# 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

F INAL 

## R EPORT 

## , D ECEMBER 

## 2009This report estimates the quantity of HCFC -22 (also recognized by the American Society of Heating Refrigerating and Air- Conditioning Engineers (ASHRAE) designation, R-22) needed to service air-conditioning and refrigeration equipment and the anticipated installed base of such equipment beyond 2010 in the United States. The report also discusses the uses and demand for other HCFCs. This analysis has been developed to assist in the allocation of HCFC consumption allowances. The analyses presented in th is report were first made available for comment in a Notice of Data Availabilit y (NODA, 70 FR 671 72) and request for comment issued on November 4, 2005. Revisions to the analysis were made in September 2006 and a revised report was made available for comment at a stakeholder meeting held in Washington DC, at EPA Headquarte rs. A third draft of this report was then issued in June 2008 in support of the proposed rule “Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export” (2010 allocation rule) (December 23, 2008; 73 FR 78680). This final report reflects comments received after January 7, 2009, and include a summary and analysis of the final R-22 allocati ons set by EPA for 2010 through 2014. A more detailed description of notable updates and additions can be found in the document, “Recalculations and Notable Revisions to the Report: The U.S. Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector.”

Questions concerning this report should be directed to:

Jeremy Arling Stratospheric Protection Division U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW (6205J) Washington, D.C. 20460 1-202-343-9055 (phone) 1-202-343-2338 (fax) Arling.jeremy@epa.gov

# Contents

Executive Summary

.............................................................................................................................. ...... 1

1. Background: The U.S. HCFC Phaseout Schedule ............................................................................. 4

1.1 Report Objective

.............................................................................................................................. 5

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

3. Overview of HCFC Use in the United States ...................................................................................... 8

3.1 Projected HCFC Demand ................................................................................................................ 8
3.2 HCFCs Other than HCFC-22 ........................................................................................................... 9

3.2.1 HCFC Use in Refrigeration and Air-Conditioning .................................................................. 10

4. Projected R-22 Scenarios .................................................................................................................. 14

4.1 R-22 Equipment Used Beyond 2010 ............................................................................................. 14
4.2 Projected R-22 Servicing Needs .................................................................................................... 14

4.2.1 R-22 Sources ......................................................................................................................... 16
4.2.2 Meeting R-22 Service Demand ............................................................................................. 17 4.2.3 EPA’s Allocations of R-22 for 2010 through 2014 ................................................................. 21
4.3 Factors Affecting Projections ......................................................................................................... 22

4.3.1 13 Seasonal Energy Efficiency Ratio (SEER) ....................................................................... 22 4.3.2 Transitioning to Alternative Refrigerants ............................................................................... 23
4.3.3 Recovery and Reuse Practices ............................................................................................. 24
4.3.4 Recycling and Stockpiling Plans ........................................................................................... 25 4.3.5 R-22 Economics .................................................................................................................... 26
4.3.6 Pre-charged Imports .............................................................................................................. 26

5. Conclusion

.............................................................................................................................. ............ 27

Appendix A: Methodology Used to Calculate Projected Servicing Needs ......................................... 29

A.1 EPA’s Vintaging Model .............................................................................................................. 29 A.2 Limitations and Caveats ............................................................................................................ 35

Appendix B: HCFC Projections by End-Use .......................................................................................... 37

Appendix C: Additional “Recovery Rate” Scenarios ............................................................................ 39

6. References

.............................................................................................................................. ............ 43The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# Executive Summary

Hydrochlorofluorocarbons (HCFCs) are a class of chemical compound s that deplete the stratospheric ozone layer, leading to overexposure to 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 organi sms. Reversing the course of stratospheric ozone depletion is crucial to human and environmental health worldwide. As a Party to the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol), the United States is subject to a cap on the consumption of HCFCs—defined as production 1 plus imports minus exports—in an international effort to protect the stratospheric ozone layer (UNEP 2000) . Specifically, the United States is obligated to phase out production and consumption of HCFCs by 2030 by making graduated reductions in HCFC production and consumption by certain dates. To meet these interim reduction targets, the U.S. Environmental Protection Agency (EPA) established a schedule for the phaseout of HCFCs starting with those with the highest ozone depletion potentials (ODPs), namely HCFC-141 b, HCFC-142b, and HCFC22. 2 EPA phased out consumption of HCFC-141b in 2003. The next phaseout milestone occurs on January 1, 2010, when the production and import of HCFC-142b and HCFC-22 (except 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 will still be 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 HCFC-142b 3 is not presented in this analysis. However, a brief section discussing the basic needs for HCFC-142b and other HCFCs is provided. Estimated consumption of R-22 in the U.S. AC and refrigeration industry totaled approximately 108,000 metric tons in 2008 and is by far the larges t use of an HCFC by any U.S. industry (EPA 2007a). For this reason, and because the allowable servic ing 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 refrigerat ion 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 re source to assist in the allocation of production and consumption allowances.

This report examines the primary sources of R-22 to service the installed base of equipment after 2010, including (1) the amounts recovered from equipment that are subsequently re cycled or reclaimed for reuse and (2) the virgin production and import quantit ies (i.e., consumption) limited under the Montreal Protocol that may be distributed by EPA through an allowance system. 4 Five supply and 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. Recovery scenarios repr esenting 10, 15, 20, 50, and 75 percent are presented. For exam ple, “Scenario 10” assumes that 10 percent of refrigerant is recovered and available for reuse at equipment end-of- life. In addition, the allocations for R-22 as issued in EPA’s Final Rule are presented for comparison purposes.

In September 2007, the United States and other Parties to the Montreal Protocol agreed to strengthen the phaseout schedule for HCFCs in both developed and dev eloping countries. One result of this agreement is that in 2010, the U.S. HCFC production and consumption must be reduced by 75 percent of their respective baselines. The 2010 production cap represents a new commitment under the Montreal

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

3 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.

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

December 2009 Page 1The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Protocol, whereas for the 2010 consumption cap the agreement results in an additional 10 percent of a reduction than the previous phaseout commitment. The scenarios in this report are analyzed in comparison to the adjusted 2010 reduction step.

In accordance with the Montreal Protocol commitments, in 2010 EPA can allocate consumption allowances for no more than 3,810 ODP-weighted me tric tons of HCFCs. The quantity of 3,810 ODPweighted metric tons equates to 69,273 metric tons of HCFC-22. This analysis projects that HCFC-22 demand in 2010 will be approximately 62,500 metric tons—equivalent to 3,438 ODP-weighted metric tons, and approximately 372 ODP-weighted tons bel ow the cap in 2010. Figure ES-1 summarizes servicing demand in comparison to the U.S. HCFC c onsumption cap, and the total allocation amounts from 2010 to 2014 as promulgated by EPA in the 2010 HCFC Allocation final rule. The remainder of service demand not supplied by R-22 allocations, wh ich must instead be met through recovered R-22, is also illustrated.

Figure ES-1: Total Projected R-22 Servici ng Demand and EPA’s 2010-2014 Allocations of HCFC-22 a

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

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020HCFC-22 (MT) Recovered R-22 Needed to Satisfy Remainder of Service Demand

R-22 Allocation Amount

Total R-22 Service Demand U.S. HCFC Consumption Cap

a U.S. HCFC consumption cap expressed in R-22 un-we ighted metric tons (calculated using an ODP of 0.055 for HCFC-22).

The R-22 consumption allocations set by EPA for y ears 2010 to 2014 decrease annually, resulting in recovered material comprising a greater proportion of the supply required to meet total demand each year. As such, the percentage of the total need to be met with reclaimed material will rise from 20 percent to 29 percent of total demand in 2014, which is intended to help facilitate the industry’s ability to meet the estimated demand in 2015, of which at least 29 percent must be met with recovered material. The annual decrease in allowable virgin R-22 will e nable a smooth transition for the AC and refrigeration industry as it should foster greater recovery and reclamation of R-22.

As shown in Figure ES-1, the AC and refrigeration industry could experience shortages in 2015 if only newly manufactured refrigerants will be used to meet ov erall demand. To that end, this analysis consists of an evaluation of the role of reused refrigerants when considering the servicing tail need for virgin refrigerants. 5 Thus, the scenarios presented in this an alysis assume a mix of recovered and newly manufactured refrigerant to satisfy future R-22 servic ing needs. As with previous phaseouts (i.e., CFCs)

5 Recovered refrigerant may be recycled and reused in the same owner’s equipment; 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

.

December 2009 Page 2The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 3 recovery of used refrigerant from converted or retired equipment returned to the supply chain is necessary to avoid supply shortfalls.

In addition to recovery practices, several other fact ors influence which R-22 demand scenario is more likely. For example, with approximately 150 million AC and refrigeration units projected to be in use in 2010, the sooner equipment transitions to alternativ e refrigerants, the better the chance for an adequate R-22 supply to satisfy the forecasted demand. This report explores the following market trends and how they may influence future R-22 servicing deman d and available supply estimates, including:

• the rate of market transition to alter native 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

• potential future quantities of R-22 that could be obtained from interpollutant transfers of allowances.

The analysis presented in this report uses EPA’s Vintaging Model (EPA 2007a) 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, refrigerant banking, and levels of imports of used R-22.

This report provides the basis for further collaborat ion between EPA and the AC and refrigeration community to ensure that supplies (through reuse) are increased in order to continue to service equipment and achieve the next HCFC phaseout targets without refrigerant shortages.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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

Title VI of the 1990 Clean Air Act Amendments (C AAA) mandates the development and implementation of regulations to protect the stratospheric oz one layer and ensure U.S. compliance with the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol). Under the Montreal Protocol, the United States and other signatories are obligated to achieve progress toward the total phaseout of the consumption and production of HCFC s, which are ozone-depleting substances (ODS) and have been widely used as refrigerants, solvent s, foam blowing agents, and fire suppressants. 6 Consumption is defined as production plus import s minus exports; production is defined as the manufacture of a controlled substance minus am ounts destroyed and amounts completely used as feedstock in the manufacture of other chemicals and does not include amounts reused or recycled (UNEP 2000).

In September 2007, the nineteenth Meet ing of the Parties to the Montreal Protocol was held in Montreal, Canada, marking the 20 th anniversary of the signing of the Protocol. At the meeting, the Parties agreed upon a strengthened phaseout of HCFCs. The adjustment s call for Article 2 countries—the Protocol’s identifying term for developed countries—to reduce HCFC production and consumption from baseline amounts by 75 percent by 2010, 90 percent by 2015, and 99.5 percent by 2020—allowing for 0.5 percent of the baseline for annual servicing over the period 2020-2030. 7 Previously, the 2010 reduction step was 65 percent and was limited solely to consumption, not production.

Table 1-1 presents the HCFC consumption baseline and the graduated reductions (caps) to allowable HCFC consumption for the United States (and all Article 2 countries).

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

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

Jan 1, 1996 Baseline set at 2.8% of the 1989 ODP-weightedCFC consumption plus 100% of the 1989 ODPweighted HCFC consumption 15,240 277,091

Jan 1, 2004 35% reduction from the baseline 9,906 180,109 Jan 1, 2010 75% reduction from the baseline 3,810 69,273 Jan 1, 2015 90% reduction from the baseline 1,524 27,709 Jan 1, 2020 99.5% reduction from the baseline 76.2 0 c Jan 1, 2030 100% reduction from the baseline 0 0

a An ODP-weighted metric ton takes into account each ODS’ relative contribution to ozone depletion. One metric ton equals approx imately 2,204 pounds.

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

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

Table 1-2 details the U.S. phaseout schedule for HCFCs establish ed under the 1990 CAAA to comply with the targets set by the Montreal Protocol (as presented in Table 1-1). The production and import of HCFC-141b, the HCFC with the highest ODP, was ph ased out with limited exemptions on January 1, 2003. Beginning in 2003, EPA established an allow ance system to control the U.S. production and consumption (including import and export) of HCFC s and to apportion consumption allowances amongst HCFCs. An allowance is the privilege for the allo wance holder to produce and/or import a quantity on an annual basis limited to the allowance granted. Pr oduction and consumption allowances for HCFC-141b (for limited exemptions), HCFC-22, and HCFC-142b were authorized and distributed (on a kilogram basis)

6 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).

7 Article 5 countries—the Protocol’s i dentifying term for developing countries—fo llow a later phaseout schedule than Article 2 countries and as a result of the agreement in 2007 are subject to reduction steps of 10 percent by 2015, 35 percent by 2020, 67 .5 percent by 2025, and allowing for servicing at an annual average of 2.5 percent from 2030-2040.

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December 2009 Page 5 to certain companies (EPA 2003a). 8 Therefore, as of 2003, only those companies with allowances were allowed to produce and/or import these HCFCs.

Table 1-2: U.S. HCFC Phaseout Schedule Mandated Under the 1990 CAAA (to Comply with the Protocol)
Date Restriction Jan 1, 2003 • Ban on production and import of HCFC-141b.

Jan 1, 2010 • Ban on production and import of HCFC-22 and HCFC -142b except for on-going servicing needs in equipment manufactured before January 1, 2010. a

Jan 1, 2015 • Ban on the production, import, and introduction into interstate commerce or use of HCFCs except where the HCFCs are used as a refriger ant in equipment manufactured prior to January 1, 2020. a Jan 1, 2020 • Ban on remaining production and im port of HCFC-22 and HCFC-142b. a Jan 1, 2030 • Ban on remaining production and import of all other HCFCs. a

a Certain additional exemptions apply, including exemptions for (1) HCFCs used in processes resulting in their transformation or destruction, or (2) pre-authorized import of HCFCs that are recovered and either recycled or reclaimed. Source: EPA (2003a); EPA (2007b).

