Manufacturers Look At Refrigerants' Present And Future
The questions were based on comments from contractors and technicians working in the field, articles in recent environmental and government publications, and presentations at recent industry trade shows.
Topics ranged from CFCs to CO2, from legal sources to illegal smuggling, from the near future of HCFCs to the long-term future of HFCs.
Responding to our questions were Atofina's Matt Ricketts, DuPont's Mark Baunchalk, Honeywell's David Metcalf and Steve Bernhardt, ICOR's Gordon McKinney, National Refrigerants' Jim Lavelle, and Refron's Jay Kestenbaum. The responses are up to date as of Jan. 12, but in this rapidly changing sector of the industry, it is possible that some aspects may have changed after press time.
The answers appear in their entirety. The only editing done was to conform to News writing style and to help in the overall flow of material. Likewise, the sequence of comments following each question was based on an orderly flow of information.
Question 1Late in 2003, the Reuters news agency reported that a United Nations organization called the Environmental Investigation Agency (EIA) issued a statement on CFC smuggling that said in part, "Singapore and Dubai were the major conduits for rerouting of [CFCs] to countries such as South Africa and the United States."
What can you tell contractors and technicians about CFC supplies in the United States? How can contractors obtain legal supplies? And what should they do if they suspect a source of CFCs is illegal?
Currently there are ample supplies of CFCs for current needs in the United States. Although many wholesalers do not regularly stock many of these CFCs, they are available upon request either by calling some of the larger chains or by contacting some of the refrigerant manufacturers themselves who can easily relay the request to wholesalers whom they know regularly stock these items for supply to their customers. There are no CFCs which are technically â€˜not available' - although they may not be so easy to find at all through regular wholesaler outlets.
Accordingly, contractors should not have to resort to dealing with unusual or suspect suppliers outside of the industry for any of their needs. If contractors or technicians suspect illegal CFCs either as a result of the nature of the product, or brand, and/or the source of the supply - especially if the product is being supplied at a price well below what the market would be - they can contact various industry sources. They can talk with some of the larger refrigerant wholesalers who may have a better feel on the product.
Manufacturers can also point them in the right direction and ultimately to the government agencies that are very interested in pursuing these suspect illegal supplies, such as the EPA [Environmental Protection Agency] and IRS [Internal Revenue Service].
Both CFCs and the equipment they are used in are slowly disappearing, and most contractors shouldn't have much of a need for CFCs in the future. CFCs have not been manufactured in the United States for some time, and most of the CFC material available today is reclaimed, even though it may not be labeled as such. All refrigerants that are reclaimed and resold must be processed by an EPA certification facility, and contractors should verify the name of the refrigerant reclaimer who processed the material and verify that the company is an EPA certified reclaimer. The list of reclaimers is kept fairly up to date and found at www.epa.gov/ozone/title6/608/reclamation/reclist.html.
For most applications and CFCs, including those using R-12 and R-502, there are several less expensive retrofit blends available from Honeywell and other manufacturers.
Because R-22 is now a controlled substance, contractors and wholesalers should also be knowledgeable about their source for virgin-manufactured R-22 to be sure that it was legally made or imported. If a contractor suspects that a company is violating the U.S. Clean Air Act by illegally importing or venting R-22 or other ozone-depleting refrigerants, they can contact the EPA's Ozone Protection Hotline at 800-296-1996.
In regard to obtaining legal supplies, we recommend that the contractor go through an established wholesaler/distributor. Buying name brands through established companies ensures a basic purity standard and product warranty to fall back on if there is a problem.
National Refrigerants still has a full line of CFCs, available to the contractors through United Refrigeration. Refrigerant management practices, our certified reclaim programs, and consolidation of leftover virgin production from 1995 have all contributed to an inventory that has, so far, been able to meet our customers' demands.
If a contractor suspects a source of CFCs is illegal, don't take a chance buying it. If they don't want to report a suspicious source to the EPA, they can at least report it to their wholesaler.
There are a number of legitimate HVACR supply distributors that one can legally purchase CFCs from. And common sense would say that legitimate distributors do not sell refrigerant directly out of the back of a rented moving van in a dark alley. The options are very cut and dry. Turn in a CFC smuggler, get a cash re-ward. Get caught smuggling - or be implicated in a CFC smuggling scheme - and go to jail.
