Honeywell, Dupont Lose Challenge to Cap-and-Trade Program

Honeywell International Inc. and DuPont Co. lost a challenge to a U.S. cap-and-trade emissions program as a federal appeals court said it already ruled the credit-transfers at issue in the case were lawful.

The U.S. Court of Appeals in Washington today dismissed the companies’ complaint that improper transfers by Honeywell’s competitors in 2008 under an Environmental Protection Agency program for hydrochlorofluorocarbons, or HCFC, reduced the company’s market share. The court said an earlier case, Arkema Inc. v. EPA, found the transfers valid under the Clean Air Act.

“Put simply, Honeywell’s claim is foreclosed by this court’s decision in Arkema,” U.S. Circuit Judge Brett Kavanaugh wrote for the three-judge panel.

The dispute stems from regulatory efforts to phase out all use of the pollutant by 2030. The agency caps the production and consumption of HCFC on an annual basis and sets allowances for each company and each pollutant in the program. Under the Clean Air Act, the companies are allowed to transfer or swap their allowances.

The appeals court ruled three years ago that the EPA had to honor transactions made by Arkema and Solvay SA that had been overlooked by the agency when setting their allowances for 2010 through 2014.

“The company is disappointed with the court’s decision and is currently studying the decision,” Peter Dalpe, a spokesman for Morris Township, New Jersey-based Honeywell, said in an e-mail.

Catherine Andriadis, a spokeswoman for Wilmington, Delaware-based DuPont, said she couldn’t immediately comment on the ruling.

The case is Honeywell International Inc. v. Environmental Protection Agency, 10-1347, U.S. Court of Appeals for the District of Columbia (Washington).

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