Beginning January 1, 2010, U.S. production and impo rt of HCFC-141b, HCFC-142b, and HCFC-22 will be limited to use in equipment manufactured prior to Jan uary 1, 2010, or where additional exemptions apply. The final phaseout for HCFC-22 and HCFC-142b is on January 1, 2020, and for all other HCFCs on January 1, 2030. Production and consumption allowances must be granted under the allowance system. EPA evaluated the amount of HCFC-22 and HCFC-142b necessary for servic ing as well as the need for other HCFCs to ensure that the permitted level for a ll HCFCs does not exceed the U.S.’s international obligation to reduce the production and consumption levels to 75 percent below the respective baseline levels in 2010. In addition, EPA considered the amount of HCFC- 22 and HCFC-142b ne eded to meet servicing needs of existing equipment. The actual a llocated amounts of HCFCs by chemical can be found in the final rulemaking.



## 1.1 Report Objective

This report presents quantitative estimates of the projected amount of (a) units of equipment using HCFC22 beyond 2010 in the United States and (b) HCFC -22 needed to service equipment beyond 2010 in the United States. It estimates R-22 consumption needs for air-conditioning (AC) and refrigeration equipment (the largest HCFC market and the largest industry se ctor using HCFCs) that will be in use after 2010 and possible future scenarios to meet those needs. This final version additionally contains an analysis of EPA’s allocated amount for the 2010-20 14 control periods. This analysis also explores, in a limited way, demand for HCFC-142b and other HCFCs. The remai nder of the report is organized as follows:

• Section 2 provides a brief overview of the methodology used to project servicing scenarios.

• Section 3 provides an overview of HCFC use in the United States, including projected demand of HCFCs, and an overview of HCFC use other than HC FC-22 in the AC and refrigeration sector.

• Section 4 provides two projected recovery scena rios and resulting R-22 consumption needs as well as an analysis of EPA’s 2010-2014 allocation.

• Section 5 summarizes the key findings of the analysis.

• Appendix A presents further information on t he projection methodology and its limitations.

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

• Appendix C provides estimates of R-22 consumption needs based on projected minimum and maximum recovery rates of R-22 for servicing equipment.

8 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.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 2. Methodology Overview

EPA’s Vintaging Model is the primary tool used to per form the analysis and form the basis for quantitative estimates of current and projected HCFC consumpt ion. 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 inform ation on the market size and growth for each end-use, as well as a history and projections of the ma rket transition from ODS to alternatives. As ODS are phased out, a percentage of the market share origina lly filled by the ODS is allocated to each of its substitutes. The model tracks emissions of annual “v intages” of new equipment that enter into operation by incorporating information on estimates of the quantity of equipment or products sold, serviced, and retired or retrofitted each year, and the quantity of t he compound required to manufacture, charge, and/or maintain the equipment. EPA’s Vintaging Model uses this market information to build an annual inventory of in-use stocks of equipment and the ODS and non-ODS substitutes in each end-use.

According to EPA’s Vintaging Model, the AC and refrigerat ion industry curr ently represents 97 percent (by mass) of HCFC-22 consumption and 88 percent (by mass ) of total HCFC consumpt ion. Other HCFCs are explored in a limited manner (Section 3 ) based on the Vintaging Model and industry analysis.

Appendix A discusses the assumptions used to dev elop the supply and demand estimates presented in this report and the limitations and caveats inherent in the analysis . In addition to the use of EPA’s Vintaging Model, during the development of the first version of this report, EPA contacted a limited number of industry experts to corroborate the findi ngs and market dynamics affecting the servicing needs of the AC and refrigeration indust ry after 2010. EPA used the informal discussions to confirm or modify preliminary estimates obtained from EPA’s Vintaging Model for this analysis.

The first release of this report was on November 4, 2005 when EPA made the preliminary draft version available for comment in a Notice of Data Availability (NODA, 70 FR 67172). EPA received five comments, which are available at EPA’s electronic docket at www.regulations.g ov (Docket ID number, EPA-HQ-OAR-2003-0130 ). Among the comments received, two commenters stated that the overall projected demand of R-22 for servicing AC and refrig eration equipment is reasonable; however, all commenters expressed concern regarding the proj ections of the supply of R-22 recovered from equipment and subsequently recycled or reclaimed for reuse 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 50% recovery scenario presented in the preliminary draft report, nor would the current collection and processing infrastruc ture support projections of the recovered supply. In response, EPA used the Vintaging Model to test whether demand might exceed supply under some circumstances.

On September 29, 2006, EPA’s Stratospheric Protec tion Division held a meeting for HCFC stakeholders regarding the 2010 milestone in the HCFC phaseout. EPA issued a S eptember 2006 version of this report at that time. This version contained one addi tional scenario of consumption needs for R-22 based on industry input on the 2005 draft report. EPA subs equently received comments on this report as well as options for a future rulemaking to allocate HCF Cs for the control periods of 2010-2014. The June 2008 version of the report took into account the comments from stakeholders and provided an updated set of analyses based on the most recent Vintaging M odel output. The June 2008 version of the report included the estimates of a recovery rate of 15, 20, and 75 percent in addition to updating the previous scenarios of 10 and 50 percent.

On December 23, 2008, EPA published two proposed rules, Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export ( 73 FR 78680) and Ban on the Sale or Distribution of Pre-charged Appliances (73 FR 78705). Comments on both proposed rules were submitted during the public comment period in early 2009 in Docket ID No. EPA–HQ–O AR–2008–0496 and Do cket ID No. EPA–HQ–OAR–2007–0163 respectively. The Allowance System propose d rule requested comments on the draft servicing tail analysis. This version of t he report takes into account relevant comments from stakeholders. As with previous versions of this report, the analysis uses EPA’s Vintaging Model in

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December 2009 Page 7 conjunction with industry collaboration and reported HCFC consumption data to inform the quantitative estimates on projected servicing needs. The analysis employs the same Vintaging Model output as the June 2008 version. 9 It also focuses on Scenarios 20 and 50 (additional scenarios are in Appendix C) and presents the actual allocation amou nts for the 2010-2014 c ontrol periods as found in EPA’s final rule.

9 The June 2008 version of the report used a model run developed in 2007 (EPA, 2007a) to assist in projecting future servicing demands for HCFCs. While several updates were made to the inpu ts of EPA’s Vintaging Model si nce 2007, these updates were determined to have minimal impact on the HCFC projections.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 3. Overview of HCFC Use in the United States

HCFCs have a variety of applications in the foam, aerosol, solvent cleaning, fire protection, and sterilization industry sectors; however , their largest presence is in the AC and refrigeration industries. Although the Montreal Protocol has identified numerou s HCFCs under Article 2F, only those listed in Box 3-1 are consumed in significant quantities in the United States.

Box 3-1: Summary of Common HCFC s and their End-Use Applications



### • HCFC-141b –historically used as a blowing agent in rigid polyurethane foams and integral skim foams and in aerosol solvent cleaning applications. Production and consumption phased out in 2003 except for exemption production for specific applications.



### • HCFC-22 - used as a refrigerant in several applications such as unitary air conditioners, cold storage, retail food refrigeration equipment, chillers, and indus trial process refrigeration; see Section 4 for further information. Also used (in smaller quantities) as a blowing agent for certain foam applications and as a component of some sterilant
mixtures.



### • HCFC-123 - used in centrifugal chillers and portable fire extinguishers.



### • HCFC-124 - used in some sterilant mixtures and as a component in some replacements for CFCs as a refrigerant or for halon as a fire suppressant. Replaces CFC-114 in some heat pumps and special air conditioning equipment.



### • HCFC-142b - used as a blowing agent in extruded polystyrene bo ardstock. Also used in small quantities in refrigerant blends as a retrofit refrigerant for applications such as motor vehicle ACs that previously used CFC-12.
T able 3-1. HCFC Atmospheric Lifetime (Years) and Ozone Depletion Potential

HCFC Chemical Name CAS Number Atmospheric Lifetime (years) ODP a

HCFC-141b (CH 3 CFCl 2 ) 1,1-Dichloro-1-fluoroethane 1717-00-6 9.2 0.11 HCFC-142b (CH 3 CF 2 Cl) 1-Chloro-1,1-difluoroethane 75-68-3 17.9 0.065 HCFC-22 (CHF 2 Cl) Chlorodifluoromethane 75-45-6 12.0 0.055 HCFC-124 (CF 3 CHFCl) 2-Chloro-1,1,1,2-tetrafluoroethane 2837-89-0 5.8 0.022 HCFC-123 (CHCl 2 CF 3 ) 1,1-Dichloro-2,2,2-trifluoroethane 306-83-2 1.3 0.02

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

Section 3 is organized into two su bsections. Section 3.1 provides a brief discussion of projected demand of HCFCs, including estimates in ODP-weighted metric tons. Section 3.2 presents an overview of the HCFC demand by end-use sectors for HCFCs other than HCFC-22 with a primary focus on the AC and refrigeration sector.



## 3.1 Projected HCFC Demand

HCFC-142b and HCFC-22 production and import will be limited beginning January 1, 2010, to use as a refrigerant in, or to provide service to, equipment manufactured prior to January 1, 2010. Servicing use of these two HCFCs is limited to the AC and refriger ation sector. Projected demand for HCFC-22 was estimated based on EPA’s Vintaging Model and is further ex plored in Section 4, which presents projected scenarios of the extent to which HCFC-22 demand (in 2010 and beyond) can be met through supplies of recovered refrigerant. In addition to servicing demand, there is demand associated with other HCFCs for other end-use applications not subject to the 2010 use restrictions on HC FC-142b and HCFC-22. EPA projected demand for those other HCFCs by examini ng estimates of current demand through various sources, including consumption data as reported by r egulated entities to EPA, input from industry experts, and assumptions from EPA’s Vintaging Model on future anticipated trends (EPA 2007a; NASA 2008; U.S. HCFC Manufacturer Representatives 2008; U.S. HCFC Manufacturer Representatives 2009). Figure 3 demonstrates all projected HCFC demand in 2010 (ODP -weighted); as shown, HCFC-22 servicing need constitute over 97% percent of all HCFC demand in 2010. -1

s

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December 2009 Page 9 Figure 3-1. Total Projected HCFC Demand in ODP-Weighted Metric Tons, 2010

HCFC123

33%HCFC124

16% HCFC142b

10%HCFC225

ca/cb

41%

HCFC22

98.2%

Source: HCFC-22 estimate based on EPA, 2007a. Estimates for other HCFCs based on consumptio n as reported by regulated entities to EPA, modeling assumptions from EPA, 2007a, and input from U.S. HCFC Manufacturer R epresentatives, 2008, and 2009. Note: Totals do not sum due to independent rounding. HCFC ODP-MT Demand HCFC-22 3,437

7

21

10

26

63

00 HCFC-142b

HCFC-123

HCFC-124
HCFC-225 ca/cb

Other HCFCs
Total 3,5
3,500 ODP-MT 63 ODP-MT



## 3.2 HCFCs Other than HCFC-22

As Figure 3-2 illustrates, the largest sector in 2007 using HCFCs (excluding HCFC-22) is the foam industry, followed by the refrigerat ion and AC, sterilants, and solvents industries. In 2010, the largest sector using HCFCs (excluding HCFC-22) is expected to be the refrigeration and AC industry (at 43%), , followed by solvents industry, which includes aerosol solvents (at 41%), and the sterilants industry (16%). In comparison, the fire suppression and explosion prot ection sector is not projected to use significant amounts of HCFCs other than HCFC-22 in 2010 (i.e., 1%). Projections of HCFC use in the adhesives, coatings, and inks sector have not been estimated due to insufficient data available to validate any use of HCFCs, particularly HCFC-225 ca/cb in this sector.

Figure 3-2. Estimated HCFC (Excluding HCFC-22 ) Virgin Demand by Industry Sector, ODPWeighted Metric Tons

Ref/AC,

4%

Solvents,

3% Foam Blowing

89% Fire Suppression & Explosion Protection,

0.19% Sterilants,
3%

2007 HCFC Market Characterization (not including HCFC-22) Ref/AC,
43% Solvents,
41%

Sterilants,
16%

Fire Suppression & Explosion Protection,
1%

2010 HCFC Market Characterization (not including HCFC-22)

Source: HCFC-22 estimate based on EPA, 2007a. Estimates for other HCFCs based on co nsumption as reported by regulated entities to EPA, modeling assumpti ons from EPA, 2007a, a nd input from U.S. HCFC Manufacturer Representatives, 2008 and 2009. Note: Totals do not sum due to independent rounding. 609 ODP-MT 63 ODP-MTThe U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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### 3.2.1 HCFC Use in Refrigeration and Air-Conditioning

Historically, CFCs were extensively used as refriger ants in the AC and refrigeration industries; by the 1970s, R-22 and R-502 (a blend of CFC-115 and R-22) we re also well established refrigerants. On January 1, 1996, the production and import of CFC re frigerants, classified as Class I controlled (ozonedepleting) substances under the CAA Amendments of 1990, were phased out in the U.S. and other industrialized countries. HCFC refrigerants, which deplete the ozone layer to a lesser degree and are classified as Class II controlled substances under the 1990 CAAA, were found acceptable as substitutes for the controlled CFCs in some end use applications.



### Air-Conditioning End-Uses

AC equipment can be categorized as either mobile or stationary.

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 for light-duty vehicles and other mobile air-conditioning systems.