The best place for information about obtaining legal supplies of CFCs or ensuring that product you may have is legal is the EPA Web site: www.epa.gov/ozone.
Question 2The supply of HCFCs is an often-visited topic, but it warrants some additional comments. How would you describe the availability of HCFC-22? (Possible answers might include more than adequate, adequate, possibly subject to periodic shortages, or tight.) This is being asked because while most technicians seem to be able to obtain the R-22 they need, they keep hearing rumors of possible shortages due to such issues as HCFC Allocation Final Rule for Class II or situations that cause short-term production plant shutdowns.
Supplies of HCFC-22 are adequate going into 2004. The Allocation Rule limits the number of companies and the quantity of each HCFC. The total amount of allocated R-22 has become fixed. However, this supply will likely meet the demand over the next few years.
The main difference between an allocated market and a free market is that there will be a greater impact when one of the larger suppliers has a production problem. (Smaller companies may not have the pounds available to step in.) Allocation becomes important in the long term when the size of the market gets small enough for one or two companies to control the whole thing. Allocation will protect the customer by keeping more suppliers in the game.
It is impossible to predict temporary plant shutdowns, and they certainly disrupt the market in the short term. However, the supply situation over the next 10 years should be stable in terms of overall U.S. production capacity and permitted imports. In addition, as we saw 10 years ago with CFCs, an increase in the price of R-22 will promote more reclamation, which will bring a substantial amount of R-22 "back from the dead."
Currently the supply of R-22 is adequate and is expected to stay that way until 2015. In 2015, the Montreal Protocol will force a substantial reduction in the overall HCFC supply, which includes R-22. Under the Montreal Protocol, the United States will be required to reduce the HCFC consumption to just 10 percent of the established ozone depletion potential cap.
Using some simplistic calculations, that means the United States will only be able to consume about 60 million pounds of virgin R-22 beginning in 2015. Right now, the total R-22 consumption in the United States is believed to be in excess of 200 million pounds. U.S. OEMs will no longer be allowed to produce R-22 units be-ginning in 2010, but currently even that does not look like it will be enough to keep the market from being constrained.
With the anticipated DOE regulations in 2006, which appear to be raising the minimum SEER rating on residential equipment from 10 to 12 or 13, the average system charge size will increase - using more refrigerant in the future. Also, the transition from R-22 to R-410A has been slower than we have anticipated, keeping R-22 demand high. These items, along with the continued strong demand for unitary equipment could actually cause R-22 demand in the service sector to increase by 2015 as compared to today.
Increased efforts in recovery and recycling will play a large role in helping the United States meet these possible future shortages, so we encourage all contractors and wholesalers to participate in the many programs that exist today.
In summary, unless the market begins to move rapidly away from current HCFCs (R-22) towards proven HFC alternatives (R-410A) and improve its recovery efforts, there could be significant shortages on R-22 in the future.
There is currently global overcapacity of R-22, and more than adequate supply. Even with the EPA's HCFC allocation rule in place, DuPont does not anticipate supply issues for R-22 in the United States short term. Having said that, it is important for contractors to think ahead about their business and make sure they understand what will be happening in the marketplace in the next several years, so that they have the refrigerant products they need to service customers.
Longer term, global supply issues could emerge from continued implementation of the Montreal Protocol. The industry needs to be mindful of the timelines associated with the protocol and plan accordingly, as well as focus on responsible use minimizing leaks and emissions.
In January 2003, the EPA implemented an HCFC allocation plan that essentially rationed the right to make or import R-22 and R-142b. (R-142b is used as a component in several retrofit blends.) This negatively impacted several companies that had been importing R-22 refrigerant, and set firm volume caps on the supply of these chemicals.
The short-term supply of refrigerants is subject to many factors, including raw material supplies, production issues, and seasonality. Refrigerant is one of the most weather-dependent products in our industry, and so having ample supplies during the peak spring and summer months is a key challenge for companies in our industry.
There have certainly been examples where the weather and other demand issues have caught manufacturers of refrigerants (and other products) by surprise. Honeywell is committed to being able to meet the needs of our customers.
