The Future of HFCs in Montreal Protocol

My Peter Powell

April 8, 2013

It’s easy to argue that no single development has impacted the HVACR industry as much as the Montreal Protocol. The international treaty, which was signed 25 years ago, ultimately phased out CFC and HCFC production; introduced refrigerant recovery, recycling, and reclamation; and, essentially, enveloped the HVACR industry under the power of the U.S. Environmental Protection Agency (EPA), which now dictates certifications and penalties related to the use and handling of refrigerants.

More than two decades later, the worldwide contract is still strongly impacting many sectors of the HVACR industry, including the decisions of contractors and service technicians. Ongoing discussions are currently underway, examining ways to incorporate HFCs into the protocol in order to phase down their use due to relatively high global warming potential (GWP). And while no changes are expected in the foreseeable future, these continuing conversations, and the potential developments pending, have surely caught the attention of those across the industry.

Good News

But first, the good news: The protocol was designed to protect the ozone layer by phasing out the production of substances found to be responsible for ozone depletion, those having ozone depleting potential (ODP).
And, it appears to be working.

“The Montreal Protocol is widely recognized for being very effective in reducing ozone depleting substances including CFCs and HCFCs,” said Robert Wilkins, vice president of public affairs, Danfoss. “Although we do not expect atmospheric chlorine to return to pre-1980 levels until about 2050, it has peaked and has been trending downward for several years.”

The Emergence of HFCs

With the HVACR industry forced to turn away from CFCs and HCFCs, it has moved on to HFCs, which include no ODP. However, many HFCs carried a high GWP due to their abilities to trap infrared radiations in the atmosphere, which does contribute to the greenhouse effect.

The latest efforts to revise the Montreal Protocol include rating gases based on GWP, as well as ODP.
Rajan Rajendran, vice president of engineering services and sustainability for Emerson Climate Technologies, noted, “The U.S., Canada, and Mexico have proposed an amendment to the Montreal Protocol to address global warming with a phase down of HFCs. This effort has been in place for a few years now. While there are 107 other countries supporting it, there are other, more developing countries like India, China, and Brazil who oppose. One barrier that is often mentioned is that the Montreal Protocol has historically had a very clear mission of addressing ozone depletion, but climate change is outside of its charter.”

Danfoss’ Wilkins added, “The EPA and the Department of State jointly held a stakeholders meeting in Washington on Feb. 5 with American industry leaders and others to discuss possible steps forward. With industry representatives expressing support for a well-planned orderly global HFC phase down on a GWP-weighted basis, it is likely the North American proposal will be resubmitted in 2013 for consideration at this year’s annual meeting.”

But what happens after that is uncertain, although many expect minimal action for a few subsequent years.
Mack McFarland, environmental fellow, DuPont Chemicals & Fluoroproducts, said, “The proposed amendment to the Montreal Protocol has not yet been endorsed by all of the developing countries. Amendments are adopted by consensus. Discussions continue with more and more countries voicing their support each year. I think the industry views the predictable process under the Montreal Protocol as preferable to country-by-country command and control regimes.”

Rajendran agreed. “While there are efforts to make some changes in the protocol, I don’t believe we’ll see any changes in the next few years.”

Europe and the US

European leaders are conversationally discussing HFC regulations based on GWP.

According to the website R-744.com, “The debate did advance, with countries discussing HFC amendment proposals in an informal setting, as well as requesting more information on the availability of environmentally sound alternatives to ozone depleting substances.”

R-744.com noted that this debate has spanned four years, without resolution. In his second inaugural address President Barack Obama said, “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.” He did not specify any specific proposals during this speech.

A Feb. 12 report from the White House, titled, “The President’s Plan for a Strong Middle Class and a Strong America,” revived calls for more reliance on solar and wind energy generation. The only reference to climate change was the statement, “The president has directed his cabinet to identify executive actions from across the administration to help reduce pollution, prepare our cities and nation for the worsening effects of climate change, and accelerate the transition to more sustainable sources of energy.”

