F-gas manufacturers brace for tougher EU climate goals

Workers assemble air conditioners at a factory of Gree Electric Appliances in Wuhan in central China's Hubei province 18 April 2013. Hydrofluorocarbons (HFCs), an F-gas widely used in refrigeration and air-conditioning, are gradually being restricted across Europe as part of an EU crackdown on the planet-warming refrigerant. [EPA/SHEPHERD ZHOU]

This article is part of our special report Fluorinated gases.

The fluorinated gases industry is gearing up for a transformation as tighter supply restrictions are due to be implemented in the coming months and an upcoming EU legislative review next year is expected to push the EU market even further towards greener alternatives.

Hydrofluorocarbons (HFCs), an F-gas widely used in refrigeration and air-conditioning, are gradually being restricted across Europe as part of an EU crackdown on the planet-warming refrigerant, which has a global warming potential up to 23,000 times greater than carbon dioxide.

And despite hiccups in the implementation of the current rules, manufacturers are already bracing for their next challenge – aligning production with the EU’s upcoming revised climate targets for 2030.

An EU-wide phase-down of HFCs was introduced in 2015, imposing annual production quotas on manufacturers to incentivise the use of gases with a lower global warming potential.

Quota allocations have shifted from 183.1 million tonnes of carbon dioxide equivalent (Mt CO2e) in 2015 to 100.3 Mt CO2e in 2019, according to the European Environment Agency (EEA).

According to the EEA, the current legislation is a success because HFCs placed on the market were “1% below the 2018 overall market limit”.

Indeed, the supply of F-gases and their carbon footprint have both gradually decreased, matching the quota timeline. The total volume of supply in in 2018 was 14% lower than in 2017 with a GWP that was 30% lower, the EEA said.

However, calculations are solely based on company reporting and does not take the illegal trade in F-gases into account, which causes inconsistencies between observed emissions and national inventories.

“As much as 16.3 million tonnes of CO2e of bulk HFCs were illegally placed on the market in 2018,” or 16% above the 2018 quota, according to according to the Environmental Investigation Agency (EIA), an international NGO which produced a report on the matter last year.

Those inconsistencies in national inventories could be fixed by atmospheric observations, according to the EU’s Copernicus satellite programme. “Emissions of the hydrofluorocarbon gas 125 estimated by inverse modelling and in-situ measurements are larger than those reported to UNFCCC by Germany and Ireland,” it said in a report.

The dark underbelly of the illicit trade in F-gases

In its crackdown on planet-warming F-gases, the EU introduced annual quotas in 2018, hoping the resulting price increase would encourage the use of greener refrigerants. But instead of a green transition, the move has generated a black market economy raking in the surplus.

Beyond adaptation

Despite worries about illegal trade, the European Commission marches on with its planned F-gas quota reduction and is planning further restrictions as part of a broader F-gas legislative review planned for the end of next year.

The industry says it is willing to transform, but is asking for regulatory predictability to ensure their investments in Europe are preserved.

“Heating and cooling can make a major contribution to achieving the energy transition, for example with the electrification of heating via heat pumps, and by providing flexibility to the grid with demand side flexibility, thermal storage and other solutions,” said Andrea Voigt, director general of the European Partnership for Energy and the Environment (EPEE), an industry group.

From 1st January 2020, the use of all virgin HFCs, with a GWP above 2,500 and pre-charged equipment over 40 tonnes of CO2e, shall be prohibited. The quota exempts recovered gases until 1st January 2030.

The current legislation promotes reclaimed gases. Thus, the reprocessing of F-gases to match the equivalent performance of a virgin substance is not subject to quota limits.

“Recycling of HFCs will be driven by economic incentives,” said Honeywell’s director Tim Vink. “With illegally imported HFCs flooding the EU market, there is little incentive to recycle and reuse HFCs,” he added.

Illegally traded HFCs are mostly sent back to the source country, but ahead of the revision the European Commission envisages they could be confiscated and destroyed at the expense of the importer, or auctioned to a bidder that ensures compliance with quotas.

Aiming for climate neutrality

Meanwhile, environmental groups are raising the pressure on policymakers to accelerate the phase-out of F-gases.

“A ban of F-gases altogether would be a very easy win against climate change” and contribute to the EU’s effort of reaching climate neutrality by 2050, says Rita Tedesco, programme manager at ECOS, a green NGO.

But views differ on the feasibility of phasing out F-gases entirely. The industry, in particular, dismisses such a scenario.

“It is not possible from a safety, energy efficiency, affordability and reliability perspective to ban F-gases and there is no need to do so, as they are successfully addressed under the F-Gas Regulation with expected emission reductions of around 65% by 2030,” Voigt said.

The European Commission, for its part, considers that it may “not yet feasible to fully avoid F-gas emissions by 2050,” an EU official told EURACTIV. In such an event, F-gases should be avoided in new equipment and products while preventing emissions throughout their lifetime, the official said.

NGOs also urged policymakers to consider immediate bans for new switchgear containing sulphur hexafluoride (SF6), the most potent greenhouse gas on earth, which the Commission considers can be avoided in certain types of electrical switchgear.

Green alternatives

The industry has already started shifting towards greener alternatives but has expressed concerns over safety. Alternatives such as propane, other hydrocarbons, CO2, air or water still have a limited uptake, mostly in HFC blends, it says.

With the transition, “it has become increasingly important for installers and service technicians to be able to safely handle flammable, high-pressure and toxic refrigerants,” Voigt said.

Tedesco said that new technologies “are commercially available” and “have been developed to address the different thermodynamic and safety aspects of these low-GWP options compared to F-gases”.

In this respect, Tedesco regretted the absence of references to refrigerants in the European Commission’s latest draft of the new Ecodesign Regulation on air conditioners.

The forthcoming revision of the Ecodesign and Energy Labelling regulations in 2021 “are essential to complement the F-gas Regulation as well as to provide a clear market signal” in support of cleaner alternatives, Tedesco said.

Ahead of the legal redrafting, Sameer Bharadwaj, president of Koura, a manufacturer of HFCs, said that “the EU should stop the hypocrisy about applying its climate ambition to F-gases when alternatives have serious safety issues”.

“Let’s work together to do something real,” he said.

EU seeks to phase out planet-warming refrigerants

The EU’s legislation on fluorinated gases, adopted in 2014, needs an overhaul “to increase ambition in line with the European Green Deal” and “better prevent” an ongoing surge of illegal imports coming from China, an EU official told EURACTIV.

(Edited by Frédéric Simon)

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