ICARHMA – EPEE Interactive Workshop
A short introduction to EPEE & ICARHMA
Andrea Voigt
EPEE Director General
Steve Yurek
Secretariat ICARHMA
AHRI President & CEO
Montreal Protocol Meeting, Bangkok,
25/07/2012 2
Introduction to EPEE
The European Partnership for Energy & theEnvironment
Andrea Voigt, Director General
Montreal Protocol Meeting,
Bangkok, 25/07/20123
The full value chain of the Refrigeration,
Air Conditioning and Heat Pump SectorA major part of the European RAC & HP industry
• > 200,000 employees in Europe
• > € 30 billion turnover in Europe
Montreal Protocol Meeting,
Bangkok, 25/07/20124
EPEE’s three key priorites
• Energy Efficiency
– Ecodesign Directive
– Energy Efficiency Directive
– Eco Label and Energy
Label…
• Market Surveillance
– Raise awareness on the
importance of properly
enforcing and policing
legislation
• The F-Gas Regulation and
its revision
– Maintain and strengthen
the F-Gas Regulation
– Support a technically and
economically feasible
phase-down
Montreal Protocol Meeting,
Bangkok, 25/07/20126
Introduction to ICARHMA
International Council of Air-Conditioning, Refrigeration, and Heating
Manufacturers’ Associations
Steve Yurek , ICARHMA SecretariatMontreal Protocol Meeting,
Bangkok, 25/07/20127
ICARHMA
• Established 1991 – AHRI organized
• AHRI is the Secretariat
• Purpose
– Unite and strengthen the voice of global industry
– Focus on energy efficiency and environmental
stewardship
• Created as ICARMA but added heating in 2009
� ICARHMA
Montreal Protocol Meeting,
Bangkok, 25/07/20128
Members
• ABRAVA – Brazil
• AHRI – United States
• AREMA –Australia
• CRAA – China
• EPEE – Europe
• EUROVENT – Europe
• HRAI – Canada
• JRAIA – Japan
• KRAIA – Korea
• RAMA - India
What does ICARHMA do?
• Global strategy, advocacy and standards
activity
• Current main topics include:
– Climate Change
– Refrigerants
– Energy Efficiency (MEPS)
– Intellectual Property Rights
– Standards
Montreal Protocol Meeting,
Bangkok, 25/07/201210
Recent Activities
• Refrigerants and Responsible Use (2012)
• Comprehensive Responsible Refrigerant Use
(Update: 2010)
• Global Technician Training Guidelines
(Update: 2010)
• Responsible Equipment Management
(Update: 2010)
Montreal Protocol Meeting,
Bangkok, 25/07/201211
Part I:
Refrigerants and the global context
A global perspective on
refrigerant choice
Steve Yurek
Secretariat ICARHMA
President & CEO of the Air-Conditioning, Heating and
Refrigeration Institute (AHRI)
Montreal Protocol Meeting,
Bangkok, 25/07/201212
Refrigerants Are Vital
• Used in Air-conditioning,
– Vital for personal Health, Comfort, and Well-being
• Used in Refrigeration
– Prolong life of perishable food
– Keep life-saving medicines safe
• Improve
– Health, Productivity, and Safety
Montreal Protocol Meeting,
Bangkok, 25/07/201213
Things to discuss today:
• Evaluating refrigerant characteristics for informed choices
• Proper refrigerant handling
• Refrigerant Research
• Making transition predictable, smooth, and informed
Montreal Protocol Meeting, Bangkok,
25/07/201214
Goal:
Appropriate Successor Refrigerants
• No ozone depletion
• Low total global warming potential
(LCCP/TEWI)
– Direct
– Indirect
• Safe
• Economical
Montreal Protocol Meeting, Bangkok,
25/07/201215
Choosing a Refrigerant
• Cannot be based on one factor
• Must be based on an analysis of all factors:
– Safe
– Energy efficient
– Widely available
– Economical
• Will be different for different applications
Montreal Protocol Meeting, Bangkok,
25/07/201216
Law of Unintended Consequences
• Most economic sectors are inter-connected
• Policy makers need to be sure that:
– Policies do not reduce emissions in one sector
while increasing in another
– Low emissions should not be at expense of overall
efficiency
– Efficiency must be maximized in all situations
Montreal Protocol Meeting, Bangkok,
25/07/201217
ICARHMA Policy Statement
• Many factors go into decisions on refrigerants:
• Not just GWP but also: – Cost effectiveness for intended application
