Transcript The Business Case for Avoiding & Replacing High

The Business Case for Avoiding & Replacing
High-Global Warming Potential HFC Refrigerants
While Phasing Out HCFC Refrigerants
Arunabha Ghosh, CEEW
Stephen O. Andersen, IGSD
David Doniger & Bhaskar Deol, NRDC
Side Event to Montreal Protocol Open-Ended Working Group
Bangkok, 26 June 2013
Preliminary findings of a project of: The Council on Energy, Environment & Water
(CEEW), The Energy & Resources Institute (TERI), Institute for Governance &
Sustainable Development (IGSD), and The Natural Resources Defense Council (NRDC)
in collaboration with relevant industry associations
Global Drivers of Room and Automobile
AC Market Transformation
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Countries respond to energy and environmental concerns with labeling, energy efficiency
standards, and product prohibitions
– EC is phasing out MACs with GWP>150 by 2017
– US EPA removing HFC-134a from MACs through vehicle emission standards; will
reduce high-GWP HFCs through SNAP program
– Australia taxes HFCs to encourage containment, recovery and recycling and for tax
revenue
– Japan is rewarding the most energy efficient products with market domination through
“Top Runner”
– China is enacting stringent energy efficiency standards and offering rebates for
purchase of top runner products
– Agreement of China President Xi Jinping and US President President Barack Obama
to phase-down of climate-damaging HFCs using the Montreal Protocol
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Each Global Market Region is Unique
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Local climate conditions
– Cooling season temperature and humidity
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Mix of domestic and foreign air conditioning supply
– China sources nearly all their room AC from domestic and foreign companies
manufacturing in China
– India sources room AC from domestic manufacturers, foreign companies
manufacturing in India, and from imports from manufacturers in countries such
as China, Korea, and Thailand
– The US, EU, and many other countries source room AC primarily from
manufacturers in other countries
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AC purchase cost, energy price, appliance energy efficiency standards, and other
factors determine total ownership cost
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What is the India Business Case Project?
• Explores the business case for avoiding high-GWP HFCs for room air conditioners (RAC)
and motor vehicle air conditioners (MACs) in India
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Consolidates relevant market data
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Characterizes what makes the Indian market unique and challenging
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Catalogues the “drivers” changing Indian domestic and export AC markets
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Collects the wisdom of industry leaders and engineers
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Shares findings through business and engineering organizations
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India Project Team
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Stephen O. Andersen, IGSD
Bhaskar Deol, NRDC
Arunabha Ghosh, CEEW
Anjali Jaiswal, NRDC
Rajeev Palakshappa, CEEW
Girish Sethi, TERI
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September 2012 Meetings
Chennai, Mumbai, New Delhi & Pune
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Informal Government
– National Ozone Unit & Bureau of Energy Efficiency
Technology NGOs & IGOs
– The Energy and Resources Institute (TERI) & UNDP
Influential & Respected Technology Experts
– Professor Radhey S. Agarwal (IIT, retired), Dr. Sukumar Devotta (NEERI, retired)
Rajendra Shende (UNEP retired, now at TERRA Policy Center) & Markus Wypior
(GIZ)
Industry Associations
– Refrigerator and Air-Conditioner Manufacturers’ Association (RAMA)
– Society of Indian Automobile Manufacturers (SIAM)
Mobile AC Companies
– Delphi, TATA & Subros
Room AC Companies
– AECOM, Birla, Blue Box, Blue Star, Carrier, Daikin, Danfoss, Emerson, General
Electric, Godrej, Hitachi, Kenmore Vikas, Samsung, Tecumseh, Voltas &
Whirlpool
Chemical Suppliers
– Honeywell
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India Business Case Study
Preliminary Findings & Challenges (1)
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Technology to leapfrog high-GWP HFCs in RAC and MACs is available and the companies
in India know how to implement it
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Indian companies wonder why they are asked to implement technology not yet
commercialized or promoted in developed countries or in the countries where they market
products
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Safety standards are needed for manufacturing, installing, and servicing equipment using
flammable refrigerants to give confidence in safety and to prevent unsafe products
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The Government of India and its Ozone Cell are respected and appreciated by Indian
companies and could be influential in moving forward with coordinating energy efficiency
standards with the phase-out schedule and in rapidly implementing and enforcing safety
standards
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India Business Case Study
Preliminary Findings & Challenges (2)
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Most companies in India currently plan to implement HFC-410a to replace HCFC-22, but
anticipate a second transition
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One company—Godrej—has already leapfrogged HFC-410a by implementing HC-290 and
has capacity to supply a growing market in 2013; 25% of 2013 sales have been 5-Star HC
units
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Two companies—Daikin and Panasonic—plan to leapfrog HC-410a by implementing HFC32 and will also have capacity to supply a growing market in 2013
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Commercialization of these environmentally superior flammable refrigerants requires
appropriate safety standards and disciplined installation and service in strict compliance
with the standards
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India Business Case Study
Preliminary Findings & Challenges (3)
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Most automobile ACs manufactured in India use HFC-134a
