I wrote last month of the concerns swirling around Europe regarding the F-Gas Regulation, particularly what the HFC phasedown might do to supply and demand and pricing. Since then, we have talked to leading policy experts, end-users and suppliers, and I can report that the consensus is this: The industry must act sooner rather than later, or face the consequences in terms of high prices and refrigerant shortages.

Those of you in the U.S. should pay attention as the supply-and-demand issues afoot in Europe are almost inevitably going to be repeated when the time comes to start phasing down HFCs in North America.

There are two lessons to learn:

1. The world is all about GWP now, so everyone better get used to talking about "CO₂e."
2. If you are going to put a quota system in place, your authorities better be sure they have their figures right.

Here in Europe, those whose job it is to forecast demand believe there have been significant underestimates of actual demand for HFCs, which will inevitably cause more problems as quota reductions start to bite. The problems are twofold:

First, a significant amount of refrigerant has reportedly been imported from outside of Europe without being reported to the European Commission. Therefore, the imported refrigerant does not feature in the EC's quota system.

Second, the EC has factored in a large cut in HFC quota for 2018 — a date that was originally supposed to include a service ban on high-GWP systems in the same year. Although the service ban was postponed until 2020, the authorities didn't change the quota system accordingly.

The result is a significant mismatch between the quota and the predicted actual demand. What does this mean in practice for European industry? Well, unless customers make plans for reducing the GWP of the refrigerants in their estates, they could be faced with a nasty shock, hitting them where it hurts most: in the pocket.

At this point I should remind you about CO₂e. A key effect of the F-Gas Regulation is to shift everyone's thinking to the "carbon dioxide emissions equivalent" of everything they do. Because quota is based on this CO₂e, not on refrigerant volume, customers in Europe now need to think carefully about what choices they make for refrigerant.

High-GWP gases like R404A, which is ubiquitous in the United Kingdom, will take up more quota than the low-GWP options, such as HFO blends.

So much of the concern surrounds one simple question: What can I do to lower the GWP of my estate, and how soon do I need to do it?

Consultant Ray Gluckman puts it in context:

"I envisage a quiet period this year, as we have the same quota amount we had in 2014, plus whatever everyone has been stockpiling in anticipation," Gluckman said. "Next year and the year after there will be a 7 percent cut in quota, which is not massive. But in 2018, we see a massive 37 percent cut — this is only the headline number, because there is roughly a further 10 percent cut in sales resulting from precharge controls.

"This refers to the fact that anyone importing precharged equipment will have to take the refrigerant for the precharge out of the quota. So the early challenge will be that 2018 cut of well over 40 percent in historic use. We need to get the message across that this is doable, but only if people get off their backsides and actually 'do' something about it."

As to what to do, Gluckman refers to what he calls four core actions to reduce HFC consumption:

1. Start using lower-GWP refrigerants for new equipment.
2. Use the lower-GWP refrigerants in existing larger systems where feasible.
3. Aim to reduce leakage. Over 50 percent of the current consumption of gas [in Europe] goes toward topping up leaked systems.
4. Have good end-of-life recovery in place and begin to use reclaimed refrigerant.

As Gluckman points out, the average GWP of what was bought in 2013 in Europe was 2,000, so to achieve the 80 percent cut demanded by the quota, the industry needs to get to an average GWP of 400 by 2030.

This can only be achieved by using a basket of lower-GWP gases, ranging from so called transitional blends of HFCs (like R407A or R407F) — which can only be used in the short term, but bring down GWP dramatically — to longer-term options like the HFO blends that have recently become commercially available.

New "mildly flammable" versions, with even lower GWPs, are also currently at the field trial stage. The mild flammability (to be designated A2L) is a new challenge for both industry and the standards-makers to come to grips with in the coming months. The message from refrigerant suppliers is that A2L "is straightforward, but just requires a new procedure to be understood and learned."

"We have been in the happy land of having lots of nonflammable refrigerants, but now we have to learn to work with a degree of flammability," Gluckman said. "My own view is that we will not get to the phasedown target without using 2L. I am not afraid of the 2L banding, but we don't have a lot of operating experience yet.

"The cuts are really challenging, so we need to convince people that they can't sit back for too long — if by next year we aren't seeing more activity out in the market, we should get worried."

The view is supported by Mark Hughes, of refrigerant manufacturer DuPont.

"It is probably the shortest period of time that we have ever had for regulation change," Hughes said. "We have two or three years to get organized, and it will have a massive effect."

Hughes also points out that the situation is volatile. For example, if people try to hang onto R404a, whatever the price, that "will suck up the quota and put more pressure on the other gases."

"It is such a dynamic situation that we will have to see how the market develops — but it will happen quickly, which is why we are encouraging people to take action sooner rather than later," he said. "The sooner people convert to lower-GWP the better — put the strategy in place, even if you don't make a massive move today."

Now lest anybody think this view is merely the vested interest of refrigerant manufacturers, the sentiment is also shared by suppliers.

Graham Wright, president of U.K. manufacturers' body HEVAC is forthright about the need to make plans or face the consequences — with a particularly scary forecast of pricing. His comments serve to sum up the challenge well:

"In my nearly 30-year career, what always surprises me is why the industry always waits to the last minute to do anything about legislation," Wright said. "As a representative of the manufacturers, let me say, if we all wait to the deadline, we are going to be in trouble. From where I am looking I can easily see the price of R410A going up to 10 to 20 times what it is now.

"I am not trying to scaremonger. It stands to reason that the quicker people move to lower-GWP gases, the less it will cost them."