Refrigerant Management: Meet ESG Goals and Save on Costs

Nicholas Cade, Director, Tradewater

02/17/2022

RILA identified refrigerants as a top environmental compliance retail trend to watch for in 2022. To be sure, a retailer stands to gain a great deal from strategically managing its refrigerant, a practice which can play a huge part in helping a company to achieve even the most ambitious sustainability goals.

A retail organization that establishes smart refrigerant management practices can also plan for significant cost savings over time by positioning themselves in front of a rapidly changing refrigerant market. They might even be able to sell their used refrigerants for a surprisingly high value.

And yet, refrigerant management is often an overlooked component of ESG strategies. Here are a few *cool* things to know about refrigerants that can put retailers on the right track to take advantage of these opportunities.

How Can Refrigerants Play a Role in Meeting Sustainability Targets?

While refrigerants serve valuable purposes in retail, commercial and industrial settings, many are also harmful, potent greenhouse gases (GHGs) and some are also ozone depleting substances (ODS). The older refrigerants tend to have higher global warming potential (GWP), including chlorofluorocarbon (CFC) and hydrochlorofluorocarbon (HCFC) refrigerants, which can range from roughly 1,800 times to over 10,000 times more potent than carbon dioxide.

Although there are well-established U.S. bans on production and import of all CFCs and nearly all HCFCs, end uses of these legacy refrigerants are not banned entirely. Legacy uses of CFCs include building insulation, refrigerators, and cooling systems manufactured before the global phase out of import and production of CFCs. In 2020, researchers at MIT projected that as much as 9 billion tons of carbon dioxide equivalent (CO₂e) remain stockpiled and in use around the world in the form of old CFC refrigerants.

Yet because the commonly accepted Greenhouse Gas Protocol does not require companies to report their inventory of CFCs and HCFCs, many businesses are not keeping track of these refrigerants and do not factor them into their analyses when auditing their facilities, calculating emissions, or setting sustainability goals.

By taking stock of the refrigerants used throughout a portfolio of buildings, an organization can mitigate those potential emissions with strategic refrigerant management plans. Doing so can have a big impact on meeting meaningful sustainability commitments, as companies that proactively convert to low-GWP cooling systems can see gains in system efficiency and significant reductions in potential or actual refrigerant emissions. Moreover, smart refrigerant management may also be good for the bottom line.

How Can Strategic Refrigerant Management Be Good for My Bottom Line?

Addressing refrigerants is not only environmentally responsible—it can also be a smart business decision for retailers seeking to design strategic plans that anticipate regulatory and market fluctuations projected to affect refrigerant pricing in the years to come.

For instance, the new production and importation of R-22, a common HCFC, was effectively prohibited in the U.S. starting in 2020 and all HCFCs will be banned in the U.S. in 2030. Not surprisingly, the price of R-22 has since climbed significantly, as supplies begin to shrink and some companies that have R-22-bearing equipment build reserve supplies for future repairs and recharges.

A company that saw this coming could have proactively accelerated conversion to new cooling systems and refrigerators that do not use R-22 prior to 2020. Such an adjustment would have spared them the astoundingly high prices they will need to pay to recharge their R-22 systems now, and also would have allowed them to plan a phase in transition and switch to systems that use a refrigerant with a lower GWP.

It’s not too late for retailers to take action in light of these changes. With foresight and strategic planning, a company can start planning the conversion of their cooling systems now, rather than find themselves stuck paying the high prices for R-22 recharges and repairs until the system fails or is replaced.

5 Key Proactive Action Steps Retailers Can Take

1. Build an up-to-date inventory of all refrigerants used in company’s operations – Building an up-to-date inventory is a key first step in getting a handle on the scope of risk your refrigerants could pose – both from an emission as well as a financial standpoint. Some questions to consider are:

Has your business completed a full inventory of all the refrigerant on its premises?
What refrigerant(s) do you have in your facilities various cooling systems (e.g., HVAC systems; refrigerators, including vehicle refrigeration uses for any owned vehicle fleets or equipment)?
What are the quantities of each of the refrigerants in use?
Do you have any reserve supplies (“stockpiles”) of refrigerants and, if so, in what quantities?

2. Develop strategy to manage refrigerants – Companies can use internal staff or partner with industry experts to create a strategic plan for how to best manage the company’s inventory of refrigerants moving forward.

3. Develop and implement plans for conversion to alternatives with lower GWP – Companies may benefit from working with industry experts to understand what low GWP systems are best for specific needs, and when those systems will be widely available.

4. Identify and implement responsible end-of-life solutions for used and old refrigerants – Many used and old refrigerants can be sold to EPA-certified refrigerant reclaimers who may reclaim (or, effectively, recycle) the refrigerant for resale and reuse or, alternatively, destroy the refrigerant. A company may want to be informed about, or even affirmatively direct, the exact end use of their old refrigerant.

5. Build in continuous monitoring and program improvement – Plans should anticipate changes in refrigerant prices, pending regulatory and statutory proposals affecting refrigeration use, and emerging, low GWP technologies. Continuing to work with your company’s ESG committee on this work is key to keeping the program aligned with and supportive of evolving ESG goals.

The Takeaway

Retailers who start planning and developing smart refrigerant management strategies now will find themselves well-positioned to meet both current and future ESG goals and to anticipate regulatory and refrigerant market fluctuations. Ultimately, doing the work of inventorying and then strategically managing your refrigerant is good for the environment and smart business.

Tradewater is a project development firm focused on collecting and destroying potent greenhouse gases including CFC and HCFC refrigerant. They are also EPA-certified reclaimers.

Tradewater’s Catalytic Coalition is comprised of leading businesses that are taking responsible action to mitigate the risk posed by their refrigerants. It is supported by an experienced team of strategists, technicians, and engineers who partner with businesses to build out robust refrigerant inventories and related potential emissions, develop customized and cost-effective plans toward responsible refrigerant management and destruction and accelerate conversions to alternatives with lower global warming potentials. For more information about Tradewater or the Catalytic Coalition contact Nicholas Cade, Director of Tradewater Refrigerant Solutions, at ncade@tradewater.us