• Motor vehicle air-conditioning (MVAC) includes AC in the passenger compartments of light duty vehicles—both cars and trucks (e.g ., pick-up trucks, minivans, sport utility vehicles). A variety of refrigerant blends, some of them including HCFC s, are approved for use in the United States by EPA as replacements for R-12 in MVACs. Ho wever, these blends hav e not been endorsed by vehicle or system manufacturers for such use, thereby capturing only a small and declining share of the retrofit market, which consists mainly of R-134a. R-134a is not an ODS; therefore, the light-duty MVAC sector is not disc ussed further 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 most bus AC systems convert ed directly from R-12 to R-134a, the majority of the existing fleet of transit buses, t our buses, and trains continue to use R-22 in their AC systems.

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

• Unitary air-conditioners and heat pumps include both split systems and packaged units and are designed for air circulating, cooling, cleani ng, and dehumidifying and sometimes heating 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 two major categories of chillers—centrifugal and positive displacement. Centrifugal chillers are centralized air conditioning systems typically used in larger buildings (e.g., offices, hotels, shopping centers, and other large buildings). Positive displacement chillers are smaller and may be wate r-cooled or air-cooled. There are three types of positive displacement chillers—1) reciprocati ng, 2) screw, and 3) scroll—each of which is named for the type of compressor employed.

• 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.

• Window units , also known as room air-conditioners, are small appliances used to condition the air in a single room.

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 2009).

December 2009 Page 10The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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

Figure 3- 3 : Types of Air-Conditioning Systems a



### Air-Conditioning (AC) Equipment

Motor Vehicle AC 

### Stationary Air-Conditioning

Water and Ground Source

Heat Pumps Dehumidifiers

Residential

Small Commercial Large Commercial Other Mobile
A C 

### Mobile Air-Conditioning Packaged Terminal AC

and Heat Pumps

Window Units

Centrifugal Chillers

Positive Displacement

Reciprocating Screw Scroll Unitary AC and

Heat Pumps

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



### Refrigeration End-Uses

Refrigeration equipment can be broken down into four categories: domestic refrigeration, refrigerated transport, industrial process refrigerat ion, and commercial refrigeration.

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. Centralized retail food systems, also known as remote systems, consist of a series of

December 2009 Page 11The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- compressors located in a remote machinery room, providing a cooling medium to display cabinets and cold storage rooms in other parts of the building. The most common form of centralized systems circulate refrigerant thr oughout the store. Alternatives to these types of systems include secondary loop and distributed systems that for the most part use 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- 4 : Types of Refrigeration Systems a



### Refrigeration Equipment

Domestic Refrigeration Commercial Refrigeration Refrigerated

Tr

an spo rt Industrial
Process Refri g eration

a S

a Dashed boxes cover end-uses that are assumed to not use Household
Freezers Water Coolers Household Refrigerators Ice Makers Cold Storage Retail
Food

HCFC refrigerants; double boxed end-uses are those for which supply and demand projections are estimated in this report.

HCFC-22 represents the majority of the refrigeration and AC ma rket, however, other HCFCs are also used by the refrigeration and air-conditioning industries. A briefdiscussion of the use of HCFC-142b, HCFC123, HCFC-124, and HCFC-21 as refrigerants is provided below; in addition, Box 3-2 presents a brief summary of HCFCs uses in refrigerant blends. 11

The production and import of virgin HCFC123, HCFC-124, and HCFC-21 is scheduled for phaseout in 2020 for use in new AC and refrigeration equipment, and in 2030 for use in AC and refrigeration equipment manufactured before January 1, 2020. The phaseout schedule for HCFC-142b is the same as that for HCFC-22—beginning January 1, 2010, production and import of HCFC-142b will be limited solely for use in equipment manufactured prior to January 1, 2010. The final phaseout for HCFC-142b (and HCFC-22) is on January 1, 2020, and for all HCFCs on January 1, 2030. Table Box 3-2: Summary of HCFCs used in Refrigerant Blends Often refrigerants are formulated with several substances, such as hydrofluorocarbons (HFCs) or hydrocarbons (e.g., propane, butane, isobutane). HCFC-22 is used as bot h a stand-alone refrigerant and a component of refrigerant blends. Table 3-2 presents the composition of the more common refrigerant blends containing HCFCs.
Table 3-2: Compositions of Common HCFC Refrigerant Blends
Blend R-22 R-124 Other
R-401A 53% 34% 13% HFC-152a R-402A 38% 60% HFC-125, 2% propane (R-290)
R-502 48.8% 51.2% CFC-115

11 HCFC consumption data presented in this anal ysis 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). End-uses in which these refri gerant blends containing HCFCs are currently used are presented in the table below.
Table 3-3: HCFC-Containing Refrigerant Blends by End-Use

Refrigeration Equipment Type Refrigerant Type
R-401A R-402A R-502
Retail Food x x Cold Stora g e x IPR x Refrigerated Transport x x x

December 2009 Page 12The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 13 3-4 presents projected estimates of HCFC refrigerant demand (excluding HCFC-22) for the refrigeration and AC industries in five year increments from 2010 to 2020.

Table 3-4: Projected HCFC-124, HCFC-123, and HCFC-142b Demand for Refrigeration and Air-Conditioning, 2010-2020, (Metric Tons )

HCFC 2010 2015 2020

HCFC-124 <5 <5 0

HCFC-123 1,000 1000 600

HCFC-142b 100 0 0 Source: Based on consumption as reported by regulated entities to EPA, modeling assumptions from EPA, 2007a, and input from U.S. HCFC Manufacturer Representatives, 2009.

• HCFC-124 — HCFC-124 is minimally used as a refrigerant; its primary use as a refrigerant is inblends, mainly R-401A, in industrial process and transport refrigeration equipment. As a standalone refrigerant, it has found some niche applicat ions that reach high condensing temperatures as well as an alternative for CF C-114 in some naval chillers. T he 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. However, its use in blends R-401A, R-401B, R-409A, R-414A, R-414B and others is constrained because those blends also contain R-22. HCFC-124 is also a component of R-416A , which does not contain any other ODS.

• HCFC-123 — HCFC-123 is used in the refrigeration and AC sector mainly in centrifugal chillers for industrial process refrigeration and commerc ial comfort AC. 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 AC and refrigeration equipment manufactured before January 1, 2020.

• HCFC-142b — In addition to being used in the foam industry, HCFC-142b is also used as a refrigerant, but only as a constituent of a few refrigerant blends. While HCFC-142b refrigerant blends are approved as acceptable substitutes for CFC refrigerants in some end-uses, their use is small and declining. R-409A (composed of HCFC-22, HCFC-124, and HC FC-142b) is the most common refrigerant blend using HCFC-142b. Howe ver, sales of R-409A are rapidly declining, and are being replaced with R-404A (composed of HFC-125, HFC-134a, and HFC-143a) (U.S. HCFC Manufacturer Representatives 2008). Based on industry estimates, it is assumed that current demand for HCFC-142b as a refrigerant will continue to decrease to approximately 100 metric tons in 2010 and to zero by 2015 (U.S . HCFC Manufacturer Representatives 2008).

• HCFC-21 — HCFC-21 currently is used by NASA as a re frigerant in the cooling loops of the space shuttle fleet (NASA 2008). Research indicates that NASA is the only industrial user of HCFC-21. NASA's plan is to use the HCFC-21 unt il shuttle fly-out (2010) and to employ HCFC21 alternatives in the next genera tion of space vehicles (NASA 2008) . For this analysis, it is assumed that demand for HCFC-21 be yond 2010 is zero; however, it is conceivable that NASA may access in-house stockpiles or require small qua ntities of new production of the refrigerant for potential future uses.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 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, and R-22 economics.

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

• Section 4.2 estimates the quantity of both virgin (i.e., consumption as defined under the Montreal Protocol) and recovered R-22 that will be requi red to service existing equipment beyond 2010. This section also provides a summary and examination of the final R-22 allocations set by EPA for 2010 through 2014.

• 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 prov ided 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 , EPA estimates that approximately 145.6 million units of all such types of AC equipment will be in use in 2010, decreasing from 2010 levels by about 41 percent by 2015, and 86 percent by 2020. EPA also estimates that in 2010 there will be approximately 3.8 million units of refrigeration equi pment, including retail food, industrial process refrigeration, and transport refrigeration equipment (b ut not including cold storage warehouses). The installed base of refrigeration equipment is project ed to decrease from 2010 levels by about 44 percent by 2015 and 75 percent by 2020. EPA developed these estima tes based on the 2007 version of EPA’s Vintaging Model (EPA 2007a). 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 145,633,300 86,049,100 20,615,300 Total Refrigeration 3,779,600 2,114,800 930,300
Total 149,412,900 88,163,900 21,545,600

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 space using R-22 is 231 million ft 3 in 2010, 133 million ft 3 in 2015, and 61 million ft 3 in 2020. Source: Based on modeling assu mptions using EPA, 2007a.



## 4.2 Projected R-22 Servicing Needs

AC and refrigeration equipment commonly requires se rvicing, which may include adding refrigerant to account for refrigerant losse s that occur over time. 12 While the production and import of HCFC-22 is banned for use in new equipment in 2010, it will st ill be permitted for servicing and maintenance purposes for equipment manufactured prior to January 1, 2010. Table 4-2 presents projected R-22 demand (including that used in blends) for servicing equipment in 2010, 2015, and 2020. These estimates were

12 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.

December 2009 Page 14The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 15 developed based on the EPA’s Vintaging Model (EPA 2007a). 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 62,500 metric tons of R-22 will be required to service AC and refrigeration equipment, of which the majority—41,700 metric tons (67%)—will be used to service AC systems. EPA projects that servicing demand for R-22 in AC and refrigeration equipment will decrease to 38,800 metric tons by 2015 and 18,200 metric tons by 2020. Both the 2015 and 2020 projections of servicing demand exceed the U.S. consumption cap for virgin HCFCs for these years; however, 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 2011 2012 2013 2014 2015 2020

Total AC 41,700 38,600 35,600 32,400 29,200 25,900 11,300 Total Refrigeration 20,800 19,300 17,600 16,000 14,400 12,800 7,000

Overall Total 62,500 57,900 53,200 48,400 43,600 38,800 18,200
Source: Based on data anal ysis using EPA, 2007a. Note: Totals do not sum due to independent rounding.

Figure 4-1 displays the breakdown of R-22 servicing dem and 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.

Source: EPA's Vintaging M odel (VM IO file_11-12-07_ALL) 2010 Total Consumption for Servicing: 62,500 MT

Residential AC 33% Retail Food Small mmercial AC

23%

IPR 14%

Chillers 5%

Large Commercial AC 5%
Cold Storage 2% Other Equipment 1% 17% Co

Residential AC 35% Retail Food

13%

Small Commercial AC 23%

IPR 18%

Chillers 3% Large Commercial AC 5%
Cold Storage 2% Other Equipment 1% 2015 Total Consumption for Servicing: 38,800 MT Figure 4-1. R-22 Demand for Servicing Refrigeration and AC Equipment, by End-Use a

a “Other Equipment” includes window units, packaged terminal units, water and ground source heat pumps, other mobile AC, and refrigerated transport.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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### 4.2.1 R-22 Sources

Starting in 2010, only existing sources of R-22 and a controlled quantity of virgin R-22 (limited through allowance allocations distributed by EPA) will be avail able to the AC and refrigeration industry to meet servicing demand. 13 Existing sources of R-22, which can o ffset the need for virgin R-22, include:

1. R-22 that is recovered and either recycled or reclaimed before reuse. Under EPA regulations at 40 CFR 82.156, refrigerants containing HCFCs must be recove red. 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 environmenta lly-acceptable technologies that meet the definition of destruction in 40 CFR 82.3 (i.e., li quid injection incineration, reactor cracking, gaseous/fume oxidation, rotary kiln inciner ation, cement kilns, and radio frequency 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.
3. The conversion of allocations from other chemic als to R-22 as allowed under the final allocation rule.

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



### Recycled R-22
Recovered R-22 is often recycled prior to being used again in equipment. The recycling process cleans the refrigerant for reuse without meeting all the r equirements 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 equipm ent using a recycling device (EPA 2003b).

EPA regulations allow for the recharge of used refrigerant without subse quent reclamation for refrigerants that are recovered and charged back into the same a ppliance or to another appliance if those appliances have the same owner. Several companies, such as supermarket chains, employ recycling plans through which the refrigerant is recovered when dismant ling or converting one establishment’s equipment and reused to service equipment at another facility with the same ownersh ip. EPA does not collect data on the amount of R-22 that is recycled.



### 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 purit y of the reclaimed refrigerant. EPA certified reclaimers are approved to reproces s used refrigerant to at least the purity level based on 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 2008, the amount of pure R-22 reclaimed by EPA-certified reclaimers totaled approximately 4,556 metric tons, or 10.05 million pounds (EPA 2009). 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 40 metric tons, or 88,040 pounds reporte d for 2008 (EPA 2009). 14 Reclamation data from 2000 to 2008 is presented in Table 4-3 below.

13 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.

14 Feedback received from stakeholders in response to the NODA indi cated that because R-502 is an azeotropic blend, it is difficu lt and expensive to separate R-22 from the blend, and hence such separation is very limited (N ational Refrigerants 2006).

December 2009 Page 16The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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

2000 2001 2002 2003 2004 2005 2006 2007 2008

R-22 3,218 1,960 2,230 1,976 3,280 2,800 3,872 3,716 4

, 556

R-502 281 113 150 41 48 25 52 34 40

Source: EPA 2009.

