Contractors who have found virgin
hydrochlorofluorocarbon (HCFC)-22 readily available at their local
supply houses had best prepare for a drastic drop-off in such supplies
very soon.
The U.S. Environmental Protection Agency (EPA) announced its final
phasedown schedule regarding production and importation of HCFC- 22 on
Oct. 16. The order calls for an immediate drop from 51 million pounds
allowed in 2014 to 22 million pounds beginning Jan. 1, 2015.
Subsequently, 18 million pounds of new and imported R-22 will be allowed
in 2016, 13 million pounds in 2017, 9 million pounds in 2018, and 4
million pounds in 2019. No new or imported R-22 will be allowed in the
U.S. on or after Jan. 1, 2020.
Aggressive Linear Reduction
In its ruling, the EPA described the phasedown as an aggressive linear
reduction.Other options would have allowed between 30 and 36 million
pounds in 2015 — much higher than the 22 million pound limitation.
"EPA is trying to address the concerns about oversupply in existing
inventories while encouraging transition, reclamation, and proper
refrigerant management, all while sending a signal to the industry that
allocations will be dropping," said Charlie McCrudden, senior vice
president of government affairs, ACCA, commenting on the supply options
the EPA explored. "The agency considered market information, comments,
regulatory and statutory requirements, and its long-standing policy
objectives as it weighed the merits of the proposed approaches.The final
allocation meets the 2020 phaseout deadline and should help achieve a
smooth transition to more environmentally friendly alternatives while
providing regulatory certainty to consumers and industry."
Jon Melchi, director of government affairs, Heating, Air-conditioning,
and Refrigeration Distributors International (HARDI), said: "This rule
provides contractors with the knowledge that this transition is indeed
happening. While there will certainly be some tightening of the market,
there will be sufficient supply to meet servicing demands in the near
future, and we urge all contractors to work with their distribution
partners on the all-important question of, 'where do we go from here?'
The smart play is to begin investing in training [on alternative
refrigerants] and to not wait until the last minute to prepare your
customers and your businesses for a time when R-22 is not readily
available."
Immediate Impact
The impact on virgin R-22 supplies will be almost immediate.
"The agency settled on a much more aggressive schedule — a 57 percent
reduction from the 2014 allocation," said Gordon McKinney, vice
president, ICOR Intl. Inc. "We encourage all of our associates to
prepare for a dramatic increase in R-22 pricing and a major spike in
alternative refrigerant sales and reclaim activity."
Steve Mella, CEO, ComStar Intl. Inc., predicted immediate and future
shortages and price increases."These are normal results and will be
expected by the industry at large. [But] as this moves forward, the
market will dictate what fills the vacuum and the direction the industry
takes. Once the word gets out to all levels of our industry, we should
hear a sigh of relief. The five-year allocation plan will give the
industry the ability to make financial decisions that will help the
overall industry and economy."
Maureen Beatty, vice president of operations, National Refrigerants
Inc., said some suppliers may limit the quantity of R-22 they are
offering, but that does not mean R-22 is unavailable. "Contractors
should make sure they are buying from a reputable supplier who will
assure the legitimacy and quality of the R-22 they sell," she said.
Honeywell Intl. Inc. addressed immediate implications in an
announcement: "One model suggests this ruling will result in existing
channel inventory to be drawn down at an accelerated rate as end users
attempt to build stock in anticipation of limited supply, while others
hold inventory. The combined effect could be limited supply near-term.
Contractors should prepare accordingly."
Honeywell's statement also referenced an existing base of
hydrofluorocarbon (HFC) refrigerants that can be retrofitted into
existing R-22 systems, a process that has been successful for a number
of years, adding, "these are proven alternatives to R-22 for every
application. Contractors should take steps to educate themselves and
their customers on the alternatives."
Reclamation
The use of reclamation services has long been available and brings used
refrigerants back to ARI-700 purity standards. Such a service will
allow any R-22 currently in use or yet to be produced to be recycled and
reused well beyond the 2020 end of virgin and imported versions of the
refrigerant.
