F-Gas Quotas: Beating the 2016 price rises for R404A, R507

If you operate or maintain refrigeration equipment then the new 2016 quotas for refrigerant gas mean you may well be affected by supply shortages later in the year and rapidly increasing prices even sooner.

In summary

Regulators in the UK and across Europe want to dramatically reduce emissions of greenhouse gases and are now focusing on refrigerant leaks. In particular they are clamping down on gases like R404A, R507 and other HFCs which have a particularly high global warming potential. If you are a food manufacturer or retailer, chances are this is what your refrigeration systems use.

Chart: Falling F-gas quotas 2To force everyone into action, the European Commission is enforcing a system of reducing quotas for suppliers. In 2016, for the first time, suppliers will be allowed to sell less than was actually used in recent years. Within two years, the quota will have fallen substantially, by 37%.

Although many UK businesses are making good progress in reducing how much refrigerant they use, this is a Europe-wide quota, so continued high demand in some areas will put pressure on available supply everywhere.

As the year goes on, you may struggle to find anyone who will supply the gas you need for essential maintenance. But even with forward planning, the price increases will be a real issue.

Disproportionate price increases

The 2016 price lists for the main refrigeration gas suppliers show increases of 10% to 15% on last year’s prices for R404A, R507 and others.

Table: F-gas CO2 equivalenceHowever they aren’t just cashing-in on an imbalance in supply and demand: The problem for refrigerant suppliers is that their quotas are based on CO2 equivalence, also known as global warming potential. So for every sale of R404A they use up twice as much of their quota than if they focused on customers who want lower carbon gases like R410A or R134A. The refrigeration market is still growing, so they have a choice: stop selling as much of those gases or double the profit margin to make it worthwhile.

This is, of-course, exactly what the regulators hoped to achieve: Making refrigerant leaks hurt.

Avoiding the problem

Identify leaks of refrigerant gas earlyMost of the time, the only reason to buy more refrigerant gas is because you have lost a lot through leaks in your system. In the past, with low prices, most people only worried about leaks that were big enough to impact their cooling capacity.

But now, with the high cost of gas top-ups, containment has become key. It is now more cost-effective to catch leaks early and have your maintenance people fix them before any significant quantity escapes. If you can detect the very first signs of a leak, when only tiny amounts of gas are escaping, you still have time to schedule a maintenance visit and stop the leak before you incur high costs, as well as avoiding downtime and disruption to your operations.

This approach isn’t new; some food manufacturers and retailers have been benefiting for years.  However now that refrigerant gas is becoming more and more costly, the return on investment is clear for everyone, no matter what size your operation.

Next steps

At Parasense we are experts in refrigerant leak detection. Our products are trusted by refrigeration contractors, food manufacturers and retailers across the UK and Ireland, from the biggest names down to small, independent specialists. Our team will be happy to advise you on the best options.

To find out more, please check out our refrigerant leak detectors or contact us on 01452 724123.

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