Organisation looking into reports of rationing of AC refrigerant despite a lack of alternatives on the market
Refrigeration registration body Refcom is investigating claims that some refrigerant wholesalers are rationing R410A to contractors, while still holding large supplies of the higher GWP refrigerant R404A. The organisation hopes that an industry-wide effort to curb reliance on R404A would allow the wider market to better prepare for surging refrigerant prices.
Graeme Fox, head of Refcom said that while “most wholesalers and contractors” had heeded the industry advice to encourage transition to lower-GWP gas products where possible - thus ensuring that F-Gas quota is still available for use with applications where there are few or no alternatives – it wasn’t universally being applied across the UK supply chain.
He said, “Some wholesalers are still encouraging the use of R404A, by maintaining large stocks of that gas, while restricting the sale of other medium GWP gases such as R410A despite there being no alternative for a great many applications yet for R410A.”
VRF systems are not yet available with a lower-GWP alternative, meaning that AC contractors have no choice but to specify the gas for top-up and new installations.
Mr Fox said the wholesaler’s stance was short-sighted on two fronts:
“It not only undermines the intent of the phase-down process, but is starting to put at risk the financial stability of hundreds of contractors affected by the rising cost of refrigerant gas.”
Refcom said it had been made aware of a case where a contractor purchased R410A, but was told they were not allowed any more “for the time being”. The body said it was yet to determine the exact motives of the rationing but would naturally be very concerned if this was a conscious effort to build up large amounts of R404A in order to profit at the potential expense of industry stability. R404A prices rose tenfold last year as suppliers sought to manage supply and demand.
Refcom is investigating and it said that at this stage it is not clear whether the rationing is exclusive to a specific wholesaler, a group of companies or even to the actions of specific staff.
Under the EU F-Gas regulations, the availability of HFCs available on the market is steadily being reduced under a GWP-weighted quota system. The steepest cut in the quota came into effect on January 1, effectively reducing HFC availability to 63 per cent of the 2015 baseline amount.
Mr Fox said that within this context it would be understandable that wholesalers would look to steadily ration gas sales, but that simply basing it on previous years’ sales risked being too simplistic an approach in such a volatile market.
He said: “Just before Christmas another large service contractor shut down, making a large number of engineers redundant. As in similar circumstances before, a number of those engineers will start their own small service companies. How are they going to obtain the gas necessary to work in the sector if they have no track record?”
“What about the SME current businesses who want to take over some of the contracts that are now up for grabs? If a company has previously worked mainly in small splits but now has taken over responsibility for VRF installations, they will inevitably have a greater need for gas than they previously had. How can their suppliers restrict that supply?”