But most do not see this as an omen for unilateral action. For one, a divided Congress seems unlikely to act on potentially costly initiatives. And many in the industry see the EPA wanting to work in the framework of a global consensus.

At the same time, Rajendran did suggest, “The HVACR industry in the U.S. should be watching the emerging U.S. state government regulations out of the West and Northeast as well as potential U.S. government actions and regulations on greenhouse gasses.”

DuPont’s McFarland said, “There are a broad range of global activities under way to address greenhouse gas emissions, such as the U.S. CAFE standard for lightweight motor vehicles, renewable fuels, electricity programs in various countries, and cap-and-trade pilots in China. We anticipate that absent of a global agreement such as the Montreal Protocol, the U.S. government will seek ways to reduce HFC emissions under its current authority.”

But, in the context of a global perspective, Wilkins said progress may occur slowly. “Any changes to the Montreal Protocol would take a few years to enact. If India and China could be persuaded to support an HFC phase down, leading to a global consensus, the Montreal Protocol would then undergo negotiations to finalize the amendment and provide specific targets and timetables for phasing down HFCs globally. The amendment would then need to be ratified country by country. In the U.S., that would likely require action by the Senate. Once approved, each country could begin its own process for phasing down HFCs — similar to the phase down of CFCs and HCFCs.”

SIDEBAR: A No-Go for Kyoto

If changes to the Montreal Protocol are slow starters in regards to any additional impact on HVACR contractors, the Kyoto Protocol is a non-starter. Kyoto was to be the document to obligate countries, starting in 2005, to reduce greenhouse gas emissions (GHG). Many countries signed and ratified it. The U.S. signed it, but failed to ratify it and Canada withdrew from it in 2011.

Even then, many ratifiers had problems reducing GHG emissions to promised levels. However, more than 100 nations have pledged support behind the regulation of GHG emissions through the Montreal Protocol, and a growing number of countries are ready to join on, if a draft is ever presented.

Mack McFarland, environmental fellow, DuPont Chemicals & Fluoroproducts, said, “While there are no discussions under the Kyoto Protocol specific to the HVACR industry, there are active discussions under the Montreal Protocol.”

Robert Wilkins, vice president of public affairs, Danfoss, acknowledged that climate change is emerging as an important issue for the Obama administration. “Since the U.S. never ratified the Kyoto Protocol, and nothing has developed regarding refrigerants, there isn’t likely to be any impact on the HVACR industry.”
Rajan Rajendran, vice president of engineering services and sustainability for Emerson Climate Technologies, said climate-change regulations could still surface in the U.S.

“From the Kyoto Protocol point of view, which is focused on climate change, the HVACR industry in the U.S. should be watching the emerging U.S. state government regulations on greenhouse gases.”

Publication date: 4/8/2013

Peter Powell is Refrigeration Editor. E-mail him at peterpowell@achrnews.com.

EPA Finalizes R-22 Allocations for 2012-2014

By Charlie McCrudden | April 4, 2013 | Leave a Comment

On April 3, the U.S. EPA published in the Federal Register the final rule adjusting the allocation of HCFCs (including R-22 refrigerants) for the years 2012-2014 (2013 Final Adjustment Rule).

According to the Final Adjustment Rule, R-22 allowances for 2013 will rise by about 13% relative to 2012, and decrease by 20% in 2014 relative to 2012. The allocations for the years 2015-2019 will be set in a subsequent rulemaking. These allocations became effective on April 3, 2013.
See the chart below (click to enlarge).

Contractors may want to contact their wholesalers or gas distributors to inquire about any changes in pricing or sales policies in light of the 2013 Final Adjustment Rule. Despite the unexpected increase in the allocations for 2013, the market remains volatile and prices for R-22 may not respond to the increased supply.

Background
The U.S. EPA controls the production and use of HCFCs, including the refrigerant R-22, through a cap and trade program. The amount of virgin R-22 that can be produced in a given year is set by annual allocations. The production and use of HCFCs is slowly being phased out in the United States, because these chemicals are known to damage the ozone layer when released into the atmosphere.

