The future of refrigerants Jim Wolf Global Policy

The future of refrigerants Jim Wolf Global Policy Associates May 2015

Overview s Current and future environmental policy s Refrigerant comparisons s Future refrigerants

Montreal Protocol Adopted in Montreal on September 16, 1987 Objective “To control and eventually eliminate … OZONE-DEPLETING substances. ” Among 6 major chemicals, CFC and HCFC refrigerants were classified as an Ozone Depleting substances, and subject to phase outs.

Kyoto Protocol · December 1997, Kyoto Japan, Conference of Parties · Kyoto Protocol focus is on Global · Among 6 major chemicals, HFC Warming. refrigerants were classified as Global Warming, or Greenhouse Gases, and subject to restrictions.

Efficiency Drives Environmental Impact

Important Environmental Policy s Montreal Protocol (UNEP) s Kyoto Protocol (UNFCCC) s Country Policies and Regulations

Montreal Protocol: HCFC Phase out Dates

US EPA Accelerated Phase-out Rule (Unchanged) CFCs 1996 All CFCs 0 % (Production) HCFCs 1996 Cap at 2. 8% (3. 1%) of 1989 Consumption of CFCs plus HCFCs 2003 HCFC-141 b 0 % (Production) 2010 HCFC-142 b (No New Product Use) HCFC-22 0 % (Production) HCFC-142 b 0 % (Production) HCFC-123 (No New Product Use) HCFC-124 (No New Product Use) All HCFCs 0 % (Production) 2020 2030

Million Kilograms CFC-11 Equivalent ODP Weighted U. S. HCFC Use and HCFC Cap 15 HCFC Production Cap Actual HCFC usage Actual R-123 usage 65% - 2004 10 35% - 2010 5 Sep 07 MP Change 25% Expected new HCFC demand 1 10% - 2015 0. 5% - 2020 0 1985 1990 1995 2000 2005 2010 2015 2020 1 http: //epa. gov/ozone/title 6/phaseout/Servicing. Needs. Revised. Draft. Report_September. 2006. pdf 2025 2030

Will There Be Enough R 123 2020 -2030 - 0. 5% of 1989 level of “equivalent” R-11 Assumptions: Chillers in US with R-123 (50, 000 chillers) Average chiller size: 500 tons Refrigerant charge: 2 lbs/ton (1. 7) Average charge/chiller: 1000 lbs 0. 5% leakage rate/yr (50, 000 chillers) x (1000 lbs/chiller) x (0. 5% leakage rate/year) = 250, 000 lbs/yr 0. 5% cap from 1989 levels equates to 12, 100, 000 lbs/year of R-123 Almost 50 times the needed volume can be produced!

Will R-123 continue to be manufactured ? s R-123 is used as a feedstock to produce R-125 s R-125 is 50% of the blend that makes R-410 A ( replacement for R-22) s R-125 is 25% of the blend that makes R-407 C

Climate change policy s Kyoto Protocol created in 1997 s European Union CO 2 cap & trade program, and HFC regulation enacted in 2005 s Activity in 2015 u Climate Change negotiations for 2015 agreement u Cap & trade programs/legislation u Montreal Protocol proposals on HFC phase down u EU regulation on HFCs u U. S. HFC regulation u Canadian regulation consultation

U. S. Senate Climate Change Legislation s S. 2191 – Lieberman – Warner bill (Cap and Trade Program) u u s Caps greenhouse gas emissions Reduces greenhouse gas emissions Greenhouse gas coverage u Carbon dioxide u Methane u Nitrous oxide u Sulfur hexafluoride u Perfluorocarbons u Hydrofluorocarbons, HFCs (Separate basket) - Cap set in 2012 -70% reduction by 2037

HFC Cap vs Business as Usual Demand Low-GWP solutions needed

H. R. – 2454, Waxman – Markey legislation - Establishes baseline of average of 2004, 2005, and 2006 consumption of HFCs - Phase down of production of HFCs: . 12. 5% reduction in 2013. 22. 5% reduction by 2017. 33% reduction by 2020. 54% reduction by 2025. 70% reduction by 2029. 85% reduction by 2033 - Passed House (6/26/09) and sent to Senate

