# THE U.S. PHASEOUT OF HCFCS:

PROJECTED SERVICING NEEDS IN THE U.S.
AIR-CONDITIONING AND REFRIGERATION SECTOR

Prepared for

U.S. Environmental Protection Agency Office of Air and Radiation Stratospheric Protection Division 1200 Pennsylvania Avenue, NW Washington, DC 20460

Prepared by

ICF International 1725 Eye Street, NW Washington, DC 20006

R EVISED 

## D RAFT 

## R EPORT 

## , S EPTEMBER 

## 2006This report presents estimates of the pr ojected quantity of HCFC-22 needed to service air-conditioning and refrigeration equipment and the anticipated installed base of such equipment beyond 2010 in the United States. The objective of this analysis is to provide a resource to assist in the allocation of future HCFC consumption caps. The analyses presented in this report have been revised based on input received in re sponse to a Notice of Da ta Availability (NODA, 70 FR 67172) and request for comment issued on November 4, 2005.

Questions concerning this report should be directed to:

Cindy Newberg Stratospheric Protection Division U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW (6205J) Washington, D.C. 20460 1-202-343-9729 (phone) 1-202-343-2338 (fax) newberg.cindy@epa.gov

# Contents

Executive Summary.............................................................................................................. ......................1

1. Background: The U.S. HC FC Phaseout Schedule.............................................................................4

1.1 Report Objective ............................................................................................................... ...........5

2. Methodology Overview ........................................................................................................... .............6

3. Current HCFC Use in Air-Conditioni ng and Refrigerati on Equipment............................................7

3.1 Air-Conditioni ng End-Uses ...................................................................................................... ....7
3.2 Refrigerati on End- Uses ......................................................................................................... ......8
3.3 HCFC Refrig erants .............................................................................................................. ........9
3.3.1 HCFC-22 ........................................................................................................................ .......10
3.3.2 HCFC-142b ...................................................................................................................... .....10
3.3.3 HCFC-123 ....................................................................................................................... ......11
3.3.4 HCFC-124 ....................................................................................................................... ......11
3.3.5 HCFC Refrigerant Blends......................................................................................................12

4. Projected R-22 Scenarios ....................................................................................................... ...........13

4.1 R-22 Equipment Us ed Beyond 2010.........................................................................................13
4.2 Projected R-22 Se rvicing Needs ...............................................................................................13
4.2.1 R-22 Sources................................................................................................................... ......14
4.2.2 Meeting R-22 Serv ice Demand .............................................................................................16
4.3 Factors Affecti ng Projections.................................................................................................. ...20
4.3.1 13 Seasonal Energy Effi ciency Ratio (SEER) .......................................................................20
4.3.2 Transitioning to Alter native Refrig erants ...............................................................................20
4.3.3 Recovery and Reus e Practices.............................................................................................22
4.3.4 Recycling and St ockpiling Plans ...........................................................................................23
4.3.5 R-22 Economics ................................................................................................................. ...23
4.3.6 Pre-charg ed Impor ts............................................................................................................ ..24

5. Conclusion ..................................................................................................................... .....................26

Appendix A: Methodology Used to Calc ulate Projected Se rvicing Ne eds .........................................28

A.1 EPA’s Vintagi ng M odel .......................................................................................................... ....28
A.2 Supplemental Analysis: Pre-charged Im ports ...........................................................................34 A.3 Limitations a nd Caveats ........................................................................................................ ....34

Appendix B: HCFC Projec tions by End-Use ........................................................................................ ..36

B.1 R-22 Equipment and Servici ng Demand by End-Use ...............................................................36
B.2 Other HCFC Refrigerants Pr ojected by End-Use......................................................................37

Refere nces..................................................................................................................... ............................38

# Executive Summary

Hydrochlorofluorocarbons (HCFCs) are a class of chemical compound s that deplete the stratospheric ozone layer, leading to overexposure of ultraviolet (U V) radiation at the earth’s surface. Excessive UV radiation damages biological systems and causes malignant melanoma and other skin cancers, cataracts, and harm to certain crops and marine organisms. Reversing the course of ozone depletion is
crucial to human and environmental health worldwide. As a Party to the Montreal Protocol, the United States is subject to a cap on the co nsumption of HCFCs—defined as production 1 plus imports minus exports—in an international effort to protect the st ratospheric ozone layer (UNEP 2000). Specifically, the United States is obligated to phaseout consumption of HCFCs by 2030 by making graduated reductions in HCFC consumption by certain dates. In order to meet these interim reduction targets, the U.S. Environmental Protection Agency (EPA) began by es tablishing a schedule for the phaseout of HCFCs with the highest ozone depletion potentials (ODP s), namely HCFC-141b, HCFC-142b, and HCFC-22. The next phaseout milestone occurs on January 1, 2010, when the production and import of HCFC-142b and HCFC-22 (unless for use in equipment manufactured prior to January 1, 2010) will cease. Under the restrictions, between 2010 and 2020, both the production and import of HCFC-142b and HCFC-22 are still permitted to service existing equipment.

In the United States and worldwide, the primary use of HCFC-22 is as a refrigerant, whereas, the primary use of HCFC-142b is as a blowing agent in the foam industry (UNEP 2003a). While HCFC-142b is also blended with other constituents to form refrigerant bl ends, its use in the U.S. air-conditioning (AC) and refrigeration industry is minimal, and therefore servicing demand for R-142b, 2 if any, is not presented in this analysis. Estimated consumption of R-22 in the U.S. air-conditioning (AC) a nd refrigeration industry currently totals approximately 114,900 metric tons and is by far the largest use of an HCFC by any U.S. industry (EPA 2006a). For this reason, and becaus e the allowable servicing of existing equipment between 2010 and 2020 is applicable primarily to the AC and refrigeration industry, this report presents estimates of the projected quantity of R-22 needed to service AC and refrigeration equipment and the anticipated installed base of such equipment beyond 2010. In quantifying future servicing needs and evaluating how these needs can be met, the objective of this analysis is to provide a resource to assist in the allocation of future consumption caps.

This report examines the primary sources of R-22 to service equipm ent after 2010, including (1) the amounts recovered from equipment that are subsequently recycled or reclaimed and (2) the virgin production and import quantities (i.e., consumption) limited under the Montreal Pr otocol and distributed by EPA through an allowance system. 3 Two servicing demand scenarios were analyzed that differ by the quantity of R-22 recovered from equipment at the end-of -life and available to service other equipment still in use. Scenario 1 assumes that 50 percent of refrigerant is recovered and available for reuse, while Scenario 2 assumes only 10 percent of refrigerant is recovered and available for reuse.

Figures ES-1a and ES-2a summarize the two servic ing demand scenarios in comparison to two theoretical allocations of the U.S. HCFC consumption c ap in 2010 and 2015: in the first allocation, it is assumed that 100 percent of the HCF C cap will be assigned to R-22; in the second, only a portion (i.e., 90 percent) is assigned to R-22, with the remainder set aside to allocate to other HCFCs. As shown in both potential consumption cap allocations and in both servicing demand scenarios, total projected R-22 servicing demand is estimated to exceed the consumpti on cap starting in 2015, and therefore, the use of recovered refrigerant will be necessa ry to avoid R-22 supply shortages. Scenario 1, which represents a recovery and reuse rate of 50 percent of all available refrigerant (Figure ES-1a), projects that sufficient supplies of recovered refrig erant will be available, while Scenario 2, which assumes a lower recovery and reuse rate of 10 percent (Figure ES-1b), projects in sufficient supplies of recovered refrigerant.

1 Under the Montreal Protocol, producti on is defined as “the amount of controll ed substances produced, minus the amount destroyed...and minus the amount entirely used as feedstock in t he manufacture of other chemicals. The amount recycled and
reused is not to be consi dered as production” (UNEP 2000).

2 The nomenclature ‘R’ is typically used to designate chemical compounds us ed as a refrigerant. Hence, R-22 is synonymous with the use of HCFC-22 as a refrigerant, R-142b with the use of HCFC-142b as a refrigerant, etc.

3 The import of used R-22 as approved by EPA is another source; however, this source is not included in the projections of this analysis.

Draft-Do Not Cite or Quote- 1 September 2006Figure ES-1a: Total Projected R-22 Servicing Demand, Recovery Scenario 1 a, b

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

2010HCFC-22 (MT) 100,000

Anticipated R-22 Supply from Recovered R-22

Virgin R-22 Needed to Satisfy Service Demand

Total R-22 Service Demand

90% of U.S. HCFC Consumption Cap

U.S. HCFC Consumption Cap

2015 2020

Source: EPA's Vintaging Model (VM IO file_6-30-06_ALL)

a Potential consumption cap allocations expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

b In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Figure ES-1b: Total Projected R-22 Servicing Demand, Recovery Scenario 2 a, b

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

2010HCFC-22 (MT) Anticipated R-22 Supply from Recovered R-22

Virgin R-22 Needed to Satisfy Service Demand

Total R-22 Service Demand

90% of U.S. HCFC Consumption Cap

U.S. HCFC Consumption Cap

2015 2020

Source: EPA's Vintaging Model (VM IO file_6-30-06_ALL)

a Potential consumption cap allocations expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

b In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Draft-Do Not Cite or Quote- 2 September 2006Under the future scenarios developed in this analysis , the AC and refrigeration industry is potentially facing shortage risks starting in 2015 if enough refrigerant is not recovered and reused. 4 However, under a scenario with higher refrigerant recovery, supplies ar e projected to satisfy future R-22 servicing needs using both recovered refrigerant and limited amounts of virgin refrigerant. Therefore, encouraging the adoption of practices that recover the highest possible quantity of used refrigerant from converted or retired equipment to be put back into the supply chain is necessary to avoid R-22 supply shortfalls within the AC and refrigeration industry.

In addition to recovery practices, several other fact ors also influence which R-22 projection scenario is more likely. For example, with approximately 150 m illion AC and refrigeration units projected to be in use in 2010, the sooner this equipment transitions to alternative refrigerants, the bette r the chance for a more balanced R-22 supply and demand forecast. This r eport explores the following other market trends and how they may influence future R-22 servici ng demand and available supply estimates:

• Changes in equipment charge sizes to accommodate t he 13 SEER energy standard;

• Rate of market transition to alternat ive refrigerants in the United States;

• R-22 cost;

• Assumed equipment leak and servicing loss rates;

• Levels of refrigerant recovery for reuse, reclamation, and/or banking;

• Levels of imports of used R-22; and

• Levels of imports of pre- charged R-22 equipment.

The analysis presented in this report uses EPA’s Vintaging Model (EPA 2006a) in conjunction with industry collaboration to inform the quantitative esti mates on projected servicing needs. The factors listed above influence supply and demand and are addressed in the quantitative analysis with the exception of R-22 cost and refrigerant banking.

The projected scenarios highlighted in this analysis provide a basis for further collaboration with the AC and refrigeration community to maximize supplies (through reuse) in order to continue to service equipment as the U.S. achieves the next HCFC phaseout targets.

4 Recovered refrigerant may be reused in the same owner’s equipm ent; however, if the refrigerant will be used in equipment with different ownership or sold to a new owner, it must first be reclaimed by an EPA-certified refrigerant reclaimer.

Draft-Do Not Cite or Quote- 3 September 2006

# 1. Background: The U.S. HCFC Phaseout Schedule

Title VI of the Clean Air Act (CAA) mandates the development and implementation of regulations to protect the stratospheric ozone layer and ensure U.S. compliance with the Montreal Protocol on Substances that Deplete the Ozone Layer (the Protocol). Under the Prot ocol, the United States and other signatories are obligated to achieve progress to ward the total phaseout of the consumption and production of hydrochlorofluorocarbons (HCFCs), which are ozone-depleting substances (ODS) and have been widely used as refrigerants, solvents, foam blowing agents, and fire extinguishants. 5 Consumption is defined as production plus imports minus export s; production is defined as the manufacture of a controlled substance minus amounts destroyed and amounts completely used as feedstock in the
manufacture of other chemicals and does not in clude amounts reused or recycled (UNEP 2000).

Table 1-1 presents the HCFC consumption cap and the graduated reductions to allowable HCFC consumption for the United States (and all non-Article 5 6 countries), as determined for compliance with the Protocol. The first HCFC phaseout milestone wa s in 1996, when HCFC consumption levels were capped at 1989 ozone-depletion potentia l (ODP)-weighted HCFC consumption levels plus 2.8 percent of the ODP-weighted 1989 CFC consumption. The se cond phaseout milestone occurred on January 1, 2004, when HCFC consumption limits were reduced by 35 percent of the above cap, which is to be followed by a 65 percent reduction in 2010, a 90 percent reduction in 2015, a 99.5 percent reduction in 2020, and a complete phaseout in 2030.

