The UN’s Intergovernmental Panel on Climate Change (IPCC) warns that the window of opportunity to avoid catastrophic impacts of climate change is rapidly closing. The need for clean cooling has never been more pressing and almost a decade after the EU agreed its hydrofluorocarbon (HFC) phase-down, energy-efficient cooling technologies relying on climate-friendly natural refrigerants are continually gaining market share. Yet current global measures to limit HFC use do not reflect the level of ambition needed to tackle the spiralling climate crisis.
This paper analyses what we have learnt over the last decade through the EU’s pioneering F-Gas Regulation, including effective demand reduction strategies through equipment and product prohibitions and the need for robust policy measures and implementation to counteract illegal trade in HFCs. It examines the changes needed to deliver a revised EU F-Gas Regulation in line with the European Green Deal and considers how lessons learnt in Europe can inform a rapid global transition away from climate polluting HFCs.
Ten years after the European Union (EU) began negotiations to agree the world’s first mandatory phase down of hydrofluorocarbon (HFC) greenhouse gases, the world has changed significantly. In February 2022 at the launch of the Working Group II report of the IPCC’s Sixth Assessment Report, UN Secretary General António Guterres said: “I have seen many scientific reports in my time, but nothing like this. Today’s IPCC report is an atlas of human suffering and a damning indictment of failed climate leadership.” But the looming climate crisis we face is still avoidable with rapid and deep emission reductions across all sectors. Scientists agree that to avert dangerous impacts of climate change we must limit temperature change to 1.5°C above pre-industrial levels. This requires global greenhouse gas emissions to peak before 2025, reduce by 43% by 2030 and reach net-zero by 2050.
Cooling is at the nexus of climate change, an essential adaptation tool for a warming world, yet a major source of emissions. About 30% of emissions from cooling come from the refrigerant, with the rest associated with energy used by equipment. Avoiding the use of HFCs and other fluorinated gases can therefore have a rapid impact on reducing emissions from cooling. There is widespread availability of efficient natural refrigerant-based technologies across many sectors, but we need effective HFC demand reduction strategies to promote further innovation and ensure uptake of climate-friendly alternatives.
In 2016, Parties to the Montreal Protocol made history with the adoption of a global agreement to phase down HFCs. Under the Kigali Amendment, most developed countries began HFC reductions in 2019 while most developing countries will freeze their consumption in 2024 with reductions beginning in 2029. Prior to the Kigali Amendment, the EU had already capped HFC consumption in 2015 under the EU F-Gas Regulation. Supply of HFCs in carbon dioxide equivalence terms (CO2-eq) has been reduced by 47% from 2015-19. The next reduction step takes place in 2024, when HFC supply is cut to 31% of the 2009-12 baseline. The EU is now reviewing the F-Gas Regulation with a view to more ambitious emission reductions, in line with the European Green Deal. This review gives an opportunity to appraise which aspects of the EU F-Gas Regulation have been most successful and areas where improvements are needed. It is also a chance to reflect on policies within the Regulation that can offer learnings to other countries phasing down HFCs.
Proven effective HFC demand reduction strategies
a. New Equipment Bans
Although centred around a phase-down, bans on HFCs in new equipment are core demand reduction measures used by the F-Gas Regulation. These act as signposts for both equipment manufacturers and end users guiding them away from investment in soon to be obsolete technologies. The 2014 EU F-Gas Regulation missed the opportunity of adopting a broader range of bans across sectors, however its commercial refrigeration equipment ban has demonstrated the value of this approach. Although the ban only came into effect in 2022, eight years after the Regulation was adopted, it sent a clear signal to end users which has resulted in rapid uptake of alternatives such as CO2 transcritical systems. Today the EU is a hub of innovation in the sector. As of March 2021, it was estimated that of the approximately 48,000 CO2 transcritical systems used in commercial refrigeration globally, 38,400 were in Europe, compared to 29,000 in March 2020. The number of transcritical systems is expected to double 2021 levels by 2025. Likewise, the European Commission evaluation of the F-Gas Regulation identified that the major driver for an observed reduction of HFCs in stationary AC was the replacement of HFC-410A (GWP 2088) with HFC-32 (GWP 675) in new small split units, in advance of a 2025 new equipment ban with a GWP threshold of 750, and the replacement of HFC-410A with propane (GWP<1) in new hermetically sealed moveable units, in line with the 2020 new equipment ban with a GWP threshold of 150.
