16 April 2020
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Matt Watson, Temperature Control Specialist at Aggreko, explains how temporary chiller or cooling systems can help companies smoothly manage the transition into F-Gas ban compliance
With the introduction of the F-Gas ban on January 1, companies are under increasing pressure to implement more environmentally friendly practices as far as refrigerants are concerned. However, certain solutions enacted in light of this ban, such as continuing to run equipment on recycled refrigerant, can place organisations at significant financial risk.
A requirement of EU Regulation 517/2014 that will continue to be in effect after the UK leaves the European bloc, the F-Gas ban came into force at the beginning of 2020. Under the regulations, any hydrofluorocarbons (HFCs) with a global warming potential (GWP) of over 2500 are now banned.
While F-gases count for just 2% of the EU’s overall greenhouse gas emissions, the fact they have risen by 60% since 1990 marks them out as a cause for concern, especially considering all other emission contributors have been reduced. Consequently, the ban forms part of a larger UK and EU-wide initiative to reduce HFC usage by 79% by 2030 due to this outsized contribution to climate change. Specifically, it applies to all refrigeration systems containing hydrofluorocarbons (HFCs) equivalent to over 40 tonnes of carbon dioxide. This equates to around 10kg of R404A, a common refrigerant in medium sized systems.
As a result of the F-Gas ban, businesses that refill industrial and commercial refrigeration or freezer units of this size with virgin HFC refrigerants are required to take steps to phase out the use of these materials. Breaching the ban is classed as breaking the law and can put companies at risk of a fine of up to £200,000 under 2018’s Fluorinated Greenhouse Gases Enforcement Regulation in Great Britain.
Consequently, the ban represents a source of major upheaval for most commercial and industrial organisations using cooling, chilling and freezing equipment. Specifically, those using commonly used refrigerants such as HFC R404A or R507 will need to enact wide-ranging operational changes and find new solutions in order to keep in line with new regulations.
This can include making adjustments to system components such as compressors and condensing units, which, depending on the unit in question, may see their duty cycle affected by the use of non-R404A or R507 refrigerants, or need a liquid injection fitted for lower temperature applications. Furthermore, plant owners and operators might need to invest in new electronic expansion valves designated for use with F-Gas ban-compliant refrigerants, and could also have to carry out a number of software updates to ensure their unit adheres to regulations.
Coming up against capex constraints
Although though these necessary changes will solve issues around obeying the F-Gas ban, the cost associated with their adoption and investing in new refrigerants with a lower GWP value can provide prohibitive. This means options around adjusting existing plant, never mind investing in new, compliant units, may not always a viable option for certain site owners and operators. Indeed, while certain organisations may have the financial capital to implement these changes, other companies may find their options limited by capex constraints.
As a result, many of these businesses find themselves in an unenviable situation – needing to obey this new law, but unable to provide the funding required to do this. So, while enacting change through a permanent solution remains an attractive option, it is often but not financially practical for smaller businesses due to short-term concerns. With evolving their business becoming increasingly difficult, plant owners and operators may understandably be seeking cost-effective solutions to solve this impasse.
Potential recycled refrigerant risks
With the above in mind, and in order to smooth the transition to a future where industrial and commercial refrigeration units run on non-HFC refrigeration with much smaller GWP measurements, Regulation 517/2014 includes smaller steps organisations can take. This includes the ability to use reclaimed HFC refrigerants, and recycled HFC refrigerants that have been recycled from existing on-site equipment or by organisations servicing that equipment.
Due to the unstable economic climate the UK markets find themselves in for the near future, a number of organisations are electing to continue as they are before investing in new solutions and refrigeration. Yet though this is an understandable course of action, these organisations are running an expensive risk due to supply and demand issues.
For example, with shortages around higher GWP refrigerants expected following the F-Gas ban’s enforcement, the cost of this stopgap solution could rise exponentially. Taking this into account, it is highly possible that organisations originally looking to opt for this cost-effective solution could instead fall victim to market fluctuations and encounter unpredictable delays regarding the changes.
Long-term hire solutions
Considering all of this, it is clear that implementing the permanent changes required to adhere to the F-Gas ban would take substantial investment. Furthermore, attempting to adopt a transitionary solution such as using recycled or reclaimed HFC refrigerants could leave businesses with existing capex concerns, while compounding matters with a worsening financial situation.
However, another option exists – long-term equipment hire. While UK industry continues to grapple with economic uncertainty, more companies may benefit from hiring equipment in order to remain compliant and avoid unnecessary expense before making impactful and permanent business decisions around the F-Gas ban. This includes assessing the different options available and how some might be able to realise better life cycle costs and carbon emission performance.
Therefore, businesses can take advantage of a longer consideration period before providing the substantial upfront investment required to buy such equipment outright, while also enjoying the benefits of F-Gas ban-compliant chillers and cooling systems. Once an organisation has saved the capital needed for a permanent solution, hired equipment can also be used to minimise disruption while installation work is carried out, ensuring essential processes can continue as usual.
Leaks and maintenance
In addition, long-term hire provides an off-balance sheet option with no requirement for depreciation of tangible assets. As well as this, hire solutions also come with maintenance capability. Because a third-party team is available to handle product optimisation, ongoing maintenance and remedial action should issues occur, those hiring the equipment can enjoy peace of mind about its performance. This is in pronounced contrast to continuing with non-ban-compliant refrigerants and cooling systems, which due to service and maintenance bans brought in under the new regulations could be made completely unusable by a single major leak or rendered useless over an extended period through a slow leak.
Alongside ensuring F-Gas ban compliance, chiller and cooling systems from suppliers such as Aggreko can help site owners and operators begin their journey towards the Government’s target of net zero carbon emissions by 2050, without the disruption or hassle of capital expenditure outlay. Through the use of energy generation technologies, such as combined heat and power (CHP), lithium-ion batteries or cleaner-burning gas solutions, suppliers like Aggreko can provide the solutions and expertise required to build sustainable businesses without hitting the bottom line.
There are many benefits of hiring equipment when it comes to the F-Gas phase-out, including upgrading existing equipment or buying in a new system. By channelling capex into their core activity and hiring equipment on a temporary, long-term basis, plant owners and operators can avoid the prohibitive costs associated with new system upgrade costs or replacing equipment that is coming to the end of its useful lifetime. Instead, such solutions allow time to save capital and consider all available options for a permanent solution.
- Aggreko offers a range of products that can help to manage the F-Gas phase-out. To download the guide visit: http://bit.ly/33OIrbB
