In the past, the refrigeration industry has attracted attention for one thing in particular: being nothing special. In other words, little innovation, little technology and little change. Refrigerants have been used almost everywhere for decades. The market size is just under 100 billion US dollars and there has been moderate growth in the last few years. However, in light of massive global changes such as global warming, experts are anticipating an increase in refrigeration demand.
In addition, the currently dominant solution based on F-gases is outdated and urgently in need of an overhaul, especially from an environmental perspective. The nature of F-gases means they are extremely harmful to the climate. Due to its poor energy efficiency, the refrigeration industry accounts for a whopping eight percent of global CO2 emissions, significantly contributing to global warming.
For this reason, the refrigeration industry has long been a thorn in the side of environmentally-conscious companies, supporters of climate agreements and the EU. It certainly deserves our undivided attention and requires comprehensive further developments. Nevertheless, changes had to be legally imposed.
Concrete demands are now being placed on the refrigeration industry in the form of a global phase-down and the F-Gas Regulation. In the EU, the F-Gas Regulation provides for a phase-down period, which came into force in 2015. In addition, it has been imposing various bans since January 2020 and will bring about a complete regulation of the refrigeration industry by 2030.
This blog post gives you an overview of the F-gas phase-down, the gradual restrictions on the available quantities of fluorinated greenhouse gases, what has changed and is now changing and how you can benefit from the situation and promote sustainability with natural refrigerants.
It’s not the first time there’s been a legal ban on harmful refrigerants. Since 1987, chlorofluorocarbons (CFCs), HCFCs and halons as well as substances that severely damage the ozone layer have been subject to a global phase out of production and use. Thanks to the extension of the Montreal Protocol – adopted with the Kigali Amendment in October 2016 and in force since January 2019 – the interim solution of partly fluorinated hydrocarbons (HFCs) and thus of F-gases will soon be a thing of the past. The global phase-down was initiated by the Kigali Amendment.
In Europe, the F-Gas Regulation (Regulation (EU) No. 517/2014 on fluorinated greenhouse gases) has been in force since 1st January 2015. The Regulation governs the use of fluorinated greenhouse gases (F-gases) in the industry and thus implements the objectives of the Kigali Amendment.
The phase-down is a core element of the EU Regulation and provides for the gradual reduction of partly fluorinated hydrocarbons (HFC) to one fifth of the current quantity. The goal: a 70 percent reduction in F-gas emissions by 2030 compared to 1990. To put that into figures, it means that emissions caused by F-gases in the EU must be reduced by 70 million tonnes CO2 equivalent to 35 million tonnes by 2030!
The extension of the Montreal Protocol established a timetable for industrialised countries to reduce HFCs – the agreed EU plan is more ambitious. The European refrigeration industry has less than ten years left, which is tight even in extremely dynamic, innovation-driven sectors.
A small excerpt from the EU reduction timetable: Since 1st January 2020, a ban on the use of the refrigerant R404A in existing refrigeration systems has been in force. From 1st January 2022, refrigerators and freezers used for commercial purposes that contain the refrigerant R134a may no longer be placed on the market. By 2025, certain products, such as stationary refrigeration equipment or mono-split air conditioners, will be gradually withdrawn from the market.
The bans on the use of F-gases and onm distribution products containing F-gases pose a number of challenges for a range of users. F-gases are contained in refrigeration and air conditioning equipment, and are not limited to one industry. Therefore, many companies are currently faced with the question of which refrigeration devices and chillers may still be used: this includes the entire manufacturing industry, data centre operators and all kinds of processes used to cool buildings.
The F-Gas Regulation has been making itself felt on the market for some time. Manufacturers have largely ceased production of refrigerants with a high GWP value. Refrigerant prices have been rising significantly since 2017. According to the German Confederation of Skilled Crafts, there have even been supply bottlenecks at times in Germany. Rising prices and supply bottlenecks have led to massive illegal imports, usually in the form of impure refrigerants and refrigerant mixtures that pose a risk to both man and machine.
The one thing that is certain, however, is that proven substances and processes in the refrigeration industry will soon become a thing of the past. This poses a great challenge to both users and refrigeration technology, as the chemical construction kit is limited. Nevertheless, the growth potential of the refrigeration industry remains immense and demand is more than stable.
This is where low GWP (global warming potential) refrigerants come into play. Although there is lots of talk about low GWP refrigerants at the moment, anyone who thinks about sustainability from a holistic and long-term perspective knows that they are not a real solution. The term “low GWP” only refers to refrigerants that have a lower value compared to refrigerants that are currently used. In just a few years, these low GWP refrigerants will no longer be legally compliant.
Low GWP solutions also harm the environment and people in other ways. The substances, especially their decomposition products, are becoming new environmental pollutants that give cause for concern. Among other things, this can lead to the emergence of pollutants such as trifluoroacetic acid (TFA) and hydrofluoric acid (HF). These substances hardly decompose in the environment and pass into soil and water. There are also no reliable facts about the stability and efficiency of many low GWPs, as is shown by the examples of R1234yf and R1234ze.
For this reason, the role of sustainable innovation driver falls to natural refrigerants, which are by no means a new discovery. Hydrocarbons, carbon dioxide, ammonia and water were discussed at the dawn of F-gases in the refrigeration industry, but were quickly discarded. The use of F-gases became much easier and sustainability goals have not really been a big issue until now.
One of the hurdles in the past was rather rudimentary technology. Even today, the comparatively high initial investment is also slowing down the switch in many places – although the life cycle costs show that natural refrigerants are the better option in the long term both ecologically and economically.
Natural refrigerants are definitely the future, but they too are associated with technical challenges. In addition, you must take appropriate safety precautions when using them:
Water differs from other natural refrigerants in a number of crucial ways:
Today, innovative technologies make water an optimal refrigerant and thus highly efficient. We will be happy to advise you on your investment opportunities in the most promising natural refrigerant on the market.
The phase-down poses unprecedented challenges to a long list of industries and companies. Nevertheless, the phase-down is a positive development and a huge opportunity for the refrigeration industry. By demanding rather than merely promoting innovation, there is now movement in a billion-dollar sector that has been dormant for a rather long time.
The EU’s ambitious project will surely benefit the future of the industry. With its reduction plan, the EU is setting standards of global relevance. Only they can make Europe a pioneer in the field of environmentally-friendly refrigeration and give companies the incentive to expand their expertise in a fast-growing industry sector and assume market leadership. In the long term, this will give the European refrigeration industry a clear competitive edge and thus a profitable business advantage. This could soon serve as an incentive for the global refrigeration industry.