NEXT Series: Industry sees 2016 as 'strong growth year' for natural refrigerants

By team, Jan 14, 2016, 16:51 7 minute reading

How will the market for natural refrigerants develop in 2016? What will drive the development of green solutions in the HVAC&R industry? And how can the challenges currently facing naturals be overcome? To launch our new NEXT series of articles looking ahead to the next twelve months, we asked our partners about their plans, hopes and expectations for the natural refrigerant industry in 2016.

As the ink dries on the global climate deal struck at UNFCCC talks in Paris last month, natural refrigerant manufacturers are looking forward to 2016 with great expectations.

Natural refrigerants ‘becoming more and more popular’

“This year should be a strong growth year for natural refrigerants,” Clay Rohrer, business unit manager at Parker Hannifin. Systemes LMP President Jeffrey Gingras agrees: “Natural refrigerants are becoming more and more popular as people are becoming more concerned with global warming.”

December’s COP21 deal gives clear momentum to the heating, air-conditioning and refrigeration (HVAC&R) industry to seek viable alternatives to substances with high global-warming potential. Natural refrigerants, which have zero or negligible global warming impact, are the market-ready sustainable alternative to HFCs that can help to deliver the Paris climate deal targets.

Manufacturers like CAREL plan to actively contribute to combatting climate change in 2016 by continuing to develop high-efficiency products and solutions. “Natural refrigerants such as propane for self-contained units or CO2 for centralised systems are now the standard in the European refrigeration market, while new applications such as water-cooled self-contained cabinets are also gaining ground. All these things are bringing a massive phase-out of HFC refrigerants”, said Diego Malimpensa, who manages CAREL’s retail solutions business unit.

Ammonia: interesting applications in the pipeline

While the natural refrigerant CO2 is expected to become the standard choice for commercial refrigeration in a growing number of countries, manufacturers foresee interesting developments in the market for ammonia in 2016.

“Evapco’s current focus is in the food and beverage market (manufacturing and cold storage) where ammonia is already well-accepted and the refrigerant of choice due to its efficiency and cost advantages. The combination of increasing safety regulations around the use of ammonia, and the growing interest in the use of ammonia as a solution to climate change regulations, has significantly increased the awareness and need for low-charge ammonia systems, ” said Evapco Vice-President Kurt Liebendorfer, adding that the introduction of the Evapcold packaged low-charge ammonia system had met with high levels of market interest.

Liebendorfer predicts that as the current administration in Washington ramps up enforcement of OSHA and EPA regulations, we will see greater levels of fines and citations for improper use of ammonia in 2016. Interest in low-charge ammonia systems will therefore increase even more, he argues, because these systems “allow owners to fall below the ammonia Threshold Quantities where regulations kick in”.

Jesper Olsen, business and application manager at Alfa Laval, predicts a strong market for ammonia in traditional industrial applications, “now with energy efficient heat pumps and heat recovery systems as interesting applications to focus on”.

Roadblocks for naturals being removed worldwide

Asked how they see the natural refrigerant market developing regionally and globally, manufacturers talked of an “ever growing” market all around the world. Malimpensa cited CAREL’s successes with solutions for natural refrigerants in several regions beyond Europe, such as Japan, the United States, South Africa and Australia, “where natural refrigerants are still a very promising option however not yet a reality”. CAREL is also present in fast-developing regions such as China and South America, with projects that are looking to transcritical CO2 booster systems as an upgrade on standard subcritical solutions.

Parker Hannifin sees the market for natural refrigerants growing in 2016, with many customers testing the technology to determine the right fit for their organisation. “Some in northern regions in North America have standardised on the technology due to finding a proper return on investment and [the right] fit for their business needs,” Rohrer says. To complement the significant natural refrigerant volume in Canada and Europe, Rohrer suggests that these technologies will engage even more retailers as they mature and natural refrigerants become more efficient in warmer climates.