Table 1-1: U.S. HCFC Consumption Phaseout Targets Under the Montreal Protocol

Date Consumption Cap ODP Weighted Quantity Quantity Expressed in
R-22 Metric Tons a

Jan 1, 1996 Consumption freeze capped at 2.8% of the 1989 ODP-weighted CFC consumption plus 100% of the 1989 ODP-weighted HCFC consumption 15,240 ODP-metric tons b 277,091 metric tons

Jan 1, 2004 35% reduction of the cap 9,906 OD P-metric tons 180,109 metric tons Jan 1, 2010 65% reduction of the cap 5,334 OD P-metric tons 96,982 metric tons Jan 1, 2015 90% reduction of the cap 1,524 OD P-metric tons 27,709 metric tons Jan 1, 2020 99.5% reduction of the cap 76.2 ODP-metric tons 0 metric tons c Jan 1, 2030 100% reduction of the cap 0 ODP-metric tons 0 metric tons

a Calculated using an ODP of 0.055 for HCFC-22.

b An ODP-metric ton takes into account each ODS’ relative contribution to ozone depletion. Note: one metric ton equals approxima tely 2,204 pounds.

c In 2020, 0.5 percent of the U.S. consumption cap remains, but the U.S. phaseout schedule prevents any allocation of the cap to R-22.

Table 1-2 details the U.S. phaseout schedule for HCFC s established under the CAA to comply with the targets set by the Montreal Protocol (as presented in Table 1-1 ). As shown, the production and import of HCFC-141b, the HCFC with the highest ODP, was ba nned with limited exemptions beginning January 1, 2003. Also beginning in 2003, an allowance system wa s established to control the U.S. production and consumption (including import and export) of HCFC s and to apportion consumption amongst HCFCs. An allowance is the privilege for the allowance holder to produce and/or import a quantity on an annual basis limited to the allowance granted. Production and c onsumption allowances for HCFC-141b (for the limited exemptions), HCFC-22, and HCFC-142b were authorized and distributed (on a kilogram basis) to certain chemical manufacturing companies (EPA 2003a). 7 Therefore, as of 2003, only those companies with allowances were allowed to produce and/or import these HCFCs.

5 The production and import of other ODS used by these industries, including chlorofluorocarbons, carbon tetrachloride, and meth yl chloroform, were phased out in 1996 – halons in 1994 (with limited exemptions).

6 Article 5 countries, primarily developing countries identified in the Montreal Pr otocol, are on a later schedule for phasing o ut ODS.

7 The production of one kilogram of HCFC requires the expenditure of one production allowance an d one consumption allowance. The import of one kilogram of HCFC requires the expenditu re of one consumption allowance. While the import of used HCFCs does not require the expenditure of allowances, it does require petition approval by EPA; see Section 4.2.1 for more detail.

Draft-Do Not Cite or Quote- 4 September 2006Table 1-2: U.S. HCFC Phaseout Schedule Mandated Under the CAA (to Comply with the Protocol)

Date Affected Substance(s) Restriction Jan 1, 2003 HCFC-141b • No production and no import of HCFC-141b

Jan 1, 2010 HCFC-142b, HCFC-22 • No production and no import of HCFC-142b and HCFC-22, except for on-going servicing needs in equipm ent manufactured before 1/1/2010

Jan 1, 2015 HCFC-142b, HCFC-22
and All Other HCFCs • No production and no import of all other HCFCs, except for on-going servicing needs in equipment manufactured before 1/1/2020

• No sale and use of all HCFCs except (1) for use in chemical reactions

where the HCFCs are completely used up in the process; (2) reclaimed and recycled HCFCs; or (3) for on-going servicing needs in refrigerant equipment manufactured before 1/1/2020 Jan 1, 2020 HCFC-142b, HCFC-22 • No production and no import of HCFC-142b and HCFC-22 Jan 1, 2030 All Other HCFCs • No production and no import of any HCFCs Source: EPA (2003a)

To meet the next phaseout milestone beginning Januar y 1, 2010, U.S. production and import of HCFC142b and HCFC-22 (unless for use in equipment manufactu red prior to January 1, 2010) will cease. The phaseout for all other HCFCs, such as HCFC-123, begins on January 1, 2015, when U.S. production and import is restricted except for use as a refrigerant in equipment manufactured before January 1, 2020. The final phase out for all HCFCs occurs on Januar y 1, 2030. Production and consumption allowances for all other HCFCs must still be granted under the allowance system; additionally, the U.S. Environmental Protection Agency ( EPA) will re-evaluate HCFC-22 and HCFC-142b allocation levels prior
to 2010 and issue allowances at a level that will be suitable solely for the required servicing needs.



## 1.1 Report Objective

The objective of this report is to present quantitativ e estimates of the projected amount of (a) units of equipment using HCFCs beyond 2010 and (b) HCFCs needed to service equipment beyond 2010. In an effort to prepare for the next phaseout scheduled fo r the United States, this report presents possible future scenarios on the servicing needs for air-condi tioning (AC) and refrigeration equipment that will be in use after 2010. These estimates will aid EPA in allocating future HCFC consumption caps.

This analysis focuses solely on post-2010 R-22 serv icing needs in the AC and refrigeration industry, the largest HCFC market and the largest industry sector using HCFCs in the United States. Projections of post 2010 HCFC-142b servicing needs are expected to be marginal and therefore are not explored in this analysis. The largest industry sector using HCFC-142b is the U.S. foam industry, which uses HCFCs to create foam products; furthermore, while HCFC- 142b refrigerant blends are approved as acceptable substitutes for CFC refrigerants in some end-uses, th e modeling used in this analysis does not project any R-142b servicing demand beyond 2010 for the AC and refrigeration industry.

The remainder of the report is organized as follows:

• Section 2 provides a brief overview of the met hodology used in this analysis to project servicing scenarios. A further discussion on the methodologies can be found in Appendix A.

• Section 3 provides an overview of the AC and refrigeration industry and presents current consumption and servicing estimates for all HCFCs used in this sector.

• Section 4 provides projected scenarios for uni ts of R-22 equipment and R-22 servicing needs.

• Section 5 summarizes the key findings of the analysis.

• Appendix A presents the projection meth odology and the associated limitations.

• Appendix B provides AC and refri geration projections by end-use.

Draft-Do Not Cite or Quote- 5 September 2006

# 2. Methodology Overview

The main tool used to launch the analysis and form the basis for quantitative estimates of current and projected HCFC consumption was EPA’s Vintaging M odel. The Vintaging Model estimates the annual chemical emissions from industry se ctors that have historically used ODS, including AC, refrigeration, foams, solvents, aerosols, and fire protection. Within these indu stry sectors, there are over 50 independently modeled end-uses. The model uses informat ion on the market size and growth for each of the end-uses, as well as a history and projections of the market transition from ODS to alternatives. As ODS are phased out, a percentage of the market share or iginally filled by the ODS is allocated to each of
its substitutes. The model tracks emissions of annual “vintages” of new equipment that enter into operation by incorporating information on estimate s of the quantity of equipment or products sold, serviced, and retired each year, and the quantity of t he chemical required to manufacture and/or maintain the equipment. EPA’s Vintaging Model makes use of this market information to build an annual inventory of in-use stocks of equipment and the ODS refrigeran t and non-ODS substitutes in each of the end-uses.

As an initial step in this analysis of current and proj ected HCFC use in the United States, an investigation was conducted into the entire HCFC market, cove ring all end-uses that utilize HCFCs in the AC and refrigeration, foam, solvents, aerosols, and fire pr otection sectors. This analysis was conducted by compiling estimates from the 2005 version of EPA’s Vintaging Model on HCFC co nsumption for both new manufacturing and the servicing of existing equipm ent, and the total units of equipment containing HCFCs from 2005 through 2030 by end-use (EPA 2005a). The Vintaging Model data indicated that in 2005, the AC and refrigeration industry represent ed 96 percent of total HCFC-22 consumption and 86 percent of total HCFC consumption. 8 Therefore, this analysis was narrowed to focus on R-22 servicing needs in the AC and refrigeration industry.

Having established initial estimates, a limited num ber of industry experts were then contacted to corroborate the findings and market dynamics affecti ng the servicing needs of the AC and refrigeration industry after 2010. Representatives including th ose from the Association of Home Appliance Manufacturers (AHAM); Air-Conditioning and Refrigerati on Institute (ARI); Carrier Corporation; Heating, Air-Conditioning & Refrigeration Distributors Internatio nal (HARDI); Hill Phoenix; Honeywell; a member of the Food Marketing Institute; and York were contacte d to discuss stationary AC and refrigeration enduses. 9 The informal discussions were used to confirm or modify preliminary estimates obtained from EPA’s Vintaging Model; information gathered from the di scussions was in turn used to refine assumptions and inputs in the Model to improve the estimates provided in this analysis.

On November 4, 2005, EPA made the preliminary draft ve rsion of this report available for comment in a Notice of Data Availability (NODA, 70 FR 67172). EPA received five comments, copies of which are
available at EPA’s electronic dock et (EDocket ID number, OAR-20 03-0130, Dupont 2005a, National Refrigerants, Inc. 2006, Honeywell 2006, The Allianc e for Responsible Atmospheric Policy 2006, CFC Refimax 2006). Among the comments received, two commenters stated that the overall projected demand of R-22 to service AC and refrigeration equipment is reasonable; however, all commenters expressed concern regarding the projections of the supply of recovered/reclaimed R-22 that can satisfy future demand. One commenter indicated that the existing business model for R-22 recovery does not encourage the conservation efforts required to meet the scenario presented in the preliminary draft report, nor would the current collection and processing infrastruc ture support projections of the recovered supply. In response, additional analysis was conducted using EPA’s Vintaging Model to test whether demand might exceed supply under some circumstances. A ppendix A includes a discussion of the assumptions used to develop the supply and demand estimates pres ented in this report and the limitations and caveats inherent in the analysis.

8 The recently updated Vintaging Model indicates that the AC and refrigeration industry represents 98 percent of total HCFC-22 consumption and 89 percent of total HCFC consumption (EPA 2006a).

9 In order to comply with the Paperwork Reduction Act of 1995, fewer than ten people were contacted regarding each information category (44 U.S.C. 3502(3)).

Draft-Do Not Cite or Quote- 6 September 2006

# 3. Current HCFC Use in Air-Conditioning and Refrigeration Equipment

The AC and refrigeration industry encompasses a wide variety of equipment and employs a diversity of HCFC and other refrigerants. This section is organized as follows:

• Sections 3.1 and 3.2 present an overview of AC and refrigeration end-uses, respectively; and

• Section 3.3 provides an overview of HCFC refriger ants used in the AC and refrigeration industry.



## 3.1 Air-Conditioning End-Uses

AC equipment can be categorized as either mobile or stationary. These broad end-use categories are
discussed further below and outlined in Figure 3-1

.

Mobile air-conditioning systems include all forms of AC t hat provide cooling to passenger compartments in all types of moving vehicles. Th is category can be further broken down into motor vehicle air-conditioning and other mo bile air-conditioning systems.

• Motor vehicle air-conditioning (MVAC) includes AC in the passenger compartments of light duty
vehicles – both cars and trucks (i.e., pick-up trucks, minivans, sport utility vehicles, etc.). A variety of refrigerant blends, many of them in cluding HCFCs, are approved for use in the United States by EPA as replacements for R-12 in MVACs. However, these blends have not been endorsed by vehicle or system manufacturers for such use, thereby capturing only a small and declining share of the retrofit market, which cons ists mainly of R-134a. Therefore, the MVAC
sector is not discussed fu rther in this analysis.

• Other mobile air-conditioning includes AC in the passenger compartments of both buses (including school, transit, and tour buses) and trains (including heavy, light, and commuter rail, and Amtrak trains). 10 Although school bus AC systems converted directly from R-12 to R-134a, the majority of transit buses, tour buses, and tr ains continue to use R-22 in their AC systems (Sartin Services 2005; Motorcoach Training 200 5; WMATA 2005; Amtrak 2005; NJ Transit 2005).

Stationary air-conditioning includes a wide variety of equipment, further categorized into the following
six end-uses.

• Unitary air-conditioners and heat pumps include both split systems and packaged units and are designed for air circulating, cooling, cleaning, and dehumidifying in residential and small and large commercial applications.

• Chillers regulate the temperature and humidity in o ffices, hotels, shopping centers, and other large buildings. There are four major types of chillers—centrifugal, sc roll, reciprocating, and screw—each of which is named for the type of compressor employed. Often, standard AC systems, such as chillers, are customized to be us ed for industrial applications. Modifications are made to customize the equipment for unusual circ umstances (e.g., protection from flammability, high temperatures, or for outdoor use).

• Dehumidifiers are mechanical refrigeration systems designed to remove moisture from the air by drawing air first over cold evaporator coils and th en warm condenser coils, causing the moisture
in the air to condense onto the cold coils. Ex amples include indoor pool dehumidifiers and portable units used to dehumidify basements.

• Water and ground source heat pumps use fluid circulated in a common piping loop as a heat source/sink to cool and heat air. Water-source heat pumps typically use water pumped from a well, lake, or stream as a heat source/sink. Direct expansion geothermal heat pumps circulate refrigerant through piping in the earth.

10 For the purposes of this report, “other mobile AC” does not in clude ships, planes, RVs, or cons truction/farm equipment. In th e case of boats, some R-22 is used in AC systems (UNEP 2003a), but this consumption is accounted for in this report under stationary AC equipment, such as packaged term inal units or chillers (Cold Ships 2005).

Draft-Do Not Cite or Quote- 7 September 2006• Window units , also known as room air-conditioners, are small appliances used to condition the air in a single room.

• Packaged terminal units are ACs or heat pumps that are mounted on the wall. They are often used in hotel rooms, dormitories, or classrooms.