– Energy efficiency
– Safety
– Operating pressures
– Capital and operating costs
– Operating temperatures
• In addition, national, regional, and local laws
Montreal Protocol Meeting, Bangkok,
25/07/201218
Ammonia
Benefits
• Economical
• Low GWP
• Efficient
• Available
Montreal Protocol Meeting, Bangkok,
25/07/201219
Drawbacks
• Flammable
• Highly toxic
• Incompatible with
copper and copper
alloys
Hydrocarbons
Benefits:
• Efficient
• Low Toxicity
• Economical
Montreal Protocol Meeting, Bangkok,
25/07/201220
Drawbacks:
• Highly flammable
• Prohibited by some
building codes
CO2
Benefits
• Low GWP
• Economical
• Non-flammable
Montreal Protocol Meeting, Bangkok,
25/07/201221
Drawbacks
• Operates at higher
pressures
• Expensive
• Prone to leaks
R-32
Benefits:
• Lower GWP
• Economical
Montreal Protocol Meeting, Bangkok,
25/07/201222
Drawbacks:
• Slightly flammable
Planning for Phase-Down of High GWP
Refrigerants
• Business needs predictability
• Research into new generation of refrigerants
• Determining positives and negatives for
alternatives
Montreal Protocol Meeting, Bangkok,
25/07/201223
Barriers
to Use of Alternative Refrigerants
• Recently completed project summarizes barriers region-by-region
– CO2, Ammonia, Hydrocarbons, R-32, and HFO-1234yf
• Conclusion: Most would be restricted in Japan, U.S., EU.
• Not just technical barriers but also legislative and regulatory barriers
Montreal Protocol Meeting, Bangkok,
25/07/201224
Life Cycle Climate Performance (LCCP)
Model for HVACR Systems
• Established a standardized methodology to
calculate LCCP of HVACR Equipment
• Developed user-friendly Excel-based
simulation tool to perform LCCP calculations
for U.S. residential heat pumps
• Final report and tool available at:
http://www.ahrinet.org/technical+results.aspx.
Montreal Protocol Meeting, Bangkok,
25/07/201225
Low GWP Alternative
Refrigerant Evaluation Program
• Objectives
– Identify and evaluate promising
low-GWP alternative refrigerants
– Understand technical challenges,
avoid duplicative efforts, and
efficiently use industry resources
• Program started in March 2011
Montreal Protocol Meeting, Bangkok,
25/07/201226
Responsible Use
• Minimizing environmental releases– Contain refrigerants in secure or closed systems
and containers
– Train all personnel in proper handling techniques
– Ensure refrigerants are safely handled at the end
of their useful life:
• Recovery
• Recycle, reclaim, or destroy
Montreal Protocol Meeting, Bangkok,
25/07/201227
Be Ambassadors
of Information• We are producers and primary users
– We have knowledge and experience!
• We have a unique responsibility to help ensure
informed decisions
• Consumers depend on us to educate
policymakers so that products are as economical,
efficient, and environmentally sound as possible
Montreal Protocol Meeting, Bangkok,
25/07/201228
Summary• Different situation than when
transitioned from HCFCs to HFCs
• Still inventing alternatives
• Broadened our consideration to include refrigerants that were
disqualified before because they were toxic and/or flammable
• We have the time to do the necessary research
• But we must be serious and expend the resources
commensurate with the challenge
• We have a good record as an industry
Montreal Protocol Meeting, Bangkok,
25/07/201229
Climate action in Europe:
HFC phase-down and its impact on the heating and cooling industry
Andrea Voigt, Director General
The European Partnership for Energy and theEnvironment (EPEE)
Part II:
The impact of refrigerant policy on the regional level
Montreal Protocol Meeting,
Bangkok, 25/07/201230
Containment & recovery
• Preventive tightness checks
• Leak detection systems:
Record keeping (logbooks)
• Recovery, recycling or destruction
Training and certification
• Adequate training
• Mutual recognition in the EU
• Minimum requirements
Reporting obligations
• Applies to producers, importers
and exporters of quantities > 1to
• Member States to establish
reporting systems.
