Fixing the refrigerant problem

The bad news: The refrigerants we use in air conditioners, fridges, and vehicles absorb hundreds to thousands of times more heat than carbon dioxide does. The good news: We’re in the middle of a global effort to replace them with lower impact alternatives. Will we replace them fast enough to hit climate targets? And in the meantime, can we prevent them from leaking into the atmosphere? In this episode, Shayle talks to Ian McGavisk, senior advisor at RMI for carbon-free buildings. An industry veteran, he recently co-authored a report on recovering residential AC refrigerants in the U. S., which have the carbon equivalent of 1.7 million cars. (Ian also works in business development at Transaera. Energy Impact Partners, where Shayle works, invests in Transaera.). Shayle and Ian cover topics like: The sources of emissions in the refrigerant lifecycle The economics of recovering and reclaiming refrigerants Alternatives with low global warming potential and their tradeoffs, such as efficiency, flammability and concerns about forever chemicals Recommended resources RMI: Refrigerant Reclamation Project Drawdown: Refrigerant Management Project Drawdown: Alternative Refrigerants EPA: Transitioning to Low-GWP Alternatives in Commercial Refrigeration UN Environmental Programme: Montreal Protocol On Substances That Deplete The Ozone Layer, Report Of The Technology And Economic Assessment Panel, May 2024 Catalyst is brought to you by EnergyHub. EnergyHub is working with more than 70 utilities across North America to help scale VPP programs to manage load growth, maximize the value of renewables, and deliver flexibility at every level of the grid. To learn more about their Edge DERMS platform and services, go to energyhub.com. On December 3 in Washington, DC, Latitude Media is bringing together a range of experts for Transition-AI 2024, a one-day, in-person event addressing both sides of the AI-energy nexus: the challenges AI poses to the grid, and the opportunities. Our podcast listeners get a 10% discount on this year’s conference using the code LMPODS10. Register today here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  Latitude Media, podcast at the frontier of climate technology.

• 0:07Shayle Kann?

  I'm Shayle Khan, and this is Catalyst.

• 0:13Speaker 02

  You're starting to get, you know, 30 to 50 gigatons of CO2e over the next 20 to 25 years.

• 0:21Shayle Kann?

  And that's a big number, right? Like, that's

• 0:23Speaker 02

  It's a huge number.

• 0:24Shayle Kann?

  I don't remember the number offhand, but that's on the order of aviation, right? It's about the same.

• 0:28Speaker 02

  It is. You know, you just think about it, if you get it down to a US context, I mean, you know, just the residential sector in the United States is, you know, the equivalent of 1.7 million cars on the road annually. So they are, they are big numbers.

• 0:41Shayle Kann?

  This week, the greenhouse gases that are 2,000 times more potent than CO2. We're talking refrigerants.

• 0:56Speaker 03

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• 2:29Shayle Kann?

  I'm Shayle Khan. I invest in revolutionary climate technologies at Energy Impact Partners. Welcome. All right. You know those types of things that you know are important, you've heard about for years, but you've just never had the time to really understand. That's me with refrigerants. Like refrigerants are, in aggregate, actually a huge source of global greenhouse gas emissions from a climate impact standpoint. They are roughly on par with aviation, which is big. We talk a lot about aviation and the industry is obsessed with sustainable aviation fuel and all this other kind of stuff. And for all the rhetoric in climate and climate tech world, I hear much less about refrigerants, despite the fact that, in aggregate, they contribute

• 3:14Shayle Kann?

  about the same amount of global warming potential. I think that's in part because, you know, they're this component in HVAC systems that is this little bit of material that we use. It seems like it should be solvable. And in fact, interestingly enough about this sector, we've solved a big environmental problem to do with refrigerants before. This was the ozone hole that we were creating and solved it with the Montreal Protocol, replaced all the refrigerants. Why don't we just do it again? And maybe we will, but it's it's sort of complicated, as always. It's harder than you want it to be when it comes to reducing greenhouse gas emissions. And also, you know, refrigerants are not one thing. There are many different kinds used in many different applications, including,

