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US and Australia set for rising refrigerant prices

The cooling industries in the US and Australia are bracing themselves for major refrigerant price hikes, as result of forthcoming legislation.

The Australian price rises are set to materialise from July when a new tax is imposed on HFCs.

The tax, linked to GWP, is being brought in alongside the national carbon tax and will be levied on both refrigerants and pre-charged units.

Under the scheme the typical price of R410A would triple after  1 July and industry association Refrigerants Australia estimates the HFC tax could cost the cooling industry A$270m (£170m) a year. 

The association said: “At this stage there is little detail and many unanswered questions. No doubt a raft of unintended consequences will emerge.”

The tax is likely to be linked to the average carbon tax price, initially set at A$23 (£15) per tonne of CO2e.

The scheme will not tax HCFCs, and to speed adoption to lower GWP refrigerants the national government has undertaken to pay for destruction of end-of-life HFCs and HCFCs  from 2013.

Cooling industry groups have complained that taxing GWP is a blunt instrument that does not reflect the energy impact of the refrigerants.

Meanwhile the American RAC industry is seeing R22 prices rise rapidly as stocks are wound down under the conditions of the Montreal Protocol.

Virgin R22 has not been allowed in new equipment in the US since 2010, but it is still allowed for servicing.

However, by 2015, the industry consumption has to be cut to 10 per cent of its original baseline, so refrigerant producers are cutting back accordingly.

US contractors have reported R22 prices jumping from $40/lb (£55/kg) to as much as $90/lb (£120/kg) in the last year as restrictions bite.

But contractors say that the additional cost of the gas has caused the cost of a typical AC recharge to rise fourfold.

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