Labelling
• Chemical abbreviation of F-gas,
weight of the refrigerant
• Kyoto protocol-covered
• Where applicable: product is
hermetically sealed.
• Further information in the
manual (e.g. GWP)
The current EU F-Gas Regulation:
Four main pillarsThe F-Gas Regulation 842/2006
4 main pillars
Montreal Protocol Meeting, Bangkok,
25/07/201231
The ongoing revision process
of the F-Gas RegulationArt. 10 of the F-Gas Regulation 842 / 2006:
• By 4 July 2011, the Commission shall publish a report based on the experience of the application of this Regulation.
• Where necessary, the Commission shall present appropriate proposals for revision of the relevant provisions of this Regulation.
EU Commission report on the need for further action
Yes: Revision No: Revision
EU Commission Impact Assessment
EU Commission legislative proposal
• Öko-Recherche Report
• Stakeholders
• Öko-Institut Report
• Stakeholders
Montreal Protocol Meeting,
Bangkok, 25/07/201232
The outcome of the Commission report:
The F-Gas Regulation stabilises emissions
Further reduction is needed:
• Up to 70 Mtonnes of CO2eq
in all F-gas applications
• Drive transition towards
technologies with lower
GWP
– Phase-down
– Bans
– Voluntary agreements
• Improve containment and
recovery
• Improve monitoring
• Take into account latest
scientific information
-28%
-44%
-46%
-64%
BAU
F-Gas & MAC
Additional measures
Source: EU Commission report:
http://ec.europa.eu/clima/policies/f-gas/docs/report_en.pdf
Montreal Protocol Meeting,
Bangkok, 25/07/201233
The importance of flexibility:
Refrigerant choice is essential but complex
Size of
equipment
Application-Temp. Level
- Residential/ Industrial/
Commercial
Geographical
location
Performance
Low indirect
impact- Capacity
- Energy Efficiency
Health & Safety
considerations
Compatibility
with key
components
Low direct
environmental
impactCompliance with
relevant
regulations
34
The importance of a balanced approach:
No sacrifice on energy efficiency !
Two thirds
of total
GHG
emissions
in RAC
equipment
are due to
energy use
144 Mtonnes
CO2eq
335 Mtonnes
CO2eq
Direct
Emissions
Indirect
Emissions
Year 2010
Montreal Protocol Meeting,
Bangkok, 25/07/201235
Heat pumps are essential
to reach the EU 20-20-20 targets and beyond
Heat
Pumps
use
F-Gases
to run
safely and
efficiently
*Based on the same amount of heat delivered: 1300 TWh
0
50
100
150
200
250
300
350
Fossil fuel boilers Heat pumps
Indirect
emissions
from energy
use
Direct
refrigerant
emissions
-155Mt
Year 2030
Mto
nn
es
CO
2e
q e
mis
sio
ns
36
Why a phase-down?
Flexible, safe and cost-effective
Montreal Protocol Meeting,
Bangkok, 25/07/201237
Global context Reinforces
F-Gas Reg.
Energy
saving
Cost-
effective
Uptake of
renewables
Paves the
way
Sets the
path for a
global
phase-down
Stimulates
leakage
prevention
and
refrigerant
recovery
Permits the
use of the
most
efficient
refrigerant
Cost can be
spread over
time
Heat pumps
achieve
substantial
CO2 savings
vs. fossil fuel
boilers
Potential F-Gas
consumption
cut by up to
80% in 2050
Regulatory certainty
>70 Mtonnes of CO2eq HFC emission reduction potential in 2030
The need for reliable data:
Two studies
• French ERIE / ARMINES and British SKM Enviros
research institutes
• Refrigeration, Air-Conditioning and Heat Pump
Market: 80% of total F-Gas emissions
• Analysis of 7 main sectors , 43 subsectors and
14 alternatives to currently used refrigerants.