• 3:59Shayle Kann?

  by the way, and maybe this is the thing that will bring refrigerants back to prominence, data centers, which require a lot of cooling and thus a lot of refrigerant. So it's a good time to talk about refrigerants, talk about their climate impact, and try to figure out what the solutions might be. This is, as I said, a category I haven't spent enough time in yet. So this one's valuable as a learning tool for me. And the right guy to do it is Ian McGavish. Ian is a senior advisor for carbon-free buildings at RMI. He's an expert on refrigerants. He wrote a good report recently on reclaiming high GWP refrigerants in residential HVAC. And I use this as a sort of refrigerant 101 for me. So hopefully

• 4:42Shayle Kann?

  it'll be the same for you. As a disclaimer, also, Ian works in business development at a company called Transera in the HVAC space, which EIP, my firm, is an investor in. Okay, on to the conversation with Ian. Ian, welcome.

• 4:55Speaker 02

  Thanks for having me, Joe.

• 4:57Shayle Kann?

  Let's talk about refrigerants, starting with what are refrigerants? What do they do? What's the purpose?

• 5:02Speaker 02

  Yeah, refrigerants are used to make sure you can complete a refrigeration cycle. So, you know, in any air conditioner, for example, and I'll use a residential because that's probably the easiest one to describe, you need to take refrigerant and change it from a liquid to a gas over and over again to be able to collect heat inside the space or inside your home, and then reject that heat outside your home. So refrigerants are substances that are used in that cycle, and they repeat the cycle over and over by going from liquid to gas phase to collect and reject the heat. They've been around for a long time, and you know, they're basically the working fluid for any refrigeration or air conditioning type of application.

• 5:44Shayle Kann?

  You mentioned they've been around for a long time. I would be interested in like a brief history of refrigerants. Like, when did we start using them? And then how have the actual refrigerants, the materials that we've used as refrigerants, how have they evolved over time?

• 5:57Speaker 02

  Yeah, so you go back to, you know, the original refrigerants where all the natural refrigerants, ammonia, carbon dioxide, were the first ones that were used. And that's, you know, goes back well over 100 years. And they were used primarily in the refrigeration industry. I mean, ice makers were kind of the first, were the first uses of some of those refrigerants. You know, Willis Carrier is the one who gets credit for using those and in kind of air conditioning systems is the father of air conditioning. And then they've migrated since then to, you know, to all sorts of different, you know, applications, whether it be transport refrigeration, or, you know, residential refrigeration and air

• 6:37Speaker 02

  conditioning, you know, industrial process cooling. Today, the biggest consumer of cooling is data centers. So as we talk about AI and all the AI applications, all that doesn't exist without a significant amount of cooling to keep those servers warm and keep those data centers operating. So it's been a real evolution from basically some minor comfort cooling and food process, all the way now to every industrial process pretty much requires some sort of cooling to make it viable.

• 7:08Shayle Kann?

  So you mentioned we started long ago with ammonia and carbon dioxide. What are the predominant refrigerants that we use today? I know it varies by application, but high level.

• 7:17Speaker 02

  It does, and those refrigerants are still around today. Since then, you know, a whole family of synthetic refrigerants has been created. And I say synthetic, they're made through a chemical process. And, you know, we've had an evolution through those as well. The original synthetic refrigerants were found to have significant ODP or ozone depletion potential. And so that that was the first problem with these synthetic refrigerants. They're fluorinated or chlorinated and they were causing holes in the ozone layer. So the Montreal Protocol was the first major treaty to reduce the use of these gases and come up with a second generation of refrigerants, let's call it, that were a little more environmentally friendly.

• 7:59Speaker 02

  Now, while we solved the ozone depletion problem, we created a global warming problem. The refrigerants that were developed to replace the original set then had a significant global warming impact. And as we learn more about climate science and we learn more about what impacted the climate, this second generation of refrigerants were found to be significantly a significant contributor to the global warming. And so now we're in the process of changing out those refrigerants to a to a third generation, let's call it, of lower GWP or global warming potential refrigerants.