As 2010 approaches, the price of R-22 has increased and it is expected that the reclamation of R-22 will also continue to increase. Comments received during the comment period to EPA’s proposed rule, Adjustments to the Allowance System for Cont rolling HCFC Production, Import, and Export ( 73 FR 78680), also indicate the support for increasing reclam ation. For example, distributors are increasingly offering refrigerant recovery services and the certif ied reclaimer community is offering more aggressive reclamation programs (HARDI 2009). Additionally, Arkema noted that they recently launched a new incentive-based national reclaim program for their di stributors (Arkema 2009). A more detailed discussion on R-22 economics and recovery and reuse practices is provided in Section 4.3, “Factors Affecting Projections.”



### Imports of Used R-22 Unlike virgin HCFCs, used HCFCs are not subject to Montreal Protocol restrictions on consumption. 15 However, in creating the allocation system for t he use of HCFCs, EPA developed a shipment-by-shipment petition process for impo rting used HCFCs as described in 40 CFR 82.24 (EPA 2003a). The petition process ensures that HCFCs have been used (and were not newly produced) prior to import. For each shipment of used HCFC greater than five pounds, the importer needs to petition EPA 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 either an objection notice or a non-ob jection notice to the prospective importer.

Currently, the quantity of used R-22 imports is minimal; however, recently the Agency has received inquires from additional companies interested in impor ting used R-22. The projections in this report do not specifically include the potential future quantities ob tained from the import of used R-22 because this analysis indicates that there is sufficient potential to offset future demand for virgin material using domestic sources.



### Interpollutant Transfers of Allowances

Another source of R-22 can result from allowance hol ders transferring their allowances from one HCFC to HCFC-22, which is permitted on an annual and ODP-weighted basis. Section 607 of the Clean Air Act permits year-by-year inter-pollutant transfers of pr oduction and consumption allowances. Section 607(b) requires that EPA’s rules are to per mit “a production a llowance for a substanc e for any year to be transferred for a production allowance for another substa nce for the same year.” For example, converting 100 allowances of HCFC-123 (with an ODP of 0.02) w ould result in 36.36 allowances of HCFC-22 (with an ODP of 0.055). Allowance holders have conver ted their allowances to meet market demand historically; this practice is expected to continue, however, the projections in this analysis do not quantitatively assess the potential fu ture quantities that could be obtained from converted allocations.



### 4.2.2 Meeting R-22 Service Demand

Although limited production of virgin 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 significant portion of the demand fo r HCFC-22 for servicing can be met with previously used refrigerant that is recovered and then recycled or reclaimed. Increased amounts of recovered R-22 are a source made available as a result of the v enting prohibition EPA has es tablished under Section 608 of CAA (EPA 2004a). To determine the potential am ounts of used refrigerant available to service

15 “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).

December 2009 Page 17The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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s equipment, EPA used its Vintaging Model to develop five theoretical scenarios 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. This section presents two of these scenarios and Appendix C presents the other three, which represent the lower and higher recovery rates analyzed for this report. The two scenarios presented in this section are closer to the recovery rate necessary to meet demand between 2010 and 2014 under EPA’s final allocation rule. In addition, this sect ion presents an analysis of EPA’s actual allocation amount and the associated necessary rate of recovered material.

In developing the scenarios using t he Vintaging Model, EPA projected the amount of recovered R-22 based on the quantity available from decommissioned or retrofitted equipment. While refrigerant recovered from equipment during servicing can also be available for reuse in other equipment, this potential source is not included in these scenarios for se veral reasons. First, it is projected to be minimal in net terms (i.e., refrigerant recovered during serv ice would likely be returned to the same equipment from which it was recovered). Also , according to industry sources, re frigerant recovered during service events primarily originates from commercial and indust rial equipment (i.e., equipment with relatively large charges). Refrigerant is rarely recovered during the servicing of small equipment because these units tend not to be overcharged or leak ing (Home Energy Center 2006, Ai rgas 2006). Additionally, only a small portion of all servicing events conducted on commercial and industrial equipment involve the refrigerant circuit, and when recovering refrigerant to per form repairs is necessary, often only a section of the refrigerant charge is isolated an d recovered, not the entire charge.

To estimate refrigerant recovery and reuse, EPA assumed that a certain percentage of refrigerant is recovered from decommissioned or retrofitted equipment. 16 It is important to note that not all refrigerant is assumed to be recovered. While EPA has regulations prohibiting int entional venting, for the purposes of this analysis it is appropriate to create scenarios that assume less than the full charge of refrigerant i recovered at equipment end-of-life. For example, in many instances, equipment is disposed of after a catastrophic failure, which might have resulted in a lar ge or even complete loss of the refrigerant. Also, when equipment is removed from service, there can be losses associated with previous leaks and during attempts to recover the remaining refr igerant. It is also possible that owners or technicians disposing of a piece of equipment might not comply with the regulations and might vent the refrigerant.

This analysis then assumes that the entire pool of recovered refrigerant re-enters the market (see Appendix A for more details) and hence offsets the demand for virgin R-22. The two scenarios investigated can be summarized as follows:

• Scenario 20 assumes that by 2010, 20 percent of re frigerant from retired or retrofitted

equipment is recovered and available for reus e in equipment (i.e., a 20 percent recovery rate). The remaining 80 percent is not available for reuse.

• Scenario 50 assumes that by 2010, 50 percent of re frigerant from retired or retrofitted

equipment is recovered and available for reus e in equipment (i.e., a 50 percent recovery rate). The remaining 50 percent is not available for reuse.

Tables 4-4 and 4-5 summarize the two recovery scen arios in comparison to the phaseout caps under the Montreal Protocol and the actual U.S. HCFC consumption allocations for HCFC-22.

16 To calculate the amount recovered, the Vintaging Model assu mes equipment contains a full c harge at disposal and assumes a certain percent of that is recovered. It does not take into account a) refrigerant destroy ed after equipment is decommissioned or b) any stockpiling of recovered refrigerant beyond a one- year timeframe. See Appendix A for further details.

December 2009 Page 18The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Table 4-4 summarizes the projections under the first recovery scenario that assumes practices that yield a recovery rate of 20 percent. These projections ar e compared to the U.S. HCF C consumption cap. As shown the estimated virgin R-22 supply needed in 2010 can be adequately met with a portion of the HCFC consumption cap remaining. A 20 percent reco very rate would meet 9 percent of servicing demand in 2010, 23 percent in 2015, and 46 percent in 2020. Under this scenario, the quantity of recovered R-22 projected to be available in 2015 and 2020 plus the amount of virgin R-22 production allowable under the cap remains inadequate to m eet the projected servicing demand, consequently leading to R-22 supply shortfalls beginning in 2015.

Table 4-4: Scenario 20: 20% Recovery Rate: Summary of Projected R-22 Supply, Dema nd, and Shortfall (R-22 Metric Tons)

2010 2011 2012 2013 2014 2015 2020 Projected R-22 Servicing Demand Summary a Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200 Modeled R-22 supplied from recovery/reuse 5,900 8,200 8,300 8,500 8,600 8,800 8,300 % of total R-22 servicing demand supplied by modeled recovery/reuse 9% 14% 16% 18% 20% 23% 46%

Modeled R-22 supplied from virgin R-22 56,600 49,700 44,900 40,000 34,900 30,000 9,900 Comparison to HCFC Consumption Cap Virgin R-22 supply available under cap b 69,273 69,273 69,273 69,273 69,273 27,709 0 d Modeled R-22 supplied from virgin R-22 56,600 49,700 44,900 40,000 34,900 30,000 9,900 Additional virgin R-22 allowable under cap c 12,673 19,573 24,373 29,273 34,373 -2,291 -9,900

a Based on modeling assump tions using EPA, 2007a.

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

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

d In 2020, a cap equal to 0.5 percent of the U.S. consumption baseline remains; however, the phaseout schedule in 2020 prevents a ny allocation of the remaining baseline to R-22.

Table 4-5 summarizes the projections under the second reco very scenario that assumes practices that yield a recovery rate of 50 percent from retired or converted equipment. A 50 percent recovery rate would meet 24 percent of servicing demand in 2010, 57 percent in 2015, and 100 percent in 2020. Projections under this scenario indicate that sufficien t supplies of refrigerant would be available to service equipment if 50 percent of refrigerant from retired equipment is recovered and re-enters the pool of refrigerant available to meet demand.

Table 4-5: Scenario 50: 50% Recovery Rate: Summary of Projected R-22 Supply, Dema nd, and Shortfall (R-22 Metric Tons)

2010 2011 2012 2013 2014 2015 2020 Projected R-22 Servicing Demand Summary a Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200 Modeled R-22 supplied from recovery/reuse 14,800 20,500 20,800 21,200 21,600 22,000 18,200 % of total R-22 servicing demand supplied by modeled recovery/reuse 24% 35% 39% 44% 50% 57% 100%

Modeled R-22 supplied from virgin R-22 47,700 37,400 32,400 27,300 22,000 16,800 0 Comparison to HCFC Consumption Cap Virgin R-22 supply available under cap b 69,273 69,273 69,273 69,273 69,273 27,709 0 c Modeled R-22 supplied from virgin R-22 47,700 37,400 32,400 27,300 22,000 16,800 0
Additional virgin R-22 allowable under cap 21,573 31,873 36,873 41,973 47,273 10,909 0

a Based on modeling assump tions using EPA, 2007a.

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

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

December 2009 Page 19The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Figures 4-2a and 4-2b illustrate the projected supply of recovered refrigerant available to meet demand, as well as its subsequent importance in meeting future demand, resulting from the two recovery scenarios. Depending on the recovery practice employ ed, the potential exists for either a surplus or shortfall to occur in 2015 (Scenario 50 shows a su rplus while Scenario 20 shows a shortfall).

As the market prepares for the 2010 milestone in the HCFC phaseout, it is impor tant to ensure that R-22 is recovered, recycled, stockpiled, or reclaimed to maximize available R-22 supply and avoid potential shortages. Increased reuse of R-22 will be needed to satisfy future servicing needs that will not be met through virgin supplies alone. The scenario pres ented above that avoids shortfalls throughout 2010 to 2020 projects recovered R-22 to be approximately 14,800 metric tons in 2010, followed by 22,000 metric tons in 2015 and 18,200 metric tons in 2020 (i.e., Scenar io 50). A lower recovery rate scenario also could provide a no-shortfall situation. A recovery rate scenario of 26 percent is the lowest recovery rate necessary to adequately meet demand starting in 2015. A 26 percent recovery rate will yield 29 percent of total servicing demand in 2015.

For comparison, as noted in Table 4-3 , in 2008 a total of 4,556 metric tons of HCFC-22 was reclaimed, which amounts to approximately five percent of total HCFC-22 consumption in 2008 (according to consumption data as reported by regul ated entities to EPA). (The actual am ount of refrigerant recovered, recycled, and reused without being reclaimed is not known.) If the 2008 level of reclamation remains constant, reclaimed R-22 would fulfill only 31 percent of the modeled R-22 supplied from recovery/reuse as projected to be available under Scenario 50 in 2010, dropping to approximately 21 percent and 25 percent in 2015 and 2020, respectively (see Table 4-5 ). A further discussion on recovery practices is provided in Section 4.3.3.

Figure 4-2a: Total Projected R-22 Servicing Demand, Recovery Scenario 20 a, b

a Consumption cap and 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 baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22.

December 2009 Page 20The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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Figure 4-2b: Total Projected R-22 Servicing Demand, Recovery Scenario 50 a, b

a Consumption cap and 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 baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22.



### 4.2.3 EPA’s Allocations of R-22 for 2010 through 2014

Based in part on the results of these scenarios, EPA has determined R-22 consumption allocations for years 2010 to 2014; the quantity allocated annually for these years is shown in Table 4-6 . Although EPA has not yet allocated HCFC consumption allowances for 2015, the R-22 allocation can be no more than 27,709 metric tons. Therefore, based on estimated servicing demand, recovery can be no less than 11,091 metric tons, or, at least 29 percent of servic ing demand (i.e., estimated at 38,800 metric tons) in that year. Table 4-6 also illustrates the quantity of R-22 r equired from recovery/reuse, which represents the difference between estimated demand and the allocati on quantity for each year. This quantity of R-22 required from recovery/reuse, estimated at 12,500 metric tons annually from 2010 to 2014, represents 20 percent of the total R-22 servicing demand in 2010 growing to 29 percent in 2014. Figure 4-3 is a graphical representation of R-22 servicing demand from 2010 to 2020 and R-22 supply from 2010 to 2014 based on the allocations set by EPA.

Table 4-6: Actual R-22 Consumpt ion Allocations (R-22 Metric Tons)

2010 2011 2012 2013 2014 2015 2020 Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200

Total R-22 allocation amount 50,000 45,400 40,700 35,900 31,100 TBD a 0 b
R-22 required from recovery/reuse 12,500 12,500 12,500 12,500 12,500 TBD 18,200 % of total R-22 servicing demand supplied by R-22 required from recovery/reuse 20% 22% 23% 26% 29% TBD 100%

a TBD: to be determined. EPA has not yet i ssued allowances from 2015 through 2019.

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

December 2009 Page 21The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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a U.S. HCFC consumption cap expressed in R-22 un-we ighted metric tons (calculated using and ODP of 0.055 for HCFC-22). 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020HCFC-22 (MT) Recovered R-22 Needed to Satisfy Remainder of Service Demand

R-22 Allocation Amount

Total R-22 Service Demand U.S. HCFC Consumption Cap Figure 4-3 : Total Projected R-22 Servicing Demand and EPA’s 2010-2014 Allocations of HCFC-22 a



## 4.3 Factors Affecting Projections

Several market dynamics affect the projections of future servicing needs for R-22. Certain equipment specification requirements, the transition to alternative refrigerants, the stockpiling of refrigerant as well asequipment manufactured with HCFCs for sale after the phaseout, and the import of equipment precharged with HCFC refrigerant can all potentially alter the projected servicing scenarios. Each of these issues is discussed further below.