The question of longer-term supply and demand will depend on the marketplace and the products that are sold and serviced. In 2006, the minimum SEER for new residential air conditioners and heat pumps will be raised by 20 percent, and these systems will require larger refrigerant charges and more refrigerant for both installation and servicing. This factor, combined with normal economic growth, would indicate that the demand for R-22 could continue to grow in the United States at least through 2006 or 2007.
The way the regulations are currently written, it would be illegal to make or import R-22 refrigerant after 2009 because the allocations that were put in place in 2003 expire after that date. This is not a cause for alarm, however, as the EPA is expected to pass additional regulations some time after the next few years to allow for the production and importation of R-22 after 2009 to service equipment.
It does leave many questions open though about what the regulations will look like and how R-22, R-123, and other HCFC refrigerants will be affected. What the actual supply for these products will be and who will be allowed to supply are unanswered questions.
Due to a variety of factors that can affect R-22 supplies and pricing, we can't say exactly what is going to happen and when. It is however true that today, R-22 is still relatively inexpensive and there is more than an adequate supply.
As far as the Final Ruling is concerned, most believe this is nothing more than a formality. What will change is where the R-22 is going to be produced. More companies and suppliers are relying on offshore R-22 production than ever before. And already you see signs that several domestic companies are gearing up for a boom in the reclaimed R-22 business.
The supply of HCFCs, and more specifically R-22, has been affected the past few months due to several factors. The HCFC allocation which has been in effect for this year will continue to result in tighter supplies as the cutback restricted imports to levels lower than what was being imported in the final few years. Additionally, certain industry factors, such as plant shutdowns in anticipation of lower demand in the next few years, will no doubt have an effect on supply and pricing for R-22.
Material is in fact available, but may be subject to periods of tightness in the current year. Technicians who were relying on enormous imports from China and India may find that these have been severely restricted. As was the case for the CFC cutbacks and phaseouts, reliable suppliers will have product for their loyal customers for many years to come.
Question 3Let's say a system designed for R-22 is running well and could do so for many years to come. At what point down the road would questions about supplies of R-22 cause a technician to look to change out the system to a unit that uses an HFC?
Technicians need to be looking and planning ahead. Certainly 2009 is an absolutely pivotal year, since R-22 cannot be produced for use in new equipment beginning in 2010. Then 2020 will bring the end of R-22 manufacturing for use as a service refrigerant.
Most people expect their refrigerators and air conditioners to last longer than 15 years, so it is not too early to be planning for the R-22 phaseout. We believe technicians should be talking to and giving their customers the option to move to equipment with alternatives such as R-410A for air conditioning and R-404A or R-507 for refrigeration.
We believe technicians and homeowners will make these types of decisions based strictly on dollars and cents. Some of the factors affecting this decision should include SEER rating of a current unit versus a new one (and asking questions like, "How much is it costing the homeowner to operate versus a new, high-efficiency unit?") and how much the homeowner spends in maintenance each year (and asking, "Is it leaking or not?"). For a properly maintained, high-efficiency system, there may be little incentive to replace, even if the price of R-22 rises dramatically from supply constraints.
The real question here is not about changing out an existing R-22 system, but more about helping to move the market away from R-22 in favor of longer-term options, like R-410A, more quickly. If the market begins to aggressively move toward R-410A and recovery efforts continue to improve, there should be enough R-22 supply to sustain an existing well-maintained R-22 for its anticipated life.
A technician should consider replacing the equipment with a new HFC unit when the economics make it clear to do so. If the technician can still service a perfectly good R-22 unit cheaper than replacing the unit with HFC equipment, then the choice is clear. More than likely, however, there is something else wrong with the unit being serviced and it will be obvious whether it should be replaced or just recharged.
We also expect that there will be a handful of retrofit blends for R-22, just as there are many choices for R-12 retrofitting today. Technicians will have several options available that include servicing with R-22, replacing the equipment, or retrofitting with a blend. Economics and personal experience will drive the decision for the type of equipment concerned.
The real factor affecting the timing for a change-out will be the frequency of service or charge needed for the system, and the price of R-22 at that time.
When regulations started for CFCs such a R-12, the price was approximately the same as the price that R-22 is currently and went to a high of about $25 to $30 per pound several years ago. Even at that price, some users still preferred to keep systems running on R-12. There are many systems that still might not warrant a change to an HCFC system if the only factor were the cost of R-22 (assuming the system was running well).