• 8:31Shayle Kann?

  Yeah, I want to talk more about the the climate impact of refrigerants and what the next, you know, gen three might be. But just to harp on it for one second, it's one thing I think folks who maybe weren't around or weren't paying attention at the time have maybe forgotten, which is it's actually a pretty impressive feat that we pulled off on a global basis here, which is we had all these refrigerants, they were causing ozone depletion. There was the Montreal Protocol was a was a UN treaty that phased all that stuff out and it worked, right?

• 9:02Speaker 02

  Yes, I mean, the Montreal Protocol is probably the single most effective global treaty that's been put in place. You know, through UN sponsorship and and that's been the basis now for, you know, kind of next generation, the Kigali Amendment. And as you go through, you know, the the number of updates to that and technical committees that have been formed around it and constant evaluation and measurement that's put in place. So it is probably the gold standard in environmental treaties and it continues to be that today and it continues to grow and evolve today is we're, you know, we we we learn more and we understand more and then we go take take action.

• 9:39Shayle Kann?

  Okay, so let's get to the climate impacts. How much emissions are refrigerants responsible for today?

• 9:48Speaker 02

  You know, it's the data is not exact, but it, you know, the the best estimates are it's between, you know, between one and a half and two gigatons annually of CO2 or carbon dioxide equivalents. And so, you know, when you look at when you kind of run that out over the next,

• 10:07Speaker 02

  you know, when you run that out toward to 2050, you know, you're starting to get look at, you know, 30 to 50 gigatons of CO2 over the next 20 to 25 years. And, you know, if we got that target, one and a half degrees C, that can't be met without dealing with this refrigerant issue and and being able to to minimize the impact of refrigerants on the environment.

• 10:29Shayle Kann?

  And that that's a big number, right? Like, that's I don't I don't I don't remember the number offhand, but that's that's on the order of aviation, right? It's about the same.

• 10:36Speaker 02

  It is. Yeah. And then, you know, you just think about it if you get it down to a US context. I mean, you know, just the residential sector in the United States is, you know, the equivalent of 1.7 million cars on the road annually. So they are they are big numbers. And that's just the direct portion, right, which we we we kind of put refrigerant emissions into the direct and indirect categories. The direct portion is refrigerant that escapes from equipment. The indirect portion, which is three or four times the impact is the carbon emitted by producing the energy to run the equipment. So you've got, you know, you've got two impacts, direct and indirect, but that indirect impact is is also an important consideration in the air conditioning and refrigeration industries.

• 11:24Speaker 03

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• 13:34Shayle Kann?

  And for a minute, let's just talk about why there are emissions from refrigerants, right? Because you could imagine, like, let's just say you're using CO2 as refrigerant. I think people will obviously understand CO2 has global warming potential. But if it were sitting there in a closed loop, but it never escaped into the atmosphere, then you would have no climate impact. So what is it that's actually causing the emissions here?

• 13:56Speaker 02

  Yeah, there's, and I think that's the most important point here is that until a refrigerant leaks to the atmosphere, it doesn't have a negative impact on the environment. So if you could, in an ideal world, if you could keep all the refrigerant in the piece of equipment that it was designed to operate with, and then recover that refrigerant at the end of life, and then either properly recycle it or destroy it, you really don't have any environmental impact. So all these, all this impact that we're talking about, this 1.5 gigatons annually, is coming from that refrigerant being released into the atmosphere, either intentionally by technicians who are unaware or untrained, or unintentionally by equipment that fails and then releases the refrigerant into the atmosphere.

• 14:38Shayle Kann?

  So do we have data on, it sounds like there's, you know, there are multiple categories of these emissions. There's the leaking from an operating unit, whether intentionally or unintentionally, and then there's end of life equipment, whether, if you don't do sufficient reclamation or recovery, then it leaks in the atmosphere. Do you know how much is coming from each of those categories?

