Friday, November 30, 2012

Swedish customs find suspected fake R134a product stickers

Source: -
Published on 27 - November - 2012

SWEDEN: Customs officers are continuing to identify what appears to be growing incidences of false stickers being used by criminals to disguise illegal exports of waste or secondhand CFC refrigeration equipment.

Following last week's news of cases of interceptions of shipments of illegal waste or secondhand fridges in Germany and the Netherlands, customs officers in Sweden have now reported finding a batch of suspected false R134a stickers.

In the German and Dutch cases, waste or secondhand refrigerators carried stickers suggesting that the compressors contained R600a (isobutane). On removing the stickers, customs officers found they actually contained the now banned CFC R12.

In this latest case Swedish customs found a batch of R134a refrigerator/compressor product stickers when checking a person that was earlier fined for smuggling waste CFC equipment. While the stickers showed different company names, all had the same model and production numbers. The person carrying the stickers person did not work for any of the companies involved.

European regulations prohibit the export outide the EU of products and equipment containing CFCs or whose continuing function relies on supply of CFCs. Similar regulations apply in many other countries.

Tests on Chinese R134a finds 25% "substandard"

Published on 26 - November - 2012
Source: -

CHINA: Inferior and counterfeit refrigerant is still rife in China. A swoop on auto parts suppliers by officials in Guangzhou City found a quarter of all refrigerants did not meet the purity standard expected of R134a.

Of sixty automotive refrigerant samples taken from 51 dealerships, 15 were judged to be substandard. The City's Industrial and Commercial Bureau pinpointed R134a being mixed with other refrigerants or other substances posing as R134a. The impurities are not specified but, based on recent history, R12 is one of the major suspects.

Apart from being inefficient, the Bureau warns that substandard refrigerant may also cause damage to the automobile air conditioning system. It also reminds consumers to pay particular attention to the packaging specifications and warned that with R134a priced at over 30 yuan (£3) anything cheaper was likely to be substandard. It also pointed out that in most cases the quality of products can be distinguished by weight - the counterfeiters also providing short weights on their products.

Wednesday, November 21, 2012

Winding Down a Complicated Year in Refrigerants

November 12, 2012 Air Conditioning, Heating & Refrigeration NEWS


It has been an interesting — and complicated — year when it comes to refrigerants.

The year began with cutbacks in HCFC production. We had expected there to be about 90 million pounds of virgin R-22 in 2012, down a bit from 2011. But the EPA proposed at the most 80 million pounds and at the least 55 million. This was to jump-start the move away from virgin R-22 to reused R-22 via the reclamation route or the move to alternative refrigerants.

As of the writing of this column, the EPA has yet to make its proposal final; but most everybody in the industry figures it is going to be at that 55-million-pound level and, in fact, refrigerant manufacturers have been producing to be at that level since early in 2012. The fact of the matter is, even if the EPA comes up with a higher allocation than 55 million pounds of virgin R-22, I don’t see producers ramping up at this late date and bringing a lot of new R-22 to the market at the last minute.

So let’s take a look at the two options of working around use of new R-22 but still keeping all those systems designed for R-22 still running.


The trend seems to be up for reclamation. And, frankly, it was so low for so long that there wasn’t anywhere to go but up. But we won’t have good solid numbers for 2012 compared with previous years in terms of pounds reclaimed until after the first of the year. (Looking ahead, the April 8, 2013, issue of The NEWS will be devoted to a large extent to the topic of recovery, recycling and reclamation.)

Meanwhile, along the way, a number of reclaimers have been supplying The NEWS with stories on the reclamation sector both in terms of how the chemical reclaim process works and how a contractor can get refrigerant he or she recovers into the reclamation channel.


Then there is the most interesting dynamic involving HFCs being used in retrofitting systems originally designed for use with R-22. I’m currently looking into this, and will cover the most popular HFCs for the various R-22 applications in the Dec. 3 issue of The NEWS.

Factoring into this process is the increasing use of low global warming potential (GWP) HFCs as part of those R-22 retrofits. This is part of an even grander perspective; it now seems many in the industry are touting low-GWP HFCs as long-term alternatives to HCFCs.

At this point, I should say there are other long-term alternatives for HVACR systems than either HCFCs or HFCs. They include CO2, HCs, ammonia, HFOs and some new developmental refrigerants being worked on. Nonetheless, HFCs are staying in the ballgame.

My first awareness of low-GWP HFCs as retrofits for R-22 came to my attention when I was grocery shopping in late September and discovered the supermarket was doing a major build-out of floor space because of increased shopper traffic and demands for newer health-related products.

