EU F-Gas Regulations Drive HFC Price Increases

The EU has been regulating fluorinated greenhouse gases (F-gases) such as hydrofluorocarbons (HFCs) for more than 12 years, beginning in 2006, and tightening its restrictions in 2015. While these gases have a wide range of applications, from fire suppression to solvent cleaning to insulating electrical equipment, they are very strong greenhouse gases.

The EU established a phase-down schedule for HFCs based on CO₂ equivalency. In 2015, the schedule permitted manufacturers to put HFCs with a global warming potential (GWP) equal to 183 million tons of CO₂ on the market. Since HFCs have a much higher GWP than CO₂, each pound of HFC marketed has a substantial impact – for example, each pound of HFC-227ea, a common fire suppressant agent, counts against the cap as 3,220 pounds of CO₂, and each pound of HFC-4310mee used in solvent cleaning and formulating applications counts as roughly 1,644 pounds of CO₂.¹

The first cuts in HFC consumption took place in 2016, and in 2018, the EU is already at a 37% reduction from 2015 levels. The phase down of HFCs will culminate in 2030 at a 79% reduction from 2015 levels, impacting most HFC markets and applications, including fire suppression, bulk solvents and those HFCs used by aerosol formulators.

Notable price shocks have already taken place for HFCs used as refrigerants, fire suppressants, cleaning solvents and more. In 2017, the Cooling Post reported that Chemours had doubled the price of its products with high-GWP refrigerants R-404A and R-507 and Honeywell had announced that it would stop selling them in the EU. In 2018, fire suppression system manufacturer Sea-Fire Europe announced (PDF, 95 KB) that it would no longer be selling systems using HFC-227ea not only because it is a responsible and environmentally sustainable action to take, but also because “the phase-down will create HFC227 suppression agent shortages that will drive up prices. The forecast for Europe is for costs to double in the next 18 months.”² Overall, a study by research firm Öko-Recherche (PDF, 2 MB) on behalf of the European Commission found numerous HFCs’ prices had increased by over 1,000% from 2014-2018, as reported by R744.com.³ Historically, as chemicals such as halon have been phased out in industries such as fire suppression, those markets have seen substantial cost increases. This suggests that cost increases in HFCs may be seen in solvent cleaning, fire suppression and other subsets of the overall HFC market.

Both regulatory initiatives and voluntary actions are driving markets away from HFCs toward more sustainable solutions. According to the European Commission, “To avoid use and emissions of both hydrofluorocarbons (HFCs) and hydrochlorofluorocarbons (HCFCs), a variety of climate-friendly, energy efficient, safe and proven alternatives are available today.”

A 2011 study of key alternatives for reducing HFC use (PDF, 5 MB) suggested that, in fire suppression, the use of 3M™ Novec™ 1230 Fire Protection Fluid, with a GWP of less than 1, “could fully substitute the use of HFC-23 (GWP 14,800) as fire extinguishing agent in or before 2030” and substitute most applications of HFC-227ea (GWP 3,220).  As the EU leads the way in the HFC phasedown, other markets – solvent cleaning, refrigerants, and more – will feel the impact.

If you’re looking for sustainable alternatives to HFCs in fire suppression, solvent cleaning, and other applications, that are not subject to regulatory phasedowns or restrictions, we may have a 3M™ Novec™ brand solution that combines exceptional performance with environmental sustainability and human safety. There are now over 25 different Novec fluids available for a broad range of applications – contact us today to learn more.

¹https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.150.01.0195.01.ENG, Annex I

²http://www.martinflory.com/releases/sfix24045.pdf (PDF, 95 KB)

³http://r744.com/articles/8339/eu_s_hfc_prices_skyrocketing_since_start_of_f_gas_regulation