PEARL RIVER, NY – December 9, 2013 – Hudson Technologies, Inc. (NASDAQ: HDSN), announced that on December 5, the Environmental Protection Agency (EPA) issued a proposed rule pertaining to allowances for virgin production of HCFCs, primarily R-22, for 2015 through 2019. The proposed rule sets the schedule for the final stage of the phase out of virgin R-22 production, as was agreed to under the Montreal Protocol. R-22 is a widely used refrigerant in the residential and commercial setting, but it is a harmful greenhouse gas if not properly managed.
The proposed rule discusses various methods and ranges of allowances under consideration by the EPA – all of which would eliminate virgin R-22 production by 2020. The EPA’s preferred method, according to the proposed rule, would provide for virgin R-22 allowances of approximately 30 million pounds in 2015, 24 million pounds in 2016, 18 million pounds in 2017, 12 million pounds in 2018 and 6 million pounds in 2019, with a final ban of all production effective January 1, 2020. A final rule, which is expected to be issued next year, following a comment period and the EPA’s review and analysis of any comments received, will specify the final HCFC allowances for years 2015 through 2019.
Kevin Zugibe, Hudson’s Chairman and CEO, stated,
“The EPA’s proposed rule would return to the step down approach for the phase out of R-22, which, as stated previously, we believe is the best method for the orderly phase out of R-22 and for the establishment of reclamation as the principal, and ultimately the sole source of supply of R-22. Under the EPA’s preferred method, the 2015 allowances of 30 million pounds would represent an approximate 40% reduction from the 2014 levels. We continue to believe that as the R-22 phase out progresses, the aftermarket demand for R-22 will exceed the total allowances and that reclaimed R-22 will bridge the supply and demand gap, we believe creating a significant long term opportunity for Hudson as one of the largest reclaimers in the marketplace. We look forward to the EPA’s issuance next year of its final rule.”
A pre-publication copy of the proposed rule is available at http://www.epa.gov/ozone/downloads/2015-2019_HCFC_Proposed_Rule_Pre-publication_version_12-5-13.pdf