As long as some mechanicals had to be moved about and some new equipment added, the store decision makers decided to change out the R-22 with a low-GWP HFC. One of the interesting aspects of the retrofit was that it was being done in the context of a lot of other construction work, meaning the refrigerant change-out was only a part of the total costs.

I will continue to cover these refrigerant topics, but for now, contractors need be aware of HFC alternatives for the rapidly dwindling supplies of R-22. And if customers aren’t ready to retrofit only for the sake of retrofit, maybe that aspect can be worked into projects of a bit larger scale.

Publication date: 11/12/2012



Tuesday, November 20, 2012

California sells out of first pollution permits

2012-11-19T17:01:35Z2012-11-19T19:16:28ZCalifornia sells out of first pollution permitsThe Associated PressThe Associated Press

13 hours ago

California sold out of the first pollution permits issued as part of a landmark offensive against greenhouse gases at an inaugural auction that regulators said Monday went smoothly.

The effort to curtail carbon emissions involved the sale of 23.1 million permits _ each allowing for the release of one ton of carbon _ for $10.09 apiece, the California Air Resources Board said.

The permit sales last week opened the largest carbon marketplace in the nation and the second-biggest in the world after the European Union. The California air board will hold four such auctions a year.

"By putting a price on carbon, we know we are beginning the process of breaking our dependence on fossil fuels," Mary Nichols, board chairman, said during a conference call with reporters.

The board would not divulge specific figures on how many permits were bought by individual polluters covered under newly instituted caps on carbon emissions. The board does not comment on bidding activity to protect each polluter's strategy regarding use of the carbon market, Nichols said.

However, a sampling of the more than 300 companies that are covered include utilities such as Pacific Gas & Electric Co., petroleum refiners such as Phillips 66 Co. and even food processing companies such as Saputo Cheese USA Inc.

Blair Jones, a spokesman for Pacific Gas & Electric, said the company is "satisfied with the process based on what we've observed." He said he couldn't comment on whether PG&E participated in the auction due to restrictions in the cap and trade regulations.

The board said participation in the auction was robust, with three times more bids submitted than allowances available for sale.

Robert Day, a partner at Boston-based clean tech investment firm Black Coral Capital, said the high number of bids showed that California's carbon market is legitimate.

"As an investor, I take a lot of comfort that this was for real, was done right and will continue into the future," Day said

The permits are part of California's so-called "cap-and-trade" program _ a central piece of the state's 2006 global warming regulations seeking to dramatically reduce emissions of heat-trapping gases.

Businesses are required to either cut emissions to cap levels annually, or buy pollution permits called "allowances" from other companies for each extra ton of emissions discharged annually.

The cap and number of allowances will decline over time in an effort to reduce greenhouse gas emissions year-by-year.

The final price for 2013 allowances was just nine cents above the $10 minimum price set by regulators.

"The fact that the prices are clearing a little above the reserve is a good sign that people's fears about out of control costs for cleanup are not justified by the way the market actually worked," Nichols said.

About 97 percent of the allowances were bought by companies regulated under the program, and another 3 percent were bought by financial traders for later sale.

Nearly 40 million permits for 2015 _ a year when cap-and-trade widens to include more entities _ were made available in the first auction. About 5.5 million of those allowances were auctioned for $10 each.

Petroleum refiners, manufacturing companies and other industries have been outspoken opponents of the program, calling it an illegal tax that will hurt California's economic recovery.

The California Chamber of Commerce has filed a lawsuit seeking to invalidate the program, arguing the board does not have the legal authority to collect money for the state.

"Instead of hiring workers, expanding production, or investing in new carbon-reducing equipment, these auction dollars will be distributed by government for other purposes," said Shelly Sullivan of the AB32 Implementation Group, a business coalition that supports greenhouse gas reductions but opposes the auctioning of allowances.

Some of the money collected by the state between now and 2020 is earmarked for residential utility ratepayers and small businesses to help offset an expected rise in their bills due to cap and trade. Other portions of the funds will go to energy efficiency and other projects in low-income neighborhoods.



California carbon market launches, permits priced below expectations

SAN FRANCISCO | Mon Nov 19, 2012 4:56pm EST

SAN FRANCISCO (Reuters) - California's largest greenhouse gas emitting businesses paid $10.09 per metric tonne (1.1 ton) for the right to release carbon, raising almost $300 million for the cash-strapped state and its energy companies in its first-ever carbon permit auction,

The permit price was below market expectations despite strong demand from utility companies, manufacturers and oil refineries participating in the auction, market sources said.