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

In 2001, the U.S. Department of E nergy (DOE) set a stricter seaso nal energy efficiency ratio (SEER) standard for residential unitary ACs and heat pumps. The minimum efficiency standard of residential unitary ACs and 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).

Residential AC equipment generally requires a larger charge size to meet this standard because efficiency improvements are often achieved by in creasing the size of t he evaporator and condenser, which in turn requires an increase in refrigerant charge. The average central AC unit sold in 2004 was approximately 11.5 SEER, with an av erage charge size of around 3.4 kilograms (7.5 pounds) (ARI 2005). 17 In 2007, sales indicated that approximately fi ve out of every six AC units sold to homeowners were 13 SEER through June of 2007 (with the remainder 14 SEER or hi gher) (Sk aer 2007).

Consequently, the amount of R-22 contained in ne w residential AC systems starting in 2006 has increased, resulting in an increase in projected se rvicing demand (assuming that service and leak losses, as a percentage of the equipment char ge, do not change as a result). The projections provided in this

17 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).

December 2009 Page 22The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- analysis incorporate the additional R-22 that is ex pected 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 refriger ants found acceptable under EPA’s SN AP program are available in the AC and refrigeration sector. Hydr ofluorocarbons (HFCs) and HFC-based alternatives, including R-134a, R-410A (composed of HFC-32/HFC-125), R-407C (c omposed of HFC-32/HFC-125/HFC-134a), R-404A (composed of HFC-125/HFC-143a/HFC-134a), and R-507A (composed of HFC-125/HFC-143a), are currently used in a variety of refrigeration and AC equipment. The pace of transition to equipment using these alternatives has varied by industry and type of equipment. Several AC and refrigeration equipment manufacturers have indicated that they have discontinued production of new equipment that uses R-22. (Hill Phoenix 2009; Hussmann 2009; Kysor/Warren 2009; Johnson Controls 2009). 18 These actions are consistent with the actions found in the mid-1990s, when the refrigeration and AC industries phased out CFC refrigerants from new production chillers, refrig erators, motor vehicle ai r conditioners, and other products two or more years before the 1996 CFC consumption phaseout.

HFC alternatives to R-22 are greenhouse gases (GHG s) with high global warming potentials. A factor adding to the uncertainty that may have affected de cisions by entities regard ing the timing of their transition away from R-22 is whether the future refrigerant market may be affected by potential restrictions on HFCs either through adoption of domestic or international commitments to reduce production, consumption and/or emissions. For example, in 2009 the U.S. House of Representatives passed legislation that included controls on HFCs though, at the time of this report, although the U.S. Senate has yet to taken action. The Federated States of Micr onesia (FSM) and Mauritius introduced a proposal to
amend the Montreal Protocol to include controls on HFC production and consumption. The United States, Mexico, and Canada submitted a proposal that build s on the FSM and Mauritius proposal to be taken up by the Parties in November 2009. It remains to be seen what the details of any future HFC controls may be and how they would further delay or accelerate a transition away from existing equipment containing HCFC-22 and refrigerant blends containing HCFC-22 and/or HCFC-142b.

In projecting servicing needs, this analysis accounts for delayed transition trends that maintain production of new HCFC-22 equipment until December 31, 2009, 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 replacing R-22 in new stationary and mobile AC equipment. Some mobile AC equipment has been using alternatives si nce the early 1990s, with some buses and trains using R-134a, and some heavy rail cars using R-407C (WMATA 2005; Amtrak 2005; Motorcoach Training 2005; Greyhound 2005; Carrier Corporation 2005b). Stationary 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).

Despite the availability of alternatives, more than 90 percent of residential AC split-systems sold in 2004 were charged with R-22 (Honeywell 2005). Accord ing to a survey conducted by Emerson Climate Technologies in November 2007, 40 percent of the cont ractors and distributors said they would wait until 2010 to convert their sales to equipment containing alternative refrigerant (Emerson 2007). The consumer preference is for the refrigerant that cost s less; in the years leading up to 2010, R-22 has been cheaper than alternatives. However, the economic s is changing and R-410A pricing is beginning to match that of R-22. Most residential AC equipm ent purchasers now prefer to buy equipment using R410A for equipment. For customers wishing to buy higher efficiency equipment, that is, greater than 13 SEER, R-410A is often the only option (Johnson Controls 2009).

18 Some manufacturers continue to manufactu re R-22 outdoor units in 2009 to satisfy t he replacement market in which only the outdoor units need to be replaced versus the entire system (Johnson Controls 2009).

December 2009 Page 23The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- To be conservative, the projections in this analysis are based on slower transitions to alternatives. For example, new sales of residential AC systems are modeled such that only 10 percent of the market adopts alternatives by the end of 2008 and the remainder of the market transitions completely by the endof 2009 (see Appendix A for more details). A more quickly paced adoption of alternatives by the ACmanufacturer and end-user community will have the effect of lowering the overall servicing demand of R22 charged equipment post-2010 and lessen the risk of pot ential shortfalls as projected in Scenario 20 of this analysis.



### Refrigeration Industry
Industry experts have indicated that retail food refrigeration end-uses ar e transitioning to alternatives more quickly than AC end-uses; the projections in this analysis are based on modeling that reflects this industry’s input. Based on industry feedback, R-22 is currently the leading refrigerant in the U.S. supermarket industry representing about 35-40% of refr igerants used in existing stores (Verisae 2009). In comparison, the Vintaging Model currently assumes th at 48% of supermarket systems installed in the U.S. use HCFC-22. Although the life expectancy of commercial refrigeration equipment is around 20 years, supermarkets tend to remodel every 7 to 10 y ears, which offers supermarkets the opportunity to install new equipment that uses an alternative more often than the typical equipment lifetime would imply (Hill Phoenix 2005). It is estimated that only 5% of new refrigeration systems installed in 2009 are charged with R-22 (Hill Phoenix 2009; Hussmann 2009; Kysor/Warren 2009). Advanced refrigeration technologies (e.g., distributed systems and secondary loop systems) represent an estimated 40% of new equipment sales and are always charged with HFC refrigerants (Hill Phoenix 2009; Hussmann 2009). The current trend in the supermarket industry is to use HFC refrigerant blends, particularly R-404A and R507A. It is expected that the industry will continue to rely on HFC refrigerants but will trend toward blends with lower GWPs, such as R-407A and R-407C (Verisae 2009).



### 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 scenarios presented in this section and the overall findings of this analysis:

• In 2010, the amount of recovered refrigerant is pr ojected to range from 5,900 to 14,800 metric tons, depending on the percentage of total available refriger ant from retired or converted 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 be 38,800 metric tons, therefore requiring at least 11,091 metric tons of recovered R-22. Scenario 50 projects sufficient amounts of recovered material (i.e., 22,000 metric tons) to meet this demand, wh ereas, the projected quantities under Scenario 20 does not (i.e., 8,800 metric tons, or approximately 20 percent lower than needed to prevent a shortfall). 19

• In 2020, Scenario 50 projects sufficient supplies of recovered R-22 to meet projected 2020 servicing demand (i.e., 18,200 metric tons). Conversely, the estimated projections of 8,300 metric tons of recovered R-22 under Scenario 20 will not be enough to meet total projected demand, as no virgin manufacture is allowed under the cap.

• The R-22 consumption allocations set by EPA for years 2010 to 2014 decreas e annually, maintaining the supply of recovered HCFCs at a constant leve l, and resulting in recovered material comprising a greater proportion of the supply required to meet to tal demand each year. As such, the percentage of the total need to be met with reclaimed material w ill rise from 20 percent to 29 percent of total demand in 2014, which is intended to help facilitat e meeting the estimated demand in 2015, of which at least 29% must be met with recovered material. The annual decrease in allowable virgin R-22 will

19 Note that these numbers are calculated assuming the entire cap is allocated to HCFC-22 production, which is unlikely to occur due to the needs for continued production of other HCFCs. For example, a portion of the cap in 2010-2014 is allocated to other HCFCs.

December 2009 Page 24The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- enable a smooth transition for the AC and refrigeration industry as it should foster greater recovery and reclamation of R-22.

Although there is the potential for supply shortage s after 2010, thorough maintenance practices during the lifetime of equipment, recovery practices at the time of equipment disposal or decommissioning, and the full penetration of reclaim and reuse practices can great ly 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 to reduce incidences of major leaks. Service technicians must take efforts to isolate components or recover refrigerants prior to service as venting (releasing) HCFC (and CFC and HFC) refrigerant when making repairs is illegal. Service practices that involve locating and repairing leaks in lieu of “topping off” leaking systems further ensure fu ture supplies of used refrigerant. As with servicing procedures, the venting of refrigerant during de commissioning is illegal. The AC and refrigeration 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 an d reclaimed R-22, while currently minimal (less than 4,600 metric tons of HCFC-22 was reclaimed in 2008), can increase future supplies once fully realized. Should current reclamation levels of R-22 not increa se significantly, a sufficient supply of reusable refrigerant will not be available to meet servicing demand projec tions. To reach the projected supply of recovered refrigerant necessary to meet demand, a three to five-fold increase in current (as of 2008) reclamation levels is required. 20

While there is expressed concern from stakeholders in the AC and refrigeration community that the current business model for R-22 reclamation and related infrastructure will not support projected demand, the annual step-down of R-22 allocations from 2010 to 2014 will help foster growth in the reclamation industry and help establish recovery and reclamation of R-22 as a standard operating procedure. With future supply of material being less than demand, this type of growth in this market is an essential component in the AC and refrigeration industr y strategy to prepare for the HCFC phaseout.



### 4.3.4 Recycling and Stockpiling Plans

With proper storage tanks, a reserve of recovered 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 m anagement plans (RMPs) as a strategy to ensure an adequate supply of CFC refrigerants for use after the December 31, 1995, CFC production phaseout. Of those surveyed, 52 percent were banking recovered CFC refrigerant, an activity adopted primarily by store operators 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/ or multiple AC units, as well as ot her multi-facility operations, have th e opportunity to internally bank refrigerant to meet futu re 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 affect the results of this analysis by increasing future availability of recovered and

20 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.

December 2009 Page 25The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 26 reusable refrigerant. Stockpiling refrigerant ensures addi tional supply for a given user for later years, but there is some concern refrigerant will not be stockpiled due to occupying floorspace needed for more profitable inventory (Dyslin 2006). Furthermore, a large end-user stockpiling R-22, which may otherwise re-enter the market after being reclaimed, could resu lt in the premature shortage 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 low cost of virgin R-22 in the market for the past several years has weakened demand for reclaimed refrigerant, which is more expensive. Over time, as the supply of virgin R-22 decreases, it is expected t hat the demand for recovered and reclaimed refrigerant as well as R-22 alternatives will increase. To that end, reclaimers of R-22 and manufacturers of R-22 alternatives will experience economies of scale and their prices will fall, causing a shift in pricing structures. However, spot shortages of R-22 may occur, as was seen with the phaseout of CFC-12.

As a result of the increase in demand for this refr igerant, along with other economic factors, R-22 pricing has continued to increase. Market signals, such as this one, will likely encourage an increase in the demand for reclamation and the transition to alternative refrigerants.



### 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 is on the rise (UNEP 2003a; U.S. Census Bureau 2009). Central AC systems from foreign manufacturers such as Samsung, LG, and Haier are 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 equipm ent from international manufacturers that is then sold under their labels (HARDI 2005).

Effective January 1, 2010, domestic manufacturers of AC and refrigeration appliances will not be able to charge newly manufactured appliances with newly produced or imported HCFC -22 or HCFC-142b, and thus will not be introducing appliances containing th ese newly produced substances into interstate commerce. However, this regulatory provision does not lead to similar results for AC and refrigeration equipment that has been “pre-charged” with refrigerant before entering the United States. Should R-22 pre-charged units continue to enter the United Stat es after 2010—with estimates indicating that an average annual total of pre-charge d R-22 imports could range from 9.6 million to 12.5 million units—it would have the effect of increasing the overall se rvicing demand of R-22 charged equipment post-2010, adding further concern to the risk of potential shortfa lls as projected in Scenario 20 of this analysis (and Scenarios 10 and 15, as provided in Appendix C). 21

To that end, EPA is finalizing a January 1, 2010, ban prohibiting the sale or distribution of pre-charged units imported after that date. Further details rega rding the ban on import of appliances pre-charged with HCFCs is available in EPA’s Final Rule and in EPA’s docket, at Docket ID No. EPA–HQ–OAR–2007–
0163.

21 This analysis was conducted under the assumption that a ban on imported pre-charged imports would become effective beginning in 2010.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 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 2010 if practices to recover and reuse refrigerant are not increased. The findings indicate significant variance in the projected supply of recovered refrigerant available to meet demand depending on the future recovery and reuse of refrigerant. Only under scenarios with higher refrigerant recovery and reus e are supplies projected to satisfy future R-22 servicing needs using both recovered refrigerant and li mited amounts of virgin refrigerant. Results from this analysis show that given the final R-22 allocati on of 50,000 metric tons in 2010, in order to meet projected servicing demand, the remaini ng 12, 5 00 metr ic tons (i.e., 20 percent of total demand) must be supplied by recovered R-22 to avoid a shortfall. Furthermore, by 2015, a year in which allocations are yet to be determined, a minimum of a 26 percent recove ry rate yielding 29 percent of total demand is necessary to avoid a shortfall in demand.