### Air-Conditioning (AC) Equipment

Motor Vehicle
A C 

### Stationary Air-Conditioning

Chillers Unitary AC and

Heat Pumps Water and
Ground Source

Heat Pumps Dehumidifiers

Residential Small
Commercial Large
Commercial Other Mobile
AC 

### Mobile Air-Conditioning

Window Units Packaged
Terminal AC and

Heat Pumps Figure 3-1: Types of Air-Conditioning Systems a

a The shaded end-use (MVACs) is assumed to not use HCFC refrigerants; double boxed end-uses are those for which supply and demand projections are estimated in this report.



## 3.2 Refrigeration End-Uses

Refrigeration equipment can be broken down into four categories: domestic refrigeration, refrigerated transport, industrial process refrigeration, and commerci al refrigeration. These categories are described
further below and outlined in Figure 3-2

.

Domestic refrigeration includes household refrigerators, household freezers, combination refrigerator/freezer units, and water coolers. For the majority of these equipment types, the refrigerants used do not typically include HCFCs or blends contai ning HCFCs. Older household freezers sometimes employed R-22; however, because thes e units are viewed as a minor part of the domestic refrigeration market, this end-use is not furt her analyzed in this report.

Refrigerated transport includes refrigeration used in equipment that moves products from one place to another and includes refrigerated ship holds, truck tra ilers (i.e., reefer trucks), railway freight cars, and other shipping containers.

Industrial process refrigeration (IPR) systems are complex, customized systems used to cool process streams in the chemical, food proc essing, pharmaceutical, petrochemic al, and manufacturing industries. This sector also includes industrial ice machines, equi pment used directly in the generation of electricity,
and ice rinks.

Commercial refrigeration can be further broken down into three end-uses:

• Cold storage warehouses are refrigeration systems with vary ing designs and charge sizes. They are used to store meat, produce, dairy produ cts, and other perishable goods before and after food processing.

• Retail food systems are used to refrigerate food in commercial retail establishments, such as grocery stores. These systems can be classified as either centralized or self-contained units.

Draft-Do Not Cite or Quote- 8 September 2006Centralized retail food systems, also known as remote systems, consist of a series of compressors and condensers located in a remote machinery room, providing a cooling medium to display cabinets and cold storage rooms in other pa rts of the building. The most common form of centralized systems circulate refrigerant throughout the store. Alternatives to these types of systems include secondary loop and distributed sy stems using HFC refrigerant blends. Selfcontained retail food units, also referred to as st and-alone systems, are factory produced with all the components integrated. Examples include wa lk-in refrigerators/cool ers/freezers, roll-in refrigerators/freezers, under-counter refrigerators /freezers, reach-in refrigerators/freezers, wine and beer coolers, ice cream machines, beverage vending machines, and a variety of stand-alone upright or horizontal display cases (e.g., beverage merchandisers, deli cases).

• Ice makers are factory-made units used in commerci al establishments to produce ice for consumer use (e.g., in hotels, restaurants, and co nvenience stores). Ice makers are not further analyzed in this report because they do not typically employ HCFCs or blends containing HCFCs.

Figure 3-2: Types of Refrigeration Systems a



### Refrigeration Equipment

Domestic Refrigeration Refrigerated
Trans p ort Industrial
Process Refrigeration Commercial Refrigeration

Cold Storage Ice
Makers Retail
Food Household Refrigerators Household
Freezers Water
Coolers

a Shaded areas are assumed to not use HCFC refrigerants; double boxed end-uses are those for which supply and demand projections are estimated in this report.



## 3.3 HCFC Refrigerants

Historically, chlorofluorocarbons (C FCs) were extensively used as refr igerants in the AC and refrigeration industry; by the 1970s, R-22 and R-502 (a blend of CFC-115 and R-22) were also well established refrigerants. On January 1, 1996, the production an d import of CFC refrigerants, classified as Class I controlled [ozone-depleting] substances under the CAA Amendments of 1990, were phased out in the U.S. and other industrialized countries. HCFC refr igerants, which also deplete the ozone layer and are classified as Class II controlled [ozone-depleting] substances under the CAA, were approved as substitutes for the controlled CFCs. Table 3-1 lists the Class II ODS used as refrigerants (or components of refrigerant blends), in descending order according to their ODP. 11 Table 3-1 also lists the phaseout schedule for consumption of Class II substances in both new and existing AC and refrigeration equipment, as required under the CAA.

11 An ODP value is a measure of a chemical’s relative ability to deplete ozone. A reference level of 1.0 is assigned to CFC-11.

Draft-Do Not Cite or Quote- 9 September 2006Table 3-1: Class II ODS Used as Refrigerants
Consumption Phaseout (Starting Jan. 1) Class II ODS CAS
Number Atmospheric Lifetime (years) ODP a New Equipment Existing Equipment HCFC-142b (CH 3 CF 2 Cl) b 75-68-3 17.9 0.065 2010 2020 HCFC-22 (CHF 2 Cl) 75-45-6 12.0 0.055 2010 2020 HCFC-124 (CF 3 CHFCl) 2837-89-0 5.8 0.022 2020 2030 HCFC-123 (CHCl 2 CF 3 ) 306-83-2 1.3 0.02 2020 2030

a ODP values are taken from the Montreal Protocol (UNEP 2003b).

b HCFC-142b is formulated into refrigerant blends; however, these bl ends have an insignificant market share in the AC and refrige ration industry (ICF Consulting 2005; UNEP 2003a).

The remainder of Section 3.3 provides current esti mates of the HCFCs and blends containing HCFCs consumed as refrigerants.



### 3.3.1 HCFC-22

HCFC-22, also known as R-22, was first commercialized as a refrigerant in the 1930s and has been used continuously since that time (UNEP 2003a; Dupont 2 005b; Calm and Domanski 2004). R-22 is the most common HCFC refrigerant used in AC and refrigeration applications.

Potential non-ODS candidates to replace R-22 vary by application and include HFC-134a, R-404A (composed of HFC-125/HFC-143a/HFC-134a), R- 407C (composed of HFC-32/HFC-125/HFC-134a), R410A (composed of HFC-32/HFC-125) and R-507A (composed of HFC-125/HFC-143a).

Table 3-2 presents current estimates of R-22 consumpti on and the estimated percent of that consumption that is used to service AC and refrigeration equipment. These estimates were developed based on data from EPA’s Vintaging Model and information provided by industry contacts (EPA 2006a). Appendix A explains the methodology used to develop these esti mates and disaggregates servicing estimates by equipment type. As shown in Table 3-2 , current estimated consumpt ion of R-22 for both AC and refrigeration equipment totals approximately 114,900 metric tons. Approximately 66 percent of this consumption is for servicing existing equipment, with the refrigeration industry using a higher percentage of its total consumption to service equipment than the AC industry. The majority of R-22 consumption for servicing is currently attributed to residential and small commercial unitary AC equipment and retail food refrigeration equipment (see Appendix B).

Table 3-2: Summary of U.S. R-22 Consumption (2005) a

Equipment Type Total Consumption for New Manufacturing and Servicing (Metric Tons) Consumption for Servicing (Metric Tons) % of Total Consumption for Servicing
Total AC 73,600 43,300 59% Total Refrigeration 41,300 33,100 80%

Total 114,900 76,400 66%

a Quantities of R-22 from blends containing R-22 are factored into these estimates. See Section 3.3.5 for a discussion of blends containing HCFCs.

Since R-22 represents the largest HCFC market in the United States, the projected servicing needs presented in Section 4 focus solely on the use of R-22 and blends containing HCFC-22 in the U.S. AC and refrigeration industry.



### 3.3.2 HCFC-142b

HCFC-142b, also known as R-142b, is not used as a stand-alone refrigerant but as a constituent of a few ASHRAE-designated refrigerant blends including R-409A (composed of HCFC-22/HCFC-124/HCFCDraft-Do Not Cite or Quote- 10 September 2006142b) and R-406A (composed of HCFC-22/isobutane[ R-600a]/HCFC 142b). Although the phaseout schedule for HCFC-142b is the same as that for HCFC-22, current research indicates that other refrigerants are used in the large majority of AC and refrigeration equipment, indicating that blends using R-142b are not commonly used (U NEP 2003a, ICF Consulting 2005, EPA 2006a). Therefore, projected R-142b servicing needs, if any, are not explored in this analysis.



### 3.3.3 HCFC-123

HCFC-123, also known as R-123, is primarily used as a refrigerant in centrifugal chillers for commercial comfort AC and in industrial process refrigerati on. R-123 is the second most commonly used HCFC refrigerant (after R-22), with current overall consum ption totaling around 2,000 metric tons—equivalent to about two percent of R-22 consumption. As Table 3-3 indicates, the majority of R-123 is used in AC equipment, specifically for chillers.

The estimates presented in Table 3-3 are drawn directly from the Vintaging Model (EPA 2006a). The production and import of virgin HCFC-123 is scheduled for phaseout in 2020 for use in new AC and refrigeration equipment and in 2030 for use in existing AC and refrigeration equipment. 12 Because this phaseout occurs later than HCFC-22, servicing need s for HCFC-123 are not explored further in this analysis.

Table 3-3: Summary of R-123 Consumption (2005)

Equipment Type Total Consumption for New Manufacturing and Servicing (Metric Tons) Consumption for Servicing (Metric Tons) % of Total Consumption for Servicing
Total AC 1,400 500 36% Total Refrigeration 600 <50 9%

Total 2,000 500 25%



### 3.3.4 HCFC-124

HCFC-124, also known as R-124, is used in blends (mainly R-401A), in industrial process and transport refrigeration equipment. As Table 3-4 shows, in 2005, total consumption of R-124 (used in blends) was estimated to be less than 50 metric tons, all of which was for servicing refrigeration equipment.

The estimates presented in Table 3-4 are taken directly from the Vintaging Model (EPA 2006a). The production and import of virgin HCFC-124 is scheduled for phaseout in 2020 for use in new AC and refrigeration equipment and in 2030 for use in existing AC and refrigeration equipment. 13 Because this phaseout occurs later than HCFC-22, servicing need s for HCFC-124 are not explored further in this analysis.

12 In 2015, HCFC-123 production and import will be phased out for all non-refrigerant uses.

13 In 2015, HCFC-124 production and import will be phased out for all non-refrigerant uses.

Draft-Do Not Cite or Quote- 11 September 2006Table 3-4: Summary of R-124 Consumption (2005) a

Equipment Type Total Consumption for New Manufacturing and Servicing (Metric Tons) Consumption for Servicing (Metric Tons) % of Total Consumption for Servicing
Total AC 0 0 NA Total Refrigeration <50 <50 100%

Total <50 <50 100%

a These estimates represent quantities of R-124 from blends containing R-124. See Section 3.3.5 for a discussion of blends containing HCFCs.



### 3.3.5 HCFC Refrigerant Blends

Often refrigerants are formulated with several HCFCs and other substances, such as hydrofluorocarbons (HFCs) or hydrocarbons (e.g., propane, butane, is obutane). HCFC-22 is used as both a stand-alone refrigerant and a component of blends. When used in blends, HCFC-124 is used in combination with HCFC-22. HCFC-142b is also typically used with HCFC-22 to formulate refrigerant blends, with the exception of some blends designed to replace R-12 in motor vehicle air conditioning. Table 3-5 presents the composition of the more common refrigerant blends containing HCFCs. 14

Table 3-5: Compositions of Common HCFC Refrigerant Blends

Blend R-22 R-124 Other
R-401A 53% 34% 13% R-152a
R-402A 38% 60% R-125, 2% propane (R-290)

R-502 48.8% 51.2% CFC-115

Table 3-6 presents the end-uses in which these refrigerant blends containing HCFCs are currently used.

Table 3-6: Common Uses of HCFC-Containing Refrigerant Blends by End-Use Refrigerant Type Refrigeration Equipment Type R-401A R-402A R-502
Retail Food x x Cold Storage x IPR x Refrigerated Transport x x x

14 HCFC consumption data presented in this analysis include quantities consumed in blends by employing the percent composition of the corresponding HCFC constituent(s) of that blend. In orde r to accurately portray the number of units containing HCFC ble nds, however, blends are not disaggregated when presenting the num ber of units of equipment (i.e., a unit running on an HCFCcontaining blend counts as one unit).

Draft-Do Not Cite or Quote- 12 September 2006

# 4. Projected R-22 Scenarios

Section 4 presents projections of the number of R-22-containing units of equipment and the associated servicing needs for 2010, 2015, and 2020. R-22 scenarios were developed by investigating various trends that are expected to affect future market needs . Such trends include changes in charge sizes, the transition to alternative refrigerants, changes in refrigerant recovery and reuse practices, R-22 economics, and potential imports of pre-charged equipment.

The remainder of this section is organized as follows:

• Section 4.1 summarizes the projected market size of R-22 containing equipment beyond 2010 in the United States.

• Section 4.2 provides projected estimates of the quantity of both virgin (i.e., consumption as defined under the Montreal Protocol) and recovered R-22 that will be required to service existing equipment beyond 2010.

• Section 4.3 discusses the factor s that may affect estimates of the installed base and servicing needs for R-22 equipment.

Appendix B presents further detail on the estimates provided in Section 4, disaggregating R-22 containing equipment and overall service demand estimates into end-use specific projections.