• 15:00Speaker 02

  You know, I would say that there's not real good data here. It's one of the, one of the areas that there's, I think, a significant gap. And one area for additional research is to understand, you know, I think we have a pretty good understanding of what occurs from leaking equipment, because there's a track, there's a record there, right, of refrigerants that have been purchased and installed in equipment. You know, the single biggest emitter is the refrigeration sector, and that's primarily what I'd call the commercial refrigeration sector. That's supermarkets, convenience stores, and that's the single largest emitter. What we don't have real good data on is, you know, end of life residential air conditioning equipment. So when a homeowner's unit, when it comes time to replace, for

• 15:43Speaker 02

  whatever reason, you know, how much of that refrigerant is left in that unit? And then is that refrigerant You know, collected, recovered, reclaimed, or recycled, or sent for destruction. So that's a, that to me is a gap in the, in the data set and one that, you know, would, would require some research to close, but I think it's research that would be important to do.

• 16:05Shayle Kann?

  Okay, so let's, we're going to set aside replacement of the existing refrigerants. We'll come back to that in a minute. Assuming we were stuck with the refrigerants that we've got right now. In your mind, how much of the problem is a technical problem versus a sort of, I don't know, market problem? Like, is, is the problem of leakage, for example, or lack of recovery? Is it actually just a difficult technical challenge to avoid leakage or to recover? Or is it just that, like, actually, like you said, we need to train technicians better? We need to mandate a certain end of life process, et cetera?

• 16:37Speaker 02

  Yeah, I think it's really not a technical problem. The technology exists. Nothing has to be developed to be able to successfully recover, reclaim, and, and refrigerants. It is, it is more of a, frankly, it's more of an economic problem right now. The, the market price for reclaimed refrigerant is more expensive than it is to use virgin refrigerant. So, and when I say virgin refrigerant, it's refrigerant that has not been used previously. So today, the primary driver for a lot of the venting is economic. It, the technician or the contractor's time is worth, worth more than actually collecting the refrigerant and selling it into the, into the reclamation market. Now, that will change over time.

• 17:21Speaker 02

  We've seen this in the past as new refrigerants, as old refrigerants are being replaced with new refrigerants. The market for, the aftermarket price for these reclaimed refrigerants goes up. Then it becomes economical for contractors to, to recover and, and reclaim those refrigerants.

• 17:40Shayle Kann?

  So it's interesting because I guess now we should talk about like the next, the gen three refrigerants, but. The implication of the fact that there is an effort toward Gen 3 refrigerants and replacing existing refrigerants with the low GWP ones sort of implies that like we generally don't believe we're going to solve those market problems.

• 18:00Speaker 02

  Yeah, so the market problems will not be solved with, it's unlikely the market problems will be solved without some intervention and that's government intervention. And we've seen kind of best practices globally where the governments have intervened. They've actually stepped up to pay that premium to contractors in order to make that recovery economically viable. You know, over time, as the existing refrigerant supply starts to dwindle, then we will start to see the economics become more favorable and then we'll, you know, some of that will naturally correct as part of the supply-demand cycle. But, you know, there will always be a challenge, I think, on that, on the economics here for contractors.

• 18:45Shayle Kann?

  Okay, so talking about lower GWP refrigerants for a minute, I guess the one thing we didn't talk about is what is the GWP of the existing refrigerants? Because like, you know, I mentioned it's in aggregate, it's about the same global warming potential as aviation, but of course it comes in a very different fashion, which is that aviation has way, way, way more volume of emissions, but it's emitting CO2, whereas refrigerants, way, way, way, way, way lower volume, but extremely high GWP.

• 19:10Speaker 02

  Yeah, so the refrigerants primarily in use today, the GWP is around 2,000. And, you know, I'll use R410A as an example. It's what's most common in the residential market in the, in, around the world. And so the GWP there is roughly 2,000. So the replacement refrigerants, kind of for this round of replacements, going to R454 and R32, are in that 600 to 700 GWP range. So this is a transition, but it's not the last transition. There are another set of replacements or transition that we're going to have to go through to get to what's, you know, what's known as the ultimate low GWP refrigerants. And there we're down into single digits, right? Where a pound of refrigerant is about

• 19:51Speaker 02

  equal to a pound of CO2 from an equivalency standpoint. So, so this is, you know, this is kind of the second transition. There's going to be one more and the best practices we develop today will help us when we get to that that third and final transition when we go to the ultra-low GWP refrigerants.

