Adverse Impacts on the U.S. Reclamation Sector of Customs Duty Abuse and Other Anticompetitive Behavior.  Excerpt from Comments by FluoroFusion Specialty Chemicals Inc. 

The reclamation sector in the United States faces an existential threat from various anticompetitive practices that have been deployed for many years by virgin refrigerant producers and importers. This appendix provides additional context and background information about those challenges. Although some of these practices may involve activities that are outside the scope of the proposed rule, it is essential that EPA and other federal and state policymakers who wish to foster a vibrant reclamation sector: (a) fully understand these challenges; (b) take all available steps within their statutory authority to mitigate and compensate for these challenges; and (c) take further steps, in consultation with affected stakeholders, to identify additional interagency coordination and legislative efforts to address them.

Virgin Refrigerants Producers and Importers Have Shifted Most U.S. Refrigerant Production Capacity to China, and Have Used the Department of Commerce’s Antidumping Rules – Especially the 2016 Blends Order – to Secure Highly Favored Trade Treatment for Virgin Producers with Dire Impacts on Reclaimers

The 2016 Hydrofluorocarbon Blends from the People’s Republic of China Antidumping Duty Order (“2016 Blends Order”) restricts the import of specific blends like R404A, R507A, R410A, R407A, and R407C by imposing a significant 285% duty for most importers. Although the stated aim of such AD/CVD duties is to prevent these blends from entering the U.S. market at prices that could undercut domestic producers, the Blends Order has been weaponized far beyond its nominally intended function of protecting U.S. domestic producers from unfair Chinese practices.  

 

Instead, the Blends Order serves to restrict the most popular HFC blends from entering the market by nearly quadrupling the cost of these refrigerant blends in a manner that has been designed by virgin producers to secure future cost advantages for their patented HFC replacements for R22 as well as future HFC/HFO blends. These types of measures adversely impact the domestic reclaim market because the next-generation replacement refrigerants can be, and often are, priced just below the cost of reclaiming the refrigerant it replaces.

 

A basic understanding of the 2016 Blends Order is fundamental to understanding the current state of the U.S. refrigerants market. Specifically, it is essential to understand that the 2016 Blends Order included – at the request of virgin producers – an exclusion for certain refrigerants that were produced in China under patent. It provides in relevant part:  

 

Any blend that includes an HFC component other than R–32, R–125, R–143a, or R–134a is excluded from the scope of this Order.

 

Excluded from this Order are blends of refrigerant chemicals that include products other than HFCs, such as blends including chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), hydrocarbons (HCs), or hydrofluoroolefins (HFOs).

 

Also excluded from the Order are patented HFC blends, including, but not limited to, ISCEON® blends, including MO99TM (R–438A), MO79 (R–422A), MO59 (R–417A), MO49PlusTM (R–437A), and MO29TM (R–422D), Genetron® PerformaxTM LT (R–407F), Choice® R–421A, and Choice® R–421B.

 

A recap of recent history in the refrigerants sector is instructive to understand the dynamic at work today. The EPA’s Draft Report – Analysis of the U.S. Hydrofluorocarbon Reclamation Market: Stakeholders, Drivers, and Practices (October 2022) shows an average annual decline in the reclamation of R22. It is easy to assume that this decline is solely due to annual reductions in the R-22 installed equipment base. However, our experience is that patented R-22 replacements, like HFC-R-438A, were being manufactured in China and imported into the U.S. without AD/CVD duty so they could be sold at a price significantly lower than reclaimed R-22. That outcome was possible because the manufacturer of R-438 was successful in specifically excluding their patented alternative refrigerant from the 2016 Blends Order. 