Montreal Protocol Meeting,
Bangkok, 25/07/201238
Three phase-down scenarios
• Scenario A:
Conservative view of current changes in the use of
refrigerants
• Scenario B:
Accelerated transition to lower GWP refrigerants in new
systems and improvements in emission rates created by
full implementation of the F-Gas Regulation.
• Scenario C:
Early, accelerated transition from very high GWP
refrigerants to lower GWP alternatives and widespread
use of mildly flammable refrigerants (not feasible today)
Montreal Protocol Meeting,
Bangkok, 25/07/201239
CONSUMPTION Reduction
Consumption
savings in 2030
vs. 2010:
Scenario A:
>60 Mtonnes CO2eq
Scenario B:
>120 Mtonnes CO2eq
Scenario C:
>150 Mtonnes CO2eq:
Not feasible today
Scenarios to be re-
assessed in 2020.
North American proposal
CFC,HCFC,HFC in the RAC sector
2010 baseline
-30%
-65%
A
B
C
40
EMISSION Reduction
0
20
40
60
80
100
120
140
160
Year 2010 Scenario A Scenario B
-73Mt
Mto
nn
es
CO
2e
q
Y 2030
41
Abatement costs vary substantially
depending on applications
-5 0 5 10 15 20 25 30
Transport Refrigeration
Mobile AC
Chillers & Hydronic Heat Pumps
Industrial Refrigeration
SAC and Heat Pumps
Scen.B vs. A, 2030, Average € / tonne CO2 eq abated
Domestic Refrigeration: - 157 € / tCO2 eq; Commercial Refrigeration still being assessed
€/
Mto
nn
eC
O2e
q a
ba
ted
42
Cost predictions are difficult:Technology maturation, new products
High capital, high
maintenance, low
efficiency
Mid-case values Low capital, low
maintenance, high
efficiency
Scen.B vs. A, 2030, Average € / tonne CO2 eq abated
Va
lue
s st
ill b
ein
gfi
na
lise
d
> 75%
43
Five main recommendations
1. A gradual phase-down approach offers
regulatory certainty
� Emission reduction potential of 70
Mtonnes CO2eq in 2030
� Time for innovation and adaptation of
technologies, standards, etc.
2. A realistic baseline of phase-down is
essential
� Market growth by 2010 needs to be taken
into account
3. Over-ambitious consumption reduction
targets will hinder emission reduction
� Today not feasible due to restricted use of
midly flammables
� Energy efficiency and uptake of heat
pumps will suffer
� Cost will accelerate44
4. Reducing emissions comes at a cost
� Maintaining and strengthening the F-Gas
Regulation is the most cost-effective
measure
� Combined with a phase-down, cost can be
spread over time
5. A re-assessment in 2020 is indispensable
� Monitoring of technology progress is
needed
� Building codes and standards may evolve
Montreal Protocol Meeting,
Bangkok, 25/07/2012
Part II:
The impact of refrigerant policy on the regional level
Australia’s Carbon Tax
Steve Anderson, Executive Director
Refrigerants Australia
Montreal Protocol Meeting,
Bangkok, 25/07/201245
Carbon Tax –
The shape of things to come
• Australia introduced a carbon tax on July 1
• Attracting international interest – ohter
governments watching closely
• Industry should also watch closely, and
critically monitor the outcomes
Montreal Protocol Meeting,
Bangkok, 25/07/201246
First the good news
• Just a tax- not an Emissions Trading Scheme
• Removes the volatility of carbon pricing- given
the relatively large size of the carbon price in
relation to the price of the product, this could
have been extremely destabilising
47Montreal Protocol Meeting,
Bangkok, 25/07/2012
Then the rest…
• A straight tax that will cost the industry
approximately $270 million in year 1
• Will apply to both bulk refrigerant and
charged equipment
• Typically add $32 a kg for R134a, $47 a kg to
R410a, $89 a kg to R404a
• HCFCs not affected
Montreal Protocol Meeting, Bangkok,
25/07/201248
But wait there’s more…
• Increases due to the tax alone are just part of
the picture
• The sheer size of the tax will generate
significant cost increases in areas such as
finance, insurance and compliance
• Then GST will be added to all these
Montreal Protocol Meeting, Bangkok,
25/07/201249
Who does it effect, and how?