## 4.1 R-22 Equipment Used Beyond 2010

The majority of R-22 equipment that is projected to be in use (i.e., within the installed base) from 2010 onward will be used for AC applications, including wi ndow units, packaged terminal units, residential and commercial unitary AC, chillers, dehumidifiers, wa ter and ground source heat pumps, and non-light duty mobile AC in buses, trains, etc. As presented in Table 4-1 , it is estimated that approximately 147.5 million units of all such types of AC equipment will be in use in 2010, decreasing by about 41 percent by 2015, and 76 percent by 2020. It is projected that in 2010 there will be approximately 2.2 million units of refrigeration equipment, including retail food, industrial process refrigeration, and transport refrigeration equipment (but not including cold storage warehouses). The installed base is projected to decrease by about 29 percent by 2015 and 51 perc ent by 2020. These estimates were developed based on EPA’s Vintaging Model, which takes into account recent input received from industry representatives for this and other analyses (EPA 2006a). Appendix A provides more detail on the methodology used to develop these projections. Appendix B provides projections disaggregated by end-use.

Table 4-1: Projected Number of R-22 Units (2010-2020) a,b

Equipment Type 2010 2015 2020
Total AC 147,455,700 86,517,700 20,419,100 Total Refrigeration 2,204,100 1,561,000 768,600

Total 149,659,800 88,078,700 21,187,700

a Including units that use blends containing HCFC-22.

b Because the estimates for cold storage warehouses are expressed in cubic feet, this equipment type is not included in this table. The projected stock of cold storage warehouse
cubic feet is 231 million ft 3 in 2010, 133 million ft 3 in 2015, and 61 million ft 3 in 2020.



## 4.2 Projected R-22 Servicing Needs

AC and refrigeration equipment commonly require servicing, which may include the need to add refrigerant to account for refriger ant losses that occur over time. 15 While the production and import of HCFC-22 is banned for use in new equipment in 2010, the limited production and import of HCFC-22 will still be permitted for servicing and maintenance purposes for equipment manufactured prior to January 1,

15 The servicing need estimates projected in this analysis include refrigerant to repl ace quantities that leak from operating equ ipment
as well as de minimis losses that may occur while servicing operating equipment.

Draft-Do Not Cite or Quote- 13 September 20062010. Table 4-2 presents projected R-22 demand (including that used in blends) for servicing equipment in 2010, 2015, and 2020. These es timates were developed based on EPA’s Vintaging Model, which
takes into account recent in dustry input (EPA 2006a). Appendix A provides further detail on the methodology used to develop these projections. Appendix B provides servicing demand projections disaggregated by end-use.

As presented in Table 4-2 , it is projected that in 2010, approxim ately 68,600 metric tons of R-22 will be required to service AC and refrigeration equipment, of which the majority—41,400 metric tons (60%)—will be used to service AC systems. In 2015, servici ng demand is projected to reach approximately 43,200 metric tons of R-22 for AC and refrigeration equipm ent, and in 2020, the projected quantity declines to 20,600 metric tons. Both the 2015 and 2020 projections of servicing demand exceed the U.S. consumption cap for virgin HCFCs for these years; ho wever, a portion of the servicing needs can be met by using recovered refrigerant, thus decreasing the need for virgin R-22.

Table 4-2: Projected R-22 Servicing Demand (2010-2020) (Metric Tons)
Equipment Type 2010 2015 2020

Total AC 41,400 26,800 12,100 Total Refrigeration 27,200 16,400 8,500

Total 68,600 43,200 20,600

Figure 4-1 displays the breakdown of R-22 servicing demand by AC and refrigeration equipment type for 2010 and 2015. As shown, residential AC, retail food refrigeration equipment, and small commercial AC are projected to account for the majority of the R-22 demand in 2010 and in 2015.

Figure 4-1: R-22 Demand for Servicing Equipment, by End-Use

Small

Commercial

AC

21% Residential AC

32% Large

Commercial

AC

4% Retail Food

20% Chillers

6% IPR

17% 2015 Total Consumption for Servicing: 43,200 MT

Large

Commercial A

4% IPR

13% Chillers

4% Small

Commercial AC

21%

Cold Storage

1%

Residential AC

31% Retail Food

26% 2010 Total Consumption for Servicing: 68,600 MT

Source: EPA's Vintaging Model (VM IO file_6-30-06_ALL)



### 4.2.1 R-22 Sources

Only existing sources of R-22 and a controlled q uantity of virgin R-22 (limited through allowance allocations distributed by EPA until 2020) are available to the AC and re frigeration industry to meet servicing demand starting in 2010. 16 Existing sources of R-22, which can offset the need for virgin R-22,
include:

16 Virgin R-22 may be stockpiled; however, the extent to which th is activity may occur is unknown. A discussion on stockpiling p lans

is covered in Section 4.3.3.

Draft-Do Not Cite or Quote- 14 September 20061. Recovered (i.e., recycled or reclaimed) R-22 . Under the current codified regulations (EPA 2004a), refrigerants containing HCFCs must be reco vered. After the recovery process, the refrigerant held in the storage container may be:

a. Recycled (i.e., cleaned through the use of recycling equipment) and recharged back into the equipment from which it came; b. Recycled and used in other equipment of the same owner; c. Reclaimed (shipped to an EPA- certified reclaimer) prior to resale to a new owner; or d. Destroyed through the use of environmentally-acceptable technologies approved in 40 CFR §82.3 (i.e., liquid injection incineration, reactor cracking, gaseous/fume oxidation, rotary kiln incineration, cement kilns, and radio fr equency plasma) (EPA 2003b).

2. Import of used R-22 that co mpanies can acquire, if the impo rt is preauthorized by EPA, through a petition process.

Each of these existing sources of R-22 is described in more detail below.



### Recycled R-22
The recycling process cleans the refrigerant for reuse without meeting all the requirements of reclamation, discussed further below. HCFC refrigerants are commonly recovered from a piece of equipment, adequately cleaned, and then recharged into the same piece of equipment using a recycling device (EPA 2003b).

EPA regulations allow for the recharge of used refrigerant without subse quent reclamation for refrigerants recovered and charged back into the same appliance 17 or to another appliance if those appliances are owned by the same establishment. 18 Several companies, such as supermarket chains, employ recycling plans through which the refrigerant is recovered when dismantling one establishment’s equipment and reused to service equipment at another facility with like ownership.



### Reclaimed R-22
Refrigerants that are resold to be used in other equipm ent must be reclaimed to a standard level of purity based on the ARI Standard 700, to ensure sufficient purity of the reclaimed refrigerant. Refrigerant reclaimers process recovered refrigerant and send samp les of the purified refrigerant off-site for purity verification through testing required by the ARI 700 Standard.

Industry representatives have indicated that the cu rrent use of reclaimed HCFCs is minimal because virgin R-22 is inexpensive. In 2004, the amount of pure R-22 reclaimed by EPA-certified reclaimers totaled approximately 3,280 metric tons, or 7.23 m illion pounds (EPA 2006b). Fewer quantities of the refrigerant blend R-502, composed of 48.8 perc ent R-22 and 51.2 percent CFC-115, are also being reclaimed, with only 48 metric tons, or 105,536 pounds report ed for 2004 (EPA 2006b). 19 Reclamation data from 2000 to 2003 is presented in Table 4-3 below.

Table 4-3: Reclaimed R- 22 by Year (Metric Tons) a

2000 2001 2002 2003 2004

R-22 3,218 1,960 2,230 1,976 3,280

R-502 281 113 150 41 48

a Source: EPA 2006b.

As 2010 approaches, the price of R-22 will likely increas e, and it is expected that the reclamation of R-22 will also increase (Powell 2004). Industry representa tives are already reporting market signals indicating that several U.S. companies are expecting an eventual surge in R- 22 reclamation (Powell 2004; CFC

17 Appliance is defined in EPA regulations at 40 CFR §82.152 as an y device which contains and uses a refrigerant. Hence, its reference is not limited to household “appliances.”

18 If refrigerant changes ownership, however, that refrigerant must be reclaimed.

19 Feedback received from stakeholders in response to the NODA indicated that because R-22 is a component of the R-502 azeotropic blend, the ability to separate R-22 from the blend is difficult, expensive, and very limited (National Refrigerants 2006).

Draft-Do Not Cite or Quote- 15 September 2006Refimax 2006). Where there is a monetary incentive, distributors are more likely to collect refrigerant and pass it on to reclaimers (HARDI 2005). A more det ailed discussion on R-22 economics is provided in Section 4.3, “Factors Affecting Projections.”



### Imports of Used R-22
Unlike virgin HCFCs, there are no Montreal Protocol restrictions on the consumption of used controlled
substances. 20 However, in creating the allocation system for the use of HCFCs, EPA developed a shipment-by-shipment petition pr ocess for importing used HCFCs as described in 40 CFR §82.24 (EPA 2003a). The petition process ensures that HCFCs ar e used (and not newly produced) prior to import. For each shipment of used HCFC gr eater than five pounds, the importer needs to petition EPA to import at least 40 working days before the shipment is to leave the country of export. EPA reviews and verifies data in the petition and issues a notice to the importe r either permitting or not permitting the import to

occur.

Currently, the quantity of used R-22 imports is minimal. The projections in this report do not include the potential future quantities obtained from the import of used R-22; however, this source of used material can offset future demand for virgin production prov ided that a lack of domestically available used R-22 justifies the need to undergo t he strict permit process.



### 4.2.2 Meeting R-22 Service Demand

Although limited virgin manufacture of HCFC-22 will be allowed to service equipment until 2020 through production and consumption allowances, the analysis performed for this report indicates that, with industry effort, a large portion of the demand for HCFC -22 for servicing can be met with previously used refrigerant that is recovered and then recycled or recl aimed. Recovered R-22 is a source that is made available as a result of the venting prohibiti on EPA has established under Sect ion 608 of the CAA of 1990 (EPA 2004a). In order to determine the potential am ounts of used refrigerant available to service equipment, two theoretical scenarios were developed using EPA’s Vintaging Model to estimate: 1) the projected amount of recovered R-22 potentially avail able to meet projected servicing demand of other equipment still in use; 2) the subsequent remaini ng quantity needed to satisfy the rest of that demand; and 3) the extent to which the remaining demand can be met with allowable quantities of virgin R-22 production.

In developing the scenarios using EPA’s Vintaging Model , the projected amount of recovered R-22 is estimated based on the quantity available from end-o f-life equipment. While refrigerant recovered from equipment during servicing activities can also be avai lable for reuse in other equipment, this potential source is not included in these scenarios as it is proj ected to be minimal. According to industry sources, refrigerant recovered during service events primarily originates from commercial and industrial equipment; refrigerant is rarely recovered during the servicing of small equipment in the residential sector because these units tend not to be overcharged or leaking (Hom e Energy Center 2006, Airgas 2006). Additionally, only a small portion of all servicing events conduc ted on commercial and industrial equipment involve the refrigerant circuit, and when recovering refrigerant to perform repairs is necessary, only a section of the refrigerant charge is isolated and recovered, not the entire charge.

To estimate refrigerant recovery and reuse, it is as sumed that a certain percent age of refrigerant, which varies by scenario, is recovered from discarded equipment. 21 While EPA has regulations in place prohibiting intentional venting, for the purposes of this analysis, it is appropriate to create scenarios that could imply less compliance with the regulations. It is then assumed that the entire pool of recovered refrigerant re-enters the market (see Appendix A fo r more details) and hence off-sets the demand for virgin R-22 production. The two scenarios investigated can be summarized as follows:

20 “Used controlled substances” ar e controlled substances that have been recovered from their intended use systems (which may
include controlled substances that have been, or may be subsequently, recycled or reclaimed) (EPA 2003a).

21 The Vintaging Model assumes equipment contains a full charge at disposal and does not take into account a) refrigerant destroyed after equipment is decommissioned or b) any stockpiling of recovered refrigerant beyond a one-year timeframe. See Appendix A for further details.

Draft-Do Not Cite or Quote- 16 September 2006• Scenario 1 assumes that by 2010, 50 percent of refrigerant from retired equipment is recovered and re-enters the pool of refrigeran t available to meet demand (i.e., a 50 percent recovery rate). The remaining 50 percent is not available for reuse.

• Scenario 2 assumes that by 2010, 10 percent of refrigerant from retired equipment is recovered and reused in equipment (i.e., a 10 percent recovery rate). The remaining 90 percent is not available for reuse.

Table 4-4 provides the estimated percentages of the R-22 supply that would be needed to meet demand through (a) recovered refrigerant (i.e., recycled or reclaimed) and (b) new (i.e., virgin) refrigerant.

Table 4-4: Projected R-22 Supply Needed to Meet Demand by Source (Metric Tons)

Scenario Source 2010 2015 2020

Recovered 27% 52% 100% Scenario 1: 50% Recovery Rate Virgin 73% 48% 0%

Recovered 5% 10% 21% Scenario 2: 10% Recovery Rate Virgin 95% 90% 79%

As presented, there is a significant range between th e two scenarios with regard to the percent of R-22 servicing demand that is projected to be needed from virgin manufacture. For example, in 2020, Scenario 2—representing minimal refrigerant recovery at equipment disposal—results in a projected need for virgin refrigerant to fully meet the projected servicing demand. Such consumption is a legal impossibility under the Clean Air Act, as it would put the U.S. out of compliance with the Montreal Protocol, which calls for consumption of HCFCs to drop to 0.5% of the cap beginning in 2020.

