The refrigeration and air conditioning industry is the largest user of synthetic greenhouse gases and ozone depleting substances in Australia.
Cold Hard Facts 2022 analyses data from 2021 to identify key developments and emerging trends in the refrigeration and air conditioning industry.
The trend of significant slowdown in the growth of the regulated bank of refrigerants in Australia, as reported in previous issues of Cold Hard Facts for the period from 2016 to 2019, could be reversing.
The Australian bank increased by approximately 700 metric tonnes between 2020 and 2021 to 54,140 tonnes, compared to a decline of around 140 tonnes in the previous year.
The key factors contributing to this unexpected change in trend are:
- Rapid growth in deployment of heat pumps resulting, in part, from government policies aimed at accelerating a migration away from gas appliances and less efficient electric appliances, and towards lower emission appliances.
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Continuing delay in transition to hydrofluoro‑olefin (HFO) refrigerants such as HFO‑1234yf in mobile air conditioners for motor vehicles.
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Slow transition of commercial refrigeration applications to alternative refrigerants including natural refrigerants (hydrocarbons (HC), carbon dioxide and ammonia) and HFO/HFC blends.
These trends and delayed technology transitions, due in part to COVID‑19 and associated supply chain issues, will likely slow the rate of decline of the carbon dioxide equivalent (CO2e) value of the refrigerant bank.
In Australia some state regulators have legislation and evolving plans to reduce reliance on gas as a critical part of achieving net zero emissions. Heat pumps, which use vapour compression refrigeration cycle technology to heat or both heat and cool (reverse cycle units) water or air, are emerging as the high efficiency technology alternative in a variety of applications including hot water heat pumps replacing gas and electric resistive hot water services; reverse cycle split system air conditioners replacing gas ducted heaters and room space heaters; heat pump clothes dryers replacing older style, inefficient electric resistive clothes dryers; and multi-function larger format chillers that can both heat and cool replacing gas boilers in large commercial buildings.
Domestic hot water heat pumps employing high global warming potential (GWP) HFC‑410A have seen a surge of imports. This technology had previously been predominantly using lower GWP refrigerants. Annual sales in 2021 surged by 90% compared to the previous year, adding around 50 tonnes of HFCs to the bank in 2021 with significant growth predicted in the years ahead. Heat pump clothes dryer sales have grown from around 3,300 in 2012 to over 74,000 units in 2021, adding around 36 tonnes to the bank in 2021 with continued strong growth predicted.
The shift from gas ducted heaters to heat pumps is moving rapidly, particularly in new homes. Several national builders have announced future proof all-electric homes and some new estates are choosing not to run gas reticulation throughout the estate.
The rapid transition of small split system reverse cycle units to the lower GWP A2L (low toxicity, mildly flammable) refrigerant, HFC‑32, as reported in Cold Hard Facts since 2016, continues. Whilst the growth of the small split system bank was less than 2% from 2020 to 2021, the growth of the HFC‑32 bank in this category was more than 35%. In 2021 the stock of HFC‑32 charged, non-ducted single split systems made up more than 38% of the equipment operating in this category, and 34% based on refrigerant mass as HFC-32 models have lower charge sizes.
The use of HFC‑32 is continuing to grow in other equipment categories with more adoption in medium and larger air conditioning applications including in ducted split systems, variable refrigerant volume/frequency (VRV/F) systems and in chillers with charges up to 100 kilograms.
Portable air conditioners have rapidly transitioned to the very low GWP HC‑290. This transition is noted in several registers including the Greenhouse and Energy Minimum Standards (GEMS) register where, as at 1 July 2021, 84% of portable air conditioner models registered contained hydrocarbon (HC).
Softening of refrigeration and air conditioning (RAC) equipment sales, a trend reported in previous years across many major equipment formats, has also reversed. Equipment sales were up across most commercial refrigeration segments. Food retail and hospitality venue re‑fits, driven by the opportunity of COVID‑19 shutdowns, instant asset write offs and other forms of government assistance, saw strong sales growth of commercial refrigeration systems in a variety of formats. Another area of commercial refrigeration growth is specialty and gourmet supermarkets with ranges of prepared meals, some of which have on site commercial kitchens.
