Joint SA-SEAP Ozone Officers Network Meeting Pattaya, Thailand 15-18 October 2012 CHALLENGES FOR HCFC PHASE-OUT IN AIR

1. Joint SA-SEAP Ozone Officers Network Meeting Pattaya, Thailand 15-18 October 2012 CHALLENGES FOR HCFC PHASE-OUT IN AIR CONDITIONING

2. BACKGROUND • HCFC phase-out in developing countries has started. Short/medium term targets: Freeze in 2013, 10% reductions from 2015, 35% reductions from 2020. • HCFC-22 is the predominant refrigerant used in air- conditioners in developing countries • Consumption of HCFC-22 in manufacturing and servicing of air-conditioners in major developing countries is significant (typically >70% of total HCFC consumption) and growing rapidly

3. MARKET FOR AIR-CONDITIONERS • Market for air-conditioners growing rapidly in developing countries – low baseline market penetration • Estimated HCFC-22 based room air-conditioner sales (2011) in key developing countries in Asia-Pacific:

4. MARKET FOR AIR CONDITIONERS (CONT’D) • By 2020, market for air-conditioners in Asia-Pacific could reach >100 million units and sales >US$ 20 billion • By 2025, ~1 billion city dwellers will “enter the global consuming class”: an air-conditioner would be their first purchase* • Most booming cities are in tropical climates • Refrigerant charge volumes for new air-conditioners sold in Asia-Pacific (developing countries in 2011) estimated at ~50,000 metric tonnes annually(!) • ____________________________ • * McKinsey Global Initiative

5. ENERGY USE • Electricity use for air conditioning in some cities with tropical weather: • Bangkok, Thailand – 60% • Delhi, India – 55% • Miami, USA – 40% • Mumbai, India – 50% • And the list goes on ……. • Electricity use for air conditioning at the national level can range from <5% (temperate zones) to over 80% (some tropical/equatorial island states)

6. DIRECT AND INDIRECT EMISSIONS • Global air-conditioner population is estimated at about 500 million to 1 billion (and growing)!! • Use HCFCs or HFCs as refrigerants, both high GWP gases • Each air-conditioner contains average 1-1.5 kg of refrigerant and has 1.5 to 4 kw connected electrical load • Annual direct and indirect CO2 emissions from air conditioners globally, could be between 1 to 4 gt (1 to 4 billion CO2-eq tonnes)!!!

7. BACKGROUND (CONT’D)

8. BACKGROUND (CONT’D)

9. BACKGROUND (CONT’D)

10. BACKGROUND (CONT’D)

12. TECHNOLOGY • Need for lifecycle management approach in technology selection • Manufacturing • Use • End of Life

13. TECHNOLOGY • MOP Decision XIX/6 urges maximizing climate benefits when phasing out HCFCs • Lifecycle CO2 emissions from air-conditioners are 60-95% indirect and 5-40% direct. In developing countries direct emissions are higher due to local conditions • Both energy use and refrigerant GWP are critical considerations to maximize climate benefits • Currently there is no perfect alternative for HCFC-22. HFC and HC candidates involve compromises and trade-offs

14. TECHNOLOGY (CONT’D) • R-410A (GWP = 2,088*) has been the preferred alternative in developed country markets since ~2000. • Population of air-conditioners with R-410A is already about 200 million (Dec 2010), mostly in developed countries: about 200,000 metric tonnes of R-410A in banks and increasing! • R-410A energy-efficiency performance in general and in high-ambient conditions in particular • Is R-410A a sustainable alternative for minimizing adverse climate impacts? • ____________________________ • * IPCC 4th Assessment Report

15. KEY ISSUES AND CONCERNS • Reducing HCFC-22 consumption in developing countries without clear technology and policy signals, will result in unintended and adverse climate impacts • For example, if developing countries prohibit HCFC-22 based air-conditioners (manufacturing and imports), automatic technology choice is likely to be R-410A. • Major developed-country technology providers showing preference for R-410A (e.g. R&D focus on optimizing R-410 systems and components, new products based on R-410A etc.)

16. KEY ISSUES AND CONCERNS • Significant expansion of HFC production facilities • Extensive introduction of high-GWP technologies will lead to rapid increase in population of air-conditioners in developing countries, based on these technologies • Considering prospective developing country markets by 2020, the net climate impact of HCFC phase-out with high-GWP technology, is most likely to be negative! • A better, more forward-looking and climate-conscious approach to alternatives is needed!

17. WAY FORWARD • What can industry do? • Introduce and promote low-GWP, energy-efficient alternatives (R-32, R-290, others) on priority • Support sustained R&D for new, better and safer molecules for substituting HCFC-22, as well as optimized components (e.g. compressors). • Cooperate with MP panels and implementing agencies for sharing and disseminating latest technologies (e.g. demonstration projects, technology workshops)

18. WAY FORWARD • What can developing country governments do? • Support incentives for better alternatives • Support policies that ensure level playing field for the industry players • ‘ • Involve industry in formulation of policies and regulations • Support targeted and clear regulations that take into account GWP and energy efficiency

19. WHAT WE ARE DOING MLF FUNDING Maximum climate impact Direct Emission Reductions (low-GWP alternatives) Montreal Protocol Measures (HCFC Phase-out) GEF/ BILATERAL/ PRIVATE-SECTOR FUNDING Indirect Emission Reductions (EE improvements) Design interventions with dual objectives of ozone and climate protection

20. THANK YOU! Comments, suggestions and questions welcome http://www.undp.org/chemicals/montrealprotocol.htm nandan.chirmulay@undp.org