 

U.S. producers in turn made a choice to invest in overseas production facilities for their R-22 alternatives in China, presumably to avoid environmental and regulatory challenges associated with the production in the United States of complex HFC blends containing class III flammable hydrocarbons. Their high-GWP R-22 alternatives were then imported into the United States, where they were aggressively priced and often added to R-22 in existing AC/R systems. This practice has significantly reduced the buyback rates of recovered R-22 that reclaimers can offer technicians, because they encourage technicians instead to simply to “top-off” leaking R-22 equipment with an R-22 alternative “drop-in.” As a result of these inexpensive replacement refrigerants and poor refrigerant management practices by technicians, the amount of recovered R-22 refrigerants coming back to reclaimers predictably dropped considerably. When those mixed refrigerants are eventually recovered, moreover, these practices have led to complex mixtures of recovered HCFC, HFC, and hydrocarbon refrigerants that cannot be safely separated using legacy HCFC reclamation technology. As explained more fully below, these practices have significantly limited capital investment in reclamation technology that is sorely needed today. 

 

Then, in the years leading up to 2020, as the patents for their HFC-based R-22 replacements began expiring, the virgin refrigerant producers ramped up lobbying efforts to pass legislation designed to phase down production and importing of HFC refrigerants. Critically, they also simultaneously initiated Department of Commerce (DOC) antidumping investigations into imports of HFC refrigerant components. These DOC efforts began on January 23, 2020, when a U.S. HFC producer filed a DOC antidumping duty petition concerning imports of difluoromethane (R-32) from China. The final affirmative determination, published on March 22, 2021, placed an antidumping duty of 161% to 221% on all imports of R-32. In the meantime, the AIM Act had been signed on December 27, 2020, and required to implement a national phasedown of the production and import of HFC refrigerants. Six weeks later, on February 3, 2021, another U.S. HFC producer petitioned DOC to initiate antidumping and countervailing duty investigations into imports of pentafluoroethane (R–125) from China. The final affirmative determination published March 9, 2022, placed an antidumping and countervailing duty of at least 277%.

 

The combined effect of these two-pronged efforts by US virgin HFC producers was that they have successfully used parallel U.S. government proceedings to build a market for imported, next-generation HFC/HFO refrigerants. Specifically:

 

• They have excluded from the scope of the antidumping duty/CVD regime their patented next-generation HFC/HFO refrigerants, thanks to the exclusion language found in the 2016 Blends Order, which has preserved their ability to continue production in low cost, foreign manufacturing plants. These regulations make it significantly more cost-effective to import HFC and HFC/HFO refrigerant blends from China. 

 

• And meanwhile, they are poised to disproportionally benefit from the phasedown in HFC production and consumption under the AIM Act, including EPA’s decisions to allocate HFC allowances based on historical import data.

 

The result of these efforts is a deep and systemic harm to the entire refrigerant reclamation industry. These practices artificially triple the market price of virgin HFC blends, while simultaneously increasing the cost of virgin HFC components that the U.S. EPA certified reclaimers need in order to reclaim recovered HFC blends back to their original specification. This scenario gives the U.S. virgin producers’ next-generation HFC/HFO blends a significant price advantage over reclaimed HFCs. Ultimately, the availability of low cost HFC/HFO blends places an effective ceiling on the market price of reclaimed refrigerant. That ceiling in turn leads to low buyback prices that reclaimers can offer for recovered HFC blends, which in turn discourage HVAC/R technicians from recovering refrigerant. And that is why we see a 98.4% release rate of HFC refrigerants today.  

The Future of Reclamation Requires Fundamental Changes to the 2016 Blends Order

As explained in our comments above, EPA’s proposed subsection (h) rules will, particularly if strengthened further as we suggest, help to provide corrective measures, most notably by creating a stable and predictable demand for reclaimed refrigerant. U.S. reclaimers, including FluoroFusion, stand ready to invest and are fully capable of delivering to market the reclaimed materials necessary to supply the demand that the proposed subsection (h) rules envision. But those changes will not be sufficient on their own to further bolster the reclamation market in the manner that is required in order to meet the current climate change crisis.