Ahead of the California Air Resources Board announcement on Monday, traders, brokers and analysts had predicted a clearing price in the range of $11.75 to $12.50 a tonne.

"The clearing price was below expectations but total participation was higher than most expected from vintage 2013," said Jeff King, managing director of environmental markets at Scotiabank.

All of the 23.1 million permits offered at the auction to cover 2013 emissions were bought, raising $233 million. The money will be given to the state's utility companies, which must use it to protect ratepayers.

The California carbon auction is a key component of the state's cap-and-trade program, the first of its kind in the country. State officials hope it will serve as a model for other states and the federal government.

The program is part of a broader effort to reduce Californian emissions to 1990 levels by 2020 -- about a 15 percent reduction, compared to business-as-usual forecasts.

The permit sale was held on November 14 and announced Monday. It is a crucial step ahead of the cap-and-trade program's official start on January 1, 2013.

"By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future," Mary Nichols, chairwoman of the board, said in a statement.

"That means new jobs, cleaner water and air -- and a working model for other states, and the nation, to use as we gear up to fight climate change and make our economy more competitive and resilient."


Compliance entities -- companies directly affected by the state's carbon caps -- bought around 97 percent of the allowances. Financial institutions bought the remaining 3 percent, the board said.

The state also auctioned 39.5 million permits that cover 2015 emissions but only sold about 5.6 million allowances.

Demand for those permits was weaker than expected, and those allowances cleared at $10.00/t, the lowest price allowed under the program's rules.

The $55 million raised by the sale of those allowances will be deposited into the state's newly minted Air Pollution Control Fund.

The money from the permit auction must be used to fund clean energy projects and energy efficiency programs, although details on how exactly the money should be spent needs to be hammered out by the state legislature.

Nichols said she wasn't surprised that not all of the 2015 allowances were sold given the large number of permits offered.

On the eve of last week's auction, the state's largest business group, the California Chamber of Commerce, filed a lawsuit challenging the state's right to sell allowances and keep the profits.

Although the state is giving 90 percent of the program's allowances away for free to covered businesses at the outset of the program, the group said all of the permits should be handed out freely, which would negate the need for the state's quarterly permit auctions.

Nichols told reporters on a conference call the lawsuit had "no impact" on the auction.

During its first two-year phase, the cap-and-trade program will cover 350 businesses representing 600 facilities, including power plants, cement-making facilities and oil refineries.

Banks and other financial institutions are also allowed to participate in the auction, although there are limits to the number of permits any one entity can hold.

Trade of CCA futures contracts, which have been traded on the IntercontinentalExchange since August 2011, were quiet in the run-up to the auction results.

Prior to the announcement, CCAs for 2013 emissions were bid at $10.25 with an asking price of $14, a wider than usual spread, with no trades seen, one trader said.

Ahead of the auction results announcement, traders and brokers said they expected the secondary market price for allowances to quickly align with the auction clearing price.

(Reporting By Rory Carroll; Editing by Bob Burgdorfer and David Gregorio)


Bloomberg News

California Carbon Allowances Sold Out at $10.09 in Auction

By Lynn Doan on November 19, 2012

Bottom of Form

Carbon allowances for the start of California’s program to curb greenhouse-gas emissions, the largest U.S. system of the kind, sold out last week at $10.09 a metric ton, lower than the range analysts forecast.

The state Air Resources Board sold all 23.1 million carbon permits offered at a Nov. 14 auction for the first compliance period of the program starting Jan. 1, the agency’s website showed today. The permits, each of which allows the release of one metric ton of carbon, were estimated to clear between $12 and $15 a ton in the first auction, according to Bloomberg New Energy Finance.

Carbon futures fell to $12.15 a ton after the California Chamber of Commerce filed a lawsuit challenging the state’s authority to sell permits. The program covers 85 percent of emissions in an economy valued at $1.74 trillion last year. The state is giving away about 90 percent of permits at the onset and selling the rest in what will be the second-biggest carbon market, after the European Union program.

The auction clearing price “echoes the sentiments expressed by some market participants regarding the uncertainties and the sheer volume of allowances being auctioned in this round,” Samantha Unger Katz, managing director of BGC Environmental Brokerage Services in New York, said by e-mail.

Second Phase

Futures contracts based on carbon permits for 2013 were trading at $11.60 a metric ton on the Atlanta-basedIntercontinentalExchange Inc. (ICE) at 4:26 p.m. New York time, down from $12.05 on Nov. 16, Lenny Hochschild, head of global carbon trading for broker Evolution Markets in White Plains, New York, said. No trades were done this morning before the release of the auction results, he said.

