## ICCT study finds that transitioning to low-GWP MAC refrigerants in China could avoid up to US$150B in costs ##### 25 September 2016 A new study from the International Council on Clean Transportation (ICCT) assesses the feasibility, benefits, and costs of phasing out HFC-134a as the refrigerant in mobile air conditioning (MAC) systems in the Chinese LDV fleet, focusing on three alternatives with lower global warming potential (GWP) most likely to be adopted by automakers with a global supply chain: HFO-1234yf, HFC-152a, and CO2. Among the findings of the report, “HFC-134a phase-out in the Chinese light-duty motor vehicle sector”, was that, considering the social cost of CO2e, up to 1 trillion RMB in costs (US$150 billion) required to address climate change could be avoided through 2050 by transitioning to low-GWP alternative MACs.

HFO-1234yf (2,3,3,3-tetrafluoropropene, GWP-100 < 1, provides an effective unit mass GWP-100 reduction of more than 99.9% relative to both HFC-134a and CFC-12); HFC-152a (1,1-difluoroethane, GWP-100 = 167, provides an effective unit mass GWP-100 reduction of 89.2% relative to HFC-134a and 98.6% relative to CFC-12); and CO2, GWP-100 = 1, provides an effective unit mass GWP-100 reduction of more than 99.9% relative to both HFC-134a and CFC-12).

The ICCT team assessed baseline and alternative system emissions under a variety of different transition pathways using an ICCT model of MAC emissions in the passenger vehicle fleet. The researchers found that all three alternatives are capable of reducing GHG emissions by more than 90%, with HFO-1234yf and R-744 systems achieving greater than 99% of reduction.

The costs of transition are generally favorable compared to other available CO2 reduction technologies for motor vehicles.

• The cost-effectiveness for HFO-1234yf declines from about 484 yuan (US$72.64) per tonne to about 312 yuan ($46.83) per tonne by 2050.

• The cost-effectiveness of CO2 declines from about 832 yuan ($124.87) to about 436 yuan ($65.44) per tonne over the same period.

• The cost-effectiveness of HFC-152a declines from 241 yuan ($36.17)/mt to 179 yuan ($26.86) per tonne by 2050.

Costs per gram per kilometer of CO2e reduced are attractive for all three alternatives relative to the cost of the engine technology package expected to be employed for fuel economy compliance in China. These costs are also much lower compared with the EU penalty rate for CO2e emissions, which effectively reflects the level of investment deemed not to be cost-effective in the EU. The United States allows vehicle manufacturers to obtain equivalent fuel economy (and GHG) credits with alternative refrigerants, which China could also adopt to facilitate transition, the ICCT authors noted.

The competitiveness impacts of transition are expected to be minor and, because transition is already underway in the major US and EU markets, this transition cannot be avoided regardless of China’s decision-making if Chinese manufacturers wish to compete globally. Joint-venture manufacturers are expected to possess little, if any, competitive advantage. MAC technology and equipment is generally of a commodity nature and is available through third-party suppliers to any vehicle manufacturer. China is already a leading producer of low-GWP refrigerants in MAC, although these refrigerants are primarily exported to meet requirements in the United States and Europe. The global movement toward low-GWP refrigerants ensures that China cannot minimize consumer cost impacts by maintaining and extending the service life of existing (HFC-134a) MAC technology.

Given the beneficial emissions and cost analysis, combined with China’s previous experience transitioning away from CFC-12, there are no vehicle-production barriers preventing a complete phase-out of HFC-134a in the China light-duty vehicle fleet during the five-year period between 2020 and 2024. Such a requirement is relatively unaggressive, given that it includes up to three years of lead time and allows for a full five years of transition. A more aggressive schedule is possible, but the five-year period is generally consistent in the industry retooling cycle. This lead time provides both manufacturers and the service industry time to adopt appropriate transition policies.

—“HFC-134a phase-out in the Chinese light-duty motor vehicle sector”

Background. Mobile air conditioning systems began appearing in large numbers of cars in the US in the 1960s, followed by penetration in Japan in the 1970s; Europe and developing countries saw MAC usage begin to pick up in the 1990s.

These older systems used chlorofluorocarbons (CFC-12) as the refrigerant gas. These were shown to be ozone-depleting, however, and were targeted for phasing out under the 1987 Montreal Protocol. The switch the HFC-134a as the preferred replacement refrigerant was rapid. The first systems with HFC-134a appeared in 1990; four years later almost all MAC systems in developed countries were using the new refrigerant.

China fully embraced HFC-134a in 2001 when it implemented its obligations under the 1987 Montreal Protocol. Currently, the HFC-134a system remains the dominant MAC system in China and around the world.

However, HFC-134a, while having zero ozone-depletion potential, has a very high global warming potential—more than 1,500 times as much warming as an equivalent amount of CO2. Accordingly, the European Union (EU), the United States, and Japan have established domestic policies that will require the phase-out of HFC-134a with these refrigerants by 2017, 2021, and 2024, respectively. China remains the largest vehicle market that still permits the indefinite use of HFC-134a.

However, China has announced an intention to halt economy-wide GHG (or CO2-equivalent) emissions growth around or before 2030, and to reduce carbon intensity per unit gross domestic product (GDP) by 65% in that same time frame. China has also stated its support for multilateral actions to phase down the production and consumption of HFCs.

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