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There are three viable refrigerant options to replace HFC-134a in automobiles: HFO1234yf, HFC-152a, and CO2
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Nearly all vehicle manufacturers in China, Europe, India, Japan, and North America have
chosen HFO-1234yf as the next-generation refrigerant
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But current price of HFO-1234yf is about five times more than HFC-134a; there is a need
to identify and promote local refrigerant vendors and to incentivize local production
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Society of Indian Automobile Manufacturers (SIAM) says energy efficiency of MACs is a
high priority; a shift to HFO-1234yf would be more attractive
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Two companies—Tata Motors and Maruti Suzuki—have designed prototype HFO-1234yf
systems for the vehicles they intend to export to Europe
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Delphi and Subros have sophisticated and capable research facilities in India that could
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develop components and systems suitable for the hot and humid Indian climate
Business Lessons from Montreal Protocol
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Developed countries phase-down first, driving innovation, shaking out the best technology,
removing barriers, achieving economy of scale, and implementing necessary safety
standards
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Some Indian companies are ahead of the competition:
– At the forefront of room A/C solutions with low-GWP refrigerants and high energy
efficiency
– Engineering and supplying solutions for motor vehicle A/C
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The Montreal Protocol Multilateral Fund (MLF) could finance the transition even before
Article 5 controls are scheduled
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Coordinating HCFC phase-out and HFC production phase-down could include
supplementary finance for maximum energy efficiency
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A credit mechanism could help MAC manufacturers reduce system design costs by
incentivising the use of the same refrigerant for cars for the domestic and export markets
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India Business Case Study
Additional Work Underway
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CEEW will convene dialogues of various stakeholders, from industry, academia, research
institutions and government; it was also consider implications for trade and investment
rules of changing standards
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TERI will prepare a matrix that analyzes alternatives to HFCs and HCFCs considering
GWP, energy efficiency, peak energy consumption, investment requirements for firms, and
impacts on consumers’ initial purchase prices and lifetime energy costs
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IGSD and Daikin will publish a “Life Cycle Climate Performance (LCCP)” analysis on
direct, indirect and embedded emissions of Room AC using different refrigerants in Indian
climate zones
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The Confederation of Indian Industry plans to conduct a structured survey of various
stakeholders (including building, vehicle, and other applications of HFCs) to capture their
views and perspectives
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These efforts will complement ongoing investigations by the NoU
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Thank You
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Room AC Refrigerant Choice
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Air conditioner choice balances concerns over ozone, climate, purchase price, operating
cost and safety
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A decade ago, in the rush to protect the ozone layer, companies selected HFC-410a to
replace HCFC-22 in room AC for non-A5 markets
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Today HFC-410a is considered as a “transition substance” soon to be replaced by
environmentally superior technology
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A5 Parties can either leap-frog HFC-410a or can convert first to HFC-410a and then to the
new technology
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Life-Cycle Climate Performance (LCCP) is the comprehensive metric for choosing next
generation refrigerants are environmentally sustainable and offer affordable cooling
performance
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The Best Available New Technology
Developed by A5/non-A5 Partnerships
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GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) has partnered with Gree
in China and Godrej in India to commercialize small capacity, highly energy efficient split
room AC using HC-290 (propane) refrigerant
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MITI (Ministry of International Trade and Industry, Japan) and Daikin with other Japanese
companies has partnered with companies in China, Indonesia, and Thailand to
commercialize small and medium capacity, highly energy efficient split room AC using HC32 refrigerant. Daikin will also commercialize HFC-32 for manufacture in its own factories
in India, Japan, and other countries.
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Next-generation technology likely to be introduced first in A5 markets close to manufacture
with prospect of growing sales
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Article 5 Choices
In Phasing out HFC-22 in Room AC
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GWP 2288 HFC-410a
– Not flammable, energy efficiency with or without heating mode
– The best available technology a decade ago when non-A5 phased out
– Now considered an unsustainable and obsolete transitional substance
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GWP 4 HC-290 (propane)
– Highly flammable, but safe & energy efficient in small-sized split ACs without heating
mode
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GWP 675 HFC-32
– Mildly flammable, but safe & energy efficient in small- and mid-sized split ACs with or
without heating mode; energy efficient at high ambient temperatures
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GWP 350-700 HFO blends
– Not flammable, claimed to be energy efficient, little information publically available
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