 

While the AIM Act holds commendable intentions for fostering American Manufacturing and Innovation within the sector, the smaller companies that define the reclaim sector today lack the financial resources to compete on a level playing field with the regulatory and, especially, the AD/CVD proceedings that are brought by incumbent virgin refrigerant producers and importers to protect their market share and weaken the reclamation sector. Moreover, these challenges are exacerbated by the cumulative effects of trade and environmental regulations, which reinforce the substantial cost advantages enjoyed by the virgin refrigerant producers – most notably, the members of the American HFC Coalition. Reclaimers, who represent a tiny minority of the domestic refrigerant market, face significant financial limitations when seeking to contest layers of government-backed protections that grant U.S. and foreign multinationals cost advantages while relieving them of life cycle cost responsibilities for the virgin products that they place on the market.

 

FluoroFusion strongly supports U.S. manufacturing, innovation, and life cycle management, with a commitment to fair trade. However, it’s evident that antidumping proceedings have been exploited to gain long-term cost advantages through government-endorsed loopholes. Examining the history, background, and impact of the 2016 HFC Blends Order reveals a deliberate strategy by virgin refrigerant producers: as popular blends like R404A, R407C, R407A, R507, and R410A approached the end of their patents, they used the R22 phasedown to position newer patented HFC next-generation blends against ozone-depleting substances and high GWP alternatives, securing a 285% cost advantage over reclaimers and importers in the United States.

 

Specifically, U.S. HFC producers leveraged the DOC to phase out off-patent products in favor of their patented replacements, ostensibly in the name of eliminating ozone-depleting substances and high GWP alternatives. They also continued to offshore the production of R32, R125, and R134a to China at low prices, ensuring an advantage in future import allowances. As the AIM Act came into effect, high costs were imposed on future importers who had to secure HFC allowances, while the virgin producers in the HFC Coalition positioned themselves to continue to import lower cost HFC/HFO blends from China, while obstructing others from doing so.

 

These strategies have long-standing ramifications, the first of which is an unhealthy reclaim industry where 98.4% of every product ends up in the atmosphere, because low-cost Chinese products are favored over utilizing the waste streams from prior production of products. It’s essential to acknowledge the significant challenges – past and future – faced by U.S.-based reclaimers due to the patent exclusion language in the 2016 HFC Blends Order. This exclusion severely limits reclaimers’ ability to market reclaimed refrigerants at competitive prices when they must compete against ultra-low-cost offshore-produced next-generation HFC/HFO blends. 

 

Moreover, smaller companies lack the financial means to contest individual rulings regarding the implementation of the 2016 Blends Order at the DOC. This encourages the HFC Coalition members – who control 64% of HFC consumption allowances under the AIM Act – to continue to produce in, and import from China their next-generation blends, thus institutionalizing the maximization of release and minimizing reclamation, which runs counter to the EPA AIM Act. 

 

HFC Coalition members heavily rely on patent exclusion language to maintain perpetually low costs for their “next generation” HFC/HFO blends, which primarily consist of 70% HFCs. Meanwhile, however, this loophole in the trade regime imposes a substantial burden on government resources, who are confronted with complex AD/CVD order circumvention efforts that hinder and complicate effective enforcement. For example, a prominent legal case revolves around the import by a non-HFC Coalition allowance holder of R421A, using a claimed exemption from AD/CVDs under the 2016 Blends Order and its subsequent transformation into blends like R407C and R407A. This case is often cited by HFC Coalition members as they “strive” to combat the illicit import of HFC blends and assist the DOC in identifying misconduct. Numerous instances can be cited to illustrate how patent exclusions have incentivized importers to engage in similar circumvention practices. Those practices in turn lead to constant circumvention inquiries and enforcement efforts even on legitimate import activities, creating disruptions in the reclamation industry and market in general.  