In 2011 the EPA was ordered to reopen the 2009 Allocation Rule that set the allocations for the years 2010-2014. The order came from the U.S. Court of Appeals for the District of Columbia Circuit in a lawsuit filed by two gas producers who charged that the EPA had failed to recognize their legally traded allocations.
In August 2011, the EPA proposed to adjust the R-22 allocations in the three remaining years of the 2009 Allocation Rule (2012-2014).

Based on consultation with industry stakeholders, the EPA determined there was an oversupply of virgin R-22 in the marketplace, evident with low demand, increased reuse of R-22, and low wholesale prices. In 2010, R-22 producers only utilized 86% of their allocations. A trade organization representing the manufacturers and importers of R-22 supported these claims, and advocated for a 20% reduction in allocations for 2012-2014.

Since 2012 refrigerant producers and importers have been operating with only temporary, 12 month authority through “No Action Assurance” letters from the EPA. Without a finalized Adjustment Rule, and without the No Action Assurance letters, virgin R-22 could not be legally produced or imported into the United States. The No Action Assurance letter from the EPA advised allocations would be less than the 2009 Allocation Rule.

The 2013 Final Adjustment Rule sets the allocations for the years 2012 (retroactively), 2013, and 2014.
In 2013, the total amount of R-22 allocated to all producers and importers is about 62.8 million pounds, compared with about 55.4 million pounds allocated for 2012. In 2014, the total allocation of R-22 will drop to 51 million pounds.

How to Choose the Right R-22 Retrofit Refrigerant

4/17/13 1:00 pm to 4/17/14 1:00 pm AKDT

Contact: Jacqlyn Ucinski

This webinar will provide a technical overview of the many different R-22 retrofits available today and how to choose the right retrofit solution. Also a brief discussion of R-22 market dynamics will be covered. A summary of what products are offered and for which specific application each one is best suited will be included along with selection criteria. The tradeoffs and compromises that occur when using retrofit refrigerants in a system specifically designed for R-22 will also be addressed. After attending this seminar, you will: Understand the R-22 EPA activity and market response Learn why some refrigerants may be better than others for your retrofit applications Understand why there are no real “drop-in” retrofits but may still have hassle-free options Become familiar with the most important criteria to consider when selecting a new R-22 alternative refrigerant

National Demolition Association Annual Convention

The EPA Cracks Down on Illegal R-22 Importation and Sale

The Alliance for Responsible Atmospheric Policy, an industry coalition, said in November 2012 the United States government successfully concluded 11 criminal and civil cases related to HCFC-22 refrigerant smuggling over the last two years. The alliance said that individuals and companies were found guilty of various crimes related to the illegal importation or sale of over 3.3 million pounds of R-22, fined over $1.5 million, required to forfeit proceeds of almost $2.7 million, and received jail and probation amounting to over 26 years.


“The U.S. government is very serious about tracking down those who illegally import or sell HCFC-22. Anyone devising illegal schemes to import or sell this refrigerant is on notice that the U.S. will arrest and convict you,” said Dave Stirpe, alliance executive director.

Only Buy Legal R-22

Stirpe went on to say that the alliance cautions industry and the public to be certain that their R-22 refrigerant purchases are legal, and to report any offers to buy illegally imported refrigerants to the U.S. Environmental Protection Agency (EPA). R-22 refrigerant may be legally produced domestically and imported into the U.S. provided that EPA-issued quota allowances are expended. Anyone importing HCFCs without legal allowances is in violation of federal law. R-22 is generally used to service and maintain existing commercial air conditioning and refrigeration equipment. Newly produced equipment generally relies on HFCs and other refrigerants.

"Purchasers of the illegal refrigerant are at risk,” Stirpe said. “The government may confiscate any illegally imported refrigerant, even if it has been passed down through the marketplace, and it may prosecute purchasers who knowingly buy illegal material. Consumers should also be wary of the refrigerant since some of the imported material has been found to be of poor quality, or it could be counterfeit.”