The total projected HCFC-22 servicing demand in 2010, 2015, and 2020 compared to a 100% allocation of the HCFC consumption cap are summarized below along with concluding points on the implications of the two recovery and reuse scenarios as well as EPA’s actual allocation for 2010.

• In 2010, a projected servicing demand of 62,500 metric tons of R-22, or about 90 percent of the 2010 consumption cap, is estimated. The total R-22 allocation amount for 2010 equals 50,000 metric tons, meaning that the R-22 required to meet the remain ing service demand is 12,500 metric tons. Under Scenario 20, it is projected that not all of the servicing demand that remains after the allocated amount of 50,000 metric tons can be met through the recovered su pply of R-22 ( as shown in Table 5- 1 with an e stimated shortfall of 6,600 metric tons )

.

Table 5-1: Comparison o f R-22 Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2010

2010 Scenario 20: 20% Recovery Rate Scenario 50: 50% Recovery Rate Cap a 69,273

Demand 62,500
Total R-22 allocation amount 50,000 Necessary Supply
Recovered 5,900 (9%) 14,800 (24%) Virgin 56,600 (91%) 47,600 (76%)
Shortfall 6,600 (11%) 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. Source: Based on modeling a ssumptions usi ng EPA, 2007a.

• In 2015, a projected servicing demand of 38,800 metric tons of R-22 is estimated, which is over the 2015 consumption cap (expressed in R-22 un-weighted metric tons) by 40 percent (i.e., 2,291 metric tons) under Scenario 20. The total R-22 allocation amount between 2015 and 2019 will be determined in a future EPA rulemaking. Under a scenari o of higher recovery an d reuse (Scenario 50), Table 5-2 indicates that supplies from recovered R-22 can satisfy enough of the demand such that a shortage of refrigerant supply does not occur if the en tire cap is allocated to R-22. However, in the 20% recovery rate scenario, a shortfall of 2,291 metric tons is projected.

December 2009 Page 27The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 28 Table 5-2: Comparison of R-22 Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2015

2015 Scenario 20: 20% Recovery Rate Scenario 50: 50% Recovery Rate Cap a 27,709

Demand 38,800
Total Allocation Amount TBD Necessary Supply
Recovered 8,800 (23%) 22,000 (57%) Virgin 30,000 (77%) 16,800 (43%)
Shortfall 2,291 (6%) 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. Source: Based on modeling assu mptions using EPA, 2007a.

• In 2020, only 0.5 percent of the U.S. consum ption baseline remains; however, the phaseout

schedule prevents any allocation of the remaining baseline to R-22. A projected servicing demand of 18,200 metric tons of R-22 is estimated (Tab le 5-3). For consistency purposes, the HCFC consumption cap is expressed in R-22 metric tons in Table 5-3 to illustrate that the necessary supply of virgin R-22 under Scenario 20 is gr eater than the 2020 HCFC consumption cap. Under Scenario 20, only 46 percent of servicing demand is projected to be met with recovered refrigerant, leading to a shortfall of 9,900 metric tons of R-22. Under Scenario 50, this demand is projected to be met entirely with recovered refrigerant.

Table 5-3: Comparison of R-22 Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2020

2020 Scenario 20: 20% Recovery Rate Scenario 50: 50% Recovery Rate Cap a 1,385

Demand 18,200
Total Allocation Amount b 0 Necessary Supply
Recovered 8,300 (46%) 18,200 (100%) Virgin 9,900 (54%) 0 (0%)
Shortfall 9,900 (54%) 0 (0%)

a HCFC consumption cap expressed in R-22 metric tons.

b In 2020, 0.5 percent of the U.S. consumption baseline remains; however, thephaseout schedule in 2020 prevents any allocation of the remaining baseline to R22. Source: Based on modeling assu mptions using EPA, 2007a.

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. Continued collaboration with the AC and refrigeration community is needed to ensure that servicing demand for HCFC-based sy stems can be met in 2010 and beyond.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 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 2007a), 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 discusses the limitations to the se rvicing projections presented in this report.



## A.1 EPA’s Vintaging Model

Box A-1: Developing and Maintaining EPA’s Vintaging Model

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

• EPA’s ODS Tracking System and submissions to the 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; and

• Numerous representatives at companies and trade associations, such as the Alliance for Responsible Atmospheric Policy, the Air-Conditioning Heati ng and Refrigeration Institute (AHRI), the Association of Home Appliance Manufacturers (AHAM), and the Alliance of Automobile Manufacturers.

In some instances the unpublished information that 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.

T he Vintaging Model is continually updated to improve assumptions and modeling techniques and refine inputs based on information received from these sources. E PA shares the revised assumptions and results of model improvements with industry through publications such as this one as well as through presentations, such as those given at the April 2007 Spring Meetings of AHRI.

In both 2006 and 2007, the model was updated based on information obtained from industry as part of the research effort for this analysis. HCFC-22 projections of servicing needs for the AC and refrigeration end-uses presented in this report represent model output based on a model run developed in 2007 (EPA 2007a). While several updates were made to the inputs of EPA’s Vintaging Model since 2007, these updates were mainly with respect to assumptions on ODS alternatives, and, hence, output from a more recent model run would only minimally alter HCFC-22 projections as presented in this report, if at all. EPA’s Vintaging Model was developed as a tool for estimating the annu al 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 60 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.

The model, named for its method of tracking the emissions of annual “vintages” of new equipment that enter into service, is a “bo ttom-up” model. This means it models the consumption of controlled ozone-depleting substances and their substitutes based on:

1) Estimates of the quantity of equipment or products sold, serviced, and retired or retrofitted each year, and 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.

Emissions are estimated by applying annual leak rates, service emission rates,

December 2009 Page 29The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- and disposal emission rates to consumption data for each vintage of equipment. Emissions from AC and refrigeration equipment are split into two categori es: emissions during equipment lifetime and disposal emissions. The first category includes the amou nt of compound leaked during equipment operation and the amount of compound emitted during service. Cons umption required to service or refill equipment is driven by the demand to replace such losses, and th erefore, 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 ther efore, 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, 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.2 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

Estimates from EPA’s Vintaging Model are often cross- checked with actual historical data from EPA’s ODS Tracking System, which tracks actual 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 Protoc ol’s definition of consumption (i .e., production plus imports minus exports). In EPA’s Vintaging Model, the Virgin Manuf acture parameter is calculated to be any need for consumption (either for new equipment or servicing) that cannot be met through recycled or recovered material; no distinction is made in the Vintaging Model between whether that need is met through domestic manufacturing or imports. As shown in Figure A-1, estimates from the model generally align to actual consumption from 1993 to 2008.

December 2009 Page 30--- --- -- --- -- --- -- --- -- --- --- -- --- -- --- -- --- -- --- --- -- --- -- --- -- --- -- --- --- -- --- -- --- -- --- -- --- --- -- --- -- --- -- --- -- --- --- -- --- - - --- -- --- -- --- --- -- --- -- --- -- --- -- --- --- -- --- -- -

Figure A-1: Comparison of EPA’s Vintaging Model Estimates for Virgin Manufacture and ODS Tracking System Data for HCFC-22 Consumption

6,000

5,000ODP Weighted Metric Tons

4,000 Vintaging Model Estimates

ODS Tracking System Data 3,000

2,000

1,000

01993199419951996199719981999200020012002200320042005200620072008

Source: EPA's ODS Tracking System, Vintaging Model (VM IO file_11-12-07) The U.S Phaseo ut of HCF Cs: Projected Servicing Needs in the U.S. Air-Conditio n ing and Refrige r ation Sector

Table A-1 p r e s ent s the inp ut assumptio ns u s ed to de vel op the proj ection s in this repo rt. The loss rate s rep r e s ent the percent of the total charge that leaks in a given year plus the am o unt, on an an nual ba si s, emitted at service, expre s sed as a p e rce n tage of to tal chemi c al cha r ge. Beca use the amount lost from leaks an d se rvicing is a nnu alize d, equip m ent is a ssu med to rea c h the end of its lifetime with a full cha r ge. 2 2 EPA’s Vintaging Model then a pplie s a “reco v ery rate,” wh ich refe rs to the perce nt of total cha r ge of the equipm ent that is re covere d and re used at the time of disp osal. These recovery rates
rep r e s ent ave r age s, intend ed to captu r e the rang e of possibl e pra c tices o c currin g at dispo s al.

Gro w th rate a s sumption s a r e also provid ed in Table A

- 1. The growth rates refer to the growth of the equipm ent m a rket for ea ch end-u s e a s a whole a nd are not spe c ific to the refrige r ant. When th e transitio n to different equip ment and different refrige r ants o c cur, th e input assu mptions a r e a d juste d to

accou nt for these cha nge s.

22 For the majorit y of equipment t y p es, the assumption that equipm e n t contains a full charge at the e n d of life is theoretically applicable. To ensure prop er and cont inual functioning of equipmen t, homeo w n e r s a nd businesses typically have their airconditioning and refrigera t ion s y st ems servic ed regularl y

. Technicians w ill check thes e sy stems for le aks using proper techniq ues and if a loss of refrigerant is found , w ill refill the sy s t em to ensure it i s functioning efficient ly afte r rep a iring an y leaki ng seals or damaged compo nents. Note that this assumption ma y not b e app r opriate for smalle r equipment t y pe s such as w i ndo w u n its but is applied consiste ntly for mo deling purposes.

Decem b er 20 09 Page 31The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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Table 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 HCFC-22 Residential Unitary A/C (2005- 2006) 3 12% 1.9% 35% 15

R-22 HCFC-22 Residential Unitary A/C (2006- 2020) 5 12% 1.9% 35% 15

R-22 R-22 Small Commercial Unitary AC 8 11% 2.5% 40% 15

R-22 R-22 Large Commercial Unitary AC 15 10% 2.5% 40% 15

R-22 R-22 Water & Ground Source Heat Pumps 4 5% 2.5% 57% 20

R-22 R-22 Dehumidifiers 0 1% 0.2% 50% 11

R-22 R-22 Packaged Terminal Units 1 5% 2.5% 35% 12

R-22 R-22 Window Units 1 1% 5.0% 50% 12

R-22 R-12 School & Tour Buses 5 10% 2.6% 50% 12
R-22 R-22 Transit Buses 8 44% 2.6% 50% 12

R-22 R-22 Trains 22 44% 2.6% 50% 5

R-22 R-11 Centrifugal Chillers 700 5% 0.5% 80% 25
R-22 R-12 Centrifugal Chillers 721 5% 0.5% 80% 27

R-22 Reciprocating Chillers 230 1% 0.2% 80% 20
R-22 Screw Chillers 300 1% 0.5% 80% 20

R-22 Scroll Chillers 240 1% 0.5% 80% 20

R-22 R-500 Chillers 926 5% 0.5% 80% 27 Refrigeration Equipment

R-22 R-12 Cold Storage <0.01 20% 2.5% 80% 20
R-22 R-22 Cold Storage <0.01 20% 2.5% 80% 20

R-22 R-502 Cold Storage <0.01 20% 2.5% 80% 20

R-502 R-502 Cold Storage <0.01 25% 2.5% 80% 20

R-22 CFC-12 Large Retail Food 1,800 30% 1.7% 80% 15
R-502 CFC-12 Large Retail Food 1,800 33% 1.7% 80% 15
R-502 R-502 Large Retail Food 1,800 33% 1.7% 80% 15
R-22 R-502 Large Retail Food 1,800 30% 1.7% 80% 15
R-22 HCFC-22 Medium Retail Food 3 8% 1.7% 80% 20

R-22 R-12 Small Retail Food 1 8% 1.7% 35% 20

R-22 R-12 Transport 8 28% 2.5% 35% 12
R-402A R-12 Transport 8 28% 2.5% 35% 12
R-401A R-502 Transport 8 28% 2.5% 10% 12

R-502 R-502 Transport 8 33% 2.5% 10% 12

R-22 R-11 Industrial Process Re frigeration 952 10% 2.5% 80% 25
R-22 R-12 Industrial Process Re frigeration 992 10% 2.5% 80% 25
R-401A R-12 Industrial Process Re frigeration 850 5% 2.5% 90% 25

R-22 R-22 Industrial Process Refr igeration 9,100 12% 2.5% 80% 25 Source: VM IO File_11-12-2007

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 products entering the market. For example, in the window un its market, any year’s consumption for new equipment 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. Only those end-uses that have been using R-22, or have in whole or in part transitioned to use R22, are shown. The first column of the table pres ents the R-22 equipment types by the refrigerants that

December 2009 Page 32The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- they originally used. The second column presents t he refrigerants that enter the market and are used in new equipment in place of R-22. 23 These refrigerants begin to enter the new-equipment market in the year presented in the third column and fully penetrate this market by the date presented in the fourth column. The final column indicates the percent of the R-22 new-equipment market that the given substitute refrigerant replaces by the transition end date. All transitions are assumed to occur linearly between the transition start and end dates. By combining multiple transitions to different refrigerants and over different time periods, the Vintaging Model mimi cs actual, non-linear transitions that may occur.

