1. Challenges Faced by Companies in Article 5 Parties in Converting to Low-GWP options R K Mehta RAMA – INDIA 20 th & 21st April 2015 Bangkok

2. Industry status in Article 5 Countries  Industry is engaged in implementation of phase-out of HCFCs to meet the stringent Compliance targets of the Montreal Protocol.  95 to 97 % contribution to Global warming is by energy generation & consumption and only 3 to 5% by Refrigerant emissions. Countries are developing and implementing stringent energy efficiency standards to mitigate global warming.  The Cooling capacity (tonnage) required for a given space varies with the ambient temperature prevailing in the country or region (Middle East to India to South East Asia to China).  Growing demand of RAC is being driven by:  improved living standards and rapid urbanization.  HFCs and Blends of HFCs are being adopted as alternatives to HCFC-22 by developed countries, due to non-availability of safe,proven,low-GWP alternatives.  The industry is on the cross-roads due to lack of clarity on choice of alternative technologies to HCFC-22 for air-conditioning sector.

3. Regulatory and Economic Challenges Montreal Protocol : Accelerated Phase-out of HCFCs:- Implementation challenges due to non-availability of safe, and economically viable low-GWP alternatives Energy Efficiency: Mandatory progressively stringent Energy Efficiency norms: non- availability of safe and proven alternatives to HCFC-22 with comparable characteristics Economic Challenges: Industry is unable to afford multiple conversions. Uncertainty about the emerging low-GWP technologies with regards to timeframe for availability and costs a Outlook of Industry: There is a growth of around 8% in india and the industry would like to achieve the growth of +15% which was witnessed prior to 2011. Industry to overcome the uncertainties created by international regulatory frameworks. Challenges

4. Challenges to Industry  Lack of clarity about definition of Low GWP.  Industry is indecisive about the use of flammable refrigerants and awaiting for safe non- flammable technologies.  Challenges in adoption of flammable technologies:  Responsibility of liability for damages, if any  Field servicing of RAC equipment using flammable refrigerants  Transportation and storage of flammable refrigerants for installation/ servicing.  Global harmonization of safety standards, regulations & codes for flammable refrigerants  Energy Efficiency Regulations and Refrigerant change have to be addressed in tandem  Article -5 countries cannot be addressed as one block solution R&D Manufac turing Sales Installati on Service within Warrant ee Service beyond warrant ee End of Life End to End Business Process

5. Challenges to manufacturers  Addressing design platforms  Non clarity of long term perspective on acceptable Refrigerants. 20 years history has shown that new refrigerants created new issues  Patents and cost of technology  Meeting Efficiency requirements under high ambient conditions  HC refrigerant are being used for more than 2 decades in Refrigerators, still penetration of HCs in this sector is only 55% of around 120 Million units produced world wide every year  Managing safety issues  Fire as a safety is at the top of the safety pyramid  Field Installation of split systems and servicing particularly during post warrantee period  Flammable refrigerants charge limit is based on space in which equipment is used  Majority of Artcle-5 countries require large size of equipment  Skill development  With seasonal nature of business attracting and retaining service technicians who get paid around US $100-120 a month  Constantly migration from HVAC technicians to other reliable income source hinders the knowledge absorption

6. Conclusion  Extension of Phase-out Schedule of HCFCs to ensure availability of safe, economically viable matured low-GWP Technologies for HCFC-22 to avoid multiple conversions.  Need for R&D and evaluation demonstration projects in Article 5 countries.  Expedite ongoing evaluations of low-GWP refrigerants for high ambient temperatures.  Global Warming should be seen in holistic way as Refrigerants contribute only 2 to 5%.  Industry is looking for solutions prior to making any definitive move for adoption of Low GWP refrigerant:  There should be solutions for all the product lines;  Technology is developed and absorbed;  There is availability of refrigerants without IPR restriction and at reasonable price;  Liability issues across business processes in handling flammable Refrigerants needs to be resolved.

7. THANKS