 

The Department of Commerce’s 2020 R421A anticircumvention inquiry, Hydrofluorocarbon Blends From the People’s Republic of China: Final Scope Ruling on Unpatented R–421A; Affirmative Final Determination of Circumvention of the Antidumping Duty Order for Unpatented R–421A, 85 Fed. Reg. 34416 (June 4, 2020), illustrates some of the issues that reclaimers face in the market with competition against low cost imported Chinese material.  This 2020 inquiry covered “imports of unpatented R-421A, a blend of HFC components R-125 (also known as Pentafluoroethane) and R-134a (also known as 1,1,1,2-Tetrafluoroethane), from China that are further processed in the United States to create an HFC blend that would be subject to the Order.” Id. Although the complaint refers to “unpatented R421A,” the importer leveraged the patent exclusion in the 2016 Blends Order to bring the material into the U.S. without incurring a 285% duty. Subsequently, DOC found that this material was converted into blends like R407A and R407C, resulting in an immediate and adverse impact on competitors/reclaimers in the U.S. market. The investigations carried out by ITC and DOC also seem to indicate no evidence of a patent for R421-A.

 

The entry into the United States of unpatented R421A under favorable trade terms based on the patent exclusion in the 2016 Blends Order raises obvious concerns about the enforceability of the Blends Order.  How can a product have a patent exclusion and receive a 285% duty advantage while having an unpatented version per the findings of the ITC?  This incident also raises questions that EPA has a direct interest in, including the ASHRAE certification and SNAP approval status of the refrigerant in question.  

 

We use the above example only to illustrate the long-term impact on reclamation in the U.S. of the current situation: in addition to the actions of the virgin producers like the HFC Coalition members, a sophisticated group of experienced importers, well-versed in DOC procedures, understands how to manipulate the current AD/CVD framework to unfairly compete with reclaimed refrigerants. This strategy entails making use of patent exclusions in the 2016 Blends Order and relying on an outdated DOC anti-circumvention process. 

 

Although this case is cited repeatedly by HFC Coalition members, it is almost an inevitable outcome of the patent exclusion loophole that the HFC Coalition members themselves sought and secured in the 2016 Blends Order. More importantly for the subsection (h) context, this type of AD/CVD circumvention, which is encouraged by the 2016 Blends Order, poses challenges for HFC reclaimers as these artificially priced products compete with reclaimed content products and hinder investments in the sector. The importation, conversion, and sale of this material continued despite anti-circumvention efforts, and it took months to bring an end to this process. This prolonged legal battle has had far-reaching consequences, including implications for the EPA phasedown of HFC refrigerants, as mandated by the AIM Act.

 

There are many other such examples. For instance, in September 2023, there were reports of the importation of nearly 80 ISO tanks filled with R421B, a blend that had been excluded from the 2016 Blends Order duties due to its patent status. R421B comprises 85% R125 and 15% R134a. While this product may not have any or minimal established applications as a direct refrigerant, it excels at avoiding duties and can be further processed into various blends that, if they had been imported as such, would be subject to the 2016 Blends Order duty, such as R404A, R407A and R407C.  The resulting refrigerants will take years to move through the supply chain as they enter the U.S. marketplace, all the while cannibalizing market share from importers playing by the rules, as well as unfairly lowering prices and impacting reclaim activities.  

 

Experienced importers, well-versed in the nuances of patent exclusion language, proactively seek ways to gain a competitive edge. When they possess assets in the U.S., they target alternative products that can be transformed into popular subject blends within the country. Notably, the 2016 HFC Blends Order outlines just five subject blends (R404A, R507, R407A, R407C, and R410A). Observing the success of HFC Coalition members in manipulating the DOC process seems to embolden these non-patent holding importers to test the boundaries further by importing products such as R410B (converted into R410A), R407G (transformed into R407C), and an array of partial blends, semi-finished blends, transshipping, and various other forms of refrigerants whose eligibility for the duty exclusion under the Blends Order is dubious.