Table 4-5 and Table 4-6 summarize the two recovery scenarios in comparison to two U.S. HCFC consumption cap allocations: in the first allocation, it is assumed that 100 percent of the HCFC cap in 2010 and 2015 will be assigned to R-22; in the second , only a portion (i.e., 90 percent) is assigned to R22 in 2010 and 2015, with the remainder set aside for allocation to other HCFCs. The first recovery scenario, which represents a recovery rate of 50 percent, is summarized in Table 4-5 . As shown in both potential consumption cap allocations, a significant po rtion of the consumption cap remains available in 2010 beyond the quantity required to satisfy the projected R-22 servicing demand. Additionally, Table 4-5 indicates that in 2015 through 2020 (and beyond), the us e of recovered refrigerant will be necessary to avoid R-22 shortfalls; however, projec tions indicate that sufficient supplies of recovered refrigerant would be available under a 50% recovery rate scenario.

Draft-Do Not Cite or Quote- 17 September 2006Table 4-5: Scenario 1: 50% Recovery Rate: Summary of Projected R-22 Supply, Demand, and Surplus (R-22 Metric Tons)

2010 2015 2020 Projected R-22 Servicing Demand Summary Total R-22 servicing demand 68,600 43,400 20,500 Anticipated R-22 supplied from recovery/reuse 18,500 22,600 20,500 Estimated virgin R-22 supply needed to satisfy remaining demand 50,100 20,900 0 Potential HCFC Consumption Cap Allocations Allocate Full HCFC Cap to R-22 Virgin R-22 supply available under cap a 96,982 27,709 0 b Estimated virgin R-22 supply needed to satisfy remaining demand 50,100 20,900 0 Additional virgin R-22 allowable under cap 46,882 6,809 0 Allocate 90% of HCFC Cap to R-22 Virgin R-22 supply available under cap 87,284 24,938 0 b Estimated virgin R-22 supply needed to satisfy remaining demand 50,100 20,900 0 Additional virgin R-22 allowable under cap 37,184 4,038 0

a Expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

b In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Table 4-6 summarizes the projections under the second reco very scenario that assumes practices that yield a lower recovery rate of 10 percent. These projections are also compared to two potential U.S. HCFC consumption cap allocations. As shown, in both cap allocations, the estimated virgin R-22 supply needed in 2010 can be adequately met with a portion of the HCFC consumption cap remaining. However, in 2015 and 2020, the quantity of recovered R-22 projected under this scenario plus the amount of virgin R-22 production allowable under the ca p is not adequate to meet the projected servicing demand, consequently leading to R-22 supply shortfalls.

Table 4-6: Scenario 2: 10% Recovery Rate: Summary of Projected R-22 Supply, Dema nd, and Shortfall (R-22 Metric Tons) a

2010 2015 2020 Projected R-22 Servicing Demand Summary Total R-22 servicing demand 68,600 43,400 20,500 Anticipated R-22 supplied from recovery/reuse 3,700 4,500 4,400 Estimated virgin R-22 supply needed to satisfy remaining demand 64,900 38,900 16,200 Potential HCFC Consumption Cap Allocations Allocate Full HCFC Cap to R-22 Virgin R-22 supply available under cap b 96,982 27,709 0 c Estimated virgin R-22 supply needed to satisfy remaining demand 64,900 38,900 16,200 Additional virgin R-22 allowable under cap 32,082 -11,191 -16,200 Allocate 90% of HCFC Cap to R-22 Virgin R-22 supply available under cap b 87,284 24,938 0 c Estimated virgin R-22 supply needed to satisfy remaining demand 64,900 38,900 16,200 Additional virgin R-22 allowable under cap 22,384 -13,962 -16,200

a Negative values represent a shortfall of R-22 available under the consumption cap and are in bold.

b Expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

c In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Figures 4-2a and 4-2b further demonstrate the significant variability in the projected supply of recovered refrigerant available to meet demand resulting from the two recovery scenarios. Depending on the recovery practice employed, the potent ial exists for either a surplus or shortfall to occur in 2015 (Scenario 1 and 2, respectively) and the potential for a shortfall in 2020 (Scenario 2).

Draft-Do Not Cite or Quote- 18 September 2006Figure 4-2a: Total Projected R-22 Servicing Demand, Recovery Scenario 1 a, b

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

2010HCFC-22 (MT) Anticipated R-22 Supply from Recovered R-22

Virgin R-22 Needed to Satisfy Service Demand

Total R-22 Service Demand

90% of U.S. HCFC Consumption Cap

U.S. HCFC Consumption Cap

2015 2020

Source: EPA's Vintaging Model (VM IO file_6-30-06_ALL)

a Potential consumption cap allocations expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

b In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any
allocation of the remainin g ca p to R-22.

Figure 4-2b: Total Projected R-22 Servicing Demand, Recovery Scenario 2 a, b

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

2010HCFC-22 (MT) Anticipated R-22 Supply from Recovered R-22

Virgin R-22 Needed to Satisfy Service Demand

Total R-22 Service Demand

90% of U.S. HCFC Consumption Cap

U.S. HCFC Consumption Cap

2015 2020

Source: EPA's Vintaging Model (VM IO file_6-30-06_ALL)

a Potential consumption cap allocations expressed in R-22 un-weighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

b In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Draft-Do Not Cite or Quote- 19 September 2006As the market prepares for the phaseout, it is critical to ensure that recovered R-22 is recycled, stockpiled, or reclaimed to maximize available R-22 supply and avoid the risk of potential shortages. Increased reuse of R-22 will be needed to satisfy future servicing needs that cannot be met through virgin supplies alone. It is projected that the minimum amount of recovered R-22 needed to meet servicing demand must be approximately 18,500 metric tons in 2010, followed by 22,600 metric tons in 2015 and 20,500 metric tons in 2020 (i.e., Scenario 1). For comparison, as noted in Table 4-3 , in 2004 a total of 3,280 metric tons of HCFC-22 was reclaimed, whic h amounts to approximately three percent of total HCFC-22 consumption in 2004 (according to data fr om EPA’s ODS Tracking System). (The amount of refrigerant recovered, recycled and reused without be ing reclaimed is not known.) If the 2004 level of reclamation remains constant, reclaimed R-22 woul d fulfill only 18 percent of the supply of R-22 from recovered refrigerant projected to be required unde r Scenario 1 in 2010, dropping to approximately 15 percent in 2015 and 2020. A further discussion on reco very practices is provided in Section 4.3.3.



## 4.3 Factors Affecting Projections

Several market dynamics will have an effect on the projections of future servicing needs for R-22. Certain equipment specification requirements, the transition to alternative refrigerants, the stockpiling of refrigerant as well as equipment manufactured with HCFCs for sale after the phaseout, and the import of equipment pre-charged with HCFC refrigerant can all pot entially alter the project ed servicing scenarios. Each of these issues is discussed further below.



### 4.3.1 13 Seasonal Energy Efficiency Ratio (SEER)

The U.S. Department of Energy (DOE) published a rule in January 2001 setting a stricter seasonal energy efficiency ratio (SEER) standard for residential unitary ACs and heat pumps. The minimum efficiency standard of residential unitary ACs an d heat pumps was raised by 30 percent to a 13 SEER for all such units manufactured for sale on or after January 23, 2006 (DOE 2001; DOE 2004).

According to industry representatives, residential AC equipment will generally require a larger charge size to meet this standard because efficiency improvements are often achieved by increasing the size of the evaporator and condenser, which in turn requires an increase in refrigerant charge (Powell 2004; Honeywell 2005; ARI 2005; Carrier Corporation 2005a). It is not expected that these changes will affect equipment lifetime, leak rates, or the frequency of se rvicing (ARI 2005). The average central AC unit sold in 2004 was approximately 11.5 SEER, with an average charge size of around 3.4 kilograms (7.5 pounds) (ARI 2005). 22 In 2006, the charge size for central ACs is expected to have increa sed by approximately 30 to 50 percent (to approximately 4.4 to 5.1 kilograms [9.7 to 11.2 pounds]) because of the changes to the energy efficiency standards (Car rier Corporation 2005a).

Consequently, the amount of R-22 contained in new resi dential AC systems starting in 2006 will increase, resulting in an increase in projected servicing dem and (assuming that service and leak losses, as a percentage of the equipment charge, do not change as a result). The projections provided in this analysis incorporate the additional R-22 that is expected to be needed to service higher efficiency residential AC equipment after 2010 (see Appendix A for more details).



### 4.3.2 Transitioning to Alternative Refrigerants

A wide range of alternative refrigeran ts approved under EPA’s Significant New Alternatives Policy (SNAP) program are available in the AC and refrigeration sector. R-134a, R-410A, R-407C, R-404A, and R-507A are currently used in a variety of refrigeration and AC sectors. The pace of transition to equipment production with these alternatives has varied by industry and type of equipment. Several AC and refrigeration equipment manufacturers have indicated t hat they will completely phaseout the production of equipment that uses R-22 prior to 2010 (York 2005; H ill Phoenix 2005). These plans are consistent with the actions found in the mid-1990s, when the refrigeration and AC industry phased out CFC refrigerants

22 Typical factory charges for cooling only equipment are around three kilograms (6.6 pounds); however, the average unit considered accounts for heat pumps, which hav e a higher charge size and make up between 15 to 25 percent of the residential AC and heat pump market (ARI 2005; Carrier Corporation 2005a).

Draft-Do Not Cite or Quote- 20 September 2006from new production chillers, refrigerators, motor v ehicle air conditioners and ot her products two or more years before the 1996 CFC consumption phaseout. Howeve r, recent industry research has indicated that the majority of the equipment manufacturers will delay HCFC transitions until absolutely necessary, with R-22 charged equipment produced until January 1, 2010. In projecting servicing needs, this analysis accounts for delayed transition trends, discussed in further detail below. Additionally, Appendix A contains the specific transitions used in the modeling for this analysis.



### Air-Conditioning Industry
R-134a, R-410A, and R-407C are currently being used to replace R-22 in some new stationary and mobile AC equipment, a trend that is expected to continue as R-22 is phased out. Some mobile AC equipment have been using alternatives since the early 1990s, with some buses and trains using R-134a, and some heavy rail cars using R-407C (WMATA 20 05; Amtrak 2005; Motorcoach Training 2005; Greyhound 2005; Carrier Corporation 2005b). St ationary AC equipment using R-410A has been commercially available since 1996 (HARDI 2004), and is expected to dominate the U.S. residential market in the future (EPA 2004b). Some industry represen tatives have indicated that the change to 13 SEER for residential ACs and heat pumps in 2006 will accelerate the rate of conversions to R-410A, with the production of residential equipment using R- 410A possibly surpassing new equipment charged with R-22 between 2006 and 2007 (Powell 2004).

Nonetheless, the transition to alternatives for AC equipment is beginning slowly. Despite the availability of alternatives, more than 90 percent of new AC systems sold in 2004 were still charged with R-22 (RTOC 2003; Honeywell 2005). AC equipment manufacturers indicated that, while the transition to buying commercial equipment that uses alternatives will oc cur in the next few years, consumers will continue to buy residential equipment that uses R-22 until the phase out date, especially if R-22 remains cheaper than the alternatives (York 2005). To be conservative, t he projections in this analysis are based on slower transitions to alternatives, modeled such that only 10 percent of the market adopt s alternatives by the end of 2008 and the remainder of the market transitions completely by the end of 2009 (see Appendix A for more details). A more quickly paced adoption of al ternatives by the AC-manufacturer and end-user community will have the effect of lowering the over all servicing demand of R-22 charged equipment post2010 and lessen the risk of potential shortfalls as proj ected in Scenario 2 of this analysis. Because consumers of residential AC equipment may not be as informed about the phaseout as commercial consumers, equipment manufacturers and dealers can encourage the transition away from R-22 by communicating to consumers the implications of the HCFC phaseout.



### Refrigeration Industry
Industry experts have indicated that re tail food refrigeration end-uses will transition to alternatives more quickly than AC end-uses; the projections in this analysis are based on modeling that reflects this industry’s input. Currently, the majority of existi ng U.S. supermarkets use R- 22 in their refrigeration systems, with only a few supermarket chains having converted existing stores to use ODS alternatives (Hill Phoenix 2005; FMI 2004). 23 Although the life expectancy of commercial refrigeration equipment is around 20 years, supermarkets tend to remodel every seven to 10 years, which offers supermarkets the opportunity to install new equipment that uses an alternative more often t han the typical equipment lifetime would imply (Hill Phoenix 2005). For the next five to 10 years, it is anticipated that approximately 200 to 300 stores per year will transition away fr om R-22 in the United States (Honeywell 2005). In new supermarket construction, the transition away from HCFCs is occurring more quickly. Currently, about 65 percent of new stores being constructed are using ODS alternatives—a trend that is growing and expected to continue over time (Hill Phoenix 2005).

23 For example, 56 percent of supermarket refrigeration system s were using R-22 in 2001 within the South Coast Air Quality Management District (SCAQMD), a four county region with a p opulation of 15 million people in s outhern California (Bivens and Gage 2004). As of 2004, one supermarket chain with over 100 stor es reported only 28 percent R-22 out of their entire refrigera nt use (FMI 2004).