Many refrigerant reclaimers applauded the announcement.
Bill Auriemma, president and CEO of Diversified CPC Intl., said: "As an
EPA-certified reclaimer, we welcome the ruling and appreciate the fact
that the EPA collected and considered industry feedback. The ruling
brings much-needed clarity to the market and enables manufacturers,
reclaimers, and HVACR contractors to move forward with decisive plans,
which will only benefit the refrigerant industry as a whole."
Kevin Zugibe, chairman and CEO, Hudson Technologies, said, "As we
approach 2020, when virgin R-22 production will be fully eliminated, the
reclamation industry will become the primary provider of R-22 to
service aftermarket demand."
Contractor to Customer
Contractors need to keep customers informed of these developments and
the impact they may have on a contractor's ability to service R-22
equipment.
"We feel the most important thing is for contractors to make sure they
keep their customers well informed," said Butch Welsch, owner, Welsch
Heating and Cooling Co., St. Louis."This spring, during maintenance
visits and in our newsletter, we will be advising customers of the
situation.We'll urge them that a replacement, rather than a repair, is
probably the best thing to do.'
Refrigerant Roundup
The U.S. Environmental Protection Agency’s (EPA) Final Rule document
that detailed the phaseout schedule of hydrochlorofluorocarbon (HCFC)-22
stated the EPA will continue to review dry-shipped condensing units and
the use of high-global warming potential (GWP) hydrofluorocarbon (HFC)
refrigerants.
Dry-Ship
The dry-ship issue goes back to 2010 when the EPA said no new equipment
could contain the refrigerant. However, the industry determined
condensing units designed for R-22 could continue to be shipped dry,
without refrigerant, as part of aftermarket servicing.
Charlie McCrudden, senior vice president of government relations, ACCA,
said, “The final rule addresses the issue of dry-shipped condensing
units that are manufactured for sale as a system replacement part. In
the request for comments to this rule, the EPA sought quantifiable
information on the number of dry-shipped condensing units that were
being shipped, whether they are being used as a repair instead of a
compressor or motor replacement, and whether, and to what extent,
condensing unit replacements extend the life of an existing system.
“The EPA did not receive substantive comments to these questions, but
intends to survey a limited number of industry stakeholders to collect
additional data,” he said.
Hydrofluorocarbons
Another simmering issue surrounding this announcement is the placement
of HFC refrigerants under the same no-venting rules that govern
chlorofluorocarbons (CFCs) and HCFCs.
Regarding this, McCrudden said: “In the final rule, the EPA mentions a
pending petition submitted by an industry trade group to extend the
Section 608 program rules to HFC refrigerants. In its response to
comments filed on this, the (EPA) final rule noted, ‘The EPA is actively
considering the merits and environmental benefits of this petition
under a separate process.’ ”
Significant New Alternatives Program
At the same time, from a global perspective, the U.S. has publicly noted
its desire to steer away from HFCs perceived to have a high GWP.
In this context, the EPA has been proposing to decertify HFCs -134a,
Refrigerant Roundup - 404A, and -507 in certain new and retrofit retail
food applications under its Significant New Alternatives Program (SNAP).
On Aug. 9, the EPA published “40 CFR Part 82 Protection of Stratospheric
Ozone: Change of Listing Status for Certain Substitutes Under the
Significant New Alternatives Policy Program; Proposed Rule” in the
Federal Register.
The proposal deems certain HFC refrigerants unacceptable in specific
applications on or after Jan. 1, 2016. There has not been a final rule
in that regard, but the EPA now is proposing to expand the list of
acceptable low-GWP alternative refrigerants.
According to a statement from representatives at Air-Conditioning,
Heating, and Refrigeration Institute (AHRI), the EPA, on Oct. 10, issued
a prepublication notice in which “the EPA found several alternatives
acceptable in air conditioning, refrigeration, and foam-blowing end
uses.” Included was the use of R-744 (CO2) in new refrigerated transport
equipment.
