16. November 2020 | Industry Insights

Illegal Imports Instead of Technological Innovation: Smuggling HFCs

The F-gas Regulation is making its presence felt on the refrigerant market. Since the start of the F-gas phase-down, synthetic refrigerants have been a highly sought-after commodity due to legislators making them a scarce commodity. As a result, they should gradually disappear completely from the market.

Manufacturers have largely stopped producing refrigerants with a high GWP value. Since then, however, the illegal trade of harmful F-gases has flourished like never before.

One Third of Refrigerants in the EU Could Be Illegal

According to the “Doors Wide Open” report, around 117.5 Mt CO2 equivalent of HFCs were put on the market by illegal refrigerant imports in 2018 alone. This is about 16.3 million tonnes of carbon dioxide equivalent above the available quota and more than 16% above the permitted quota. The European Commission itself does not contest these massive import rates.

The assumption by synthetic refrigerant manufacturers that illegally imported refrigerants account for 20-30% of the total market therefore seems well founded. Moreover, the continuing illegal import of refrigerants has already significantly distorted the market. A correspondingly large number of users are now dependent on smuggling.

Companies face penalties and risk irreparable damage to the environment caused by outdated technology and the continued use of HFCs. Get out of this vicious circle and start cooling with natural refrigerants to ensure maximum energy efficiency.

The Costs of Illegally Imported Refrigerants Skyrocket

The prices of HFCs have risen sharply with the beginning of the phase-down. According to the German Confederation of Skilled Crafts, there have been occasional supply bottlenecks in Germany, for which the industry has not been prepared. A short-term improvement is also not expected. Smugglers are known to neither adhere to market prices nor to agreements or regulations. Consequently, the costs, quality and availability of illegal HFCs are completely uncertain.

Moreover, the trade of greenhouse gases from precarious sources threatens to come to an abrupt halt as soon as controls are better. For example, some synthetic refrigerants will disappear almost overnight because they are imported illegally. Within a very short period of time, this will exacerbate the scarcity of F-gases and drive up prices even further.

A Threat to Planning Safety and the Climate

The smuggling of impure refrigerants and refrigerant mixtures endangers both operational safety and the climate. Illegally traded refrigerants are mixtures that vary in their composition, independent of any testing mechanism and quality assurance. When it comes to illegal HFCs, no user knows exactly what they are buying and using.

As a result, the black market not only threatens the success of the F-gas Regulation and global climate protection targets, but also the commercial success and operational safety of millions of users. In combination with outdated refrigeration technology that lacks energy efficiency, illegal imports help the refrigeration industry to win another sad award: the major driver of climate change.

Innovation in the Refrigeration Industry: Where Do We Stand?

In light of rising electricity costs, the urgency of a better energy balance, improved operational and planning security and a sustainable plan for the future is growing. Are innovative cooling solutions now being used? At present, users often lack a strategy for this. The potential of existing, innovative refrigeration technology has only been tapped to a limited extent thus far.

Moreover, recycling F-gases is legal until 2030. This encourages a wait-and-see attitude towards new technologies and refrigerants. However, there are new challenges when it comes to legal recycling with which most users are only too familiar, such as little know-how and minimal capacity to recycle refrigerants.

At the end of the day, it is not possible to depict the predicted rapid growth in installed refrigeration systems. Only innovative technology solutions based on legal, available refrigerants can solve the challenges of users in the long term.

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