Draft-Do Not Cite or Quote- 21 September 2006

### 4.3.3 Recovery and Reuse Practices

As indicated in the total projected R-22 servicing demand scenarios presented in Section 4.2, recovered R-22 that is recycled, stockpiled, or reclaimed must increase to satisfy future servicing needs that cannot be met through virgin supplies alone. According to the projections of this analysis:

• In 2010, the amount of recovered refrigerant is pr ojected to range from 3,700 to 18,500 metric tons, depending on the percentage of total available refrig erant from retired equipment that is recovered and reused;

• In 2015, when no more than 27,709 metric tons of virgin R-22 production and import is allowed under the cap, overall servicing demand is estimated to reach 43,400 metric tons, therefore requiring at least 15,690 metric tons of recovered R-22. Sc enario 1 projects sufficient amounts of recovered material (i.e., 22,600 metric tons) to meet th is demand, whereas, the projected quantity under Scenario 2 (the minimal recovery scenario) does not (i.e., 4,500 metric tons, or, approximately 70 percent lower than needed to prevent a shortfall).

• In 2020, Scenario 1 projects sufficient supplies of recovered R-22 to meet projected 2020 servicing demand (i.e., 20,500 metric tons). Conversely, the estimated projection of 4,400 metric tons of recovered R-22 under Scenario 2 (the minimal reco very scenario) will not be enough to meet total projected demand, as no virgin manufacture is allowed under the cap.

Although the potential for supply shortages is proj ected to occur after 2010, thorough maintenance practices during the lifetime of equipment, recovery pr actices at the time of equipment disposal, and the full penetration of reclaim and reuse practices can greatly reduce the likelihood of future shortfalls.

The use of recovery procedures during the lifetime of equipment and at the time of decommissioning reduces potential losses to a future supply of reco vered refrigerant. End-users of AC and refrigeration equipment must have equipment installed by trained te chnicians. They must also have their equipment properly maintained in order to reduce incidences of ma jor leaks. Service technicians must take efforts to isolate components or recover refrigerants prior to service as venting (releasing) any refrigerant when making repairs is illegal. Furthermore, service practice s that involve locating and repairing leaks in lieu of “topping off” leaking systems further ensure future supplies of used refrigerant. As with servicing procedures, the venting of refrigerant during de commissioning is illegal. The AC and refrigerant community, including end-users, service technicians, and all affected stakeholders, must position itself for future phaseouts of HCFCs by using proper recovery techniques and complying with regulations that are in place to promote the growth of recoverable and reusable R-22.

Furthermore, the practice of reusing recovered and reclaimed R-22, while currently minimal (only 3,280 metric tons of HCFC-22 was reclaimed in 2004), can in crease future supplies once fully realized. Should
current reclamation levels of R-22 remain constant or not increase significantly, a sufficient supply of reusable refrigerant will not be available to meet serv icing demand projections. In order to reach the projected supply of recovered refrigerant necessary to meet demand, a six to seven-fold increase in current (as of 2004) reclamation levels would be required. 24 Recent industry information indicates the
current business model for R-22 reclamation and relat ed infrastructure will not support this projected demand (Honeywell 2006). However, as prices for virgin R-22 increase and reclaimers increase their capacity in anticipation of the future reclamation market, the reclamation market is expected to grow (CFC Refimax 2006). With the potential for an imbalance in future supply and demand, this type of growth in this market is an essential component in the AC and refrigeration industry strategy to prepare for the HCFC phaseout.

24 This increase assumes that the demand projected by the Vintaging Model would be met solely by reclaimed refrigerant. Sources other than reclaimed refrigerant could also meet this demand, including recovery, recycling and direct reuse of refrigerant in the owner’s equipment (without reclamation), stockpiled refriger ant, and potential supply of refrigerant from used imports.

Draft-Do Not Cite or Quote- 22 September 2006

### 4.3.4 Recycling and Stockpiling Plans

As a preparation strategy for the 2010 phaseout, refri gerant recycling plans could evolve into banking or stockpiling plans. With proper storage tanks, a reserv e of recycled R-22 can be collected, stored, and accessed to service equipment owned by the same company years later, when R-22 is expected to be less affordable and less available. A report released in 1995 by the Food Marketing Institute (FMI) included a survey issued to supermarket operators on the use of refrigerant management plans (RMP) as a strategy to ensure an adequate supply of CFC refrigerants for use after the December 31, 1995 CFC production phaseout (FMI 1995). Of those su rveyed, 52 percent were banking recovered CFC refrigerant, an activity adopted primarily by store ope rators with 11 or more stores (FMI 1995).

Although the extent to which such refrigerant manage ment plans for HCFCs are currently in place is unknown, it is possible that the AC and refrigerati on industry will increasingly adopt such plans and bank refrigerant in preparation for the HCFC phaseout, especia lly those that own a large number of stores. In addition to supermarkets, businesses that operate chill ers, industrial process refrigeration, and central AC, as well as large operations, also have the opportunit y to internally bank refrigerant to meet future servicing needs.

While refrigerant banking is a strategy that companies may pursue, the lack of data has limited the projections in this report from quantifying stockpil es from refrigerant management plans. The banking of refrigerant may impact the results of this analysis by impacting future availability of recovered and reusable refrigerant. Stockpiling refrigerant ensures additional supply for a given user for later years; however, a large end-user stockp iling R-22, which may otherwise re-enter the market after being reclaimed, could result in the premature shorta ge of reusable refrigerant for other R-22 users (see Appendix A for more information).

Stockpiling of virgin R-22 also may be pursued, partic ularly prior to 2020 when production is entirely phased out; however, it is premature to state the extent to whic h this option will be technically and economically viable. As such, projections on future inventories of virgin stockpiles are not explored further in this analysis.



### 4.3.5 R-22 Economics

Another factor that affects the projections of R- 22 servicing supply and demand is the cost of virgin and reclaimed R-22. The relatively lower cost of virgin R-22 is currently weakening the demand for reclaimed refrigerant, which is subsequently more expensive. Over time, as the supply of virgin R-22 decreases, it is expected that the dema nd for recovered and reclaimed refrigerant as well as R-22 alternatives will increase. To that end, reclaimers and manufacturers of R-22 alternatives will experience economies of scale and their prices will fall, causing a shift in pric ing structures. However, s pot shortages of R-22 may occur, as was seen with the phaseout of CFC-12.

Recent industry information indicates that R-22 is relatively less available in 2006, most likely in part because of the change to 13 SEER. As a result, recent price increases have been observed (CFC Refimax 2006). Early market signals, such as this one, will likely encourage an increase in the demand for recovered R-22 and the transition to alternative refrigerants.

Draft-Do Not Cite or Quote- 23 September 2006

### 4.3.6 Pre-charged Imports

AC equipment pre-charged with HCFCs is currently imported into the United States predominantly from Korea, Brazil, and China. In recent years, there has been a shift to overseas manufacturing; the number of imports of AC equipment into the United States more than doubled between 2001 and 2003 (Honeywell 2005; UNEP 2003a). For example, the current demand for room ACs, such as window units, through-the-wall, split, and mini-split systems, wh ich predominately use R-22 (some new units are also being charged with R-407C and R-410A), is being me t almost entirely through foreign manufacture (AHAM 2005). Central AC systems from foreign ma nufacturers such as Samsung, LG, and HAIER are also entering the U.S. market. Additionally, some U. S. manufacturers are starting to relocate plants to Mexico and other countries (Honeywell 2005), while others import equipment from international manufacturers that is then sold under their labels (HARDI 2005).

To project the impact of pre-charged imports on futu re servicing demand for R-22 equipment, servicing estimates were calculated assuming that pre-charged imports will continue to enter the U.S. market after 2010. Projected estimates of pr e-charged imports were developed through a scenario using EPA’s Vintaging Model that assumed the entire window unit and dehumidifier market and a small portion of the residential unitary AC and packaged terminal unit market will be imported and will continue to use R-22 after 2010. Further details regarding the assumptions used to project imports are provided in Appendix A. Given the assumptions used, Table 4-7 and Table 4-8 show the breakdown of equipment types containing R-22 that are assumed to enter the U. S. market from 2010 to 2020 and the associated servicing needs that will result from these imports. The projected estimates of units of pre-charged imports in Table 4-6 are in addition to the total projected estimates of units of equipment presented in Section 4.1.

Table 4-7: Projected Units of Im ported Pre-charged R-22 Equipment Air-Conditioning Equipment Type 2010 2015 2020

Window Units 9,572,800 12,217,600 15,593,200

Dehumidifiers 3,762,100 3,857,100 3,954,500 Packaged Terminal Units 28,000 31,700 35,900 Residential Unitary AC 314,900 345,900 380,100

Total 13,677,800 16,452,300 19,963,700

The projected servicing estimates for imports presented in Table 4-8 are in addition to the total projected servicing estimates presented in Section 4.2.

Table 4-8: Projected R-22 Service Needs for Pre-charged Imports (Metric Tons) Air-Conditioning Equipment Type 2010 2015 2020

Window Units 100 300 500

Dehumidifiers <50 <50 <50 Packaged Terminal Units <50 <50 <50 Residential Unitary AC 300 1,200 2,200

Total 400 1,500 2,700

As shown, above, an estimated 13.7 million units of pre-charged AC equipment are projected to enter the United States in 2010, growing to 16.5 million in 2015, and 20 million in 2020; this translates into a projected servicing need of approximately 400 metric t ons in 2010, 1,500 metric tons in 2015, and 2,700
metric tons in 2020.

Table 4-9 presents a scenario of projected servicing needs for all AC and refrigeration equipment assuming imports of window units, dehumidifiers, pa ckaged terminal units, and residential unitary AC units pre-charged with R-22 continue to enter the U.S. market after the end of 2009.

Draft-Do Not Cite or Quote- 24 September 2006Table 4-9: Projected R-22 Servicing Scenario for all AC and Refrigeration Equipment (Including Imports) (Metric Tons)
Servicing Scenarios 2010 2015 2020 Servicing Needs of Domestically Manufactured Equipment and Equipment Imported Before 2010 68,600 43,200 20,600

Servicing Needs of Equipment Imported After 2009 400 1,500 2,700 Total Servicing Needs Including Imports 69,000 44,700 23,300

As shown in Table 4-9, the projected quantities of R-22 required to service pre-charged post-2009 imports comprise only one percent of the total serv icing needs in 2010, growing to three percent in 2015 and twelve percent in 2020. For the purpose of this analysis, import projections are based on the type and amount of equipment currently im ported; however, if higher percentage s of these types (particularly residential unitary AC) are imported, or if the import trend extends to other AC and refrigeration equipment types, particularly those with higher charge sizes, leak rates, and service rates (e.g., retail food equipment), the demand for R-22 for servicing will increase.

Draft-Do Not Cite or Quote- 25 September 2006

# 5. Conclusion

On January 1, 2010, production and import of HCFC-142b and HCFC-22 will be phased out except for on-going service needs for equipment manufactured on or before December 31, 2009. To support development of the allocation levels of HCFC-142b and HCFC-22 that will allow the U.S. to comply with the Montreal Protocol’s 2010, 2015, and 2020 reduction steps, this r eport provides projections on the quantity of R-22 needed for servicing AC and refrig eration equipment manufactured on or before December 31, 2009.

Under the projected scenarios developed in this analysis , the AC and refrigeration industry is facing the potential risk of a shortage of R-22 starting in 2015 if practices to recover and reuse refrigerant are not maximized. However, because of the uncertainty associated with the future recovery and reuse of refrigerant, the findings indicate significant variance in the projected supply of recovered refrigerant
available to meet demand. Under a scenario with higher refrigerant recovery and reuse, supplies are projected to satisfy future R-22 servicing needs using both recovered refrigerant and limited amounts of virgin refrigerant.

The total projected servicing demand in 2010, 2015, and 2020 as compared to an allocation of 100 percent of the HCFC consumption cap are summarized below along with concluding points on the implications of the two recovery and reuse scenarios.

• In 2010, a projected servicing demand of 68,600 metr ic tons, or about 70 percent of the consumption cap, is estimated. Table 5-1 indicates that approximately 27 percent of this demand could be met with recovered refrigerant if 50 percent of the available refrigerant from discarded equipment is recovered and reused; if only 10 percent of the ava ilable refrigerant is recovered and reused, only five percent of the total demand can be met with recovered refrigerant.

Table 5-1: Comparison of HCFC Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2010

2010 Scenario 1: 50% Recovery Rate Scenario 2: 10% Recovery Rate Cap a 96,982

Demand 68,600 Necessary Supply
Recovered 18,500 (27%) 3,700 (5%) Virgin 50,100 (73%) 64,900 (95%)
Shortfall 0 (0%) 0 (0%)

a HCFC consumption cap expressed in R-22 metric tons to represent an allocation of 100 percent of the cap assigned to R-22.

• In 2015, a projected servicing demand of 43,400 me tric tons is estimated, which is over the consumption cap by 57 percent. Under a scenario of higher recovery and reuse, Table 5-2 indicates that supplies from used R-22 can satisfy enough of the demand such that a shortage of refrigerant supply does not occur. However, in the lower re covery rate scenario, a shortfall of approximately 11,000 metric tons is projected.