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

1 2 3 4 5

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

HCFC-22 Residential Unitary AC R-407C 2006 2009 1%

2009 2010 5%

R-410A 2001 2005 5%

2006 2009 8%

2009 2010 81%

HCFC-22 Small Commercial Unitary AC R-410A 1996 2000 3%

2001 2005 18%

2006 2009 8%
2009 2010 71%

HCFC-22 Large Commercial Unitary AC R-407C 2006 2009 1%

2009 2010 5%

R-410A 2001 2005 5%

2006 2009 9%

2009 2010 81%

HCFC-22 Water & Ground Source Heat Pumps R-407C 2000 2006 5%
2006 2009 3%
2009 2010 23%

R-410A 2001 2006 5%
2006 2009 5%
2009 2010 41%

R-134a 2000 2009 2%
2009 2010 18%

HCFC-22 Dehumidifiers R-134a 1997 1997 89%

R-410A 2007 2010 11%

HCFC-22 Packaged Terminal Units R-410A 2006 2009 10%

2009 2010 90%

HCFC-22 Window Units R-407C 2003 2009 3%

2009 2010 35%

R-410A 2003 2009 7%

2009 2010 55%
CFC-12 Tour Buses R-134a 2006 2007 100%
HCFC-22 Transit Buses R-134a 1995 2009 100%

HCFC-22 Trains R-134a 2002 2009 50%
R-407 2002 2009 50%

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

December 2009 Page 33The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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1 2 3 4 5

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

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

R-507A 1996 2010 25%

HCFC-22 Cold Storage R-404A 1996 2009 8%
2009 2010 68%

R-507A 1996 2009 3%

2009 2010 23%

R-502 Cold Storage R-404A 1996 2010 38%

R-507A 1996 2010 12%

Other 1996 2010 50%

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

CFC-12 Industrial Proc ess Refrigeration R-134a 1995 2010 15%

R-404A 1995 2010 50%

R-410A 1999 2010 20%

R-507A 1995 2010 15%

HCFC-22 Industrial Process Refrigeration R-134a 1995 2009 2%

2009 2010 14%

R-404A 1995 2009 5%

2009 2010 45%

R-410A 1999 2009 2%

2009 2010 18%

R-507A 1995 2009 2%

2009 2010 14%

CFC-12 Retail Food R-404A 2000 2009 8%

R-507A 2000 2009 3%
R-134a 1993 1995 90%

HCFC-22 Retail Food R-404A 1995 2000 18%

2000 2005 32%

2005 2010 18%

R-507A 1995 2000 8%

2000 2005 14%
2005 2010 12%

R-502 Retail Food R-404A 1995 2000 18%
2000 2005 32%
2005 2010 18%

R-507A 1995 2000 8%
2000 2005 14%
2005 2010 12% CFC-12 Transport R-134a 1995 1999 100%

R-502 Transport c R-134a 1993 1995 55%
R-404A 1993 1995 45%

HCFC-22 Screw Chillers R-134a 2000 2009 9%
2009 2010 81%

R-407C 2000 2009 1%
2009 2010 9%
HCFC-22 Scroll Chillers R-134a 2000 2009 9%

December 2009 Page 34The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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1 2 3 4 5

R-22 Eq uip m en t Ty pe an d Market Penetra t ion of Substi tu te Start Da te End Da te Origi n al ODS Refrigerant Substi tu te b

2009 2010 81 %

R-407C 2000 2009 1 %
2009 2010 9 % CFC-12 Recipro c

ating Chillers R-410A 2010 2020 40 % CFC-11 Centrifugal Chillers R-134a 2000 2010 100 % CFC-12 Centrifugal Chillers R-134a 2000 2010 100 %

R-500 Chillers R-134a 2000 2010 100 %
Source: VM IO File_11-12-2007

a Interim transitions (e.g., from a CFC to HCFC-22 to HFCs) are not shown. For example, the retail food new-equipment market tha t originally used R-12 first transitioned from R-12 to R-502 and then to R-22. Then, between 1995 and 2010, 67 percent of the R- 22 newequipment market is assumed to transition to R-404A and the remaining 33 percent to R-507A.

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

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



## A.2 Limitations and Caveats

This analysis utilized the best data available fr om various sources. Nonetheless, when making projections several assumptions are required. The following caveats should be noted.

Recycled or Reclaimed Refrigerant EPA’s Vintaging Model was used to deter mine the quantities of R-22 from existing (recycled or reclaimed) sources that can meet post-2010 servicing needs an d 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. 24 The model aggregates the quantities recovered but does not disti nguish the “pool” of refr igerant between quantities that are reclaimed versus those that are recycled. The model then assumes that the entire pool of recovered refrigerant re-enters the market within the same year. Any additional demand for refrigerant above that which is assumed to be met by recovered refr igerant is calculated to be virgin manufacture. The recovery pool and the remaining virgin manufacture are evaluated only at the most aggregate level, across all end-uses, and not at the end-use level, as the model does not differentiate between virgin and recycled refrigerant when calculating demand for each end-use. This model attribute 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 retailed to the overall AC and refrigeration industry.

Under this modeled approach, the model does not cons ider the quantity of refrigerant that companies send off for destruction after equipment is deco mmissioned. 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. Additionally, the model does not account for any stockpiling of recovered refrigerant beyond a one-year ti meframe, as discussed in Section 4.3. To the extent that stockpiling has occurred over the last few year s, the quantity of recovered refrigerant modeled as re-entering the market may be overestimated in ea rlier years (i.e., when refrigerant is banked), and the quantity modeled as re-entering the market in later years may be underestimated (i.e., when the accumulated stockpile is accessed as a source).

24 In the base model, the percentage recover ed at disposal varies by end-use; however, for the recovery scenarios presented in th is report (e.g. Scenario 20 and Scenario 50), this variable was set at a constant percent.

December 2009 Page 35The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 36 Pre-Charged Appliance Components Part of the policy-setting process is the determinati on allowing the sale and distribution after January 1, 2010, of R-22 pre-charged appliance components (e.g ., condensing units, line sets, expansion valves) that are manufactured before January 1, 2010, and used for the purpose of servicing existing (installed pre-2010) appliances. Existing R-22 equipment remain ing in the installed base may be serviced with components that were made and pre-charged before 2010. The model assumes that some refrigerant is required at service, but does not distinguish whether this refrigerant comes within pre-charged components or is added from bulk quantities (e.g. cylinders).

The Vintaging Model assumes that components will cont inue to be available for usual repairs of existing equipment; average lifetimes for R-22 equipment assum ed in the Vintaging model account for variations in the useful life of equipment caused by early retirement, extended use, or the use of replacement parts during servicing. Hence, the analysis presented in th is report reflects a situation where the sale and distribution of either a) pre-charged appliance co mponents, or b) uncharged appliance components and refrigerant from bulk quantities is available for repa ir of the installed based in 2010 and beyond. If the analysis were to reflect otherwise, the average lifetimes of equipment would have to be truncated to account for early retirement associated with the lack of availability of appliance components (and/or refrigerant) for basic repair jobs.

Date of Sale versus Date of Installation of HCFC-22 Units It is feasible and potentially common for some AC and refrigeration appliances to be purchased in one year and installed in another year. Such would be the case, for example, for units designated for construction projects that have received building code approval and entered into a binding contract in one year but are completed in some future year. The Vintaging Model relies on shipment data of newly sold AC and refrigeration equipment to help estimate ne w units entering the market for a given year. Adjustments to shipment data to reflect the date of installation are not made—shipment data is the closest and best proxy to installation for the purposes of modeling. Thus, the model assumes the year of installation to be the same as the year of shipme nt. Any equipment modeled as “shipped” in 2009, for example, is therefore already inclusive of equipm ent installed post 2010. Upon installation, equipment lifetime and servicing demand begin to be modeled.

It is assumed in the model that the entire fleet of 2009 units within a given end-use are being retired in the same year, whereas, in reality some of these units may instead be installed a year or two after shipment, starting their lifetime and servicing demand a year or two after the shipment date, and hence, retiring a year or two after the retirement of the rest of the fl eet. Therefore, the model is not accurately reflecting the actual start and end date for servicing demand for th is subset of equipment. Instead, the model uses an average lifetime for each unique equipment type. Th is average is intended to account for units that are used for a few years as well as those that are used well beyond their assumed useful life. Given the use of an average lifetime in the model, variations of a year or two between shipment and installation date should fall within “normal” fluctuations in lifetime seen in actual equipment use. Additionally, residential and smaller commercial refrigeration and AC appliances have lifetimes of 15 years or shorter. Thus, any such equipment entering the market after 2005 is assumed to remain in service beyond 2020, when all HCFC-22 consumption will be phased out in the United States. Likewise, equipment entering the market in 2010 or 2011 would be assumed to be in service well beyond the 2020 milestone.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# Appendix B: HCFC Projections by End-Use

This Appendix provides estimates of the projected installed base of R-22 equipment by end-use and the projected quantities of R-22 needed to service AC an d refrigeration equipment. Descriptions of end-uses are provided in Section 3 of the report. For the purpose of this analysis, data on HCFC blend consumption for servicing are divided among the co rresponding HCFC constituent(s) of that blend, according to the nominal percent composition. Ho wever, to accurately portray the number of units containing R-22, blends are not di saggregated when presenting the number of units of equipment (i.e., a unit running on a blend containing HCFC-22 counts as one unit).

Table B-1 presents the number of units of equipmen t using R-22 (or a blend containing R-22) that are estimated to be in use in 2007, 2010, 2015, and 2020. These es timates were developed based on EPA’s Vintaging Model, which takes into account recent input from industry repr esentatives (EPA 2007a). 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 a Equipment Type 2007 2010 2015 2020

Window Units 75,031,300 74,178,600 41,559,500 4,102,700 Packaged Terminal Units 2,719,200 2,478,800 1,355,100 123,100 Residential Unitary AC 51,500,000 46,884,600 29,197,700 10,709,100 Small Commercial Unitary AC 18,821,200 17,097,500 10,666,800 4,291,400 Large Commercial Unitary AC 1,982,200 1,849,900 1,208,600 505,200
Chillers 417,500 443,900 326,300 202,800

Dehumidifiers 1,453,300 1,282,100 670,200 0 Water & Ground Source Heat Pumps 1,445,700 1,392,000 1,058,200 681,000 Other Mobile AC (Bus & Train AC) 44,900 25,900 6,700 0

Subtotal AC 153,415,300 145,633,300 86,049,100 20,615,300

Retail Food 4,452,900 3,770,900 2,107,300 924,700 Refrigerated Transport 4,900 0 0 0 Industrial Process Refrigeration 8,500 8,700 7,500 5,600
Subtotal Refrigeration 4,466,300 3,779,600 2,114,800 930,300

Total 157,881,600 149,412,900 88,163,900 21,545,600

a Cold Storage is not shown in this table because t he model estimates this end-use based on cubic feet of storage, rather than number of units.

Table B-2 presents the metric tons of R-22 esti mated to be needed to service AC and refrigeration equipment in 2007, 2010, 2015, and 2020.

December 2009 Page 37The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 38 Table B-2: Projected R-22 Servicing Demand (Metric Tons) Equipment Type 2007 2010 2015 2020
Window Units 300 300 100 <50 Packaged Terminal Units 100 100 <50 <50 Residential Unitary AC 21,700 20,700 13,500 6,100 Small Commercial Unitary AC 15,600 14,100 8,800 3,500 Large Commercial Unitary AC 3,000 2,800 1,800 800

Chillers 3,300 3,300 1,300 700
Dehumidifiers <50 <50 <50 0 Water & Ground Source Heat Pumps 300 300 200 100 Other Mobile AC (Bus & Train AC) 200 100 <50 0

Total AC 44,500 41,700 25,900 11,300 Cold Storage 1,100 1,100 800 600
Retail Food 14,300 10,900 4,900 1,100 Refrigerated Transport <50 0 0 0 Industrial Process Refrigeration 8,800 8,900 7,200 5,400
Total Refrigeration 24,200 20,800 12,800 7,000

Total 68,700 62,500 38,800 18,200 Note: Totals do not sum due to independent rounding.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# Appendix C: Additional “Recovery Rate” Scenarios

This report closely examines two scenarios of the potential amounts of used and recovered refrigerant available to service equipment—Scenarios 20 and 50, which assume that 20 and 50 percent, respectively, of refrigerant from retired or retrof itted equipment is recovered and reused in equipment while the remainder is not available for reuse. Appendix C includes three additional scenarios, representing the lower and higher recovery rate s of 10 and 15 and 75 percent, respectively.

Tables C-1 through C-3 summarize the lower (Scenarios 10 and 15) and higher (Scenario 75) scenarios in comparison to the U.S. HCFC consumption cap a nd the actual U.S. HCFC c onsumption allocations for HCFC-22 in 2010. As shown in Tables C-1 and C-2, the projection of recovered supply under a 10% and 15% recovery rate scenario is insufficient to meet demand in 2015 and 2020 leading to shortfalls.

Table C-1: Scenario 10: 10% Recovery Rate: Summary of Projected R-22 Supply, Demand, and Surplus (R-22 Metric Tons)
2010 2011 2012 2013 2014 2015 2020 Projected R-22 Servicing Demand Summary a Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200 Modeled R-22 supplied from recovery/reuse 3,000 4,100 4,200 4,200 4,300 4,400 4,200 % of total R-22 servicing demand supplied by anticipated recovery/reuse 5% 7% 8% 9% 10% 11% 23%

Modeled R-22 supplied from virgin R-22 59,500 53,800 49,000 44,200 39,300 34,400 14,100 Comparison to HCFC Consumption Cap Virgin R-22 supply available under cap b 69,273 69,273 69,273 69,273 69,273 27,709 0 d Modeled R-22 supplied from virgin R-22 59,500 53,800 49,000 44,200 39,300 34,400 14,100
Additional virgin R-22 allowable under cap c 9,773 15,473 20,273 25,073 29,973 -6,691 -14,100

a Based on modeling assump tions using EPA, 2007a.