As we face a rapidly warming world the need for domestic air-conditioning will grow. Representing over a quarter of global refrigeration and air conditioning sales, action to reduce HFC demand in this sector can support both international HFC phase-down commitments and sustainable development.
Single-split systems dominate this sector, with around 100 million units produced annually. In the current F-Gas Regulation, new single-split air-conditioning systems containing less than 3kg of HFCs with a GWP of 750 or more are banned from 2025. This is credited with a massive increase in the number of HFC-32 units entering the market, with an estimated 80% share of the import market. In proposed changes to the EU F-Gas Regulation the GWP threshold for split systems of less than 12kW will be further reduced to 150 in 2027. Given that technologies using propane are already available, the delay to 2027 is unnecessary.
A recent change to the international product safety standard IEC 60335-2-40 for household heat pumps, air-conditioners and dehumidifiers will enable propane to be used in many AC and heat-pump systems which were previously blocked. The development of policies aimed at incentivising the import and use of such equipment in developing countries is critical, to protect them from environmental dumping of inefficient refrigeration and air-conditioning equipment using high-GWP refrigerants, which has been documented on the African continent.
b. Ban HFCs with Very High GWP (2500 and more)
Starting with the ‘worst first’ approach to HFCs can lead to cost-effective rapid emission reductions. HFC-404A (GWP 3922) is commonly used in commercial and transport refrigeration systems. Leakage rates in these sectors are high, compounding emissions and reducing efficiency. In fact, the Commission’s Evaluation report has identified that higher leak rates are observed for R404A than other refrigerants. From 1 January 2020 the EU banned the use of HFCs with a GWP of 2500 or more in new stationary refrigeration equipment. It also banned their use for servicing refrigeration equipment with a charge size of 40 tonnes CO2e or more (e.g. more than 10 kg of HFC-404A), requiring supermarket operators to switch out their large HFC-404A or HFC-507A systems with lower-GWP HFCs. However, the provision exempts very low temperature systems, military use and reclaimed and recycled gases as well as small refrigeration systems. Fuelled by high market prices and ongoing demand, a thriving black market in HFC-404A has developed. In 2020 almost one-third of HFC seizures in Europe were HFC-404A while 60% of a series of seizures in Spain during summer 2021 were HFC-404A.
Given the plethora of available natural refrigerant solutions as well as lower-GWP HFC drop-in alternatives, there is no need for the continued use and inevitable emissions of very high-GWP HFCs like HFC-404A. The sale and use of high-GWP HFCs should be completely prohibited, globally.
Tackling illegal trade
The illegal trade in ozone depleting substances (ODS) emerged in the 1990s. As chlorofluorocarbon (CFC) production was winding down in developed countries its use was rising in developing countries, notably China and India, due to their later phase-out schedule. A continued demand in developed countries for cheap CFCs to service the installed capacity created opportunities for a profitable black market. In response, the Montreal Protocol was amended in 1997 to require a licensing system for ODS, which has helped to monitor and control the global ODS trade, however the illegal trade has continued to be the Achilles heel of an otherwise remarkably successful global agreement.
As the first region in the world to cut the supply of HFCs, the EU has experienced first-hand the challenges of illegal HFC trade and has learned the hard way the vital importance of a robust HFC licensing system. HFC prices in the EU increased significantly from mid-2017 in anticipation of a major reduction step in 2018, peaking at levels 6 to 13 times higher than in 2015. The high prices stimulated a black-market trade, ably assisted by vast profits, low chance of detection or penalties and a lax licensing system wide open to abuse. EIA estimates that illegal trade of HFCs in 2019 amounted to as much as 20-30% of the legal trade, equivalent to potential emissions of 30 million tonnes CO2e and over €77million in lost VAT and customs duty revenues.
Fundamentally, the key challenge was the absence of a real-time per shipment licensing system which would allow customs officials to determine if an HFC import was covered by a quota. In contrast to the previous ODS licensing system, the F-Gas Regulation, which predated the Kigali Amendment, merely put in a place an electronic registry which required companies to register before being able to apply for quota and was used to manage the quota authorisations and annual post-hoc reporting. Customs authorities could check if HFC importers were registered and had quota, but did not have access to information regarding the amount of quota or how much quota was left.