Draft-Do Not Cite or Quote- 26 September 2006Table 5-2: Comparison of HCFC Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2015

2015 Scenario 1: 50% Recovery Rate Scenario 2: 10% Recovery Rate Cap a 27,709

Demand 43,400 Necessary Supply
Recovered 22,600 (52%) 4,500 (10%) Virgin 20,900 (48%) 27,709 (64%)
Shortfall 0 (0%) 11,191 (26%)

a HCFC consumption cap expressed in R-22 metric tons to represent an allocation of 100 percent of the cap assigned to R-22

• In 2020, a projected servicing demand of 20,500 metr ic tons is estimated, although no consumption is allowed ( Table 5-3 ). Under a scenario of higher recovery, this demand is projected to be met entirely with recovered refrigerant. However, unde r a scenario of minimal recovery, only 21 percent of this demand is projected to be met with reco vered refrigerant, leading to a shortfall of over 16,000 metric tons of R-22.

Table 5-3: Comparison of HCFC Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2020

2020 Scenario 1: 50% Recovery Rate Scenario 2: 10% Recovery Rate Cap a 0

Demand 20,500 Necessary Supply
Recovered 20,500 (100%) 4,400 (21%) Virgin 0 (0%) 0 (0%)
Shortfall 0 (0%) 16,200 (79%)

a HCFC consumption cap expressed in R-22 metric tons to represent an allocation of 100 percent of the cap assigned to R-22. In 2020, 0.5 percent of the U.S. consumption cap remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining cap to R-22.

Projections of future HCFC refrigerant supply and demand range depending on various market trends as addressed in this report. These projections provide t he information necessary for taking initial steps in determining post 2010 servicing needs for R-22 equi pment and ensuring that supplies are available by alerting the AC and refrigeration community of the cr itical need to adequately prepare for future HCFC phaseout dates. Further collaboration with the AC a nd refrigeration community is needed to ensure that servicing demand for HCFC-based syst ems can be met in 2010 and beyond.

Draft-Do Not Cite or Quote- 27 September 2006

# Appendix A: Methodology Used to Calculate Projected Servicing Needs

This appendix outlines the methodology used to ca lculate the projected servicing needs of AC and refrigeration equipment using R-22. Th is appendix contains three sections:

• Section A.1 provides an overview of EPA’s Vintaging Model (EPA 2006a), which was used to establish the estimates of units of equipm ent using R-22 and R-22 servicing demand beyond
2010.

• Section A.2 details the assumptions used in a supplemental analysis that investigated the projected market of pre-charged AC impo rts and the associated servicing needs.

• Section A.3 discusses the limitations to the servicing projections presented in this report.



## A.1 EPA’s Vintaging Model

EPA’s Vintaging Model was developed as a tool for estimating the annual chemical
emissions from industrial sectors that have historically used ODS in their products. Emissions are estimated from the following end-use sectors: 1) Air-Conditioning and Refrigeration; 2) Foams; 3) Aerosols; 4) Solvents; 5) Fire-Extinguishing; and 6) Sterilants. Within these sectors, there are over 50 independently modeled end-uses. The model requires information on the market growth for each of the end-uses, as well as a history and projection of the market transition from ODS to alternatives. As ODS are phased out, a percentage of the market share originally filled by the ODS is allocated to substitutes. Box A-1: Developing and Maintaining EPA’s Vintaging Model

The Vintaging Model synthesizes data from a variety of sources, including:

• The ODS Tracking System and submissions to the Significant New Alternatives Policy (SNAP) program both maintained by the U.S. EPA Stratospheric Protection Division;

• Published literature from the United Nations Environment Programme (UNEP) Technical Options Committees, the Alternative Fluorocarbons Environmental Acceptability Study (AFEAS), and those provided in industry-related and EPA conference proceedings (such as the Earth Technologies Forum); and

• Numerous companies and trade associations, such as theAlliance for Responsible Atmospheric Policy, the AirConditioning and Refrigeration Institute, the Association of Home Appliance Manufacturers, and the American
Automobile Manufacturers Association. The model, named for its method of tracking the emissions of annual “vintages” of new equipment that enter into service, is a “bottom-up” model. This means it modelsthe consumption of controlled [ozonedepleting] substances and their substitutes
based on: In some instances the unpublished information that the U.S. EPA
uses in the model is classified as Confidential Business Information (CBI). The annual emissions inventories of chemicals are aggregated in such a way that CBI cannot be inferred. 1) Estimates of the quantity of equipment or products sold, serviced, and retired each year, and The Vintaging Model is continually updated to improve assumptions and modeling techniques and refine inputs based on information learned from these sources. In 2006, the model was updated based on information obtained from industry during the research phase of this analysis in 2005. As such, the methodology used in the preliminary draft report of this analysis, which required adjusting initial estimates from the Vintaging Model, was replaced with a methodology that relies solely on straight model output for the revised analysis. 2) The quantity of the chemical required to manufacture and/or maintain the equipment.

The model makes use of this market information to build an inventory of in-use stocks of equipment and quantities ofODS/ODS substitutes in each of the enduses.

Draft-Do Not Cite or Quote- 28 September 2006Emissions are estimated by applying annual leak rate s, service emission rates, and disposal emission rates to consumption data for each vintage of equi pment. Emissions from AC and refrigeration equipment are split into two categories: emissions during equipment lifetime and disposal emissions. This first category, emissions during equipment lifetime, includes the amount of chemical leaked during equipment operation and the amount of chemical em itted during service. Consumption required to service or refill equipment is driven by the demand to replace such losses, and therefore, emissions during the lifetime of equipment are equal to consumption for servicing (since it is assumed that all leaked refrigerant is eventually replaced). Emissions, and therefore, consumption from leakage and servicing can be expressed as follows:

Es j = (l a + l s ) × Σ Qc j-i+1 for i=1 → k

Where:

Es = Emissions from Equipment Serviced. Emissions in year j from normal leakage and servicing of equipment. la = Annual Leak Rate. Average annual leak rate during normal equipment operation (expressed as a percentage of total chemical charge). ls = Service Leak Rate. Average leakage during equipment servicing (expressed as a percentage of total chemical charge). Qc = Quantity of Chemical in New Equipment. Total amount of a specific chemical used to charge new equipment in a given year by weight. i = Counter, runs from 1 to lifetime (k). j = Year of emission. k = Lifetime. The average lifetime of the equipment.

The assumptions used in this calculation range by equipment and refrigerant, and vintage, reflecting that, as new technologies replace older ones, improvements in their leak, service, and disposal emission rates
are assumed to occur.

For the purpose of this analysis, the following data from EPA’s Vintaging Model were compiled and summarized for the AC and refrigeration sector:

1) Consumption for Servicing , which is equal to the demand to service (i.e., refill) existing equipment. These data are back-calculated usi ng service and leak emissions because the quantity emitted during the lifetime of equipment dr ives the demand to replace such losses. These estimates are further distinguished betwe en consumption of virgin and recycled/reclaimed chemical. The model assumes that a certain perc entage of refrigerant, which varies by end-use, is recovered from discarded equipment. The model then assumes a “best-case” scenario in which all recovered and re-usable refrigerant re- enters the market. See Section A.3 for further discussion on this “recovery pool.”

2) Number of Units of Equipment , which is equal to, for “ year X” ’, the number of units existing in

“ year X-1” plus the number of new units produced in “ year X” minus the number of units disposed
in “ year X”

. For example: No. of Units in 1999 = No. of Units in 1998 + New Units in 1999 – Units Disposed in 1999

Historical data estimated by EPA’s Vintaging Model is often cross-checked with actual historical data from EPA’s ODS Tracking System, which tracks ac tual ODS production and consumption (including import and export) by U.S. companies. The Model’s virgin manufacture parameter is considered to be most comparable to the Montreal Protocol’s definit ion of consumption (i.e., production plus imports minus exports minus destruction). In EPA’s Vint aging Model, the Virgin Manufacture parameter is calculated to be any need for consumption (either fo r new equipment or servicing) that cannot be met through recycled or recovered material; no distinct ion is made in the Vintaging Model between whether that need is met through domestic manufacturing or impor ts. As shown in Figure A-1, estimates from the model generally align rather well to actual consumption from 1993 to 2004.

Draft-Do Not Cite or Quote- 29 September 2006Figure A-1: Comparison of EPA’s Vintaging Model Estimates for Virgin Manufacture and ODS Tracking System Data for HCFC-22 Consumption

0 1,000 2,000 3,000 4,000 5,000 6,000199319941995199619971998199920002001200220032004ODP Weighted Metric Tons



### Vintaging Model Estimates

ODS Tracking System Data

Source: EPA's ODS Tracking Sy stem, Vintaging Model (VM IO file_6-30-06_ALL)

Table A-1 presents the input assumptions used to develop the projections presented in this report. The loss rates represent the percent of the total ch arge that leaks in a given year plus the amount, on an annual basis, emitted at service, expressed as a percentage of tota l chemical charge. Because the amount lost from leaks and servicing is annualized, equipment is assumed to reach the end of its lifetime with a full charge. 25 EPA’s Vintaging Model then applies a “re covery rate,” which refers to the percent of total charge of the equipment that is reco vered and reused at the time of disposal. These recovery rates represent averages, intended to capt ure the range of possible practices occurring at disposal.

Growth rate assumptions are also provided in Table A-1. The growth rates refer to the growth of the consumption market for each end-use as a whole and are not specific to the refrigerant. When the transition to different equipment and different refriger ants occur, the input assumptions are adjusted to account for these changes.

25 For the majority of equipment types, the assumption that equipm ent contains a full charge at the end of life is theoretically applicable. In order to ensure proper and continual functioning of equipment, homeown ers and businesses typically have their a irconditioning and refrigeration systems servic ed regularly. Technicians will check these systems for leaks using proper techniq ues and if a loss of refrigerant is found, will refill the system to ensure it is functioning efficient ly after repairing any leaki ng seals or damaged components. Note that this assumption may not be appropriate for smaller equipment types such as window units but must be applied consistently for modeling purposes.

Draft-Do Not Cite or Quote- 30 September 2006Table A-1: Input Assumptions, Years 2005 to 2020

Current Refrigerant Equipment Type and Original ODS Refrigerant Charge
Size a Loss
Rate Growth
Rate b Recovery
Rate Lifetime (Years)
AC Equipment

R-22 R-11 Centrifugal Chillers 700 14.1% 0.5% 51% 25

R-22 R-12 Centrifugal Chillers 720.8 8.0% 0.5% 51% 27

R-22 R-22 Chillers 1,818 8.3% 0.5% 51% 20

R-22 R-500 Chillers 926.1 10.9% 0.5% 51% 27

R-22 R-22 Residential Unitary AC ( 2005-2006) 3.4 11.9% 1.9% 57% 15
R-22 R-22 Residential Unitary AC ( 2006-2020) 4.8 11.9% 1.9% 63% 15

R-22 R-22 Small Commercial Unitary AC 7.5 11.0% 2.5% 57% 15

R-22 R-22 Large Commercial Unitary AC 15 10.2% 2.5% 57% 15

R-22 R-22 Water & Ground Source Heat Pumps 4.1 5.1% 2.5% 57% 20

R-22 R-22 Dehumidifiers 0.2 0.5% 0% 50% 15

R-22 R-22 Packaged Terminal Units 0.7 5.1% 2.5% 57% 12

R-22 R-22 Window Units 0.6 0.6% 5% 50% 12

R-22 R-12 Tour Buses 5 10.0% 0.92% 50% 12
R-22 R-22 Transit Buses 8 44.0% 1.47% 50% 12

R-22 R-22 Trains 22 43.2% 0.91% 50% 5 Refrigeration Equipment

R-22 R-12 Cold Storage 0.0088 17.2% 2.5% 43% 20

R-22 R-22 Cold Storage 0.0088 20.0% 2.5% 43% 25

R-22 R-502 Cold Storage 0.0088 17.1% 2.5% 43% 25

R-402A R-502 Cold Storage 0.0088 25.0% 2.5% 10% 25

R-502 R-502 Cold Storage 0.0088 25.0% 2.5% 10% 25

R-22 R-12 Retail Food 1,800 17.6% 1.7% 43% 15

R-22 R-22 Retail Food 93 6.4% 1.7% 43% 20

R-22 R-502 Retail Food 6.3 13.8% 1.7% 43% 20

R-402A R-502 Retail Food 6.3 21.3% 1.7% 10% 20

R-502 R-502 Retail Food 6.3 21.3% 1.7% 10% 20

R-22 R-12 Transport 7.53 27.9% 2.5% 38% 12

R-402A R-12 Transport 7.53 27.9% 2.5% 10% 12

R-401A R-502 Transport 7.53 27.9% 2.5% 10% 12

R-502 R-502 Transport 7.53 27.9% 2.5% 10% 12

R-22 R-11 Industrial Process Re frigeration 952 12.0% 2.5% 51% 25

R-22 R-12 Industrial Process Re frigeration 992 5.4% 2.5% 51% 25

R-401A R-12 Industrial Process Refrigeration 850 5.4% 2.5% 51% 25

R-22 R-22 Industrial Process Re frigeration 9,100 12.3% 2.5% 51% 25
Source: VM IO File_6-30-06_ALL

a Charge size presented in kilograms. Cold storage charge size presented in kilograms/cubic foot.

b The growth rate applies to new consumption/virgin manufacture. For example, in the window units market, any year’s consumptio n is five percent greater than the previous year’s consumption.

Table A-2 presents the assumptions used to model t he transition from R-22 to alternatives for each end use. The first column of the table presents the R-22 equipment types by t he refrigerants that they originally used. The second column presents the re frigerants that enter the market and are used in new equipment in place of R-22. 26 These refrigerants begin to enter the new-equipment market in the year presented in the fourth column and fully penetrate this market by the date presented in the fifth column.