 

In sum, it is evident that the patent exclusion in the 2016 Blends Order has the effect of incentivizing questionable import practices, which in turn artificially lowers the prices of virgin refrigerants, thereby undermining the objectives of the AIM Act. The central issue is the time it takes to file circumvention cases against such behavior, especially when foreign entities are benefiting from moving these illicit practices from one country to another. In the end, however, the result is the same: artificially low-priced HFCs ultimately arrive in the United States, and have a 98.4% chance of being released.  It can be argued that U.S. air and drinking water become the dumping ground for Chinese HFC’s and now HFC/HFO blends. 

 

There are many other adverse effects that flow from these artificially cheap HFC imports that arrive through abuse of the 2016 Blends Order’s patent exclusion, beyond the 200% price advantage over other refrigerants. These effects include the creation of de facto monopolies by certain allowance holders, who import virgin refrigerants that are unencumbered by AD/CVDs as well as by life cycle management responsibilities for their products.   

 

Although we understand that EPA has no control over the content of the 2016 Blends Order, it is long past time for the federal government as a whole to coordinate its environmental and trade policies across agencies. Concentrating solely on authorities arising under the AIM Act, while commendable and helpful to a degree, will fail to adequately safeguard the U.S. environment and the reclaim industry.  We do want to point out that the 2016 Blends order currently trumps the AIM Act’s goals of maximizing reclaim and minimizing release.  

The Blends Order Will Facilitate Future Imports of Low GWP Substitutes that will Further Harm the U.S. Reclaim Market  

In addition to the adverse impacts to the U.S. reclamation sector that arise by operation of the 2016 Blends Order and its impacts on pricing discussed above, various other adverse environmental impacts flow from the order’s patent exclusion clauses.  We explain this dynamic further below.

 

It is essential to understand that refrigerant products commonly referred to as HFO refrigerants are in fact primarily HFC/HFO blends, with HFC content ranging from 44% to 80%. Under the 2016 Blends Order, the complete value of the HFCs in such imported blends is exempt from the antidumping duties imposed by that Order. As explained above, the patent exclusion in the 2016 Blends Order creates a substantial 200% cost advantage for products imported from China. This poses a significant concern for these HFO blends, which are designed in ways that are inherently more expensive and more problematic to manage from a lifecycle management standpoint.

 

An examination of some of these HFC/HFO “available substitutes,” as defined in the AIM Act Technology Transition rule, offers specific examples that illustrate the structural barriers hindering reclamation efforts for these products in order to minimize their release. As explained further below, these are products that should only be permitted on the U.S. market if they are subject to lifecycle management control measures. 

 

• R448A is a blend composed of 26% R32, 26% R125, 21% R134A, 20% 1234yf, and 7% 1234ze(E), and is positioned as a substitute for R404A. The advantage of importing this product from China lies in a substantial 73% HFC content, benefiting from a 200% duty exemption allocated to the HFC component, as stipulated in the HFC Blends Order. Importing it in single-use cylinders without QR code tracking and the absence of reclaim usage further exacerbates the issue.  

 

This refrigerant highlights the urgent need for increased reclamation, especially since the product can be efficiently blended/manufactured in the U.S. using reclaimed materials like R407C, R410A/R407A, R407F, and others, in conjunction with 1234yf and 1234ze(E). Unfortunately, the manufacturer of R448A appears likely to use its claimed patent protection status to obstruct reclamation efforts, notwithstanding claims that it intends to “enable” qualified reclaimers who are able to meet its self-imposed criteria to conduct reclaim operations on the patented blend. 

 

While U.S. reclamation faces obstacles in navigating patent-based controls here, the patent holders freely import the virgin product from China, employing virgin HFC components without incurring antidumping duties on the HFC content and evading long-term life cycle responsibilities. As a result, the importation of R448A undermines the recycling of the high GWP product R404A (with a GWP of 3922), as virgin R448A is less expensive than the reclamation of R404A. Indeed, since the introduction of R448A into the U.S., the reclamation of R404A has decreased by at least 15%.

