The HVAC industry is undergoing a major shift as the U.S. Environmental Protection Agency (EPA) phases out R-410A, a widely used refrigerant, under the American Innovation and Manufacturing (AIM) Act of 2020. Starting January 1, 2025, new residential and light commercial HVAC systems can no longer use high-global warming potential (GWP) refrigerants like R-410A (GWP 2,088). Instead, the industry is transitioning to lower-GWP alternatives such as R-454B (GWP 466) and R-32 (GWP 675). This change, driven by environmental goals, brings challenges and opportunities for HVAC contractors, wholesalers, and manufacturers. In this post we will dive into what’s happening, the risks involved, and how businesses can prepare.
Why Is R-410A Being Phased Out?
R-410A has been a staple in residential air conditioners and heat pumps since the 1990s, replacing the ozone-depleting R-22. However, its high GWP—over 2,000 times that of CO2—makes it a significant contributor to climate change, especially as cooling demand rises with longer heatwaves. The AIM Act aims to cut hydrofluorocarbon (HFC) production and use by 85% by 2036, aligning with global agreements like the Kigali Amendment to the Montreal Protocol. As of September 2025, nine months into the phase-out, new HVAC system prices have risen 15–20%, and R-410A stockpiles are dwindling.
Key Dates in the Phase-Out
The transition follows a strict timeline:
- 2022–2024: HFC production and import allowances dropped from 90% of baseline in 2022 to 40% by 2024, tightening supply.
- January 1, 2025: No new HVAC systems using R-410A can be manufactured or imported. Existing inventory can still be sold.
- End of 2025: The sell-through period for R-410A inventory ends, leaving unsold stock at risk of write-offs.
- January 1, 2026: Servicing existing R-410A systems will rely solely on reclaimed or recycled refrigerant.
- 2028–2036: HFC allowances shrink further, reaching zero by 2036.
Non-compliance carries hefty penalties, with fines up to $121,275 per violation, such as illegal imports.
What’s Replacing R-410A?
Two main alternatives are stepping in:
- R-454B: A blend of R-32 and R-1234yf with a GWP of 466, it’s widely adopted by popular brands. It performs similarly to R-410A with lower discharge temperatures but requires A2L-specific components due to its mild flammability.
- R-32: A single-component refrigerant with a GWP of 675, it’s up to 10% more efficient and popular in mini-split systems. It’s also easier to reclaim.
Both options can reduce energy costs by 5–10% but demand redesigned systems, including leak sensors and new valves, as well as technician recertification.
How Does This Affect HVAC Businesses?
The phase-out impacts stakeholders across the industry:
- Contractors: Handling A2L refrigerants requires new protocols, like spark-proof tools and better ventilation, which could slow installations and reduce revenue.
- Wholesalers: Unsold R-410A inventory risks write-offs, potentially causing firms significant losses.
- Manufacturers and Property Owners: New systems cost 20–30% more, though rebates can help. Supply chain bottlenecks remain a concern.
Risks to Watch For
The transition introduces several risks:
- Safety Concerns: R-454B and R-32 are A2L-class refrigerants, meaning they’re mildly flammable. Large leaks in confined spaces could pose ignition risks. Businesses need EPA-mandated training, non-sparking tools, and auto-shutoff valves to stay safe.
- Supply and Cost Challenges: Reclaimed R-410A costs are expected to skyrocket. Equipment upgrades, like leak detectors, add to expenses, potentially cutting small contractors’ margins.
- Legal and Reputation Risks: Faulty A2L installations could lead to liability lawsuits, while price hikes might frustrate customers. Industry-wide costs could exceed $2 billion annually through 2030.
- Additional Requirements: Overly stringent or inconsistent permitting processes at the local level could create further hurdles. Some building departments are considering potential requirements beyond state codes for R-454B systems, such as extra permits, documentation, or inspections to address the flammability of A2L refrigerants. These added steps, while aimed at safety, could slow installation and repair timelines, increasing costs for contractors and property owners.
Some critics, like the Competitive Enterprise Institute, argue the EPA’s timeline is too aggressive, estimating compliance costs at $1–2 billion yearly and R&D expenses of $100 million per manufacturer. Small businesses face a risk of closure, while larger firms may gain market share.
How to Prepare
To navigate this transition smoothly, businesses can take these steps:
- Audit Inventory: Review R-410A stock quarterly and secure contracts for reclaimed refrigerant now.
- Train Staff: Allocate funds for A2L certification to ensure compliance and safety.
- Leverage Incentives: Use rebates and financing options to offset costs for customers.
- Update Insurance: Ensure policies cover A2L-related liabilities.
- Monitor Local Regulations: Stay informed about local permitting changes to avoid delays and ensure compliance with evolving standards.
Looking Ahead
The R-410A phase-out is a necessary step toward reducing environmental impact, but it demands careful planning to avoid disruptions. By staying informed, investing in training, and adapting to new refrigerants, HVAC businesses can manage risks and seize opportunities in this evolving landscape. For more details on compliance or pricing, check resources like the EPA’s official guidelines.
Sources
- Daikin. “The Facts about R-32 and R-454B.” r32reasons.com. Accessed 23 Sept. 2025.
- United States Environmental Protection Agency. “Technology Transitions GWP Reference Table.” epa.gov. Accessed 23 Sept. 2025.
- HVAC.com. “2025 Refrigerant Changes: How Does It Affect HVAC Prices.” 18 Jan. 2023, hvac.com. Accessed 23 Sept. 2025.
- Federal Register. “Management of Certain Hydrofluorocarbons and Substitutes under the American Innovation and Manufacturing Act.” 11 Oct. 2024, federalregister.gov. Accessed 23 Sept. 2025.
- Competitive Enterprise Institute. “Comment to EPA on AIM Act Restrictions on the Use of Certain Hydrofluorocarbons.” 25 Mar. 2024, cei.org. Accessed 23 Sept. 2025.
- Florida Building Code, 8th ed., International Code Council, Inc., 2020, floridabuilding.org.
- National Electrical Code, 2020 ed., National Fire Protection Association, nfpa.org.
- ASHRAE Standard 15: Safety Standard for Refrigeration Systems, ASHRAE, 2019, ashrae.org.