The F-Gas Regulations Iceberg

Daniel Clark warns that the refrigeration industry is in danger of vastly underestimating the F-Gas regulations.

  • Share it.

The titanic consumption of HFC refrigerants is steaming head long into the F-Gas Regulations Iceberg – and for some at least, it appears to be dark.

F-Gas Regulations Iceberg

F-Gas Regulations HFC Phase Down Iceberg

Now this may seem a very dramatic opening, but it is apt on a few levels.  The revisions to the European F-Gas Regulations are extremely aggressive and will drive a significant and effective reduction in the supply of F-Gas’s. This will ultimately hit many end users and for those not prepared or still preparing, it will hurt!

F-Gas Regulations

Right now the going is good, HFC refrigerants are available and seemingly plentiful – this will change soon. In 2018 the first meaningful production quota will begin and reliant end users may well start to feel the pinch. The old adage of supply and demand should become evident, as supply reduces and demand stays high, refrigerant costs may well spiral.

The major problem is that I don’t think all end users are aware of the F-Gas legislation and if they are, they may not fully appreciate the implications. The refrigeration industry and end users alike need to be aligned to the facts that continual investments in HFC technology are not sustainable, nor money well spent.

This of course is the desired outcome of the Regulators. I suppose they had a few options open to them to reduce F-gas reliance, as they could have taxed HFC’s as the Danish Government did a number of years ago. Either way the outcome will be the same, the use of HFC refrigerants is likely to become cost prohibitive and if high costs don’t work, they won’t be available in main stream quantities anyway.

Let there be no doubt that these F-Gas Regulations are aggressive, I hear a lot of talk about the F-gas Regulations, the first thing people usually mention is that they are already using refrigerants with a global warming potential (GWP) below 2500, but this isn’t the main issue, they’ve missed the point. The real headline of the new legislation which does not appear to be fully appreciated, is actually the tapering quota clauses, that will quickly and severely limit production and the sale of such HFC refrigerants.

F-Gas Regulations

The F-gas Regulations HFC Phase Down Timetable

The major problem is that I don’t think all end users are aware of the F-Gas Regulations and if they are, they may not fully appreciate the implications. The refrigeration industry and end users alike need to be aligned to the facts that continual investments in HFC technology are not sustainable, nor money well spent.

One of the most significant controls of the new F-Gas Regulations is that from 2022 only refrigerants with a GWP of less than 150 can be used in central multi compressor systems that have more than 40KW of cooling capacity. This is the control which will finally force end users away from installing the common place systems using HFC refrigerants and should change the face of refrigeration in Europe. Although, I’ve heard people recently saying “oh well we’ll just have to put two systems in then”, but again they are missing the point, not only are they delaying the inevitable, but refrigerants with GWP’s over 150 are not going to be freely available.

On a similar theme, companies may be thinking that the service ban in 2020 won’t be such an obstacle, as it is widely perceived that using new ‘drop-in’ refrigerants such as R449 will provide more life and time in operating HFC refrigeration assets. This is a dangerous game to play; as the new quota restrictions may not leave enough scope for this to be physically or economically possible. Companies could be left with expensive assets that need replacing long before they have reached the end of their normal life expectancy.

There is a lot of talk about new synthetic refrigerants coming along which will have very low GWP’s but the legislation around their use is undetermined yet because of their potential flammability. In addition, there are no guarantees that they will actually arrive, be efficient, have longevity and most importantly be compatible with existing compressors; enabling them (potentially) to be used as a ‘drop-in’ refrigerant. All in all, its very risky business continuing to purchase condensing plant that uses HFC refrigerant, especially if end users want cast iron certainty that these significant investments are to last beyond the next eight years.

By the end of 2023, the quotas will have driven European HFC production down to 45% of todays GWP baseline supply levels. When you consider that one of the largest consuming sectors of HFC refrigerants is food retail and that circa 70% of its current consumption is for maintenance alone, you’ll start to appreciate that there is going to be a huge shortage of HFC refrigerants unless drastic steps are taken very quickly.

We must not forget these are European quotas and that there are many member states which are less prepared and skilled than the UK; their demand for the available HFC’s will be even higher than ours.

Its not all bad news though, in the UK we have the options, tools and skills necessary to future proof all refrigeration assets now.

I realise these thoughts are largely speculative, but they are based on logic and fact. Ultimately refrigeration investments represent significant Capital Expenditure and sustaining such expenditure on HFC F-Gas technology is very much like sailing through extremely icy waters and hoping for the best.