Hudson Technologies Reports that the EPA has Issued Proposed Rule to Reduce HCFC–22 Allowances

EPA Believes Current Market Conditions “Warrant a Significantly
Lower Total Allocation For 2012, 2013 And 2014”

PEARL RIVER, NY – JANUARY 6, 2012 – Hudson Technologies, Inc. (NASDAQ:HDSN), announced that the Environmental Protection Agency (EPA) has issued a proposed rule that would reduce the allowances for U.S. consumption and production of Hydrochlorofluorocarbon-22 (HCFC-22). Specifically, the EPA is proposing to decrease annual HCFC-22 consumption allocations relative to the EPA’s December 2009 final rule (the “2009 Final Rule”) by a range of between 11 and 47 percent for calendar years 2012, 2013 and 2014. The EPA has indicated that a new final rule, which is expected to be issued later this year following a 30-day comment period and the EPA’s review and analysis of any comments received, will specify the exact reduction percentage relative to the 2009 Final Rule. The EPA is proposing to allocate fewer HCFC-22 allowances “in order to promote recovery and reclamation and encourage the transition to non-ODS (Ozone Depleting Substances) alternatives.”

The EPA recently undertook an analysis of updated market conditions and received comments from refrigeration and reclamation industry participants, including Hudson, to gauge current market demand and reclaimer capabilities, as well as the existence and size of any surplus of HCFC-22. A large portion of the commenters requested that the EPA decrease consumption allowances for 2012-2014. In its discussion of the proposed rule, the EPA noted that “commenters stated the price of HCFC-22 is low, indicating that virgin supplies are not constrained to the extent that the Agency had anticipated”. The EPA also noted:

Since EPA is continuing to allow the use of existing HCFC-22 appliances manufactured prior to January 1, 2010, reused, recycled, and reclaimed HCFC-22 will become more valuable as the phaseout progresses. The demand for HCFC-22 to service existing equipment will provide an economic incentive to increase the quantities of recovered HCFC-22 available for reuse, recycling, and reclamation. Therefore, the Agency believes . . . a lower virgin supply will further incentivize recovery and reclamation.

The proposed rule has been published in the Federal Register, Volume 77, No. 2,
page 237

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