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R22 phase-out: round table

With just five months to go, there is still a large amount of misinformation about the phase-out of R22, coupled with apathy among end users. RAC invited a panel from across the supply chain to thrash out what the industry should do to counter this

How would you describe the current situation?
John Davey Virgin R22 demand still remains high and the expected tailoff has not occurred - we are not seeing any drop in demand this year. Supply in Europe remains plentiful because of the weakness of the PTFE market and this has kept the price low, contrary to all logic. We deal with some multinational oil companies
who if they get a major leak will need maybe 30 tonnes of R22 in 24 hours, which can distort the market, so it could change as the year goes on.
Ray Gluckman It is a reasonable assumption that virgin material will be available till the eleventh hour, but that eleventh hour is so close anyway that it doesn’t make any difference whether it winds down at the end of October or the end of December, very soon we are going to hit the wall and no-one will be able to buy any more.
Mel Bridges The market has stabilised at around 1,900 tonnes of R22 a year. There is a finite quantity available in a finite amount of time.
John Davey I am already very, very concerned about people stockpiling virgin. We will support industry by barcoding and tracking cylinders, so every customer will get a letter saying you are not allowed to use it. There are only three things they can do: they can cheat, send the cylinder back or ignore it. So, we will charge people if they do not send it back and we will make our records available to the enforcing authority.

What about the level of awareness now, with only five months to go?
Mel Bridges I have been disappointed in the lack of response. Our contractors are pretty well aware, but there are different levels of awareness.
Ray Gluckman The proportion of the problem that has been solved is small. The problem still exists in supermarkets, massively in air conditioning, massively in food processing and also in chemical processing. Often the engineers are aware but their bosses are reluctant to spend the money.
Phil Hoden I have met with three different responses from three different contractors for our three different sites. One of them said the solution will cost nearly half a million pounds and still might not work. Well our bosses won’t commit that sort of money for something that might not work. I had to call in a consultant to look at the whole business - and he came up with the idea of leasing equipment in, so that we could show the efficiency benefits of the upgraded equipment. We have had 40
per cent increases in our electricity bills, so the more energy efficient kit is effectively paying for itself. Paul Garton There are thousands of companies who do not have their own refrigeration expertise in-house who don’t know what’s going on, who have all their refrigeration expertise contracted out, and who are reliant on different companies. They are getting a variety of responses back.
Ray Gluckman For virtually the whole of the food chain, it is 100 per cent of their livelihood at stake if the fridge plant goes down they cease production. It’s a refrigerated industry that no longer employs anyone who can make these decisions. Twenty years ago they would, they would have had a chief refrigeration engineer, a professional of some standing, but even some pretty big ones don’t have anyone these days.
Phil Hoden It eventually finds itsef on a radar such as health and safety, not an engineering issue - usually when it appears on an audit somewhere.
Mike Nankivell I don’t think the message has got through that it will be illegal to stockpile and use it.

What about the market for reclaimed R22?
Mel Bridges The amount available for reclaim currently of around 200 tonnes, is only going to be about 10 per cent of the market. We all have a bit in stock, but there is only so much out there and the only way we can process more is to get the stuff out of the system in the first place. It’s in the hands of the people who own the plant and the contractors and if it doesn’t come back, you won’t get any more.
Patrick Mullins On a customer that we have worked with recently, only 40 per cent of what was recovered could be reclaimed, the rest had to be destroyed because of contamination, from oil etc
Mel Bridges If 2,000 tonnes a year is being bought to replace leakage of 15 per cent, there would be a potential bank of about 15,000 tonnes out there. But asPatrick said, half is not reprocessable. And that stuff, if we don’t control it, will be out there with the unscrupulous contractors. With many end-users not knowing what the hell is going on, they will be dumping it in their systems, and the machines are going to break down.
John Davey The amount of product coming back for reclaim is pitiful but we are seeing a massive outflow of cylinders they are not coming back. That means that
somebody is storing waste. At some stage we are collectively going to run out of cylinders.
Mel Bridges We have hundreds of thousands of pounds invested in cylinders. They are price sensitive so we have one weapon to play and that is to put the costs up.
An extra ten or 20 quid has not had much impact. They may have to treble or quadruple because we cannot get cylinders made on demand, there is a long lead time. We have told our customers that after February next year will invoice them for every outstanding cylinder of R22 and we put that on every invoice now.
Ray Gluckman What we need is an effective mechanism to solve 80 or 90 per cent of the problem. F-Gas Support will be a hundred per cent behind industry in trying to agree something like a ‘virgin call-back protocol’ or something like that.
Mel Bridges We have got to do something responsibly and collectively, but we also have to move very quickly, as we only have five months.
Ray Gluckman What we can do is get all the people who have a right to call back cylinders around the table and agree a form of words that everyone can use.
To a degree we can knock that problem on the head if the suppliers were to say: “We would charge x or y pounds for a cylinder - or we take you to court.” We could say to the industry: “Look, there is a massive percentage not returned yet,” and recommend to Defra that they police the thing harder. The other route is company certification. By Christmas there should be thousands who have complied and we will have a route to write to contractors and say: “Have you got any virgin gas left?”