Other measures that are essential to support effective enforcement include:
- Licensing should include all HFCs, whether exempt from the phase-down or not (e.g. feedstocks) and include special customs procedures such as transit, temporary storage and import for re-export;
- Use of modern approaches such as QR codes or blockchain to monitor HFCs through the supply chain.
- Restricting import and export of HFCs to specific customs offices where authorities are fully trained with adequate equipment and resources to deal with HFCs;
- Ensuring illegal HFCs are seized and destroyed;
- Establishing minimum penalties for illegal HFC trade that are proportionate to the profits involved;
- Banning the import, sale and possession of high-GWP HFCs and non-refillable cylinders;
- Restricting sales of HFCs to genuine traders through a process of mandatory certification and banning sales through online marketplaces.
Focusing on the Right Solutions
Since the phase-out of ODS began more than 30 years ago, the key sectors relying on ODS have undergone several transitions – from CFCs to hydrochlorofluorocarbons (HCFCs) to HFCs. With the adoption of the Kigali Amendment, the world is poised to phase down HFCs, however some low-GWP HFC substitutes (i.e. hydrofluoro-olefins, HFOs) and their degradation products belong to the group of per- and polyfluoroalkyl substances (PFAS). PFAS have toxic and persistent bioaccumulative effects and their production and use has resulted in severe contamination of soil, water and food as well as harmful exposure to humans. For example, HFC-1234yf, which is increasingly used in mobile air-conditioning and in HFC blends, breaks down into trifluoroacetic acid (TFA), which is harmful to aquatic life and also found in drinking water. PFAS are known as ‘forever chemicals’ since their lifetime is around 1,000 years before they degrade. As we face the triple planetary crisis of climate change, pollution and biodiversity loss, surely now is the time to jump off the chemical treadmill and incorporate environmentally sustainable and future proof clean cooling solutions into effective HFC demand reduction policies.
 IPCC, 2022: Summary for Policymakers. In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley, (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA. doi: 10.1017/9781009157926.001. p21 Available here
 The ban prohibits the use of F-gases with GWP of 150 or more in multipack centralised refrigeration systems above 40kW, except in the primary circuit of a cascade system where F-gases with a GWP of less than 1500 may be used from January 1 2022.
 ATMO (2021) Natural refrigerants Market Forecast
 GWP from AR4 is used, as this is currently the GWP reference used in the F-Gas Regulation. The most recent IPCC assessment (AR6) calculates the GWP of HFC-32 to be 771, which exceeds the current GWP threshold for the split A/C prohibition in 2025. Page 1017. Available here
 Öko-Recherche (2022). Support contract for an Evaluation and Impact assessment for amending Regulation (EU) No 517/2014 on fluorinated greenhouse gases CLIMA.A2/ETU/2019/0016 Evaluation Final Report. p 73, 78
 The Economist (2019) The Cooling Imperative-Forecasting the size and source of future cooling demand
 Technology and Economic Assessment Panel of Montreal Protocol on Substances that Deplete the Ozone Layer, (2020). Report of the Technology and Economic Assessment Panel. UN Environment. Available here.
 Öko-Recherche (2022). Support contract for an Evaluation and Impact assessment for amending Regulation (EU) No 517/2014 on fluorinated greenhouse gases CLIMA.A2/ETU/2019/0016 Evaluation Final Report. p79
 Öko-Recherche (2022). Support contract for an Evaluation and Impact assessment for amending Regulation (EU) No 517/2014 on fluorinated greenhouse gases CLIMA.A2/ETU/2019/0016 Evaluation Final Report. p50
 Pers Comm Guardia Civil
 Öko-Recherche (2022). Support contract for an Evaluation and Impact assessment for amending Regulation (EU) No 517/2014 on fluorinated greenhouse gases CLIMA.A2/ETU/2019/0016 Evaluation Final Report. p92
 US Environmental Protection Agency. Phasedown of Hydrofluorocarbons: Establishing the Allowance Allocation and Trading Program Under the American Innovation and Manufacturing Act. Final Rule. p68-71. Available here.