He went on to say that purchasers of imported R-22 should verify that their importer is an authorized EPA baseline consumption allowance holder, or was involved in a subsequent legal trade of consumption allowances. An EPA list of baseline consumption allowance holders can be found at www.epa.gov/ozone/title6/allowance.html.

Some other points made by the alliance about importation and purchase of R-22:

• The recipient of a trade can show a letter from EPA acknowledging the approval of the trade.

• Purchasers who question the legitimacy of an HCFC-22 importer should request a copy of the EPA approval letter from the seller.

• Importers of used HCFCs must follow EPA petition process requirements listed at www.epa.gov/ozone/title6/imports/usedclasstwo.html.

• Violations should be reported at www.epa.gov/tips/, and may be done so anonymously.

Beyond Familiar HFCs

DALLAS — While much of the buzz at the AHR Expo was on dwindling supplies of new HCFC-22, reclamation of that refrigerant, and use of alternative HFCs in retrofits, a number of conversations centered on alternatives beyond familiar HFCs. Even with the regulatory landscape unclear, the high global warming potential (GWP) of some HFCs was causing a stir on the show floor.

Low-GWP HFCs

While HFC-410A was firmly encamped as the refrigerant of choice for air conditioning in a large number of applications, its high GWP was turning attention in Dallas to use of HFC-32 as a stand-alone refrigerant. HFC-410A, which was introduced to the industry more than a decade ago as an alternative to R-22 in new equipment, carries a high GWP. R-32 has a much lower GWP (675 vs. 2088). This is a topic that has been in the industry for a number of years, since it first surfaced as a high-profile topic in 2010 at industry conferences hosted by Purdue University.

Danfoss furthered this notion at its AHR Expo booth, where it displayed its SG scroll compressor with the signage: “Get ready for Green Solutions with R-32.”

HFOs on Display

HFO refrigerants are widely recognized as the next generation of refrigerants. The alternative garnered its fair share of attention at the expo as well.

On the show floor, Honeywell was issuing a statement about its HFO refrigerant 1234ze which it markets as Solstice L-41. The manufacturer compared its refrigerant, stating that their refrigerant offers “significant advantages over another (R-410A) alternative, R-32, which has a higher GWP and limitations related to high-discharge temperatures, which can affect performance and durability in hot climates, and may also require new lubricants.”

Honeywell boasted that Solstice L-41 offers a 75 percent reduction in GWP compared to R-410A and is intended to replace R-410A in residential and light commercial air conditioning and heat pump applications. In addition to its lower GWP, Solstice L-41 offers excellent energy efficiency, is cost effective, and can be used in existing equipment designs with minimal changes.

“Honeywell has been working closely with leading equipment manufacturers to optimize Solstice L-41 to meet the demanding requirements of both stationary air conditioning and heat pump applications across a broad range of operating conditions,” said Tom Morris, director of commercial development for Honeywell Fluorine Products. “Solstice L-41 will allow these manufacturers to offer more environmentally friendly air conditioning and heat pump systems to help address climate change.”

Solstice L-41 is based on Honeywell’s HFO-1234ze technology, which was “first introduced in 2008 and has since been proven and commercialized for chillers, insulating-foam, and aerosol applications. A new HFO-1234ze manufacturing plant is currently under construction to meet the needs of equipment manufacturers.”

Even with its involvement with R-32 in some applications, Danfoss was waving the HFO flag. The company used a press conference to announce its involvement with HFO-1234ze in its Turbocor line and the commercialization of TG310 compressors, which were released as a developmental prototype in early 2012. The company said the compressors “utilize the ultra-low GWP, zero ozone depletion potential (ODP) refrigerant HFO-1234ze.”

Safety First

As the HFO sector evolves it is becoming clear that there are HFOs with A1 (nonflammable) safety ratings and those that have A2L (slightly flammable) safety ratings. A1s generally carry higher GWPs than A2Ls. This means the sector will have to sort itself out. If regulations set especially low GWP maximums, only A2Ls would be allowed to establish a beachhead; which would require UL certification, as well as building code modifications, for the installation of such equipment in certain portions of the country.