It is never too early to begin educating yourself on R-22 replacement options. There are a number of zero ODP options available and, without a doubt, several more to come in the near future. The more a technician knows about the selection and use process, and the refrigerant options available for systems, the better the technician can react to a market charge.
And in light of the recent crackdowns by the EPA, large HCFC users should be concentrating on keeping their systems tight and usage records up to date. Or, reduce the risk altogether by moving over to HFCs. And depending on the HFC and application, the equipment owner could also benefit from a reduction in energy use.
For commercial refrigeration systems holding more than 50 pounds of R-22, the record-keeping regulations and potential EPA fines for excessive leakage have motivated many companies to convert to HFC refrigerants already. For example, the bakery industry converted many systems to HFC alternatives after intense scrutiny, several multimillion-dollar fines, and a resulting agreement with the EPA that encouraged bakeries to discontinue use of ozone-depleting refrigerants.
Further, in some states or cities there are tax advantages under "green building" programs provided to property owners who install or convert to non-ozone depleting refrigerants for air conditioning systems.
The most obvious date for market-wide HCFC supply issues will occur when the EPA implements regulations to reduce the consumption of HCFCs to meet the Jan. 2, 2015, date set out in the Clean Air Act. By this date, U.S. consumption of HCFCs must be reduced to less than 10 percent of the original HCFC baseline that the United States agreed to in the Montreal Protocol.
The maximum possible supply of HCFCs after 2014 will be far less than is currently used today, and there is a real possibility that the available supply of HCFCs will not be sufficient to meet servicing needs after 2014. Because this is an HCFC issue and not just a R-22 issue, a supply-demand imbalance would impact R-22, R-123, and all other HCFCs.
Although this date seems far off to contractors, many lines of equipment sold after 2004 will still be under warranty when this regulation is implemented by the EPA. Certainly, any piece of equipment installed today is expected to still be running when this phase-down event happens.
Technicians and contractors should present both HCFC and HFC options to consumers and facility managers, explain the key elements of the HCFC phase-out, and let their customer make the decision.
Question 4This question regarding HFCs assumes that a contractor provides a full range of HVACR services, including commercial and residential air conditioning, as well as commercial refrigeration. What HFC refrigerants should that contractor be prepared to have access to?
A contractor working on a full range of HVACR commercial and residential air conditioning and refrigeration services must be prepared to have access to R-134a, R-410A, R-404A, and R-507, as well as the full range of HCFC alternatives and blends currently in so many commercial and residential units, such as R-401A, R-402A, R-402B, R-408A, and R-409A.
The standard industry refrigerants of the future will probably be R-134a, R-404, R-507, and R-410A, as well as a favorite retrofit blend of choice. At this point in time, these are the only products being used in factory charges by major OEMs.
There are some retrofit products on the market today (R-407C, R-417A), and there will certainly be more on the way. If equipment companies latch onto one of the new blends as a first-charge product, that will become a standard as well.
R-134a, R-410A, R-417 (NU-22â„¢), R-404A, R-507, R-407C, One Shotâ„¢, and Centri-Coolâ„¢.
In the near-term, there are five basic refrigerants being used globally for air conditioning and refrigeration: R-134a, R-410A, R-407C, R-404A, and R-507.
During the phaseout of R-22, technicians will likely be presented with a variety of refrigerant products as solutions to retrofit existing systems. Just as we saw during the phaseout of R-12 and R-502, some of these products will have merit and some may be marketed using untested and even fraudulent claims.
Technicians should follow some basic guidelines when thinking about using these blends. First, technicians should make sure that the refrigerant is SNAP-approved by the EPA for the application they are working in. Using non-SNAP-approved refrigerants to replace ozone-depleting refrigerants is illegal, and technicians should be familiar with the SNAP information found on the EPA Web site (www.epa.gov/ozone/snap/refrigerants/index.html).
Second, technicians should talk with equipment manufacturers to make sure that the OEM has approved the use of the refrigerant in a given type of system. Manufacturers perform extensive testing of refrigerants and lubricants in their systems to verify that their use is safe and to determine the impact on system performance. Use of unapproved refrigerant can void warranties for new equipment or service parts including replacement compressors, valves, and other components.