Increasing numbers of dark kitchens for preparation of home delivered meals also drove growth of commercial refrigeration systems. The increased activity in medium sized commercial refrigeration (remote condensing units and small rack systems) has resulted in the growth in consumption of high GWP refrigerant HFC‑404A from an average of 834 tonnes per annum over the previous 5 years to 880 tonnes per annum in 2021.
Medium sized commercial refrigeration is firmly entrenched on HFC‑404A for new and replacement applications, with only initial signs of this segment transitioning to HFO/HFC blends or natural refrigerant alternatives, representing less than 10% of installations in 2021. However, the major supermarket chains undertaking re-fits and new builds are more often employing CO2 trans-critical refrigeration systems.
Trends to smaller charge sizes to deliver equivalent refrigeration services, often employing the more energy efficient hydrocarbon refrigerants in smaller formats, helped to cap HFC bank growth in self-contained commercial refrigeration formats. Trends observed in refrigerated display cabinets in 2019 and 2020 of growth in the adoption of natural refrigerants have been confirmed in 2021 with hydrocarbon charges smaller than 150 grams in this format being a stand-out example of rapid change in the sector. HFO/HFC blends are starting to be employed in larger commercial refrigeration display cases with charge sizes up to 3 kg seen in the market.
Nearly 10 years after its introduction in international markets, HFO‑1234yf is starting to contribute to the transition away from HFC‑134a in the automotive mobile air conditioning (MAC) bank. We estimate that at least 10% and possibly as much as 13% of all MAC imported in 2021 were charged with HFO‑1234yf. Some industry sources think this is too optimistic and suggest the penetration of HFOs in this segment could still be as low as 7% of new vehicle sales in 2021.
Finally, more than a decade after bans on imports into Australia of equipment pre‑charged with HCFC‑22 were introduced, and 35 years since the Montreal Protocol was created to eliminate ozone depleting substances from the global economy, the end of the ozone depleting HCFC‑22 bank in Australia is approaching.
Rapid development and adoption of a wide range of sometimes very specialised new refrigerants continues and is resulting in an increasingly diverse bank. Regulatory arrangements in support of a global HFC phase down, and equipment designers’ efforts to improve energy efficiency are broadly driving more of the stock of new equipment and some retrofits to lower GWP natural refrigerants and HFOs. In many instances these alternative refrigerants can deliver the same refrigerating capacity with significantly lower energy consumption, delivering both direct and indirect emissions reductions over the life of the equipment.
Changes in the Australian energy economy are influencing buyer behaviour with homeowners and commercial property owners taking steps to eliminate fossil fuel gas from buildings in favour of electric technology. Significantly higher gas prices are reinforcing the drive to heat pumps for thermal services, while increased electricity prices emphasize the need for new equipment purchases to make electrical efficiency a high priority in the purchasing decision. These fundamental cost drivers are expected to feature in the market for some time with the Australian Energy Regulator warning electricity prices could jump a further 35% next year with additional increases expected in years ahead.
The pressure on equipment owners who have delayed higher efficiency purchases (or recently chosen to buy lower cost but less efficient equipment) or delayed a transition to new refrigerants has, in some cases no immediate solution. The RAC industry is not immune from the negative impacts of global supply line disruptions with higher efficiency electric commutated (EC) fans for instance having lead times for delivery of more than a year. Ammonia charged system components are reported in some cases to have lead times of 2 years.
Despite the obstacles and surge in the HFC‑404A bank, the decade long trend towards a falling CO2e value of the bank is expected to continue as the phase down of HFC imports progresses. However, recent work by the CSIRO estimates that HFC emissions in Australia have been growing at 5% per annum since 2005 (CSIRO 2021). With an existing refrigerant bank in installed equipment that has a total global warming potential of approximately 100 million tonnes (Mt) CO2e, efforts at improved containment and effective recovery of refrigerants will be important to continue to drive down the direct emissions from RAC services in Australia.
