HFC Tax an Unlikely Option for US

Repeal of Australian Legislation a Boost for Opponents of US Tax

Last summer, Australia repealed its carbon tax, which, since July 2012, had been imposed on the country’s leading emitters of synthetic greenhouse gases controlled by the Kyoto Protocol.

(Australia is one of the world’s largest emitters of carbon dioxide per capita. See emissions chart here.)

A tax levy or carbon equivalent price was also imposed on imports of hydrofluorocarbon (HFC) refrigerants under the country’s Ozone Protection and Synthetic Greenhouse Gas Management Acts. This levy, which was proposed to promote the adoption of low-GWP (global warming potential) technologies and to provide an incentive to reduce refrigerant leakage rates, varied based on the GWP of various refrigerants.

Taxes and Death

Opponents of the politically divisive tax ultimately were successful in convincing the Australian Parliament that repeal would lower energy prices, reduce Australians’ cost of living, and boost economic growth. Despite the repeal in Australia, a number of other countries — mainly in Europe — still have HFC tax or outright bans in place. Could a tax that targets carbon dioxide emissions and refrigerants be headed to U.S. shores?

“I don’t think a tax on HFCs like the one in Australia is likely in the near future in the U.S.,” said Rajan Rajendran, vice president, system innovation center and sustainability, Emerson Climate Technologies Inc. “The appetite for more taxes, regardless the reason, does not exist in the U.S., where the economy and unemployment are still in recovery mode. The divided government makes it difficult for any one party to push tax increases through.

HFC Tax an Unlikely Option for US “And, I don’t think [such a tax] is necessary, either,” Rajendran added. “The EPA [U.S. Environmental Protection Agency] has other tools at its disposal like the Significant New Alternatives Policy [SNAP] it is trying to use for the same purpose: regulating the use of high-GWP HFCs.”