A number of apartment firms have been notified by suppliers to anticipate sharply escalating prices on R-22 refrigerant because of highly constrained supplies. Federal regulations are phasing out R-22 because of its ozone-destroying properties, although the current supply disruption was not anticipated. Since 2010, it has been illegal for manufacturers to ship new HVAC appliances charged with R-22. EPA will continue to allocate the production and importation of R-22 for use in existing equipment through 2020. After that date, only recycled R-22 will be available to service existing equipment.
While R-22 production will ultimately be phased out, in the interim, federal regulators have confirmed their intention to ensure adequate supplies of R-22 are available to service equipment currently in use. However, because manufacturers reports reduced demand for R-22 last year, EPA proposed resetting the allocation level to reflect the reduced demand. In January, EPA issued an interim proposal that temporarily reduced the amount that can be produced or imported between 2012 and 2014 by 45%.
This steep reduction has sent shock waves through the air conditioning/refrigeration service industry due to uncertainty over how to price the product. Prices will remain volatile until EPA expected to issues the final allocation determination until later this summer. It is anticipated that R-22 allocations will be reduced between 11% and 47% from the previous level. As we near 2020, the cutoff date for importation and manufacture of R-22, pricing will become more volatile as equipment servicing will be reliant on available supplies of recycled R-22. (NMHC/NAA’s industry partner, the Air Conditioning Contractors Association, has shared this guidance with additional information on the market disruption.)
In the wake of these market disruptions, property owners and managers have looked for alternative refrigerants to keep their systems operating. Members are advised that the EPA has not approved certain “substitute” refrigerants available in the marketplace.
For example, 22A refrigerant, which contains a mixture containing propane and/or butane, is not an approved substitute refrigerant for use in residential central air conditioning systems or in chillers for commercial comfort A/C in commercial or industrial buildings. EPA officials have indicated that the agency has yet to receive the information and notification that the Clean Air Act requires before 22A refrigerant may be sold or imported into the U.S. as a substitute refrigerant and, as such, it appears that this refrigerant is being sold illegally.
A complete list of approved refrigerant alternatives is available at www.epa.gov/ozone/snap/refrigerants/index.html.
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