Danfoss on F-gas regulation
The F-gas regulation was implemented at January 1, 2015. The regulation put in place an HFC phase-down from 2015 to 2030 by means of a quota system and sectorial bans on high GWP refrigerants. R404A/R507 is especially under pressure and likely to be phased out of all commercial systems. An EU quota allocation mechanism have been made and the first phase-down step was accomplished in 2016 with quotas reduced by 7% compared to baseline. The quota system mechanism assigns quotas to producers and importers of bulk gases. Quota holders can transfer part of their quota via authorizations to importers of pre charged units. Authorizations can again be delegated but only ones. All operations must be reported in the central registry to ensure compliance with the regulation. For more detailed descriptions and Q&A documents please refer to the EU homepage or to the EPEE homepage. The import of pre-charged units and the need for retrofit of R22 systems with HFC replacements are not taken into account in the baseline for the phase down. The import of pre-charged units is estimated to at 11% to the official baseline. As the amount of HFC import in pre-charged units will be accounted in the official quota from 2017 it is believed that it will create extra pressure on the availability of HFC.
By adding the pre-charged units demand into the phase down steps and assuming a constant consumption in metric tons over the years a different scenario become evident. By 2018 the quota falls to 56 percent of the baseline compared to previous 63%. The 2030 target of 21% of baseline becomes in reality around 19%.
The expected composition of the phase down until 2021 is outlined in the sectorial overview. It is obvious that the Refrigeration sector will be the main contributor to the phase down while AC and HP will gain more contribution later.
Preliminary observations at the end of 2016 show that refrigerant producers have increased prices with about 10-15% of HFCs in two subsequent years while at the same time 9% of the quota has not been utilized in 2015. Main reason for the missing usage has been reported due to many new entrants who have not used their allocated quota. Another important factor can be that a high level of stockpiling of especially R404A took place during 2014. Furthermore it has been reported that a lot of equipment placed on the market in 2015 and 2016 still relies on high GWP HFC. Also bearing in mind the additional quota surge from pre-charged units from 2017 it becomes very difficult to predict how a real supply versus demand picture becomes mature.
Bans on new equipment
The phase down schedule is complemented with bans on new equipment and bans on servicing equipment with high GWP refrigerants, as shown in Figure 15. Although the service bans are far into the future, they are within the expected lifespan of today's new equipment. This puts pressure on the industry now to stop building R404A/507 systems.