Kerry - Lieberman legislation (American Power Act) - Establishes baseline of average of 2004, 2005, and 2006 consumption of HFCs - Phase down of production of HFCs: . 12. 5% reduction in 2013. 22. 5% reduction by 2017. 33% reduction by 2020. 54% reduction by 2025. 70% reduction by 2029. 85% reduction by 2033

HFC PHASE DOWN PROPOSAL s Submitted in 2010, 2011, 2012, 2013, 2014 & 2015 s Proposal by Canada, U. S. , and Mexico to transfer HFC controls to Montreal Protocol s Baseline of average of 2011 – 2013 consumption and production of HFCs + 50% of HCFCs s Phase down of production/consumption of HFCs in Developed Countries: - 10% by 2019 ; 35% by 2024; 70% by 2030; 85% by 2036 Proposals submitted by Micronesia from 2010 – 2015 New proposals submitted by India and EU in 2015

Amendment Proposals to Montreal Protocol s U. S. , Canada, & Mexico: Phasedown: 2019 – 90%, 2024 – 65%, 2030 – 30%; 2036 – 15% . EU: Phasedown: 2019 – 85%, 2023 – 60%, 2028 – 30%; 2034 – 15% . India: Phasedown: 2018 – 90%, 2023 - 65%, 2029 – 30%; 2035 – 15% . Micronesia: Phasedown: 2017 – 85%, 2021 – 65%, 2025 – 45%, 2029 – 25%; 2033 – 10%

HFC PHASEOUT LAWS s Switzerland Air conditioners HFC ban - 2005 s Denmark GENERAL HFC ban - 2006 Cooling plants, heat pumps & air conditioning Plant HFC ban - 2007 s Austria Air conditioning and Mobile refrigeration HFC ban 2008

European Union - HFC Regulations Stationary air conditioning & refrigeration - (2005) - Containment and recovery of HFCs - Training and Certification of technicians Automobile HFC-134 a Ban – (2005) - No new vehicles with HFCs - GWP greater than 150 in 2011 - No servicing in 2019 EU Regulation on HFCs

EU Regulation on HFCs – Adopted April 2014 Phase down schedule for HFCs from baseline of the average from 2008 to 2011: Years Quantity Allowed 2015 100% 2016 -17 93 2018 -20 63 2021 - 23 45 2024 -26 31 2027 -29 24 2030 21

1 st. Petition to remove HFC-134 a from SNAP List s NRDC, IGSD, and EIA s Petition filed with EPA Administrator - May 7, 2010 s Primary request for removal of HFC-134 a for auto s Secondary request for removal of HFC-134 a for aerosols, fire suppression, foam blowing agents, refrigeration, and air conditioning sector s Regulation proposed to de-list HFC-134 a use in autos (2022) and insulation (2017)

2 nd. Petition to remove HFC-134 a from SNAP List s IEA petitioned EPA on April 26, 2012 - Remove HFC-134 a and blends for any ODS in non-essential uses - Remove HFC-134 a and blends for every enduse where more benign alternatives are available s NRDC petitioned EPA on April 27, 2012 - Remove HFC-134 a for household and retail food refrigerators & freezers 3 rd. Petition expected to remove HFC-134 a from chillers

CAFE Standard for cars and light trucks s National Highway Traffic Safety – DOT s Final rule published May 7, 2010 s Requires average 34. 1 mpg by 2016 s Provides 6 mpg credit for use of non-HFC (134 a) air conditioning system

Federal Acquisition Regulation – Proposed Rule – 5/11/15 s Affects DOD, GSA, and NASA purchases s Adds restriction on procurement of products containing high GWPs s Requires agencies to procure, when feasible, alternatives to high GWP HFCs (R-134 a, R-410 a, -407 C) and to non-ODP refrigerants used in air conditioners. s R Limits purchase of equipment containing HFCs and/or HCFCs

Environment Canada – Consultation Meetings s Consultation meetings – March 2015 s Residential air conditioning: no manufacture or import of equipment with HFCs or HFC blends with GWP above 750. s Commercial and Industrial air conditioning: no manufacture or import of equipment with HFCs or HFC blends with GWP above 750.

