U.S. companies brace for climate-friendly alternatives in cooling systems

NEW YORK (Reuters) - U.S. chemical companies including Honeywell and Chemours Co are ramping up efforts to produce alternative coolants used in air-conditioners and refrigerators, following a global pact to reduce planet-warming greenhouse house gas emissions.

A view of the corporate sign outside the Honeywell International Automation and Control Solutions manufacturing plant in Golden Valley, Minnesota, January 28, 2010. REUTERS/Eric Miller/File Photo

On Saturday, some 150 nations struck a global agreement in Kigali, Rwanda, on ways to phase down hydrofluorocarbon (HFC) gases, which are currently used in air-cooling systems and refrigerators, and help curb the release of climate-warming emissions.

The accord is an amendment to the 1987 Montreal Protocol, which was aimed at stopping the depletion of the ozone layer. As part of a larger goal to globally reduce HFCs by 80 percent by 2047, signatories such as U.S., India and China have agreed to phase out the pollutants from cooling appliances starting 2019.

The agreement is a boon for chemical and equipment makers as it gives them “clarity and certainty” and will help speed up development and testing of HFC alternatives, which are already underway, Kevin Fay, executive director of the Alliance for Responsible Atmospheric Policy, a trade group that represents chemical and equipment manufacturers, said.

Honeywell began developing HFC alternatives as far back as 2000 and has invested $500 million to date, a company spokesman said. The company has committed $900 million in total.

The Morris Plains, New Jersey-based company has already begun producing HFC substitutes used for foam insulation, aerosols, commercial refrigerants, and chiller applications at two plants in Baton Rouge, Louisiana.

It has manufacturing partnerships with local producers in India, Japan and China to produce an alternative refrigerant used in automobile air conditioners called HFO-1234yf.

Honeywell is in the process of starting up 1234yf production at the Indian plant and its facility in Geismar, Louisiana, will roll out a commercial product in early 2017, the spokesman added.

Chemours, which was spun off from DuPont Co in 2015, said in May it will invest “millions of dollars” to set up a new plant to produce the 1234-yf auto refrigerant substitute in Corpus Christi, Texas.

A spokesman for Milwaukee-based Johnson Controls Inc., said the company is working on developing HFC alternatives but declined to provide details.

Equipment manufacturers will switch to making systems with alternative coolants as chemical makers produce new HFC substitutes, Francis Dietz, VP of public affairs at trade group Air Conditioning, Heating and Refrigeration Institute.

“It’s not a big shock to the system, it’s phased in a little at a time,” Dietz said.

As per the agreement, developed countries such as the United States have to move first to reduce HFCs, followed by developing nations who have been given a longer timeline and aid to meet the accord’s climate-friendly goal.

As companies in developed countries will have to scale up production of HFC alternatives and new cooling systems, any increase in costs to consumers will eventually come down, Durwood Zaelke, president of Institute for Governance and Sustainable Development, a sustainable development research and advocacy group.

“If you buy an AC, you use it for the average life of 10 years. Most of the cost is the electricity, the refrigerant is about one percent of the life cycle cost (of the AC).”

Reporting by Malathi Nayak; Editing by Sandra Maler