HFC levy won’t make the milk sour

There have been many extravagant claims that food prices will soar due to increases in refrigerant prices. These fears have been overplayed – instead, the new levy will put Australia at the leading edge of the refrigeration industry.

Refrigerant gases are normally out of sight and out of mind, yet they are crucial for our comfort and economic performance.  They are central to almost all refrigeration and air conditioning.  But it is easy to overlook their importance and get lost in an alphabet soup of C’s, F’s and H’s.

Most believe the problem was fixed when we saw ‘CFC-free’ stickers appearing on our fridges in the mid 1990s as a result the Montreal Protocol. This is not the case. CFC refrigerants were largely replaced by hydrofluorocarbon (HFC) refrigerants.

While HFC refrigerants are non-ozone depleting, they are extremely effective at trapping heat within the atmosphere, with a Global Warming Potential (GWP) thousands of times greater than CO2. This was recognised by the inclusion of HFCs in the Kyoto Protocol. However projections show HFCs are likely to be responsible for 9-19 per cent of global emissions by 2050 unless action is taken now to phase them out.

The imposition of the carbon equivalent levy on Synthetic Greenhouse Gases is causing refrigerants to come under the spotlight again via the ‘HFC Levy’.  This time it is hydrofluorocarbon refrigerants because every kilogram emitted equals between 1.3 and 5 or more tonnes of CO2 equivalent. 

Extravagant claims have been made in the Parliament, The Australian, the ABC’s 7:30 Report and Lateline that food prices will soar and companies will be forced to the wall due to increases in refrigerant prices. The fluorocarbon industry has been telling anyone who will listen that the government is ill-informed, not listening, and that the HFC levy will cause unnecessary economic harm.

So why is the government including HFC refrigerants in the Clean Energy Future reforms? Because they are among the most powerful global warming gases, they are used pervasively and their use is rapidly growing in Australia and around the world. Because these gases are emitted at a high rate due to leakage and because there are refrigerant solutions that are both energy efficient and have low global warming potential. 

Putting a carbon price on HFCs has been shown to be a highly effective way to reduce synthetic greenhouse gas emissions. Denmark and Norway have applied taxes on HFCs to successfully reduce emissions. Australia is using a pricing mechanism to discourage the use of HFCs and encourage better leakage management.

The price rise on HFCs will give the refrigeration and air conditioning industry a reason to better manage leakage. The sausage-makers, cool store owners and food and beverage retailers will need to call on their service technicians to adhere to best practice maintenance and preventative inspection techniques. The solutions are well known, available and practiced by leading contractors.

Importantly there is also a full range of refrigerant-based technologies available for use in Australia with low global warming potential. Refurbishment of old plant, and replacement of ozone depleting HCFC (R22) equipment can be done with an increasing range of natural refrigerant choices, which in almost all cases deliver a significant energy efficiency dividend and attractive payback periods on any higher capital investment.

Supermarkets have seen this coming. They have been working since 2007 to replace fluorocarbon refrigerants with the natural refrigerant carbon dioxide. Every Aldi store in the country uses state of the art freezer cabinets using a hydrocarbon refrigerant. Hydrocarbons are non-ozone depleting and have very low global warming impact.

Australia’s only remaining refrigerator manufacturer, Electrolux, changed over to hydrocarbons in 2010. There are well in excess of 40 million domestic refrigerators manufactured per annum worldwide using hydrocarbon refrigerants.

Australia leads the world in the adoption of hydrocarbons as an HFC replacement in the car air-conditioning service market, mainly because of the significant performance and efficiency advantages.

Ammonia is probably the most efficient and environmentally benign refrigerant, which has continued to be used in cold storage industrial refrigeration applications since the 1950s. It is now experiencing resurgence with modern technology that is highly energy efficient.

With the application of a meaningful rebate for the return of old and unwanted refrigerants, Australia has an opportunity to at last get serious about the task of recovering gas at equipment end-of-life. It is high time we ended the pervasive practice of turning a blind eye prior to sending equipment and foam to the shredder without being de-gassed, and kidding ourselves that current recovery arrangements are effective.

Global demand for future-proof refrigeration and air-conditioning solutions is enormous and rapidly growing. The HFC levy will drive the innovation among Australian industry that will enable us to join the providers of sustainable solutions, and show other countries how to embrace the transition we all need to make.

The HFC levy will in fact generate high growth in the refrigeration and air conditioning industry. It will cause the industry to invest in better ways to reduce leakage. It will cause investment in transition to low GWP refrigerant-based technologies. It will put Australia on the leading edge of the industry in all respects and enable Australia to develop export capabilities as the rest of the world transitions to environmentally preferable practices.

Brent Hoare, Australian Refrigeration Association.

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