The state sold 5.58 million out of the 39.5 million allowances it put up for auction to be used in the second phase of the program, beginning in 2015. The advance permits cleared at $10 each, the lowest price allowed by the program, known as the “floor” price.

Bloomberg New Energy Finance predicted that some of the advance allowances would go unsold as fuel distributors waited to begin stockpiling credits.

Capping Carbon

Companies bid for more than three times the number of allowances up for sale to be used in the first compliance period, the state air board said.

“That’s around 70 million allowances bid, so that’s pretty healthy,” Anthony D’Agostino, director of emissions markets at RBC Capital Markets, said by telephone. “On the flip side, there were probably a lot of people who said, ‘Let’s stick some bids in at $10,’ so you have to weigh that a little. If there was no price floor, I think it would have been less.”

The California Chamber of Commerce filed a lawsuit Nov. 13 against the auction, calling it “an unconstitutional fee.” The group argued in the suit that the air board lacks authority to sell carbon allowances, saying it’s paramount to an invalid tax costing taxpayers $70 billion.

California plans to cap carbon emissions beginning next year from power generators, oil refineries and other industrial plants. The limit will decline each year to achieve a 15 percent reduction in emissions by 2020. Companies must surrender carbon permits to cover their emissions over three phases of the program. Those that discharge less than their cap can sell their spare allowances.

Auction Results

Mary Nichols, chairman of the air resources board, said the agency was “delighted” by the results of the Nov. 14 auction.

“We’re just pleased that the allowances sold out and that they sold out at a good price,” Nichols said. “That’s a sign that we’ve got a vibrant and successful market here.”

More than 70 companies qualified to bid in Nov. 14 auction, with BP Plc (BP/), Chevron Corp. (CVX), Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA), Tesoro Corp. (TSO) and Valero Energy Corp. (VLO) among the refiners who registered to participate. The qualified power utilities included Pacific Gas & Electric Co., Los Angeles Department of Water & Power, San Diego Gas & Electric Co. and Southern California Edison.

Morgan Stanley (MS), Noble Corp. (NE), Royal Bank of Canada and Vitol Inc. also qualified to bid.

The auction was conducted electronically and overseen by a half-dozen agency staff members in a room without windows. The agency took five days to review the auction for manipulation before certifying results.

To contact the reporter on this story: Lynn Doan in San Francisco at

To contact the editor responsible for this story: Dan Stets at

Monday, November 19, 2012

R-22: Contractors’ Perspectives On The Confusion

Don't miss the online extras at the bottom of this article.
Although the price of R-22 has doubled — some say tripled — in the past year, air conditioning contractors appear to be taking it in stride. “I’m not surprised at the price increase, and I think you’ll see it go up considerably more in the next couple of years,” says Bill Anderson, president, LBA Air Conditioning Heating and Plumbing, Mission, KS. “We saw this with R-12. You’ll see it with R-22. We knew prices were going to go up dramatically as there was less production. We’ve been installing R-410A equipment for quite a few years. It wasn’t a big shock. We’ve known for 20 years this was coming down the road.”
In fact, Anderson likes the new price tag. “To me, I feel like it’s been a benefit,” he says. “It stops the customers who have a leak and are just adding R-22 to their systems. Once you have them properly charged, the units start to leak the next day. Although I’m probably on the other side of the fence from other contractors, I believe the price increase will encourage more customers to do the right thing.”
Brian Holt, president, Mast Heating & Cooling, Zeeland, MI, concurs. “If the ozone layer were being damaged by CFC refrigerants and R-22 is the next in the crosshairs, let’s make it impractical for people to want to use that, so we no longer have to depend on their conscious to protect the environment,” he says. “We can count on their wallet doing the right thing.”

