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Refrigerant price increases “unjustified”

ITALY: Two of Italy’s leading associations have called on the Italian competition authority to investigate what they describe as “unjustified” and “disproportionate” increases in refrigerant prices.

In a joint submission, the air conditioning and refrigeration contractors body Assofrigoristi and CNA Installazione e impianti, the national confederation of SMEs, has asked the AGCM, Italy’s competition and market guarantee commission, to investigate what they describe as potential illegal behaviour by refrigerant producers and distributors.

European prices of all medium and high GWP refrigerants have risen dramatically this year in anticipation of the 37% cut in CO2e required next year under the European F-gas regulations.

Assofrigoristi and CNA claim that there are “no plausible reasons” for the price increases of up to ten-fold this year, which, they say, have “created serious competitive disadvantages throughout the industry in general and in particular to small businesses”.

Describing the increases as “unjustifiable”, the association’s maintain that the rises “are clearly in contravention of competition rules”.

The groups recognise that R404A and R507, the most common commercial refrigerants in Italy, can no longer be used from 2022, while the air conditioning refrigerant R410A has a ban that prevents its use from 2025 in single splits containing under 3kg of refrigerant. Due to this and the large quota cut in 2018, they argue that a reduction in availability and a rise in the prices of traditional HFCs was expected. However, the say, “Although it is clearly necessary to make a transition to new refrigerants as indicated in regulation 517/14, the first prohibitions were set in 2020 and by 2025 there are no plausible reasons for determining such price dynamics.”

Perfect storm

The cap and phase down under the European F-gas regulations is based on CO2 equivalents. This means that refrigerant producers and suppliers, operating under a quota system, are effectively able to place on the market far more low GWP refrigerants than the higher GWP gases.

The “perfect storm” of the swingeing cut in the HFC quotas next year means suppliers need to juggle production and import quotas. Industry leaders have long urged a rapid transition away from high GWP gases and warned of high price rises and possible scarcity of some gases.

Honeywell, one of the main refrigerant producers has already announced that it will cease all sales of R404A and R507 in Europe from next year and, last week, Irish distributor RSL announced it was to cease sales of R404A when its current stocks were exhausted.

Related stories:

RSL to end sales of R404A – 27 September 2017
IRELAND: Leading Irish refrigeration and air conditioning wholesaler RSL is to end sales of high GWP refrigerants R404A and R507. Read more…

R404A units still sell despite warnings – 2 July 2017
UK: As the UK’s leading refrigeration wholesalers announce another round of HFC price increases, a major supplier implores the industry to stop using R404A in new equipment. Read more…

Price of R404A to double next month – 17 June 2017
EUROPE: Chemours is to double the price of high GWP refrigerants R404A and R507 from next month as the European F-gas phase-down really begins to bite. Read more…

Retailers heading for refrigerant “shock” – 15 June 2017
UK: Green group EIA has added its voice to warnings that some retailers are heading for a major financial shock when drastic cuts in supplies of HFC refrigerants kick in. Read more…

R404A will be scarce and more expensive – 4 April 2017
UK: Refrigerant suppliers insist that they are not “crying wolf” with dire warnings about the future availability of high GWP refrigerants like R404A. Read more…

Honeywell to stop sales of R404A – 10 April 2017
EUROPE: Honeywell says it intends to stop selling the high GWP refrigerants R404A and R507 in Europe from next year. Read more…

Switch now to low GWP refrigerants – 19 December 2016
NETHERLANDS: Despite figures that suggest Europe is within the F-gas phase down limits, concerns remain that industry is failing to switch fast enough to low GWP refrigerants. Read more…

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