• A lot more than ‘Australia’s 500 biggest
polluters’
• About 1400 licencees under Ozone Protection
and Synthetic Greenhouse Gas Legislation,
mostly small and medium sized enterprises
Montreal Protocol Meeting, Bangkok,
25/07/201250
How is it passed on?
• Only the importers of bulk HFCs and pre-charged equipment will pay the tax
• As it goes down to the next level it becomes part of the price of goods sold
• So from there, sales tax will also be payable on the increased price
• Fees commenced1 July 2012, rise by inflation plus 2.5% until 2016
• Then set at average carbon price for the previous year
• Floor price on carbon of $15 per tonne
Montreal Protocol Meeting, Bangkok,
25/07/201251
Impact will vary
across sectors and products
• Less than $20 on the price of a new car, costing $25,000 (<1%)
• Less than $100 on a good quality 7.4 kW split system retailing for $2,600 (<4%)
• Less than $150 on a good quality 14 kW ducted system, costing $12,000 (1%)
• But could create significant financial stress for importers, wholesalers and contractors - e.g. insurance, security, financing costs
Montreal Protocol Meeting, Bangkok,
25/07/201252
But significant impact
in some areas
• New equipment with large refrigerant charges,
where alternatives are available
• Refrigerant cost will be a more important
consideration, along with energy, in the
context of the total cost of the equipment
• But policy-makers have not attempted to
estimate any resultant emission reductions
Montreal Protocol Meeting, Bangkok,
25/07/201253
A ‘typical’ contractors van
• 22kg R404a increase of $1954
• 22kgs R407c increase of $443
• 22kg R134a increase of $704
• 22kg R410a increase of $1042
• Total increase $4143
Montreal Protocol Meeting, Bangkok,
25/07/201254
International experience
US
• In the late eighties the US Government placed a
significant tax on CFCs, the theory being it would
drive consumers away from these products
• Was seen to have little effect, except to provide a
super-profit for CFC smugglers
• Will we see this here?
• The tax was not extended to HCFCs when these
substances were controlled
Montreal Protocol Meeting, Bangkok,
25/07/201255
Why a carbon price?
• Carbon pricing is intended to drive
behavioural change
• A price signal is supposed to lead to a
preference for low-carbon products
• But will it work with refrigerants?
Montreal Protocol Meeting, Bangkok,
25/07/201256
What will this achieve?
• There are no targets, no plan to measure the success or otherwise of the policy
• Requirements of the Regulation Impact Statement (RIS) essentially ignored- no consideration of alternative approaches, no cost benefit analysis
• Industry input largely ignored- one-size-fits-all approach
• Many possible perverse outcomes: smuggling, counterfeiting, undercharging, unsafe substitution, keeping inefficient equipment, poor servicing
Montreal Protocol Meeting, Bangkok,
25/07/201257
What does the future hold?
• Coalition government committed to rescind
carbon tax
• This will not be without its complications
• Industry remains committed to transition to
low-GWP refrigerants
• This will occur independently of the Australian
carbon tax
Montreal Protocol Meeting, Bangkok,
25/07/201258
Not learning from history
• A 25 year record of success with ozone
protection through the Montreal Protocol and
intelligent national end-use controls
• Good working relationships with government
provided certainty, minimal disruption, cost-
effective outcomes
• This success can be replicated moving to low-
GWP refrigerants
Montreal Protocol Meeting, Bangkok,
25/07/201259
Thank you for your attention!
Contact information:
Montreal Protocol Meeting,
Bangkok, 25/07/201261
AHRI
www.ahrinet.org
EPEE
www.epeeglobal.org
Refrigerants Australia
www.refrigerantsaustralia.org