I have written a few times before about the F-Gas Regulation and its effect on the cooling industry in Europe. I make no apologies for my obsession as it is the most radical change for European cooling since CFCs were banned and everyone was encouraged to use HFCs instead. Now, of course, they are being encouraged to ditch those HFCs over time and find something less prone to warming the planet.

F-Gas marks a new strategy for European policymakers as far as the cooling industry is concerned. They are using an untested combination of proposed bans and quotas to drive the industry in the direction that they want. Like a farmer with a particularly snappy sheepdog, the European Commission is seeking to maneuver users of refrigerants from the high-GWP refrigerants toward the greener pasture with the more planet-friendly gases.

Now that the F-Gas Regulation is in force, the conversation has moved on to how to cope with the inevitable consequences of a quota system — one that will ultimately see HFC production reduced by 70 percent in the European community.

While the quota reductions themselves have yet to physically bite this year's quota is simply freezing at last year's levels the cooling industry is starting to get pretty worked up about it. The concern is basically on two fronts:

  • There are those who worry about the impact of reducing production and what this will mean on the ground for those who depend on those refrigerants at the higher end of the GWP scale, notably R404A.
  • There are others who are more generally concerned that there is no way of telling how things will pan out yet, and therefore people don't quite know what they should do to prepare.

It is quite an uncertain situation, because we in Europe are pretty dependent on R404A. Unlike folks in the U.S., we don't have R22 to fall back on either.

Those at the sharp end of refrigerant distribution who have to forecast the supply predict a pretty tight squeeze on demand in the next three years or so as a result of the steadily-reducing quota. Interestingly, this squeeze now seems likely to happen well ahead of the first ban the 2020 prohibition on servicing equipment with high-GWP refrigerant purely because of the reduced supply into the market.

The F-Gas Regulation provides for a quota weighted on GWP, which means that refrigerant manufacturers can choose what combination of gases they produce to fulfill their quota. It thus only adds to the uncertainty for those on the ground since no one quite knows what basket of gases the manufacturers will elect to produce. The volume of R404A produced could actually reduce far more rapidly than the forecasters have predicted.

John Ormerod, U.K. managing director of refrigerant distributor A-Gas is one of those convinced that the industry must make plans now

"The market is going to get tighter sooner than people realize," Ormerod said. "There is no doubt that there will be a supply crunch, and it is not going to be 2020, it will be in the next three years. Our modeling shows that the shortfall in refrigerant produced because of the quota reductions could be more than the entire U.K. requirement for R404A, so it is significant."

The key consideration for those currently using higher-GWP refrigerants (notably R404A, but also blends such as the R22 replacement R422D) is whether to convert systems to so-called transitional gases, namely R32 or medium-GWP blends such as R407A and R407F, or to move straight to the new HFO blends, recently launched by major manufacturers DuPont and Honeywell.

While the manufacturers maintain that availability of the HFO-based refrigerants is not a problem, some end-users retort that they are still too new to have had the site-specific testing, particularly in-system operational testing. Price is also part of the consideration, especially since the recently released HFOs can be as much as four to five times the prices of R404A. Although, the price of R404A is equally expected to climb over the next couple of years as the production of the refrigerant reduces in line with the quotas.

Ormerod is pretty forthright about the current situation on the ground.

"People are wondering what the heck they should be doing," he said. "Get out of R404A has to be the first advice. Make plans to move away from the high-GWP refrigerants."

However, Ormerod also notes that no one seems to be in any rush to convert their systems just yet.

That lack of action will only serve to heighten any supply-and-demand shortfall. We are expecting some pretty heated questions at our debate on F-Gas, which takes place next week. I will be sure to report back on the mood from the industry.