In 1987, the Montreal Protocol, an international treaty to address atmospheric ozone depletion, established timelines for the phasing out of Chloroflourocarbons (CFCs) and Hydrochloroflourocarbons (HCFCs). Production and use of CFC's, the more damaging of the XCFC's was banned almost immediately-by 1996, immediate in regulatory terms--and hairdressers everywhere has to find alternatives to their Aquanet. HCFCs, with less greenhouse gas potential, have faced a slower phase out, with most uses phased to zero by 2020 and all uses by 2030.
Of importance to me, and really that's all that's important here, the primary refrigerant in most household air conditioning units installed before 2005 (as mine was, the significance of which will become apparent imminently) is Freon, also knows as R-22, or Chlordiflouromethane, an HCFC.
Well, upon returning from my field research trip yesterday, I arrived home to local warming--that is, my air conditioner had crapped out while I was gone. As the tech put it, we have a small leak in one of the copper lines--environmental shame on us--and a dirty coil, which caused the supply lines to freeze. The long-term solution is a new AC unit (or a lot of sweat), but the short-term solution is a cleaning and recharging of our current unit with somewhere between 0-4 pounds of R-22.
Knowing a rough history of Freon, this news from the tech caused my inner-economist to come to attention. Future bans on R-22 (supply decrease) are going to cause current supplies to decrease (rationing) and cause current price increases. So I ask, tepidly, "How much is R-22 these days?"
The tech, sensing my insider knowledge, says, well, unfortunately, prices have doubled in the past year and they're expected to keep going up until we can't use R-22 anymore in 2020. He said prices are about $100 a pound now.
Don't believe the tech? Well, here ya go:
In October 2014, the EPA announced its final phasedown schedule regarding the production and importation of HCFC-22. The order called for an immediate drop from 51 million pounds allowed in 2014 to 22 million pounds in 2015, 18 million pounds in 2016, 13 million pounds in 2017, 9 million pounds in 2018, and 4 million pounds in 2019. No new or imported R-22 will be allowed in the U.S. on or after Jan. 1, 2020.
Stefanie Kopchick, North America marketing manager for refrigerants, The Chemours Co., said the annual allowances have decreased faster than the market demand for R-22, which has depleted inventory across the supply chain.
“Chemours is not excluded from this reality,” she said. “As a result, in 2016, we’re starting to feel the snugness in supply; our wholesale partners have been cut back significantly as the inventory Chemours built in advance of the final phasedown period continues to be depleted.”
With meteorologists predicting normal to warmer-than-normal temperatures this summer, industry leaders only expect demand for the refrigerant to increase. Further adding to the increasing demand is a drop in reclamation and an increase in interest values affecting financing decisions, said Gordon McKinney, vice president and COO of Icor Intl.
“The amount of R-22 being recovered and reclaimed is not expected to contribute much more than 8 million pounds this year,” he said. “Interest rates are on the rise, and that will make repairing a better option than replaceing for many air conditioning and refrigeration equipment owners. With service demands for R-22 in the U.S. still estimated to be in the tens of millions of pounds per year, many R-22 users will need to transition to an ozone-safe alternative, like ICOR’s NU-22B®, to service legacy R-22 systems.”
McKinney mentioned the price of R-22 increased in the fourth quarter of 2015 by an average of 15 percent, is expected to increase through the year, and could reach record levels by the end of 2016. For HVACR contractors and distributors, this could spell trouble.
Damned ozone layer!