A-Gas Managing Director John Ormerod provides an update on supplies of R404A and the progress being made on meeting the F-Gas phase down challenge.
Much to our surprise, it’s been a year of turmoil on the refrigerants market. Prices shot up last year and everyone thought that the F-Gas phase downs were having the effect that they were intended to. Since then we’ve seen a flood of R404A entering the market and prices have headed in the other direction.
The widespread supply of illegal refrigerants during 2019 has given the market a false view of the availability of these high GWP products, suggesting that they are in plentiful supply. We expect this to change in 2020
The good news is that you no longer have to rely on virgin R404A. Interim replacements like R448A and R449A will give some breathing space to meet the low GWP challenge.
With prices coming down by approximately a half to two thirds compared with the heights they reached at their peak last year, some have used this as a reason to pause their retrofit activity and not commit to moving to the next generation of low GWP alternatives.
We do have some hard stops at the end of this year which are likely to force the industry to get back up to speed on the F-Gas phase downs and refocus their retrofit programmes. In 2020 there’ll be a ban on placing on the market stationary refrigeration equipment using high GWP refrigerants (>2500 GWP) with an exception for equipment operating below -50°C.
The ban on the use of virgin refrigerants with a GWP of more than 2500 will give the industry plenty to think about. Irrespective of the size of the system, this means you will be unable to install refrigeration equipment that uses gases above this threshold. This effectively brings the installation of new R404A equipment to an end.
There’ll also be a ban on servicing existing equipment with virgin refrigerants that have a GWP of more than 2500 and where the charge is greater than 40 tonnes of CO2 equivalent – that’s equal in amount to approximately 10kgs of R404A. These changes will focus the minds of installers and end users as reclaimed R404A will need to form part of their procurement plan. Reclaimed R404A is available for servicing such systems until 2030.
The amount to come from reclaimed sources will be limited as the rate of retrofit activity has declined over the year. Most industry observers were expecting the opposite to happen. This is probably down to the widespread availability of high GWP HFC refrigerants.
But with the service ban kicking in on January 1 this will force people to confront the problem if they haven’t faced up to it already. They will have to retrofit or be forced to use a dwindling supply of R404A where permitted – and I can see this only leading to price rises.
There is evidence of illegal refrigerants entering the market having an effect on supplies of R404A in the UK but not to the same extent as on supplies on the Continent. Recent media reports have highlighted the problem in Europe. Eight people were arrested in Spain when more than £450,000 worth of illegal refrigerants were seized by the police.
At ports around Europe there is often no connection between the F-Gas management system and customs enforcement. This is how shipments of illegal refrigerants can often be waved through customs without any stringent checks.
The widespread supply of illegal refrigerants during 2019 has given the market a false view the availability of these high GWP products, suggesting that they are in plentiful supply. We expect this to change in 2020.
Despite this turmoil there is a clear path to follow for the refrigeration industry with the F-Gas phase downs. My advice to end users is to accelerate their retrofit programmes if they haven’t done so already. Help is on hand from refrigerant suppliers to ensure that you and your maintenance team have all that’s needed to make the switch to low GWP gases.
It is significant that the big supermarkets and many larger operations in food processing have made this change already. Let’s not forget that we have made considerable progress on this in the last three years but maintaining momentum is key.
This year will see the major refrigerant suppliers saying goodbye to virgin R404A. Contractors need to be sure that they are buying in line with the regulations. The good news is that you no longer have to rely on virgin R404A. Interim replacements like R448A and R449A will give you some breathing space to meet the low GWP challenge into the mid to late 2020s. But if R404A is still the product for you, reclaimed product is available.
Experts are on hand to help. There’s a wealth of information available on the A-Gas website to help you make the switch from R404A to low GWP gases and we are happy to give advice at the end of the phone. Only by working together we can all meet the F-Gas challenge.