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

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

d In 2020, a cap equal to 0.5 percent of the U.S. consumption baseline remains; however, the phaseout schedule in 2020 prevents a ny

allocation of the remaining baseline to R-22.

Table C-2: Scenario 15: 15% Recovery Rate: Summary of Projected R-22 Supply, Demand, and Surplus (R-22 Metric Tons)
2010 2011 2012 2013 2014 2015 2020 Projected R-22 Servicing Demand Summary a Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200 Modeled R-22 supplied from recovery/reuse 4,400 6,100 6,200 6,300 6,500 6,600 6,200 % of total R-22 servicing demand supplied by anticipated recovery/reuse 7% 11% 12% 13% 15% 17% 34%

Modeled R-22 supplied from virgin R-22 58,100 51,700 47,000 42,100 37,100 32,200 12,000 Comparison to HCFC Consumption Cap Virgin R-22 supply available under cap b 69,273 69,273 69,273 69,273 69,273 27,709 0 d Modeled R-22 supplied from virgin R-22 58,100 51,700 47,000 42,100 37,100 32,200 12,000
Additional virgin R-22 allowable under cap c 11,173 17,573 22,273 27,173 32,173 -4,491 -12,000

a Based on modeling assump tions using EPA, 2007a.

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

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

d In 2020, a cap equal to 0.5 percent of the U.S. consumption baseline remains; however, the phaseout schedule in 2020 prevents a ny allocation of the remaining baseline to R-22.

December 2009 Page 39The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- As shown in Table C-3, the projection of recovered supply under a 75% recovery rate scenario illustrates that industry should have adequate supply if 75 percent of refrigerant from retired or converted equipment is recovered and re-enters the pool of re frigerant available to meet demand.

Table C-3: Scenario 75: 75% Recovery Rate: Summary of Projected R-22 Supply, Demand, and Surplus (R-22 Metric Tons)

2010 2011 2012 2013 2014 2015 2020 Projected R-22 Servicing Demand Summary a Total R-22 servicing demand 62,500 57,900 53,200 48,400 43,600 38,800 18,200 Modeled R-22 supplied from recovery/reuse 22,200 30,700 31,200 31,700 32,400 33,000 31,200 % of total R-22 servicing demand supplied by anticipated recovery/reuse 36% 53% 59% 65% 74% 85% >100%

Modeled R-22 supplied from virgin R-22 40,300 27,200 22,000 16,700 11,200 5,800 0 Comparison to HCFC Consumption Cap Virgin R-22 supply available under cap b 69,273 69,273 69,273 69,273 69,273 27,709 0 c Modeled R-22 supplied from virgin R-22 40,300 27,200 22,000 16,700 11,200 5,800 0
Additional virgin R-22 allowable under cap 28,973 42,073 47,273 52,573 58,073 21,909 0

a Based on modeling assump tions using EPA, 2007a.

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

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

Figures C-1 through C-3 illustrate the information provided in Tables C-1 through and C-3.

Figure C-1: Total Projected R-22 Servicing Demand, Recovery Scenario 10 a, b

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 baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22.

December 2009 Page 40The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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Figure C-2: Total Projected R-22 Servicing Demand, Recovery Scenario 15 a, b

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 baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22.

Figure C-3: Total Projected R-22 Servicing Demand, Recovery Scenario 75 a, b

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 baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22.

December 2009 Page 41The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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December 2009 Page 42 Table C-4 provides a summary of all five scenarios presented in this report to illustrate how recovered and virgin projected servicing supplies range with res pect to meeting demand based on the different rates of recovery analyzed.

Table C-4: Comparison of HCFC-22 Servicing Demand Projections (Metric Tons) and Necessary Supply Projections by Source (Metric Tons and Percent), 2010, 2015, 2020

Year Cap a Demand Necessary Supply Recovery Rate

Scenarios Recovered Virgin Shortfall

2010 69,273 62,500 Scenario 10 3,000 (5%) 59,500 (95%) 0 (0%)
Scenario 15 4,400 (7%) 58,100 (93%) 0 (0%)
Scenario 20 5,900 (9% 56,600 (91%) 0 (0%)
Scenario 50 14,800 (24%) 47,700 (76%) 0 (0%)

Scenario 75 22,300 (36%) 40,200 (64%) 0 (0%)

2015 27,709 38,800 Scenario 10 4,400 (11%) 34,400 (89%) 6,690 (17%)
Scenario 15 6,600 (17%) 32,200 (83%) 4,490 (12%)
Scenario 20 8,800 (23%) 30,000 (77%) 2,290 (6%)
Scenario 50 22,000 (57%) 16,800 (43%) 0 (0%)
Scenario 75 33,000 (85%) 5,700 (15%) 0 (0%)

2020 0 18,200 Scenario 10 4,200 (23%) 14,100 (77%) 14,100 (77%)
Scenario 15 6,200 (34%) 12,000 (66%) 12,000 (66%)
Scenario 20 8,300 (46%) 9,900 (54%) 9,900 (54%)
Scenario 50 18,200 (100%) 0 (0%) 0 (0%)
Scenario 75 31,200 (>100%) 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 2020, 0.5 percent of the U.S. consumption baseline remains; however, the phaseout schedule in 2020 prevents any allocation of the remaining baseline to R-22. Source: Based on modeling a ssumptions usi ng EPA, 2007a.The U.S Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector

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# 6. References

Airgas. 2006. Personal communication between Lauren Flinn, ICF International, and Bob Mueller, Director, Utility & CPI Industries, Airgas. August 2006.

The Alliance for Responsibl e Atmospheric Policy. 2006. Comment submitted in response to EPA’s Notice of Data Availability (NODA, 70 FR 67172), November 4, 2005. EDoc ket ID Number, OAR-2003- 0130, Document ID No. 0172, 0174, January 19, 2006, January 26, 2006.

Amtrak. 2005. Email correspondence between Ilir iana Mushkolaj, ICF Consulting and Madina Alharazim, Amtrak. July 2005.

ARI. 2005. Personal communication and transcribed correspondence between Lauren Flinn, ICF Consulting and Karim Amrane, Air-Conditioning and Refrig eration Institute (ARI). March to June 2005.

Arkema. 2009. Comment submitted in response to EPA’s Notice of Data Availability (NODA, 40 FR Part 82). December 23, 2008. EDocket ID Number, OA R-2008-0496, Document ID No. 0111.1, March, 9,
2009.

Carrier Corporation. 2005a. Personal communication and transcribed correspondence between Lauren Flinn, ICF Consulting and Fred Keller, Carrier Corporation. June 2005.

Carrier Corporation. 2005b. Personal communication between Iliriana Mushkolaj, ICF Consulting and Chris Repice, Carrier Corporation. June 2005.

Cold Ships. 2009. Personal communication between Lauren Flinn, ICF International and Gerald Donovan, Cold Ships. October, 2009.

DOE. 2004. Department of Energy Press Release. “Energy Department Will Enforce 13 SEER Air Conditioner Standard.” Number R-04-064. April 2, 2004.

DOE. 2001. Federal Register. “Consumer produ cts; energy conservation program: Central air conditioners and central air conditioning heat pumps —Energy conservation standards; Final Rule.” Volume 66, Number 14. January 22, 2001. 10 CFR, Part 430. Available at http://frwebgate.access.gpo.gov/c gi-bin/getdoc.cgi?dbname=2001_register&docid=01-1790-filed

Dyslin, John. Refrigerants in Flux. 2006. RSES Journal. June 2006.

Emerson, 2007. Emerson Survey Gauges Industry Readiness for 2010 Phaseout of R-22 Equipment. November, 29, 2007. Available at: http://w ww.emersonclimate.com/NEWS/News/CC_002238.htm

EPA. 2009. Summary of Refrigerant Re clamation 2000-2008. Available at http://www.epa.gov/ozone/title6/608/reclamat ion/recsum.pdf. Accessed July 2009.

EPA. 2007a. U.S. EPA Vintaging Model . Version VM IO file 11-12-07_ALL.

EPA. 2007b. HCFC Phaseout Schedule. Available at <http://www.epa.gov/ozone/title6/phaseout/hcfc. html>. Accessed December 2007.

EPA. 2004a. Federal Register. “Prote ction of Stratospheric Ozone: Re frigerant Recycling: Substitute Refrigerants; Final Rule.” Volume 69, Number 49. Ma rch 12, 2004. 40 CFR, Part 82. Available online at http://www.epa.gov/ozone/title6/ 608/regulations/69fr11946.pdf.

EPA. 2004b. “Analysis of Costs to Abate Inter national Ozone-Depleting Substance Substitute Emissions.” Office of Air and Ra diation, U.S. Environmental Prot ection Agency, Report No. EPA 430-R04-006. Washington, DC, June 2004.

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EPA. 2003a. Federal Register. “Protecti on of Stratospheric Ozone: Allowance System for Controlling HCFC Production, Import and Expor t.” Volume 68, Number 13. January 23, 2003. 40 CFR, Part 82. Available at http:// www.epa.gov/ozone/title6/phaseout/68fr2819.pdf.

EPA. 2003b. “Regulatory Impact Anal ysis: The Substitutes Recycling Rule (Section 608 of the Clean Air Act Amendments of 1990).” September 16, 2003. U.S. EPA, Global Programs Division, Office of Air and
Radiation.

FMI. 1995. Guidelines for the Use of Alternative Refrigerants in the Supermarket . The Education and Research Departments, Food Marketing Institute. Released September 1995.

Greyhound. 2005. Personal communication between Iliriana Mushkolaj, ICF Consulting and Mario Nava, Greyhound. June 2005.

HARDI. 2009. Comment submitted in response to EPA’s No tice of Data Availability (NODA, 40 FR Part 82). December 23, 2008. EDocket ID Number, OA R-2008-0496, Document ID No. 0117.1, March, 9,
2009.

HARDI. 2005. Personal communication and transc ribed correspondence between Lauren Flinn, ICF Consulting and Bud Healy, Heating, Airconditioning & Refrigeration Distributor s International (HARDI). February 2005.

HARDI. 2004. The Status of Refrigerant 410A For New A/C Equipment . Heating, Air-conditioning, & Refrigeration Distributors Internatio nal (HARDI), Refrigeration Systems Council Report to Industry. March 15, 2004.

Hill Phoenix. 2009. Personal communication between Em ily Herzog, ICF International and Scott Martin, Hill Phoenix. May 2009.

Hill Phoenix. 2005. Personal communication and transcribed correspondence between Lauren Flinn, ICF Consulting and Scott Martin, Hill Phoenix. February and June 2005.

Home Energy Center. 2006. Personal communication between Charlotte Coultrap-Bagg, ICF International and Steve Woolery, Home Energy Center. August 23, 2006.

Honeywell. 2005. Personal communication and tr anscribed correspondence between Mollie Averyt, ICF Consulting and David Metcalf and Steven Bernhardt, Honeywell. February 2005.

Hussmann/Ingresoll Rand. 2009. Personal communication between Julia Forge, ICF International, and Bryan Ware, Hussman/Ingersoll Rand. July 2009.

Johnson Controls, 2009. Personal communication between Lauren Flinn, ICF International and Chris Forth, Johnson Controls.

Kysor/Warren. 2009. Personal communication between Emily Herzog, ICF International, and Travis Lumpkin, Kysor/Warren. May 2009.

Motorcoach Training. 2005. Personal communication and transcribed correspondence between Lauren Flinn, ICF Consulting and Joe Pemberton, Motorcoach Training. June to July 2005.

NASA. 2008. Personal communication and transc ribed corres pondence between Lauren Smith, ICF International, and David Walla ce, NASA. March 2008.

National Refrigerants, Inc. 2006. Comments submitte d in response to EPA’s Notice of Data Availability (NODA, 70 FR 67172), November 4, 2005. EDocke t ID Number, OAR-2003-0130, Document ID No. 0170, 0170.1, January 2, 2006.

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December 2009 Page 45 Skaer, Mark. 2007. Average SEERs Rise in Residential Sector. Air Conditioning, Heating & Refrigeration News. September 10, 2007.

UNEP. 2003a. Report of the Technology and Economic Assessment Panel of the Montreal Protocol, TEAP HCFC Task Force, May 2003. Ozone Secretar iat, United Nations Environment Programme. Available online at: http://ozone.unep.org /teap/Reports/Other_Ta sk_Force/HCFC03R1.pdf.

UNEP. 2003b. Handbook for the International Treaties for the Protection of the Ozone Layer. Sixth
Edition. United Nations Environment Programme, Ozone Secretariat. Available online at http://www.unep.org/ozone/Handbook2003.shtml.

UNEP. 2000. The Montreal Protocol on Substances that Deplete the Ozone Layer. Ozone Secretariat. United Nations Environment Programme. Available online at http ://ozone.unep.org/pdfs/MontrealProtocol2000.pdf.

US Census Bureau. 2009. U.S. International Trade Commission (USITC) Data Web. Accessed August 2009 from <http://dataweb.usitc.gov>.

U.S. HCFC Manufacturer Representatives. 2009. Pe rsonal communications between ICF International and HCFC manufacturers, including Halon Alternativ es Research Corporation (HARC) and Honeywell. January-July 2009.

U.S. HCFC Manufacturer Representatives. 2008. Pe rsonal communications between ICF International and HCFC manufacturers, including AGC Chemicals, Honeywell, DuPont, Kivlan, Solvay, and York. February – March, 2008.

Verisae. 2009. Personal communication between Emily Herzog, ICF International, and Ted Gartland, Verisae. May 2009.

WMATA. 2005. Email correspondence between Lauren Flinn, ICF Consulting and Joan Lelacheur, Washington Metro Area Transit Authority. June 2005.