Last, technicians should be mindful of claims being made by refrigerant manufacturers or sales agents. Because most HVACR systems are designed to make optimal use of the properties of R-22 refrigerant, the use of any replacement product will have tradeoffs in capacity, efficiency, equipment change outs, lubricant changes, and safety. Chances are, if something sounds too good to be true, it probably is.
There may be other refrigerants used in new equipment from manufacturers. For example, R-245fa is currently being considered for use as a low-pressure refrigerant for use in new centrifugal chillers as R-123 is phased out. Technicians should continue to educate themselves through trade associations, manufacturer events, and the industry trade press.
A contractor who provides a full range of commercial and residential HVACR services should have ready access to the following HFC refrigerants: R-134a, R-410A, R-407C, R-404A, and R-507. These will enable a contractor to generally service both stationary and mobile applications in the air conditioning and refrigeration sectors.
The long-term OEM-approved HFC refrigerants are already well established. Many major unitary equipment manufacturers have already developed and are selling residential and commercial units using R-410A in place of R-22.
R-404A and R-507 have taken over low and medium temperature refrigeration applications. There is still some talk about using R-410A in certain refrigeration applications, but right now most refrigeration applications, including supermarkets, have chosen R-404A and R-507.
Question 5Approximately when do you think HFC-410A will surpass HCFC-22 as the refrigerant of choice in air conditioning applications?
In Japan, Europe, and other parts of the world, this has already happened. The key reason that R-410A has not been more quickly adopted in the United States has been a combination of resistance to change by contractors and the cost differential between R-22 and R-410A systems when marketed to consumers. As these barriers come down, R-410A promotion by contractors will grow and demand by consumers and building owners will accelerate.
Because R-410A allows for very cost-efficient designs of high-efficiency equipment, the 2006 SEER increase is expected to have an accelerating effect on the use of R-410A by equipment manufacturers. Sales of R-410A systems may exceed that of R-22 units sometime between 2006 and 2009, but it is really a moot point. The real question is, "When should contractors be prepared to sell and service R-410A systems?" The answer is now.
The major air conditioning equipment producing regions outside the United States - including Western Europe, Asia Pacific, and Japan - have completed their transition of new air conditioning equipment production from HCFC-22 to HFCs, mainly R-407C and R-410A.
The U.S. transition is still in its infancy, but is definitely accelerating. The air conditioning equipment OEMs are in the best position to project their rate of transition to R-410A, but from what we observe, we expect that the new equipment production using R-410A will surpass R-22 in the 2006-2007 time frame, driven in part by the implementation of new minimum energy efficiency standard.
We would expect that the industry would accept R-410A as its "choice" when more factory production has converted to
R-410A than exists with R-22. When the product selection for the homeowner or other customers includes a full-range of R-410A equipment, and a few R-22 options, that will be the turning point. This may occur some time between 2006 (when the new Department of Energy standard goes into effect for residential equipment) and 2010 (the phase-out date for use of R-22 in new equipment).
If you asked that question a few years ago, we would have told you that by 2005 the number of R-410A units being sold would have surpassed R-22, but each year that goes by, we push that prediction back.
We believe the DOE's [Department of Energy's] new minimum SEER standard, with expected implementation will help drive the conversion rate, but it still may not reach the 50 percent mark until one to two years after that.
Currently the cost of producing an R-410A unit is still higher than the cost of producing a compatible R-22 unit.
As the SEER rating goes up, this differential begins to be offset. But a few large equipment manufacturers have different opinions as to whether the cost of an R-410A unit will ever be comparable to R-22, regardless of the SEER rating. Most OEMs are in agreement on the fact that as more R-410A units are built, the cost of the components that make them up should begin to decrease as a result of greater mass production.
The questions depend on if this comparison is largely based on installation of new units or whether this is a technical question and whether technicians would rather work with R-410A or R-22.
The jury will be out for several years to come on this one. It would be interesting to know what contractors and technicians think about this question.
Question 6Recent international conferences paid much attention to CO2 as a refrigerant, but seemed in general to indicate that it is not necessarily a refrigerant being groomed to replace HFCs. Yet, in the past six months, it appears equipment manufacturers are stepping up their research in CO2 as an HVACR refrigerant. Why the fuss over CO2?
The pros of CO2 include that it is cheap to produce, has zero ODP, a GWP of 1 - which is a negligible "direct" effect - nontoxic, nonflammable, chemically inactive, and five to eight times more refrigerating capacity compared to R-22.