 

• R463A, which comprises 36% R32, 30% R125, 14% R134A, 6% CO2, and only 14% 1234yf, enjoys a 200% antidumping duty exemption due to its nearly 80% HFC content. This product would be perfect for reclaim content to blend from reclaimed product streams in the U.S. like R407A, R407C and many others combined with CO2 and the 1234yf additive.  Sadly, having a 200% cost advantage from China, while not allowing reclaim, will result in a 100% vent rate.  The decision to opt for an outsourcing approach in China, involving the use of one-time use cylinders free from duties, presents a considerably more cost-effective option compared to using reclaimed material. This approach not only contributes to a reduction in costs, but also enables future low cost import of 1234yf because when the 1234yf patent is finished, the importer will claim harm from China, starting the cycle over again or requesting another phasedown of PFAS ingredients to maintain control of the market and ensure the maximization of future release of HFC/PFAS. 

 

• R513A, comprising 44% R134A and 56% 1234yf, could easily be produced in a manner that maximizes the demand for reclaim, by combining recycled R134A from domestic reclaim with 1234yf from domestic reclaim.  Unfortunately, little incentive under the current regulatory and trade framework exists to not use the duty exemptions to bring this material in from China in virgin form, and in doing so undermine American reclamation efforts.  (As we discuss in our comments, moreover, azeotropic blends like R513A should not exist and have a nearly 100% release rate.)

 

• R454B, comprising approximately 69% R32 and 31% 1234yf, serves as an excellent illustration of a product that should prioritize the use of reclaimed materials from domestic sources rather than relying on global logistics. While R32 may not currently be in a full lifecycle position, it is expected to be by 2028. Consequently, this product should be mandated to incorporate reclaimed R32, reducing the need for global asset transportation.  Recycled R410A is far superior to R454B on a 100 year GWP if it is recycled four times, while R454B has a 100% release rate. 

 

FluoroFusion could provide numerous additional instances where regulated substances can be blended with small quantities of HFOs in China and then imported in virgin form, rather than produced in the United States with reclaimed HFCs. Absent a major change, we see a future where major allowance holders continue to outsource production to China, duty-free, offering more substantial profits. These duty exemptions create enticing opportunities for larger allowance holders to exert downward pressure on U.S. market pricing, while simultaneously restricting access to crucial components necessary for effective reclamation.

 

It’s not our intent to pass judgment on these major allowance holder’s use of their scale to exploit governmental advantages. However, the overarching priority must be the urgent need to combat human-induced climate change and prevent the release of over 209,000,000 pounds of refrigerant per year. It is not socially just to place profit for the few above the crucial imperative of addressing climate change. Wherever feasible, our focus must be on prioritizing the reuse of previously produced products in future blends to prevent unnecessary releases into the atmosphere.

These Problems are Compounded by Market Pressure on Reclaimers and Anticompetitive Practices by Virgin Producers and Importers

The cost pressures resulting from the cheap Chinese imports described above ultimately originate with the patent exclusion in the 2016 Blends Order. As the EPA knows, the average market price of refrigerants since October 2022 has fallen 89%. We know what comes next for U.S. reclaimers, unfortunately. Those low costs of virgin materials create disincentives for U.S. based reclaimers to invest capital that is required to maximize HFC capture and reclamation. This situation presents several challenges to the reclamation market’s growth beyond 2024, primarily due to structural barriers and the institutionalized release of refrigerants. 

 

Here are specific examples of those structural barriers and the reasons behind them, which highlight these challenges:

 

• Allowance holders exploit other strategies to avoid duties while shifting the duty burden onto smaller companies. They import various refrigerants like R410A from Oman, R125 from Vietnam, and R32 from the UAE, even though there is little evidence that the refrigerants are produced in those markets. Subsequently, these significant allowance holders artificially lower market prices, undercutting the competitiveness of smaller firms and reclaimers. This manipulation forces smaller American manufacturing and reclamation companies to exit the market or to sell allowances and exit the market. 

