Would you agree if I said that the concern about the greenhouse effect has revolutionised HVAC/R market more than anything else? Paradoxically, there are more refrigerants and mixtures of refrigerants now available, however it seems much more difficult to choose the most suitable one! Flammability, toxicity and high pressures are the main challenges of alternatives to refrigerants with a high global warming impact. Luckily, technology is available to solve these challenges. Hopefully, standards will be carefully devised to ensure safety!
A lot of effort has already been put into the successful transition from fluorinated gases to other alternatives. Starting in Europe with the F-gas regulation and quota reductions, the results are now being extended all around the world.
Last year, I wrote about how refrigerant prices were affected during 2017 in Europe and which refrigerant regulations were approved in United States. In the first quarter of 2018, we started analysing what the modifications may be to the next version of IEC 60335-2-89. Now it is time to focus on how the HVAC/R market has been affected by refrigerant changes during 2018 and what the main news has been.
Europe, where phase-down started first
“2018 has the potential to be an absolute disaster", warned Ray Gluckman, Director of Gluckman Consulting, at the European Eureka conference in 2016. He was not the only one to predict a difficult scenario in Europe: the jump from 93% to 63% in the F-gas quota was expected to be a major challenge for our sector.
Indeed, during 2017, lots of news about refrigerant price increases and decreased availability frightened HVAC/R stakeholders. For instance, the price of R-404A increased by more than 900%, and that of R-410A by around 500% (Öko Recherche), unprecedented price rises in the history of refrigerants!
During the first semester of 2018, the average prices of HFC refrigerants such as R-410A and R-134a continued to grow, whereas the price of R-404A decreased slightly (Öko Recherche). Since then, for the first time since the beginning of the HFC phase-down, the price of R-410A is higher than the price of R-404A. The lack of a drop-in for R-410A and the fact that the alternatives to substitute it are flammable is making it difficult to find a replacement. The new R-466A refrigerant that was presented last summer could be the non-flammable alternative that the HVAC market was waiting for, but it is not still clear. We will keep an eye on any news about this!
This year, however, price increases are not the main news in the media. On the one hand, the increases are smaller than last year, which can be good news, meaning that manufacturers are using other alternatives to GWP refrigerants. Indeed, the demand for mixtures of HFC and HFO alternatives, such as R-448A, R-449A (as a replacement for R-404A) and R-513A (as a replacement for R134a) has increased, resulting in moderate price increases (Öko Recherche). On the other hand, however, there are many reports regarding the illegal market of high GWP refrigerants in many European countries: illegal refrigerant sales in Italy, illegal imports in Baltic states, stolen R-134a in Germany… Hopefully, this only represents a very small percentage of the market and the European Commission will adopt the necessary measures to prevent it.
Meanwhile, in the United States…
The phase-down of HFCs in United States has taken a step backwards. The Supreme Court, on 10 October 2018, rejected an appeal to the Court of Appeals’ decision limiting EPA regulation of HFCs. This means that SNAP Rule 20 is vacated forever unless Congress steps in. Additionally, in October 2018 the EPA published a proposed rule that would remove requirements for maintenance and leakage repair provisions for equipment using substitute refrigerants such as HFCs.
In this context, some states such as New York, California, Connecticut and Maryland, all members of the United States Climate Alliance, have decided to impose their own rules for the phase-down of Global Warming substances. For instance, California Senate Bill 1383 calls for a 40% reduction in HFCs by 2030 and the California Air Resource Board (CARB), which is the state equivalent to the EPA, to act accordingly.
What about other countries?
The Kigali amendment to the Montreal Protocol is on the verge of coming into force. Remember that this was ratified by the 20th party on 17 November 2017, and will enter into force on 1 January 2019. Today, it has been ratified by 60 countries, including the European Union, which ratified it on 26 September this year.
Taking a look at worldwide refrigerant prices, it is evident that the prices of HFC refrigerants in Europe are much higher than in other countries. Interestingly, contrary to Europe (and probably as a consequence), the price of R-410A in the United States and China is lower than that of other HFCs. Moreover, the price of R-22 in China, Brazil and South Africa is still the lowest compared to other commonly used refrigerants, whereas in the Unites States, the price of R-22 as a consequence of HCFC phase-down has started increasing.
Moreover, the illegal market for refrigerants is a problem not only in Europe: a recent news report on 29.9 tonnes of illegally produced R-11 found in a Chinese CFC raid, or the increase in emissions of R-10, refrigerants not only with a very high GWP but also with a high ODP.
But the news is not all bad. A new assessment of ozone depletion in the atmosphere has confirmed that actions taken under the Montreal Protocol have led to decreases in the atmospheric abundance of controlled ozone-depleting substances and the start of the recovery of stratospheric ozone. This means good news for the environment, and motivation for our sector to keep working on the next objective: global warming.
And everybody is waiting to learn about 60335-2-89
This year has also been marked by the wait for the update to IEC 60335-2-89 that, among other measures, would allow an increase in the limit of propane from 150 to 500 grams in commercial refrigeration appliances. This measure would facilitate the substitution of HFC refrigerants by naturals. The last meeting took place in South Korea from 19 to 20 October 2018, where most of the Committee Draft for Vote comments were accepted, except that the maximum charge of flammable refrigerant that will remain 1.2 kg. We will have to wait until December or January for the final vote.
Moreover, the equivalent standard for electric heat pumps, air conditioners and dehumidifiers, IEC 60335-2-40, was published at the beginning of 2018. The alignment of European (EN) and American (UL) standards is foreseen in the next few months.
Are we working in the right direction?
In the words of Andrea Voigt, Director General of EPEE: “If there is a key learning for me from this year, it’s really that communication is key to success (…) If people don’t understand what the phase-down is and how it works, they will hardly act on it. The phase-down principle has been underestimated, because not properly understood.”
It seems that 2018 has not been an “absolute disaster” in Europe, but a key year in communicating what phase-down means, taking measures and working so as to facilitate the transition. Hopefully, this will be helpful for the other countries when they start the phase-down dictated by the Kigali amendment, and in a few years we can together celebrate another success of the Montreal Protocol!
Refrigerant prices: what is happening?
From 150 to 500 g of propane: higher charge, same risk?
Making sense of the uncertainty that the future holds for refrigerant regulations in the USA
One more step towards a “greener” planet