The cons include a very high discharge pressure, very low critical temperature, lower energy efficiency, and higher "indirect" effect of global warming.
If there is a place for CO2 in the United States, it will probably be very limited to industrial/commercial, and cool-weather regions.
In Europe there is a strong environmental lobby that is promoting the use of certain refrigerants to reduce the global warming impact of HVACR systems.
One reason that CO2 is not being discussed as a near-term replacement for HFCs in most applications is because of the excellent performance of fluorocarbon molecules on an efficiency basis.
A 1999 study conducted by the consultant A.D. Little looked at the global warming impact of a theoretical 12-SEER residential air conditioner using 2005 technology. This study examined the global warming impact of both the refrigerant due to emissions from leakage and end-of-life, and also the global warming impact that resulted from generating the power used to run the unit over its lifetime.
This type of analysis is known as Life Cycle Climate Performance (LCCP). The report found that the refrigerant contributed less than seven percent of the overall global warming effect of the system and the real culprit was the energy efficiency of the system. If a regulator or government wanted to raise the efficiency level by 20 percent, which would reduce the global warming impact of the system by about 14 percent.
This is a very technical explanation, but the bottom line is that manufacturers and regulators have to look at the total impact of a system, and not just the environmental impact of the refrigerant. It seems strange, but in many European countries where they have discussed reducing HFC use because of global warming impact, residential air conditioners have no energy efficiency requirements and weren't even labeled with an energy-efficiency until the past year.
These countries are just starting to understand that the refrigerant is only part of the overall system, and that moving to something like CO2 at a significant cost to consumers and industry may not be the best alternative for the environment.
There are many hurdles that would have to be overcome for CO2 to be used in refrigeration systems, not the least of these being the safety issue associated with systems operating a several thousand psi. Considering the resistance that industry has seen to the slightly higher pressures of R-410A, adoption of 2,500 psi CO2 for typical HVAC applications would seem an awfully difficult mountain to climb.
The biggest attraction of CO2 is its low direct global warming potential index (GWP = 1). Regulators (especially in Europe) are pushing favorable CO2 legislation based on direct global warming alone with little consideration given to cost or system performance. CO2 was once used as a refrigerant, but set aside in favor of better alternatives such as fluorocarbons. It was resurrected after environmental concerns pointed out its low direct GWP.
Because of the operating conditions of CO2 and its overall performance, CO2 systems typically have a higher indirect global warming potential when compared to HFC units. The total combined warming index (direct + indirect) is only marginally better for CO2 than for HFC units, and only at low condensing temperatures (about 90 degrees F and lower). Beyond that temperature, the opposite is true.
CO2 operates at a much higher pressure than traditional refrigerant units (about 10 times higher operating pressure) and the refrigerant requires more components (there is a need for an additional heat exchanger and an oil separator). It is estimated that CO2 systems will increase cost of the system by about 20 percent (with estimates based on auto A/C).
It is perceived that there would be less impact on global warming if CO2 was used instead of HFCs. There is always a great push from the environmental groups on alternative products that will reduce environmental impact.
Although CO2 is a good refrigerant at very low temperatures, the physical properties of CO2 make it an expensive choice at warmer temperatures. The additional cost of producing a viable CO2 system, if spent on an HFC system, will often produce an HFC system with a similar total impact on global warming (considering energy use) to CO2.
It is not very likely that we will see widespread use of CO2 in industries where economics is more of a driving force than perceived environmental benefit.
From an environmental standpoint, CO2 is perceived as very attractive. However, equipment design and operating performance clearly have been identified as challenges that need to be addressed to make CO2 systems commercially viable.
There are a number of criteria that DuPont believes should be applied to every application in determining the best refrigerant. These include the following: safety, including toxicity and flammability; environmental properties, including ozone depletion potential, global warming potential, and potential formation of atmospheric degradation products; performance, including energy efficiency, cooling capacity, and compatibility with system components; cost; and global availability.
After evaluating nearly 20 refrigeration technologies, and dozens of specific refrigerant fluids, DuPont continues to believe that HFCs provide the best balance of safety, energy efficiency, economics performance, and total environmental impact among the refrigerants available today.
Publication date: 02/02/2004