What is going to happen to companies who don’t give the cylinders back?
Ray Gluckman There is nothing illegal if a cylinder is not used after 1 January, but it is not logical for them to have it, particularly a half full one. So maybe the protocol should be to charge a monthly rental fee for that cylinder. F-Gas Support is not the regulator, but we would talk to the relevant local authority - and there is a
budget for local authorities to make regulatory visits. The visit would start with a friendly caution saying: “You have done xyz wrong… Please don’t do this again, and we will come and see you again in a month.” It might stimulate the company to send the cylinder back. If the regulator went back and found the cylinder was still there, they might issue an enforcement notice, which is a legally binding order. If they still don’t do anything it might then lead to a prosecution. If the cylinder was found to be less than fifty per cent full on the subsequent visit, that would obviously be grounds for prosecution, because it would have had to have been used. If it goes to a magistrate’s court, the maximum fine is £5,000, but if it is judged serious enough for a crown court, the fine could be unlimited.

Do people know enough about recycled R22?
John Davey They need to understand what they can and can’t do with recovered product because if the environmental groups discover that recovered R22 is being abused, the industry is going to get slaughtered. What used to be called a ‘recovery’ machine is now called a ‘recycling’ machine, thanks only to having a small filter on it, and that sends the wrong message.
Ray Gluckman The definition in our sheet RAC8 is that either the contractor or the owner or the plant can take the recovered product and use it in a recycled form. That means the contractor can use it for other clients or the end user can use it on others of their sites if they want to. It is a looser definition than we wanted, but that is Defra’s stance. It is a difficult message but contractors should be telling end users not to go for recycled but to choose reclaimed because it is their factory livelihood that relies on the quality of the refrigerant.
John Davey Harp is concerned that the industry shouldn’t rely on recycled R22 of unproven quality even though it doesn’t contravene the regulations. I think there will be some equipment working out there that will still have some R502 in it. If it doesn’t go back to a reputable reclaimer, whoever is recycling it will be trading illegally in CFCs.

 

Do you think we have a crisis on our hands?
Ray Gluckman There is a crisis based on history and the problem is that the price of R22 is still too low. It costs companies money to use reclaimed gas now, so
they don’t bother. But as soon as we hit the wall, and there is a potential crisis, the price will reach a commercial level.
John Davey The other thing is that the offshore guys don’t care whether it is £2 or £20 a kilo, because if you have to shut down an installation, it will cost them
telephone numbers. Those guys will be out there buying up the European sink of reclaimed R22 I guarantee it.
Paul Garton It will be a complete mess as some of the end-users don’t have a clue. All our large packs are converted but we will have lots and lots of one-off units, which are replaceable off the shelf and are not mission critical. I wouldn’t want to have a large pack running with 10,000 square feet on R22.
Alan Treacy There won’t be time to put the necessary money aside. We have been speaking to people who were taking two years to get the money to replace plant. But it’s worse than that now, because the credit crunch has come along and people don’t have the money to do it. People have pulled out of sites and left
someone else to pick up the legacy.
Mel Bridges There are plenty of people who think that they will just be able to call on their contractors in November time and get them to sort it out. And it goes up the supply chain, because wholesalers are going to be lower on stocks than they were last year. There will be some sort of knock-on effect that will only be felt later in the year.

What about the supply of labour and equipment?
Mike Nankivell We already have that problem in air conditioning - whenever there is a heatwave, the first thing that happens is the demand for maintenance rises, then we find there is not enough capacity to install the new equipment that is required. We have that problem when it is just two or three weeks of the year.
John Davey For split air conditioning, many of these guys will have a relatively easy job to replace R22 with 417A. The only real difference they will notice is that their invoice is higher.
Alan Treacy The question is how quickly can European wide manufacturing ratchet up to meet the demand to supply and install all the equipment that needs to be
installed? And the contractor base to install it.

How prepared are we as an industry?
Ray Gluckman My instinct is that the large supermarkets have got plans that are implemented or well under way. But I feel that the food industry is not under control in any way and they have got some kit, large pump systems, with five tonnes of R22 in a blast freezer. I am desperately worried that there is not enough independent data to tell us just how good refrigerants like 417A are in these applications. Can we pull this information together as an industry, or have trials, perhaps funded by the Carbon Trust?

What other concerns are there for you about phase-out?
Mike Nankivell One of the concerns for air conditioning is the potential environmental impact of large amounts of obsolete equipment. And, of course, there is concern about the longevity of the equipment with a replacement refrigerant. It can only be seen as an interim measure.
Paul Garton What gas do we put in next? Some of them are good from an ozone point of view, but the manufacturers won’t give the warranty. I think they should - it is not as if they are new gases.
Patrick Mullins We often have to provide the warranty, it is our risk.
Alan Treacy We should also remember that some of the retrofit solutions will lose a lot of the energy efficiency. I have seen one conversion recommended that had a 22 per cent energy penalty, and that is outside all reasonable parameters.
Ray Gluckman We shouldn’t forget that the equipment we are talking about will have to be at least nine or 10 years old, and it might be as much as 30 years old. In general the message will be that you shouldn’t retrofit really old kit.

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