He predicts that as technology evolves and interest in natural refrigerants increases, the cost of new technologies will fall, making natural refrigerant solutions even more appealing in the future. “I believe many of the roadblocks are being removed,” he declares.

Carrier is also seeing an increased activity in warmer ambient areas such as Southern Europe, where several Carrier CO2 systems are successfully operating. "This is why we at Carrier, as a Platinum sponsor of the ATMOsphere conference, are excited that this year’s conference will be held in Barcelona, and we are looking forward to showcasing the improved capabilities of our CO2OLtec® refrigeration system," said James Nutting, marketing director at Carrier Commercial Refrigeration Europe.

In 2016, Carrier looks forward to expanding the number of CO2 refrigeration system projects in Southern Europe, incorporating its variable ejector system, which allows efficient operation of transcritical CO2 systems in warm climates.

Threats to overcome in 2016

Asked what challenges the natural refrigerant market would face this year, several industry players mentioned the cost of installation and system components. “The synthetic refrigerant market will be more aggressively developing new solutions and the effects of a strong US dollar on the cost of CO2 components will be the main challenges for 2016,” predicts Gingras, president of Systemes LMP.

However, he stresses the importance of remembering that “for long-term investments, natural refrigerants are the only available [options] which are not be subjected to any phase-out programmes”. He urged component providers to adjust their pricing strategies to allow the naturals sector to become more competitive with HFC systems.

Alfa Laval’s Olsen is “afraid that the low oil and energy prices will slow down investments in energy efficiency and heat recovery,” but expressed hope that increased awareness of climate change would “balance out his fears”. Besides energy prices, he sees short-term thinking as a major threat to the natural refrigerant business. “It surprises me that it is still difficult to convince a buyer to invest in lower running costs. The investment budget is not so very often connected to a lifecycle cost.”

Early adopters against resistance to change

Besides the pricing and availability of components, the large variety of solutions being offered to customers also poses a challenge, argues Gingras at Systemes LMP. “These solutions should be evaluated with respect to the needs of the customer as well as the climatic conditions in which the system will operate. It is also critical that the selected system has standard [parts] that can be easily obtained at the local wholesaler so as not to impact the potential downtime of the system.”

For Evapco’s Liebendorfer, the main threat to natural refrigerants is no different to that facing other new or emerging technologies: resistance to change. “Packaged low-charge ammonia systems are a bit disruptive to the traditional ammonia refrigeration market and as such, the pace of adoption is related to the success of early adopters, which is why Evapco has invested so heavily in product R&D, testing and validation, along with the necessary manufacturing infrastructure.”

Putting technicians in the naturals comfort zone

Many industry players think training programmes are essential in order to educate users about new technologies. “The more knowledge the better. A lot of people are still very afraid of ammonia – scared because of accidents in plants handling ammonia – due to different process reasons and rumors,” says Jesper Olsen.

Manufacturers will continue to offer a wide variety of training programmes in 2016. For example, Systemes LMP provides training for all new technicians “to place them in a comfort zone regarding the use of natural refrigerants”. Meanwhile Parker Hannifin organises several training programmes for technicians and experts across the US and Canada, and also has supermarket seminars to “keep technicians up to speed on the latest developments”.

CAREL, with its extensive worldwide presence, is exporting European knowledge to help customers during the design stage, laboratory testing, store commissioning and fine tuning, as well as providing on-the-job training to customers dealing with the technology for the first time.

Marek Zgliczynski from Embraco agrees that safety concerns related to natural refrigerants have to be addressed with adequate measures, including specific preparation of service technicians. “For example EU refrigeration technicians’ mandatory certification does not include flammable refrigerant topics. This gap has to be quickly corrected to allow fast and safe growth of natural refrigerant technologies.”

This article is the first in our new NEXT series exploring exciting new market and policy developments in the naturals sector in 2016. Coming soon – policy developments to look out for in 2016!

By team (@r744)

Jan 14, 2016, 16:51

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