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R-22 refrigerant (HCFC-22) is the most widely used refrigerant in North America. It will remain legal to buy, sell and use forever. Misinformation in the industry indicates R-22 cannot be used once the virgin supply ceases after 2019. These statements are false. Consequently, R-22 represents a tremendous business opportunity for those wholesalers who recognize that it will remain the most commonly used refrigerant in North America long after the virgin manufacturing phaseout.
A recent report commissioned by the Heating, Air-conditioning and Refrigeration Distributors International (HARDI) and J.P. Morgan uncovered some uncertainty among wholesalers as to where they will procure R-22. The report is based on the results of a June and July 2018 survey of 160 independent wholesalers.
In response to the question, “How confident are you that you can source R-22 after Jan. 1, 2020?” almost three-quarters of respondents (70 percent) were “not sure.” Another 5 percent responded they would likely need new suppliers to continue buying R-22.
In the same survey, respondents were asked: “How active are you in educating your customers that R-22 will be available and is approved for use long after January 1, 2020?” About 25 percent said they were “very active,” while half said they were “somewhat active.” The “somewhat active” group said they offered information when asked about R-22.
Analyzing this, 75 percent of wholesalers are active in educating their customers about R-22’s availability; at the same time, 75 percent of wholesalers aren’t sure if their current supplier will have the refrigerant available after 2020 or believe they’ll need to find a new supplier.
This year, more than 8 million lb. of newly manufactured R-22 were allowed into the U.S. market, with more than 4 million lb. coming next year. After 2020, the source of R-22, other than existing stockpiles, will be from EPA-certified refrigerant reclaimers. Wholesalers will buy their R-22 supplies from them.
R-22 systems represent the largest installed base of any refrigerant in North America. Industry estimates are that tens of millions of pounds of the refrigerant are available for reuse contained in existing equipment in residential systems alone. Systems currently using R-22 and age out will have it recovered and available for reclamation. Those maintained well will need R-22 for service and repairs, potentially for 20 years or more.
EPA documentation shows that more than 100 million lb. of R-22 have already been reported as reclaimed in the last 10 years or so. The market looks well-supplied with the refrigerant now and in the future, leading to an important issue: communication regarding the R-22 phaseout specifics.
Educating the Industry
The message that R-22 is only being phased out of new manufacturing is not clear to the wider market. A quick search of the Internet on terms such as “R-22 replacement,” “R-22 phaseout” or other similar terms reveals rumors and myths, some of them aimed at trying to convince system owners to buy new HVAC systems. In many cases, this would mean abandoning an investment that could last another decade or more — whether it’s a commercial air-conditioning system, an industrial chiller system, a residential air-conditioning system or an industrial refrigeration system.
The R-22 refrigerant phaseout message has been sometimes truncated, with the part about the phaseout being only for the new manufacturing of R-22 forgotten.
It leads to questions such as, “Should I switch systems?” and “Should I switch refrigerants?” The answer to these questions should have its foundation in the system’s age and condition, which a contractor should be able to diagnose, rather than on a prediction of the future price of R-22, or worse, miscommunication of R-22’s legal status.
Refrigerant R-22 pricing has been up and down over the last five years of the phaseout. While the common perception is that R-22 may be too expensive in the future exists, the truth is that prices and supply have stabilized.
Whether a building owner should switch refrigerants for a residential system, a commercial system, rooftop system or chiller isn’t that simple. Contractors can’t simply switch refrigerants for system owners. True drop-in refrigerants — requiring no system changes, modifications or adjustments, and that have no efficiency or performance changes — do not exist. While a few replacement refrigerants exist, they have some tradeoffs, too:
There will be a cost to make system changes to accommodate a replacement for R-22.
R-22 is what the equipment was designed for and optimized for.
Remaining with R-22 means there is no drop off in energy efficiency.
Staying with R-22 may be necessary for warranty situations.
Nearly all replacement refrigerants use more energy and have higher global warming potential than R-22; substitutes may be more harmful to our environment.
Credibility: Why It Matters
Wholesalers should recognize through their customer relationships that they are not just stocking agents; they are the eyes and ears of the industry. Contractors visit the wholesalers they trust.
Everyone who handles refrigerants plays a part in knowing the law and communicating the correct information. What happens in the industry from the product and manufacturing side enters the channel through the wholesalers first. Wholesalers who can provide the correct information, give options and clarify issues are likely to build stronger relationships and enjoy more sales. That’s how trust works.
CFC refrigerants such as R-11 and R-12 were phased out in 1995. Yet these refrigerants are still in use and are still readily available for purchase today. In the case of R-11 and R-12, market pricing followed usage trends. When there was too little refrigerant to supply the systems needing it, pricing was high. Monetary incentives drove the market to clean up and reuse these refrigerants, which enabled the recovered refrigerants to be sold to reclaimers. This business model exists already, paving the way for a smoother transition into an all-reclaimed world of R-22.
By definition, reclaimed R-22 is the same as new R-22. Recovered R-22 refrigerant is sent to an EPA-certified reclaimer, where it is distilled, dried and stripped of impurities through various processes and can be called reclaimed refrigerant. A reclaimer then must certify through laboratory analysis that it has bought back the refrigerant to AHRI-700 purity levels — the same level as virgin refrigerant.
Wholesalers prepared to receive recovered R-22 from contractors and also sell reclaimed R-22 are well-positioned. Contractors will continue by law to recover R-22 and will need a convenient drop-off location to exchange full recovery cylinders. Wholesalers offering this service and selling the recovered R-22 back to EPA-certified reclaimers not only contribute to their bottom line, but they also contribute to the most environmentally responsible use of R-22 refrigerant. Wholesalers paying contractors for recovered R-22 will provide greater incentives to the contractor to recover and return R-22.
Collectively, this industry serves people and the environment. By extending the life of existing systems, we help customers recoup their investments. By recovering R-22, we preserve the ozone layer, and by reclaiming R-22, we have a lower carbon footprint than manufacturing new refrigerants.
R-22 is here, legal to buy, sell and use, indefinitely. We owe it to ourselves and our customers to get the information — and the opportunity — right.
Marla Waggoner is an account manager at Hudson Technologies, a provider of sustainable solutions for optimizing performance and enhancing the reliability of commercial and industrial chiller plants and refrigeration systems.