Think HBR

How can Hunter businesses lessen the impact of HCFC’s phase out?

Damon Lazarus
Grosvenor Engineering Group
In 1987 an international agreement called the Montreal Protocol was established to set the timeframe for the worldwide phase out of ozone-depleting CFCs (chlorofluorocarbons).
R22 (also known as HCFC-22) has been a widely used refrigerant in heat pump and air-conditioning systems for more than four decades. However, releases of R-22, for example from leaks, are detrimental to the environment and contribute to ozone depletion.
R-22 is a greenhouse gas and the manufacture of R-22 results in a by-product (HFC-23) that contributes significantly to global warming.
CFCs are now virtually phased out and refrigerant stockpiles are nearly exhausted. The current phase-out dates for HCFCs for developed countries, which include Australia, stand at:
• Freeze from beginning of 1996 (Based on 1989 HCFC consumption, with an extra allowance (ODP weighted) equal to 2.8% of 1989 CFC consumption)
• 35% reduction by 2004
• 75% reduction by 2010
• 90% reduction by 2015
• Total phase out by 2020 (Up to 0.5% of base level
consumption can be used until 2030 for servicing existing equipment, subject to review in 2015). Over the years, the phase-out timetable for ozone depleting substances has come under constant revision, with phase-out dates accelerated in accordance with scientific understanding and technological advances.
Businesses that rely on or have large mechanical systems need to understand the potential impact of the Montreal Protocol and how this is likely to affect their facilities management budgets and capital expenditure requirements. The looming lack of availability combined with rapidly rising costs of R22 becoming a reality in the near future, building owners need to start evaluating their exposure and plan to control their business risk now.
It is important to recognise that there is no ‘one size fits all’ solution for the wide range of R22 applications that exist. In the short term, particularly if your equipment is relatively new, it may be feasible to continue using R22 while there are still readily available supplies. Business who fit into this category should review refrigerant costs over time so they can set a price-point upon which they would invoke the long-term changes that will sustain their business operations.
An alternative short to medium term plan is to retrofit existing equipment to a HFC based refrigerant such as R407C. This approach is most suitable in the early to mid-stages of the equipment life cycle.
The last alternative is to take the long term view and replace the existing HVAC system with new HFC equipment. Of course this represents a higher and immediate capital expense, though to some extent this will be offset by the new equipment being more energy efficient. Making these changes now, before a major equipment failure, allows you to minimise equipment downtime, reduce unplanned capital expenditure and control your risk to business operations.
For further information contact Damon Lazarus on 1800 807 423, email or visit
Damon Lazarus2 Damon Lazarus

Is the General Manager of Grosvenor Engineering Group North West NSW. Damon holds a Degree in Business Administration, is a Certified Practicing Project Manager (CPPM) with the Australian Institute.
He is a longstanding member of the Australian Institute of Project Management (MAIPM) and Member of the Australian Institute of Company Directors (MAICD).