HFC Alternatives Should Increase Prices But Not By Much

Now that nearly 200 nations have reached a legally binding agreement to limit the use of hydrofluorocarbons (HFCs) — a key contributor to greenhouse gases in the atmosphere — starting in 2019, the race is on for companies to provide alternatives. They are likely to increase the cost of air conditioners and refrigerators, but apparently not by much.

The pact was signed in Kigali, Rwanda, early Saturday morning following an intense, all-night negotiation that was preceded by seven years of preliminary discussions. A celebratory Champagne breakfast followed, Coral Davenport reports for the New York Times.

“It is likely the single most important step we could take at this moment to limit the warming of our planet and limit the warming for generations to come,” U.S. Secretary of State John Kerry told his fellow negotiators. “It is the biggest thing we can do in one giant swoop.”

The issue has gathered momentum as the standard of living improves in developing nations in countries with regions where heat can be oppressive. 

“Worldwide use of HFCs has soared in the past decade as rapidly growing countries like China and India have widely adopted air conditioning in homes, offices and cars,” write Chris Johnston, Oliver Milman and John Vidal for The Guardian. “But HFC gases are thousands of times more destructive to the climate than carbon dioxide, and scientists say their growing use threatens to undermine the Paris accord by 195 countries, an agreement last year to reduce climate emissions.”

Honeywell and Chemours are among the companies that have been “ramping up efforts to produce alternative coolants,” Reuters’ Malathi Nayak reports.

“The agreement is a boon for chemical and equipment makers as it gives them ‘clarity and certainty’ and will help speed up development and testing of HFC alternatives, which are already underway,” Kevin Fay, executive director of the Alliance for Responsible Atmospheric Policy, tells Nayak.

Morris Plains, N.J.-based Honeywell “began developing HFC alternatives as far back as 2000 and has invested $500 million to date, a company spokesman said. The company has committed $900 million in total,” Nayak reports, including substitutes used for foam insulation, aerosols, commercial refrigerants, and chiller applications. 

Although alternative coolants exist, “many are unapproved for use in the U.S. Some are flammable. Manufacturers will have to convince regulators the new compounds are safe before retooling production,” write Andrew Tangel and Ted Mann for the Wall Street Journal.

“It’s not going to be easy, but we’re committed to doing it,” Stephen Yurek, chief executive of the Air-Conditioning, Heating, and Refrigeration Institute, tells Tangel and Mann. The ARAP’s Fay tells them that “retooling a chemical plant for a new coolant could cost more than $200 million. But consumer prices for appliances might eventually rise only as much as about 2%, as has been the case in previous coolant phaseouts.” 

Chemours, which is based in Wilmington, Del., last week announced “a new line of lower global warming potential (GWP) refrigerants, the Opteon XL Series.” They “offer similar properties, and in many cases increased performance, compared to the current hydrofluorocarbons (HFCs) they are designed to replace,” but are classified as “mildly flammable,” according to a news release.

The agreement on HFCs will have an impact throughout the supply chain, of course, including on the ships that carry all of those refrigerators and air conditioners to the U.S. from across the Pacific.

“Robert Chesters, managing director, Oceanic Technical Solutions, says the cost of refrigerant and regulatory compliance in the next five years will become as commercially important to vessel operations as regulations governing sulphur emissions are today,” according toArabian Supply Chain

Apparently, ship owners have a ways to go in reducing refrigerant consumption “by installing fixed leak detection systems, carrying out routine leak testing on-board and implementing full refrigerant reduction programs.

At the same time, the agreement should have an even greater impact on global warming although there are three distinct pathways to compliance, the BBC’s Matt McGrath reports.

“Richer economies like the European Union, the U.S. and others will start to limit their use of HFCs within a few years and make a cut of at least 10% from 2019. Some developing countries like China, nations in Latin America and island states will freeze their use of HFCs from 2024. Other developing countries, specifically India, Pakistan, Iran, Iraq and the Gulf states will not freeze their use until 2028.”

McGrath points out, however, “some observers questioned the concessions made to India and China, suggesting they had weakened the overall impact” of the program.

“They needed an agreement here as it's seen as an Obama legacy, so the U.S. delegation has been pretty aggressive in making China and India get to an agreement,” says Greenpeace International’s Paula Tejon Carbajal.

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