F-Gas regulation could have chilling effect on EU businesses and their customers

European businesses await, with a degree of trepidation, the outcome of the ongoing trilogue negotiations on the F-Gas regulation.

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Policy decisions regarding the regulation of the use of fluorinated gases may be an area of niche interest, at first glance, but the ubiquity of their use as a refrigerant, and the importance of these refrigerants to the proper functioning of the economy demands that policymakers consider carefully the downstream impact of the choices before them.

Julien Soulet is the Vice President and General Manager at Honeywell Advanced Materials.

Refrigerants are used in a wide variety of settings and support activities which are not only critical to the EU economy but to the daily lives of citizens. These include obvious applications such as food chillers in supermarkets or refrigerants which keep produce fresh while it is being transported from farm to shelf. They also include heating and cooling applications in buildings across the EU, from apartments and hotels to data centres. 

Under amendments to the current F-Gas regulations proposed by the European Parliament, the use of ultra-low global warming potential (GWP) refrigerants that are needed to achieve alternate, low carbon and fossil fuel-independent sources of heating and cooling would effectively be banned.

Across industry, the potential ramifications and unintended consequences of this proposal are abundantly clear to EU businesses. 

Phasing out the use of ultra-low GWP HFOs in commercial refrigeration could impose significant costs on European companies, and their customers, while also significantly restricting their ability to reduce emissions and energy usage. We estimate that a ban will add between €10-30 billion in electricity costs to the European supermarket sector alone because of the lower energy efficiency of alternatives and would also result in up to 24 million additional tonnes of carbon dioxide emissions from EU supermarkets every year. That’s the equivalent of the emissions produced on an annual basis by 4.7 million petrol cars.

Given the demanding scope of reductions required as part of the EU’s Green Deal, including the RePowerEU targets, a wide range of technologies and solutions will be required to meet targets and to meet the needs of supermarkets, and other European businesses.

Carmine Marotta, CEO of Italy’s General Gas said that there is no “optimal refrigerant” for all applications, and it is necessary that General Gas’ clients have the opportunity to choose the best refrigerant for each application. 

Aneta Wisniewska, Managing Director with Polish refrigerants distributor Schiessl Polska said the company is “not confident at all” in the proposed amendments approved by the European Parliament on the F-gas regulation. “It does create uncertainty for our business,” she said. “Nobody considers energy efficiency.” 

A significant part of the debate around the review of the F-gas regulation has focused on the use of “natural alternatives,” a label sometimes used to describe propane, CO2 and ammonia-based solutions as alternatives to HFCs or HFOs. 

Removing HFOs as an option for distributors such as Shiessl, and for its customers, would force them to consider a menu of unpalatable choices. For some it will mean replacing existing, HFO-based solutions, writing off their existing capital investment and imposing a significant financial burden. For others it will mean having to factor in additional energy costs, which will likely be passed on to their own customers. There is also a practical reality that the other available alternatives may simply not be suitable for their needs. Safety considerations, space requirements and even noise regulations in heavily built-up areas can mitigate against the use of certain refrigerants for some applications.

Wisniewska noted, for example, that one of the issues with propane as a solution is that it “has a lot of limitations. “It’s a very narrow scope of applications where you can use propane. So we are not feeling very confident in this situation,” she said. 

Luc Dehon, President of Climalife, expressed similar concerns. “It is very important for our customers to have a wide range of refrigerants so they can choose the solutions best suited to their needs in terms of security, in terms of coefficient performance, energy efficiency, sustainability and competitiveness,” he said.

“This will help to maintain neutrality in the technology offered on the market,” he said. 

Technological neutrality is essential for the future of businesses across the EU, as they seek to remain competitive and provide customers with the best options to suit their needs. At its core, the F-gas regulation must ensure that businesses are equipped to deploy heat pumps and refrigerants across the EU rapidly and at scale – as outlined in RePowerEU –  and that this is done in as safe, and sustainable manner as possible. 

“Many are aware of the road to decarbonisation,” said Dehon. “The main thing is to allow customers to choose the solution best suited to their needs. Our recommendation would be to leave the door open to all technologies.” 

As Luc Dehon, Carmine Marotta, Aneta Wisniewska and many other EU business owners and managers understand intuitively, achieving the objectives of RePowerEU and Fit for 55 as part of the EU’s Green Deal will demand a flexible and broad suite of solutions. It would be unfortunate indeed if the result of amending the F-Gas regulation was, by restricting this flexibility, to undermine the achievement of these objectives.


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