The 2020 HFC Phasedown

What are HFCs?

Hydrofluorocarbons (HFCs) are potent, man-made greenhouse gases that have high global warming potentials. They are mainly used in refrigeration and air conditioning applications.

What is the global HFC Phase Down?

New Zealand was one of the 197 countries to adopt the Kigali amendment to the Montreal Protocol. The Kigali Amendment requires New Zealand and other developed countries to begin phasing down the production and consumption of HFCs.

What HFC controls does the amendment specify?

The Kigali amendment specifies an upper limit on HFC consumption. Developed countries are required to limit annual HFC consumption to within the upper limit.

When will the HFC phase-down start?

New Zealand’s government ratified the Kigali Amendment on October 3, 2019. The phase-down will enter into force on January 1, 2020.

How will it be implemented in New Zealand?

The government has adopted more frequent and regular decreases in HFC consumption than those specified in the Kigali Amendment. The government will establish a permitting system to set annual limits on imports and exports of bulk HFCs.

Importers of bulk HFCs are required to surrender emission units to the government for all bulk HFCs imported.

How will the HFC phase-down affect my business?

HFC Supply and Cost

New Zealand relies on importing supplies of HFC from abroad. However, the HFC supply is at risk of reduction due to the phase-down, which targets bulk HFCs.

Therefore, businesses face increased acquisition costs due to decreased supply. R404A/R507 supplies are under the most significant pressure.

The phase-out of R404A/R507 from all commercial systems in Europe and the U.S. has been underway for several years.

Health and Safety Implications

HVAC and refrigerant industries are moving to alternative refrigerants in response to the global HFC phase-down. The standard synthetic refrigerant alternatives to HFCs are more environmentally friendly but flammable and toxic.

This move to clean refrigerants demands a shift in the refrigeration industry on two fronts:

1. The knowledge and skills required of engineers and technicians.
2. The health and safety obligations for directors and implications for end-users.

New Skills and Technology

Many of the current systems are designed for phased-down refrigerants that will become increasingly expensive and scarce.

Moving forward, service providers will need to demonstrate proficient skills and knowledge with new technology. New selection criteria for service providers will need to be developed.

Opportunities

Newly designed systems with alternative refrigerants offer the following positive implications for end-users:

• better system performance

• lower energy use

• lower operational costs

The industry-wide changes the phase down is bringing will present many opportunities savvy businesses can position themselves to exploit.

More info at the Ministry for the environment webpage can be found here.