 

• Some HFC Coalition members actively campaign against reclaim gas and obstruct the ability of reclaimers to sell in the market by depressing prices for virgin refrigerants. In some cases, for example, we understand that refrigerant wholesalers have been told that access to next generation products will be dependent on sole-sourcing from virgin refrigerant importers.  Although in a fair marketplace reclaimed material would be the most cost-effective option, virgin producers actively work to undermine the marketplace for reclaimed products.  

 

• Several HFC coalition members label reclaim gas as substandard, despite the established standard of AHRI700. Smaller companies find it challenging to market against this tactic due to the coalition’s majority of allowances and extensive resources. This labeling undermines the reclamation industry, hindering its efforts to provide high-quality products and compete with coalition members selling virgin gas.  

 

• Predatory tactics are employed, such as selling products at low prices while attacking individual reclaimers by purchasing mixed reclaim gas at higher rates than they actually sell virgin products. Many reclaimers lack the funding to file unfair competition cases, resulting in difficulties accessing feedstock and market sales.

 

• The act of transshipping goods originating in China to Mexico (increasing allowances there), relabeling the products, rerouting them to the Middle East, and ultimately bringing them back to the U.S. as a method to bypass duties has resulted in depressed market prices and adversely affected smaller allowance holders. The practice of importing from regions that lack manufacturing facilities is a clear indicator of circumvention, compelling smaller reclaimers to exit the market due to financial pressures.

 

The reclamation sector, being a relatively small player in the industry, bears the primary burden of these challenges. Its limited scale, financial constraints, and high holding costs render it susceptible to the adverse effects of market price declines, precisely when stability and investment are most critical. Reclamation businesses are encouraged to invest in their assets to boost their reclaim capabilities. However, the significant financial disparity, combined with the lack of prospects beyond chemical releases, deters potential investments from banks and private equity firms. The prevalence of such extensive practices designed to bypass the system appears to be a direct outcome of unjust regulations aimed at undermining the AIM Act before its implementation.

What Can EPA Do About the Blends Order’s Adverse Impacts?

Consistent with our prior communications, we strongly urge the EPA to take comprehensive action, utilizing its authority to revoke or retire allowances from entities involved in market manipulation and patent misconduct. EPA should in particular commence a comprehensive examination of imports where the importer has asserted a patent exclusion under the Blends Order. In cases where a company is discovered to have falsely claimed a patent, imported without a patent while claiming a patent, engaged in fraudulent activities against the U.S. Patent Office, DOC, CBP, ITC, or the EPA, the appropriate consequence should be the permanent retirement of all their allowances. Disruption of an industry by these means cannot be tolerated.  

 

We also believe that EPA should initiate a multi-agency review, under White House oversight, that takes a comprehensive assessment of the relationship between U.S. antidumping rules under the 2016 Blends Order and the climate objectives of the AIM Act, with the goal of identifying additional measures that each agency can take, within its own statutory authorities, to maximize fairness in the application of U.S. trade rules while also utilizing all available tools to increase demand for and supply of reclaimed materials.

 

These measures are vital to safeguard U.S. innovation companies, reclaimers, and the public at large from the adverse impacts of the 2016 Blends Order. This proactive approach is essential to reinstate a fair and equitable playing field for American Innovation Manufacturers, ensuring that both foreign corporations, major multinational entities, and significant domestic importers adhere to the established regulations. It is disheartening to witness the AIM Act, symbolizing the American Innovation in Manufacturing Act, undermined by the influence of larger allowance holders to the detriment of U.S. innovation companies and reclaimers.

 

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Respectfully Submitted,

David L. Couchot

President & CEO