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    EU F-Gas Regulations Drive HFC Price Increases

    February 18, 2019

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    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.

    • Price shocks in the market

      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.

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