Regulation: Just Around The Corner

Author: Kevin Davis

Since 1987 the Montreal Protocol (MP) has successfully worked to phase out and eliminate Ozone Depleting Compounds (ODC’s) such as chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), and halons. Unfortunately, what might be one of the most important international environmental agreements fails to address the production and use of hydrofluorocarbons (HFCs), chemicals that don’t deplete the ozone, but are up to 3000 times more hazardous to the climate system than CO2. For the past four years the US, Canada and Mexico have been working to draft policy that would address these HFC’s with high Global Warming Potential (GWP). In fact, in April 2013, all three countries jointly submitted a Montreal Protocol amendment proposal that calls for the phase out of 19 HFC’s through 2043, a plan that would reduce cumulative global greenhouse gas emissions by 95,400 MMTCO2 between 2016 and 2050. That’s the same impact as removing 470M cars from the road over the same time period.

This June, at the Open-Ended Working Group to the Montreal Protocol (OEWG 33), participants were able to move the HFC management discussion from ‘informal’ to ‘formal,’ with parties finally, after four years, willing to discuss HFC’s via a formal discussion group. The process appears to be moving slow, but at least moving forward with international HFC regulation certainly within view. In the meantime, apart from the MC, countries are making proactive attempts to reduce HFC use.

  • President Obama and President Xi agreed to collaborate on reducing production/consumption of HFC’s. While unclear how the collaboration will take place, its clear that it will involve pushing legislation/amendments via the MP, United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.
  • Denmark has been one of the most proactive countries with regard to HFC management. As of January 1, 2007, the Danish government eliminated the installation of refrigeration circuits with more than 10kg of HFC refrigerant. The law included installing a used system and switching refrigerants from an HCFC. Taxes also apply for import/production.
  • Norway began taxing import and production of HFC’s in January 2003 followed by refund opportunities beginning 2004 for HFC destruction. Tax rates in 2009 ranged from 32 and 80 euros/kg for common refrigerants like R134a and R404A.
  • Switzerland will ban HFC use in air conditioning, commercial refrigeration and industrial refrigeration systems beginning in December 2013. Bans are based on cooling temperature and cooling capacity.
  • Sweden has a maximum synthetic refrigerant charge of 20kg for medium temperature applications and 30kg for low temperature applications. No refrigeration/AC system can have a charge > 200kg.
  • EU’s proposal bans high-GWP HFC’s in domestic refrigeration, commercial refrigeration and mobile air conditioning units from January 2015 through January 2020.
  • Australia initiated a carbon tax on HFC imports in July 2012, an act that increased costs of high-GWP over three times.

In the United States, California is taking its own steps to begin limiting GHG emissions caused by synthetic refrigerants. The state has implemented the Stationary Equipment Refrigerant Management Program requiring facilities with > 50 lbs of high-GWP refrigerant charge to begin entering leak inspection, leak repair, and maintenance information. Facilities have until March 1, 2014 to register.

Europe is beginning to ban HFCs and Montreal Protocol participants are finally taking HFC management seriously. It’s just a matter of time before international policy is passed, HFC’s begin the phase out process and synthetic refrigerant prices begin to rise. This will produce strong demand for new, natural refrigerant technologies.