One HFO topic that appears to be sorting itself out is in the automotive sector. After automaker Daimler expressed some safety concerns over the use of HFO-1234yf in vehicle air conditioners last fall, General Motors issued a statement at the time of the expo pledging to move ahead with the use of that HFO in its vehicles — saying that in all its testing, the refrigerant proved safe and effective.

HCs and CO₂

A number of manufacturers showed equipment for natural refrigerants such as HCs and especially CO₂ at the expo.

During a Danfoss press briefing, Scott Martin, director of sustainable technologies, Hill Phoenix, spoke about CO₂ developments that his company has been doing in conjunction with Danfoss. He said that his company’s systems that utilize CO₂ technology offer several distinct advantages over traditional DX-refrigeration systems. “These CO₂ sub-critical systems deliver superior refrigeration performance with enhanced sustainability, reduced refrigerant-charge requirements, and greatly reduced refrigerant-leak rates. Simply, they are the most energy-efficient and environmentally friendly refrigeration systems available in the industry today.”

He also noted advances in CO₂ in transcritical-application use of which are growing in North America. That was reinforced on the show floor at the Bitzer booth where a transcritical-CO₂ compressor was displayed.

The editors of the European-based online publication R744.com also walked the floor at AHR and provided a viewpoint for its global readership regarding the future direction of CO₂ use in the United States.

“The pure number of booths displaying CO₂ refrigerant components and systems has not significantly increased from last year’s trade show. However, the showcase of breakthrough innovations, prototypes, and optimized product lines in R-744 (CO₂) compressors, heat pumps, or air conditioners, as well as commercialization announcements expected for the next 12 months are all solid indicators that the U.S. market is getting serious about R-744.”

Climate Change Rejoins Agenda

So just when we thought regulatory actions related to the environment were pretty mute, given not much traction in Washington mainly due to a sluggish economy, along comes, of all people, the president of the United States.


Barack Obama was barely into his second inaugural address when he said, “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.” He did call it climate change instead of global warming, since the former is the more popular catch phrase, especially when temperatures are below average. When temps are above average, the buzz phrase goes back to global warming.

He even had a dig for those few who still doubt what used to be called global warming. “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms.”

It has never been clear to me how much the HVACR industry contributes to “devastating impacts,” and certainly the president’s examples can’t seem to be directly blamed on HVACR.

Next came the plug for alternative energy sources such as wind and solar. “The path toward sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it.”

Here, the idea is that wind and solar will be taking us off the electric grid, which powers nearly all our HVACR needs. It is just that when there is no wind or no sun, the grid has to be relied on — and nobody has really come up with a cost-effective, energy-efficient option.

And speaking of money, the inaugural speech did not go into specific dollars and cents when it comes to addressing climate change and embracing new energy options. It was more like we can do it all. He said, “We cannot cede to other nations the technology that will power new jobs and new industries — we must claim
its promise.”

This is not a political column so I won’t comment on how the president intends for the United States to become a leader in taking on climate change and getting more interest in alternative energy sources and what it will cost. He did make a brief reference to dealing with the cost issue in the context of healthcare and the deficit. “We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.”

The point here is that he is trying to put climate change back on the front-burner/high-priority list during his last term in office. If climate change includes global warming issues, then many HFC refrigerants come back into the political/regulatory arena because of their perceived high GWP.

That issue never goes into the background in Europe. Even now, the European Commission, which does a lot of the regulatory legwork for the European Union, which is made up of 27 countries, is putting pressure on some sort of phase-down of HFC use in Europe, and, in cases where natural refrigerant options can be used, a phaseout of HFCs. There is still a way to go in Europe in terms of anything taking hold and manufacturer organizations over there are continuing to draw attention to the potentially higher total energy costs of using alternative refrigerants.

But should that effort in Europe gain some momentum, it is sure to cross over the Atlantic just as the phaseout of CFCs and then HCFCs started in Europe and then came to North America. The question then becomes, if that momentum does reach the U.S. within the next four years, how much will President Obama’s renewed attention on climate change in his speech move things forward?