Different countries – different trends? The situation of natural refrigerants by

Carbon Equivalent Refrigerant Levy – the Australian Experience Stefan S. Jensen B. Sc. Eng. FIEAust, CPEng, NPER, F.AIRAH Managing Director Scantec Refrigeration Technologies Brisbane, Australia

Nuremberg, 10 October 2012 Future HFC costs R134a levy: 1.3*23 = $29.90/kg SubstanceGWPNon-carbon Price Import Levy Equivalent Carbon Price Component Total Levy $$$ HFC134A R404A R407C Source: Department of Sustainability, Environment, Water, Population and Communities

Future HFC costs AUD 1.00 ≈ EUR June 2012Source: List Price Example:

Clean Energy Future Plan released 10 July 2011 The objectives of the plan are to cut pollution and drive investment in lower polluting industries Will apply to all six Kyoto gases: Carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride Fixed price period from July 2012 to June 2015 Clean Energy Future Plan Source: Department of Sustainability, Environment, Water, Population and Communities

Market based system from July 2015 with the exception of synthetic greenhouse gases Household assistance Programs to assist industry transition and improved energy efficiency (CTIP, LCA) Clean Energy Future Plan (cont’d) Source: Department of Sustainability, Environment, Water, Population and Communities

Clean Energy Future Plan (cont’d) Levy applies to SGG’s listed under the Kyoto Protocol from 1 July 2012 Levy applied through Ozone Protection and Synthetic Greenhouse Gas legislation The levy encourages: increased recycling of synthetic greenhouse gases improved servicing of existing equipment to reduce leakage a switch to purpose-designed equipment using lower GWP gases, only where this is appropriate and meets relevant safety standards and legislative requirements innovation by manufacturers Source: Department of Sustainability, Environment, Water, Population and Communities

Clean Energy Future Plan (cont’d) Applies to all imports and manufacture of HFCs, PFCs and SF6 Applies to import of HFCs, PFCs and SF6 in equipment Exemptions where impracticable or for medical, veterinary or WHS reasons Inhalers exempted Imported foam products exempted with review over next 12 months Provision for refunds for SGG exports Source: Department of Sustainability, Environment, Water, Population and Communities

Proposed Destruction Program Incentives will be provided for destruction of waste SGGs and ozone depleting substances, recovered at end of life Payment will be made after verification of destruction of the gas Program will be developed in consultation with industry Program will start 1 July 2013 Clean Energy Future Plan (cont’d) Source: Department of Sustainability, Environment, Water, Population and Communities

The “working” bank 40,100 metric tons contained in 37,000,000 devices Source: Peter Brodribb; Refrigerant Levy Panel “Working Bank”. What are the options?”

The “working” bank Source: Peter Brodribb; Refrigerant Levy Panel “Working Bank”. What are the options?”

Initial Industry Reaction Not enough time for industry to adjust Lack of information Safety issues caused by shift to low GWP fluids Security issues due to more gas theft Potential for perverse outcomes Cash flow problems Increased warranty risks Skills shortages Counterfeit hydrocarbon based refrigerants Panic buying of refrigerants Recycling of contaminated refrigerants Increases in incidents of fraud and smuggling Skills based licensing needs Need for new standards Source: AIRAH Industry Summit March 2012

Initial Industry Reaction cont’d Lack of Government understanding of industry issues Lack of evaluation framework for emissions reductions achieved Lack of articulation of Government objectives No clear path for funding assistance Lack of access to trusted information for industry Lack of enforcement of current SGG legislation Slow development of new regulations Lack of skilled trainers and equipment for NR’s ETC

Initial Industry Reaction cont’d

NO EXCEPT PERHAPS IF YOU HAPPEN TO BE A MANUFACTURER OF HIGH GWP REFRIGERANTS! SO IS IT ALL BAD?

First Step – Stop the Leaks Source: Expert Group, Peter Brodribb and Michael McCann ‘Refrigerant Emissions in Australia, Sources, Causes and Remedies, 2010 Sources of leaks as identified by survey of technicians and contracting businesses

Next Step – Transition NH 3 HFC Total engine room shaft power, kW Total annual operating costs excl. maintenance$133,120$212,369 Approx. refrigeration plant capital cost, k$ Simple pay-back for Δ investment, years4.7- Technical plant life, years ~55 m EXAMPLE 1

EXAMPLE 2 AFTER BEFORE Two Water Cooled R717 Water Chillers, 1200 kW Two Air Cooled R22 Water Chillers for Office Air Conditioning, 1200 kW Annual Energy Saving 500 MWh Next Step – Transition

AFTER BEFORE EXAMPLE 3 Central R717 Water Ethanol Cooling Plant, 6000 kW Four Water Cooled R134A Ethanol Chillers for Process Cooling, 6000 kW Annual reduction from 40% to <30% Next Step – Transition

QUESTIONS? Can we do it? Yes, we can.