Rio+20 UN Conference on Sustainable Development s Conference concluded on June 22, 2012 s Agreement document – “The Future We Want” s HFC provision: “We support a gradual phase-down in the consumption and production of HFCs. ”

Ozone Depletion Potential & Global Warming - Balancing ODP vs GWP CFC-11 12 113 114 HCFC-22 123 141 b 142 b HFC-32 125 134 a 143 a 152 a 227 ea 236 fa 245 fa 404 A 407 C 410 A 1. 0 0. 8 0. 6 0. 4 0. 2 ODP (relative to R-11) 0. 0 2000 4000 6000 8000 10000 GWP (relative to CO 2) J. M. Calm and G. C. Hourahan, “Refrigerant Data Summary, ” Engineered Systems, 18(11): 74 -88, November 2001 (based on 1998 WMO and 2001 IPCC assessments). © JMC 2001 CONFIDENTIAL AND PROPRIETARY INFORMATION OF TRANE

Natural Refrigerant Considerations CO 2 Low Temp/Refrigeration/Automotive Very low efficiency in HVAC applications CO 2 has half the efficiency of R-22 and R 410 A Hydrocarbons Stationary Air Conditioning Safety issues on application, service, recovery Ammonia Low Temp/Process Chiller Applications Limited opportunities for safe applications Safety and environmental issues, service, recovery Water Stationary Air Conditioning Low efficiency in normal HVAC applications

Options For HVAC Refrigerants “Natural” Refrigerants Fluorocarbons Ozone Depleters (Montreal Protocol) Class 1 High ODP CFC’s GWP ODP ODP GWP R-11 R-12 R 113 R-500 Non- Ozone Depleters (Kyoto Protocol) Class 2 Low ODP HCFC’s GWP ODP R-22 R-123 -ODP Concerns -GWP Concerns - Flammable Higher GWP GWP R-134 a R-410 A R-407 C Lower GWP R-32 R-152 a Propane Butane CO 2 Ammonia Water -Toxicity Concerns -Efficiency Concerns -Cost Concerns © 2008 Trane, a business of Ingersoll Rand.

How is the industry responding? s Refrigerant producers are developing new refrigerants: u u s Near zero ODP, very low GWP, energy efficient & safe Commercial availability began in 2015 Equipment manufacturers are analyzing new refrigerants: u Energy efficient, safe & low emissions u Equipment availability by 2015 - 2022

Projected Replacements High Pressure (R-22/R-410 a) R-32 • (GWP=685/716) 2 L flammable R-32 blends (GWP= 400/600). 2 L flammable Medium Pressure (R-134 a) R-1234 yf (GWP<10) - Automobile • Expensive, significant efficiency loss • 2 L flammable R-1234 ze (GWP<10) - Chillers • Moderate price • 2 L flammable Blends (GWP= 500/650) – non flammable Low Pressure , (R-123) R-1233 zd(E) (GWP<10) - Chillers © 2008 Trane, a business of Ingersoll Rand. . Moderate price . Non-flammable Blends (GWP= 170/200) – non flammable

Refrigerant Safety Classifications ASHRAE 34 & Proposed ISO 817 • Flammability – – Class 1, non-flammable most refrigerants used today, like R-22, R-134 a, R 123, 410 a, 407 C Class 2 L, new class slightly flammable refrigerants <10 cm/sec burning velocity, most new HFO’s, R 32 Class 2, more flammable, R 152 Class 3, explosive, like propane 2 L class key to use of low GWP HFOs

OLD 1 st. Generation 2 nd. Generation CFC-11 HCFC-123 R-1233 zd(E) HFC-134 a R-1234 yf (auto) Blends CFC-12 R- 1234 ze (chiller) Blends (chiller) HCFC-22 HFC- 410 a HFC - 32 or Blends HFC – 407 C HFC – 32 or Blends

The Future of HCFCs and HFCs: s R-22, R-123, R-134 a, R-410 a, and 407 C will be available for servicing existing equipment s Cost of current refrigerants will increase s Carbon tax factor: R-22 (1800) vs. R-410 a (2000); R-123 (77) vs. R-134 a (1430) s New refrigerants will cost 4 to 10 times more than HFCs