Selling a Service Item

In Holt’s opinion, the ongoing saga with R-22 began years ago. “When the law mandated an alternative refrigerant be put in place, the EPA created a loophole saying that a dry R-22 condensing unit would be a suitable thing to sell to people as a service item,” he says. “That was a detriment to our industry. It shouldn’t have happened, but it did. Not being able to produce R-22 equipment didn’t effectively eliminate the use of the refrigerant. So now elevating the cost will do that. Now there’s something tangible to take to the consumer and say, ‘You shouldn’t use it,’ as if it wasn’t a valid enough reason before to protect the environment.”
He points out that until the cost skyrocketed, the average customer with a failed outdoor unit, if given the choice, would opt to put in an R-22 unit. “What better deterrent to using that refrigerant than to elevate the price until it is no longer a practical alternative,” he says.
Like other contractors, Holt anticipated the price increase and purchased several skids of R-22 in advance. “We treat the sale of R-22 like we would the sale of any product. It carries a markup that covers our overhead and allows us a profit that we can sustain ourselves on. The stuff tripled in cost so the retail value tripled in cost. It’s a pass-through. It’s also a deterrent.”
He adds that he tries to be more flexible on the price for commercial accounts with systems that hold 200 to 300 pounds of refrigerant. “We’ve had to sit down and negotiate our markup on R-22 to be fair and equitable to them,” he says. “It’s like anything else. If you use a larger quantity, usually it comes at a narrower margin. commercially, it’s much harder to make the switch. We have a lot of large split systems at universities that we service. When we go to change the condensing unit, we have to flush the entire system and put in new expansion valves and retrofit it to a current refrigerant. The systems that aren’t being retrofitted, they just have to pay a premium for refrigerant to keep them running.”

Lose the Loophole

When the government mandated the phase out of R-22, Kevin Walsh admits he wasn’t a fan. “I thought it was completely unnecessary,” says the president of Schaafsma Heating & Cooling Co. in Grand Rapids, MI. But now he thinks its past time for the industry to move on.
“I wish that the loophole regarding the shipment of dry-charged units had not ever been found,” he says. “While I didn’t think it was necessary for us to switch to R-410A, once it became evident that they were going to phase out R-22, we told our customers in 2008 and 2009 that as of January 1, 2010, you’re not going to be able to buy any more R-22 air conditioners. We ended up with egg on our face when at the end of 2010, the EPA says, ‘No, the unit is just a part.’ Then the manufacturers started making them again. That loophole made us look like we were lying to customers.”
Walsh feels fortunate that his company didn’t have any customer backlash from the episode, but he knows contractors that did. Now, he can’t help but wonder about the priorities of those contractors who continue to consistently install dry-charged condensing units.
“I think it’s really a shame that in 2011 almost 30 percent of all shipments were dry-charged units. It doesn’t speak well for our industry. Those contractors that are putting in dry-charged units on a regular basis are not doing their customers any favors. In all honesty, if the government was really serious about energy efficiency and phasing out R-22 they would close this loophole.”
“Now don’t get me wrong,” he continues. “We still probably put in one or two R-22 units a year.” He explains that there are occasions when R-22 units are appropriate. But 30 percent is ridiculous.”

Steps to Take

Jerry Denton, CEO, DHC Comfort, Inc., White House, TN, reports that refrigerant that cost consumers about $35 a pound during the summer of 2011 now retails for about $60 a pound when purchased from his midsized company. “I hear of companies that are charging $90 to $100 per pound of refrigerant. I’ve also heard of companies charging $40 to $50 a pound. Those are usually smaller, one-man operations that don’t realize they can’t replace that refrigerant for what they are selling it for.”
Regardless of the reason, Denton supports the reduction in R-22 allocations. “I totally believe in the phasing out of R-22,” he says. “Although we do hear complaints from customers that it’s just a ploy to make people buy new refrigerant. I believe it’s for real, that there is global warming, and that everybody needs to do their part.”
To adjust to the new market realities of R-22, contractors suggest four steps:
1. Keep tabs on your product inventory.
“We’ve locked our refrigerant up,” Denton says. “We buy it by the skid, which is 40 cylinders, and unload it into a locked room. Only I and one other person have a key. We have four service techs that use the most refrigerant. They have to fi ll out a daily form, documenting the refrigerant they’ve used. We will not give them another jug of refrigerant unless they can document where the entire refrigerant has gone.”
2. Recapture the refrigerant. In years past, Denton gave to his local supplier any refrigerant recovered during a day’s process of repairs. Not anymore. “We’ve found there’s a lot of value to that,” he says. “We now have our own recycling tank where we’re reclaiming that refrigerant and selling it. We sold a tank in June for $1,500. That money helped to pay expenses. It does take time, but it’s time well spent.”
3. Keep customers informed. Every other month, Denton sends out a newsletter to almost 5,000 customers. When we first realized what was happening with refrigerant, we definitely got that in the newsletter. A lot of people called from that. We wanted to warn our customers about the price increase and entice them to replace their unit and upgrade to the R-410A refrigerant.”
4. Improve efficiency. “Look at this as an opportunity to upgrade your customers’ situation by converting them to a new system with R-410A or making the leak repair and stopping the problem and help their efficiency,” Anderson says. “Don’t fight the problem by trying to get some sort of sort of working drop-in refrigerant that’s a few dollars cheaper a pound. Maintain the right practices, and do what’s best for the customer.”