling.
  

Brian F. Coleman, President and Chief Executive Officer of Hudson commented, “With this final rule, the EPA has finalized the third important pillar from the AIM Act, the primary focus of which was to reduce leak rates and promote the growth in reclamation. We are pleased that the EPA now provides a standardized definition of what constitutes the designation of reclaimed refrigerants and has provided sector mandates for the use of reclaimed refrigerants. The EPA initiatives outlined in this rule making, combined with the findings from the RMI report we sponsored which provided scientific support for the environmental benefits of using reclaimed refrigerants versus continuing the production and use virgin refrigerant, will set the stage for both mandatory and voluntary uses of reclaimed refrigerants particularly in the servicing sectors. We appreciate the EPA's dedicated efforts in finalizing the Refrigerant Management and Reclaim rule and look forward to working with our industry partners to promote practices to adopt refrigerant emission controls that are both environmentally and economically beneficial.”

About Hudson Technologies

Hudson Technologies, Inc. is a leading provider of innovative and sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration industry. For nearly three decades, we have demonstrated our commitment to our customers and the environment by becoming one of the first in the United States and largest refrigerant reclaimers through multimillion dollar investments in the plants and advanced separation technology required to recover a wide variety of refrigerants and restoring them to Air-Conditioning, Heating, and Refrigeration Institute standard for reuse as certified EMERALD Refrigerants™. The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer's site, consisting of system decontamination to remove moisture, oils and other contaminants. The Company’s SmartEnergy OPS® service is a web-based real time continuous monitoring service applicable to a facility’s refrigeration systems and other energy systems. The Company’s Chiller Chemistry® and Chill Smart® services are also predictive and diagnostic service offerings. As a component of the Company’s products and services, the Company also generates carbon offset projects.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements contained herein which are not historical facts constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, changes in the laws and regulations affecting the industry, changes in the demand and price for refrigerants (including unfavorable market conditions adversely affecting the demand for, and the price of, refrigerants), the Company's ability to source refrigerants, regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements that become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration, the ability to obtain financing, the ability to meet financial covenants under its existing credit facility, any delays or interruptions in bringing products and services to market, the timely availability of any requisite permits and authorizations from governmental entities and third parties as well as factors relating to doing business outside the United States, including changes in the laws, regulations, policies, and political, financial and economic conditions, including inflation, interest and currency exchange rates, of countries in which the Company may seek to conduct business, the Company’s ability to successfully integrate any assets it acquires from third parties into its operations, and other risks detailed in the Company's 10-K for the year ended December 31, 2023 and other subsequent filings with the Securities and Exchange Commission. The words "believe", "expect", "anticipate", "may", "plan", "should" and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Investor Relations Contact: John Nesbett/Jennifer Belodeau IMS Investor Relations (203) 972-9200 hudson@imsinvestorrelations.com

Company Contact: Brian F. Coleman, President & CEO Hudson Technologies, Inc. (845) 735-6000 bcoleman@hudsontech.com

FAQ

What is the EPA's Final Rule on refrigerant management that Hudson Technologies (HDSN) commented on?

The EPA's Final Rule establishes the Emissions Reduction and Reclamation Program under the American Innovation and Manufacturing Act. It aims to reduce emissions of HFCs from air conditioning and refrigeration systems and maximize HFC reclamation.

How might the EPA's new refrigerant management rule affect Hudson Technologies (HDSN)?

The rule could positively impact Hudson Technologies by increasing demand for reclaimed refrigerants, aligning with the company's services as a leading refrigerant reclaimer. It may also strengthen Hudson's market position in the refrigerant management industry.

What are the key provisions of the EPA's Final Rule on refrigerant management that Hudson Technologies (HDSN) discussed?

Key provisions include leak repair requirements, automatic leak detection systems, standards for reclaimed HFC refrigerants, mandatory use of reclaimed HFCs for certain equipment servicing, HFC recovery from disposable cylinders, and recordkeeping, reporting, and labeling requirements.

What did Hudson Technologies' (HDSN) CEO say about the EPA's new refrigerant management rule?

Hudson Technologies' CEO, Brian F. Coleman, expressed support for the rule, stating it will reduce leak rates and promote growth in reclamation. He appreciated the EPA's efforts and looked forward to working with industry partners to adopt environmentally and economically beneficial refrigerant emission control practices.