• 20:10Shayle Kann?

  Okay, so let's talk about the most promising next generation low GWP refrigerants. What are they? And I guess the other question here is like, what is the challenge with introducing new refrigerants? What are the metrics that determine whether they are good or not?

• 20:26Speaker 02

  You know, I come, my lens for this is kind of from a product developer. And so we use refrigerants in our applications. And when we evaluate refrigerants to put into new pieces of equipment, we look at a couple of things. But the two primary, well, I'd say three primary considerations are, one, how does it perform in the equipment? Is the equipment more efficient or less efficient when you transition to refrigerants? As we talked about earlier, you know, 80% of the CO2 impact from a piece of equipment is that energy efficiency, or the energy that's created to run the equipment. The other 20% comes from the refrigerant. So when we evaluate refrigerants, the ability to operate very

• 21:09Speaker 02

  efficiently is probably the number one impact, the number one metric that we look at. The second thing we look at is safety. Is there a safety concern? Is the refrigerant toxic? Is it flammable? So safety is always a concern. Efficiency, I would say, is what we start with. Then we look at safety. And then the third thing is, is it available in the market? You know, are there ample sources? Does that mean the price is lower or higher? Now, different refrigerants operate better in different applications. So if you look at, you know, really low refrigeration temperatures, so things for fast food freezing or food processing,

• 21:51Speaker 02

  you know, ammonia is an ideal refrigerant for those kind of applications. When you look at air conditioning temperatures, for example, then ammonia really isn't a very good refrigerant. Thermodynamically, it doesn't perform very well. So then you get into, you know, maybe more of a synthetic refrigerant, the 454s, the R32s that perform very Well, in those applications, what I'd say is we move to these ultra-low GWP refrigerants. The primary issue is flammability, and so they are slightly flammable. And so those issues have to be addressed. You know what some of the best natural refrigerants are are R290, which is propane and R600, which is isobutane, excellent refrigerants, but obviously they have a flammability challenge. It has to be, it has to be met.

• 22:33Shayle Kann?

  From a cost perspective, is that, is that important? Like in the context of a, an AC unit, is the refrigerant a significant portion of the overall cost or is it kind of de minimis?

• 22:42Speaker 02

  It's, it's not a significant portion of the cost. I think what the cost reflects is how available it is in the market. So, you know, you don't want to put equipment into the marketplace. Um, and then there's an aftermarket requirement, right? A unit does leak, um, and you need to get refrigerant. Is, is, is it readily available so that you can get customers and back online, uh, quickly? So I think the cost is more a reflection of availability. Um, but no, it is not really a significant cost driver in the, in the cost of the equipment.

• 23:11Shayle Kann?

  So where are we in the adoption of these new loaded GWP refrigerants at this point?

• 23:17Speaker 02

  So we're going through a transition right now, kind of as we speak, the first of the year. Uh, R410A, which is kind of the most common refrigerant used in the commercial refrigeration, residential, uh, residential markets, um, won't be available to ship in new equipment. And so as we, you know, we're, we're going to go through a couple of years here as we transition out of one of these, you know, 2,000 GWP refrigerants down to the six or 700, uh, GWP refrigerants. Um, we're going to see this market dynamic now of the only, uh, there, and there will be a phase down in what is available to be produced. So the manufacturers have been set limits, um, as part of the AIM Act.

• 23:59Speaker 02

  Uh, so there, there will be, there will be a decreasing supply of refrigerant available for people who have R410 in their, in their residential units, for example. And so that will, you know, by 2030, that the source of refrigerant for service will have to come from reclaimed and recovered refrigerant. That will have to be the primary source as these manufacturing quotas go down year over year.

• 24:21Shayle Kann?