26 These transition assumptions are for new equipment only; they do not imply that the original equipment was retrofitted to the alternative refrigerants.

Draft-Do Not Cite or Quote- 31 September 2006The final column indicates the percent of the R- 22 new-equipment market that the given substitute refrigerant replaces by the transition end date. A ll transitions are assumed to occur linearly between the transition start and end dates. By combining multiple trans itions to different refrigerants and over different time periods, the Vintaging Model mimics actual, non-linear transitions that may occur.

For example, the centrifugal chiller new-equipment mark et that originally used R-11 first transitioned from R-11 to R-22. Then, between 2000 and 2010, 70 percent of the R-22 new-equipment market is assumed to transition to R-134a and the remaining 30 percent to R-407C.

Table A-2: Transition to Alternatives Assumptions of EPA’s Vintaging Model for R-22 Refrigeration and AC Equipment

1 2 3 4 5

R-22 Equipment Type and Original ODS Refrigerant Substitute Start Date End Date Market Penetration of
Substitute a

HFC-134a 2000 2010 70% CFC-11 Centrifugal Chillers R-407C 2000 2010 30%

HFC-134a 2000 2010 70% CFC-12 Centrifugal Chillers R-407C 2000 2010 30%

HFC-134a 2000 2010 70% R-500 Chillers R-407C 2000 2010 30%

2000 2009 7% HFC-134a 2009 2010 63%

2000 2009 3% HCFC-22 Chillers

R-407C 2009 2010 27%
R-407C 2010 2010 10%

2000 2005 5%

2000 2006 5%

2006 2006 20%

2007 2010 20% HCFC-22 Residential Unitary AC R-410A

2010 2010 40%

1996 2000 3%

2001 2005 18%

2006 2009 8% HCFC-22 Small Commercial Unitary AC R-410A

2009 2010 71%

2006 2009 1% R-407C 2009 2010 5%

2001 2005 5%

2006 2009 8% HCFC-22 Large Commercial Unitary AC

R-410A

2009 2010 81%

2006 2009 1% R-407C 2009 2010 5%

2001 2006 4%

2006 2009 9% HCFC-22 Water & Ground Source Heat Pumps R-410A

2009 2010 81%

HFC-134a 1997 1997 89% HCFC-22 Dehumidifiers R-410A 2007 2010 11%

Draft-Do Not Cite or Quote- 32 September 20061 2 3 4 5

R-22 Equipment Type and Market Penetration of Substitute Start Date End Date Original ODS Refrigerant Substitute a

2000 2006 5%
2006 2009 2% R-407C

2009 2010 23%
2000 2006 5%

2006 2009 5% R-410A

2009 2010 40%

2000 2009 2% HCFC-22 Packaged Terminal Units

HFC-134a 2009 2010 18%

2003 2009 3% R-407C 2009 2010 35%

2003 2009 7% HCFC-22 Window Units

R-410A 2009 2010 55%
CFC-12 Tour Buses HFC-134a 2006 2008 100%
HCFC-22 Transit Buses HFC-134a 1995 2009 100%
HCFC-22 Trains Unknown 2002 2009 100%

R-404A 1996 2010 75% CFC-12 Cold Storage R-507A 1996 2010 25%

1996 2009 7% R-404A 2009 2010 68%

1996 2009 2% HCFC-22 Cold Storage R-507A 2009 2010 23%

R-404A 1996 2010 38%

R-507A 1996 2010 12% R-502 Cold Storage

Other 1996 2010 50%

CFC-11 Industrial Process Re frigeration HFC-134a 1995 2010 100%

HFC-134a 1995 2010 15%

R-404A 1995 2010 50%

R-410A 1999 2010 20% CFC-12 Industrial Proc ess Refrigeration

R-507A 1995 2010 15%

1995 2009 1% HFC-134a 2009 2010 14%

1995 2009 5% R-404A 2009 2010 45%

1999 2009 2% R-410A 2009 2010 18%

1995 2009 1% HCFC-22 Industrial Process Refrigeration

R-507A 2009 2010 14%

1995 2000 17%

2000 2005 32% R-404A

2005 2010 18%

1995 2000 7%

2000 2005 14% CFC-12 Retail Food

R-507A

2005 2010 12%

Draft-Do Not Cite or Quote- 33 September 20061 2 3 4 5

R-22 Equipment Type and Market Penetration of Substitute Start Date End Date Original ODS Refrigerant Substitute a

1995 2000 17%

2000 2005 32% R-404A

2005 2010 18%

1995 2000 7%

2000 2005 14% HCFC-22 Retail Food

R-507A

2005 2010 12%

R-404A 2000 2010 75% R-502 Retail Food R-507A 2000 2010 25% CFC-12 Transport HFC-134a 1995 1999 100%
HFC-134a 1993 1995 55% R-502 Transport b R-404A 1993 1995 45%
Source: VM IO File_6-30-06_ALL

a The market penetration of the substitute represents the percent of the R-22 new-equipment market that is replaced by the substitute refrigerant.

b The R-502 transport refrigeration market transitions directly to HFC-134a and R-404A. There is no interim transition to R-22.



## A.2 Supplemental Analysis: Pre-charged Imports

Through discussions with industry representatives, it was determined that the anticipated trends in imports of equipment precharged with R-22 needed to be taken into account in the analysis. EPA’s Vintaging Model assumes that no new R-22 equipment enters the market after 2010. To create a
scenario that reflects the fact that R-22 equipment may in fact be imported post 2010, EPA’s Vintaging Model inputs of four end-uses—window units, dehum idifiers, packaged terminal units, and residential unitary ACs—were altered to run a scenario that reflects the assumptions listed in Table A- 3 below.

Table A-3: Assumptions for the Import Analysis a

End-use Transition Modification

Window Units

Dehumidifiers 100% of the market remains R-22 through 2030 (i.e., no transitions away from R-22)

Packaged Terminal Units Residential Unitary AC 10% of the market continues using R-22 through 2030 while the remaining 90% of the market transitions to non-ozone depleting al ternatives as described in Table A-2

a These end-uses and transition modifications were chosen based on industry contacts, which indicated that currently almost all w indow units and dehumidifiers sold in the U.S. are imported and that a smaller percentage of residential unitary AC systems and packa ged terminal units are imported (ARI 2005; AHAM 2005).



## A.3 Limitations and Caveats

This analysis utilized the best data available from various sources. However, when making projections several assumptions are required. EPA’s Vintaging Model was used to determine the quantities of R-22 from existing (recycled or reclaimed) sources that can meet post-2010 servicing needs and the remaining quantities required through virgin manufacture. For a given year, the model assumes that a certain percentage of refrigerant, which varies by end-use, is recovered from discarded equipment, while the remainder is emitted. The model aggregates the qu antities recovered but does not distinguish the “pool” of refrigerant between quantities that are reclaime d versus those that are recycled. The model then assumes that the entire pool of recovered refrigeran t re-enters the market within the same year; any additional demand for refrigerant, above that which is t hus assumed to be met by recovered refrigerant, is calculated to be virgin manufacture. It is important to note that the recovery pool and the remaining virgin manufacture can be evaluated only at the most aggr egate level, across all end-uses, and not at the endDraft-Do Not Cite or Quote- 34 September 2006use level, as the model does not serve to differ entiate between virgin and recycled refrigerant when calculating demand for each end-use. This model attr ibute reflects a more realistic scenario in that reclaimers are not likely to only sell back to the end- use market sector from which the used refrigerant originated; rather, reclaimed refrigerant can be reta iled to the overall AC and refrigeration industry.

Under this modeled approach, the following caveats should be noted:

• The model does not consider the quantity of refr igerant that companies send off for destruction (generally through incineration) after equipment is decommissioned. Although the quantities of destroyed refrigerant are very small, they are not subtracted from the recovered pool, so the quantity available for reuse may be slightly overestimated in the model.

• The model does not account for any stockpili ng of recovered refrigerant beyond a one-year timeframe, as discussed in Section 4.3. To the extent that stockpiling activities occur over the next few years, the quantity of recovered refriger ant modeled as re-entering the market may beoverestimated in earlier years (i.e., when refrigerant is banked), and the quantity modeled as reentering the market in later years may be unde restimated (i.e., when the accumulated bank is accessed as a source).

Draft-Do Not Cite or Quote- 35 September 2006

# Appendix B: HCFC Projections by End-Use

This Appendix provides more detailed projections for future servicing needs and is organized as follows:

• Section B.1 provides estimates of the projecte d installed base of R-22 equipment by end-use and the projected quantities of R-22 needed to service AC and refrigeration equipment.

• Section B.2 provides estimates of the quantit ies of R-123 and R-124 needed to service AC and refrigeration equipment by end-use.

Estimates are provided for AC and refrigeration equi pment by end-use from 2005 to 2020 in five year increments. Descriptions of end-uses are provided in Section 3 of the report. For the purpose of this analysis, data on HCFC blend consumption for serv icing are divided among the corresponding HCFC constituent(s) of that blend, according to the percent co mposition. However, in order to accurately portray the number of units containing pure R-22, blends are not disaggregated when presenting the number of units of equipment (i.e., a unit running on a blend containing HCFC-22 counts as one unit).



## B.1 R-22 Equipment and Serv icing Demand by End-Use

Table B-1 presents the number of units of equipment using R-22 that are estimated to be in use in 2005, 2010, 2015, and 2020. These esti mates were developed based on EPA’ s Vintaging Model, which takes into account recent input from industry representatives (EPA 2006a) . Sections 3.1 and 3.2 provide an overview of these AC and refrigeration end-uses.

Table B-1: Estimated Number of R-22 Units Installed
Equipment Type 2005 2010 2015 2020

Window Units 67,784,600 74,178,600 41,559,400 4,102,600 Packaged Terminal Units 2,606,600 2,478,800 1,355,100 123,100 Residential Unitary AC 51,821,200 46,884,600 29,197,700 10,709,100 Small Commercial Unitary AC 18,582,000 17,097,500 10,666,800 4,291,400 Large Commercial Unitary AC 1,910,100 1,849,900 1,208,600 505,200

Chillers 11,700 10,100 9,400 6,800

Dehumidifiers 11,666,700 3,517,600 1,448,400 0 Water & Ground Source Heat Pumps 1,390,100 1,392,000 1,058,200 680,900

Other Mobile AC 94,600 46,600 14,100 0

Total AC 155,867,600 147,455,700 86,517,700 20,419,100 Cold Storage a 253,881,300 231,153,800 132,924,500 61,119,300

Retail Food 2,261,700 2,195,400 1,553,500 763,000 Refrigerated Transport 10,700 0 0 0 Industrial Process Refrigeration 7,800 8,700 7,500 5,600
Total Refrigeration b 2,280,200 2,204,100 1,561,000 768,600

Total 158,147,800 149,659,800 88,078,700 21,187,700

a For this table, units of Cold Storage are presented in cubic feet of storage.

b Totals do not include Cold Storage

Table B-2 presents the metric tons of R-22 esti mated to be needed to service AC and refrigeration equipment in 2005, 2010, 2015, and 2020.

Draft-Do Not Cite or Quote- 36 September 2006Table B-2: Projected R-22 Servicing Demand (Metric Tons)
Equipment Type 2005 2010 2015 2020

Window Units 200 300 100 <50 Packaged Terminal Units 100 100 <50 <50 Residential Unitary AC 20,900 20,700 13,500 6,100 Small Commercial Unitary AC 15,400 14,100 8,800 3,500 Large Commercial Unitary AC 2,900 2,800 1,800 800

Chillers 3,100 3,000 2,400 1,600

Dehumidifiers <50 <50 <50 0 Water & Ground Source Heat Pumps 300 300 200 100

Other Mobile AC 300 100 <50 0

Total AC 43,200 41,400 26,800 12,100 Cold Storage 1,000 1,000 800 600

Retail Food 23,800 17,300 8,500 2,600 Refrigerated Transport 100 0 0 0 Industrial Process Refrigeration 8,200 8,900 7,100 5,300
Total Refrigeration 33,100 27,200 16,400 8,500

Total 76,300 68,600 43,200 20,600

Although the equipment-specific servicing estimates c an not be broken down into recovered versus new refrigerant, the overall servicing demand is expected to be met in part by the use of recovered refrigerant. By 2010, it is projected that between five and 27 percent of all equipment can be serviced with recovered refrigerant. The use of recovered R-22 (as a percent of overall servicing demand) is projected to increase to between 10 and 52 percent by 2015, and 21 and 100 percent by 2020. Servic ing demand is assumed to be increasingly satisfied by recovered (as opposed to virgin) refrigerant, as an increasing number of old equipment units gets retired, and their installed re frigerant becomes available for reuse.



## B.2 Other HCFC Refrigeran ts Projected by End-Use

Table B-3 presents the estimated servicing demand, in metric tons, of R-123 and R-124 in 2005, 2010, 2015, and 2020, as broken down by equipment type.

Table B-3: Other HCFC Servicing Demand (Metric Tons)
Refrigerant and Equipment Type 2005 2010 2015 2020

R-123

Chillers 500 400 300 200 Industrial Process Refrigeration <50 100 100 100
Total 500 500 400 300

R-124
Transport <50 0 0 0
Industrial Process Refri geration <50 <50 <50 <50
Total <50 <50 <50 <50

Draft-Do Not Cite or Quote- 37 September 2006

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