Updates on alternative technologies and international developments in the Refrigeration and Air Conditioning Sectors

1 BACKGROUND HCFC phase-out in developing countries has started. Short/medium term targets: Freeze in 2013, 10% reductions from 2015, 35% reductions from HCFC-22 is the predominant refrigerant used in air- conditioners in developing countries Consumption of HCFC-22 in manufacturing and servicing of air-conditioners in major developing countries is significant (typically >70% of total HCFC consumption) and growing rapidly

2 BACKGROUND (CONTD) UNDP is engaged in HCFC phase-out in the Air Conditioning sector in many developing countries In many A5 countries, reduction in HCFC consumption in the Air Conditioning sector is essential for compliance with the control targets, and also in significantly reducing CO 2 emissions

3 MARKET FOR AIR-CONDITIONERS Market for air-conditioners growing rapidly in developing countries Estimated HCFC-22 based room air-conditioner sales (2009) in key developing countries in Asia-Pacific: Country2009 Sales China~30 million India3.15 million Indonesia1.35 million Malaysia0.93 million Philippines0.70 million Thailand1.15 million Vietnam0.45 million

4 MARKET FOR AIR CONDITIONERS (CONTD) By 2020, market for air-conditioners in Asia-Pacific could reach >100 million units and sales >US$ 20 billion Refrigerant charge volumes for new air-conditioners sold in Asia-Pacific (developing countries in 2009) estimated at ~40-50,000 metric tonnes annually(!)

5 TECHNOLOGY Need for lifecycle management approach in technology selection Manufacturing Use End of Life

6 TECHNOLOGY MOP Decision XIX/6 urges maximizing climate benefits when phasing out HCFCs Lifecycle CO 2 emissions from air-conditioners are % indirect and 5-40% direct. In developing countries direct emissions are higher due to local conditions Both energy-efficiency and refrigerant GWP are critical considerations to maximize climate benefits Currently there is no perfect alternative for HCFC-22. HFC and HC candidates involve compromises and trade-offs

7 TECHNOLOGY (CONTD) R-410A (GWP = 2,088*) has been the preferred alternative in developed country markets since ~2000. Population of air-conditioners with R-410A is already about 200 million, mostly in developed countries: about 200,000 metric tonnes of R-410A in banks and increasing! R-410A energy-efficiency performance in general and in high-ambient conditions in particular Is R-410A a sustainable alternative for minimizing adverse climate impacts? ____________________________ * IPCC 4 th Assessment Report

8 KEY ISSUES AND CONCERNS Reducing HCFC-22 consumption in developing countries without clear technology and policy signals, will result in unintended and adverse climate impacts For example, if developing countries restrict HCFC-22 based air-conditioners (manufacturing or imports), automatic technology choice is likely to be R-410A. Major developed-country technology providers showing preference for R-410A (e.g. R&D focus on optimizing R- 410 systems and components, new products based on R-410A etc.)

9 KEY ISSUES AND CONCERNS Significant expansion of HFC production facilities Extensive introduction of high-GWP technologies will lead to rapid increase in population of air-conditioners in developing countries, based on these technologies Considering prospective developing country markets by 2020, the net climate impact of HCFC phase-out with high-GWP technology, is most likely to be negative! A better, more forward-looking and climate-conscious approach to alternatives is needed!

10 WAY FORWARD What can industry do? Introduce and promote low-GWP, energy-efficient alternatives (R-32, R-290, others) on priority Support sustained R&D for new, better and safer molecules for substituting HCFC-22, as well as optimized components (e.g. compressors). Cooperate with MP panels and implementing agencies for sharing and disseminating latest technologies (e.g. demonstration projects, technology workshops)

11 WAY FORWARD What can governments do? Support incentives for better alternatives Support policies that ensure level playing field for the industry players Involve industry in formulation of policies and regulations Support targeted and clear regulations that take into account GWP and energy efficiency

12 DEMONSTRATION PROJECTS R-32 technology (UNDP): Commercial air conditioning and heat pumps at Tsinghua Tong Fang, China Ammonia/CO 2 cascade technology (UNDP): Low- temperature refrigerating and freezing systems at Yantai Moon Group, China Projects under implementation with target completion in 3Q2012.

13 RECENT DEVELOPMENTS Manufacturing line for R-290 based room air- conditioners commissioned in China in June 2011 (at Gree Appliances, Zhuhai) Japan and Indonesia announce partnership in June 2011, for R-32 based room air-conditioners. Panasonic will introduce R-32 based room air-conditioners in the Indonesia market from Indonesia will prohibit manufacturing, assembly and imports of R-22 based room air-conditioners from 01 January 2015.

14 THANK YOU! Comments, suggestions and questions welcome