  Who are the major players here? I mean, is it, you know, so we have obviously the HVAC OEMs, companies who make the air conditioners and so on, cooling systems for data centers, whatever it might be. Are they producing their own refrigerants? Are they buying refrigerant?

• 24:39Speaker 02

  No, they buy refrigerants. So I'd say there's kind of three parts to this market, right? There's the large chemical companies who produce the refrigerants. There's the air conditioning and refrigeration OEMs who use the refrigerants in their product. And so they design product to operate with these refrigerants. And then there's the service side of the business, once the equipment's installed. So those are contractors and refrigerant reclaimers who service the equipment, who will actually take the equipment, take the refrigerant out of equipment at end of life and get it into the, either the reclamation cycle or the destruction cycle, depending on what the use for that refrigerant is or what the state of it is when it comes

• 25:21Speaker 02

  out of the equipment. So, you know, again, three primary parts of this. One, there's a refrigerant manufacturer. Two, there's the OEM who uses the refrigerant in their device. And then third, there's the service side of this, which takes care of the equipment after it's installed.

• 25:36Shayle Kann?

  I know one other component to throw into the mix here, at least in some places, is PFAS, forever chemicals, as they're called, which I think is an issue with some of the newer refrigerants.

• 25:49Speaker 02

  It is, and it is going to impact the transition to the ultra-low GWP refrigerants. In Europe, for example, they are moving back towards, I shouldn't say back towards, they are moving towards natural refrigerants. So, you know, propane and CO2, because they are restricting the use of these ultra-low GWP refrigerants because of the PFAS concerns. So it is going to be a variable in the refrigerant transition, as, you know, as regions of the world deal with the PFAS issue. It will impact the transition to ultra-low GWP refrigerants.

• 26:25Shayle Kann?

  All right. Well, so I guess to wrap it up, what is your level of optimism here? I mean, in some ways, relative to a lot of the big thorny climate challenges that I talk about, this one feels surmountable. We've done it before in the sense that we've replaced a bunch of refrigerants with a bunch of other refrigerants that have lower environmental consequences. This sounds like we're making progress here and there's a bunch of new refrigerants that have some issues to work out, but but real promise that are lower GWP. So should I be considering this like, you know, not a solved problem, but we're on we're on the path toward it? Or is it harder than that?

• 27:03Speaker 02

  I think that's a good question. And I think I'm not optimistic. You know, the technical solutions are all there. New refrigerants have been developed, a product to use the new refrigerants have been developed. But this transition phase, what we really have to focus on is making sure we recover as much of the refrigerant that's out there being used today as possible. What we really can't afford to happen during this transition period, and when I say the transition period, say 2025 to 2040 or 2050, we can't allow all the refrigerants that's in use today to be vented and to be released to the atmosphere. That will be an environmental disaster. And the reclaim rates are very, very low. And that's for economic reasons, we talked about briefly. That's for training reasons.

• 27:48Speaker 02

  That's for awareness reasons. So, you know, I would encourage any homeowner who's having a piece of equipment replaced to make sure their contractor, you know, comes and reclaims and recovers the refrigerant. You know, that refrigerant recovery is the first step from a piece of equipment that's being replaced or a piece of equipment that's being serviced. But it's critical that we recover and either reclaim or destroy the refrigerant that's in the that's out in the field today being used in this equipment. Because if we don't, the impact is going to be with us for hundreds of years. So that's that's a real that's the part that scares me. That's the part I worry about is this refrigerant recovery during this transition period.

• 28:29Shayle Kann?

  All right, Ian, this was illuminating. Thank you so much.

• 28:32Speaker 02

  All right, Sheil, glad to do it. Thanks for having me.

• 28:35Shayle Kann?

  Ian McGavisk is a senior advisor for carbon-free buildings at RMI. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. Prelude backs visionaries, accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn more at preludeventures.com. This episode was produced by Daniel Waldorf. Mixing by Roy Campanella and Sean Marquand. Theme song by Sean Marquand. Stephen Lacy is our executive editor. I'm Shayle Khan, and this is Catalyst.