By Jim Taylor, Editor MACS ACtion Magazine
There has been a lot of speculation on the cost of the next refrigerant HFO-1234yf, and the situation isn’t getting any clearer. Some recent world events may further affect the situation. All of modern day refrigerants are constructed from a variety of chemicals, including many known as “rare earth” elements. Those aren’t particularly rare, but they are hard to get at, and China holds over 90 percent of the world supply of manganese, fluorspar, and other necessary ores. In recent years, that country has imposed a variety of taxes, license fees, tariffs and quotas on the export of their resources including the rare earths.
In 2009, several western nations including the U.S and Canada filed unfair trade practice complaints with the World Trade Organization (WTO). The group functions as a clearing house for developing policies and agreements for trade between nations. All the members agree to abide by the rules, and the rules make trade easier and more fair.
The WTO issued a judgment in July of this year, finding in favor of the plaintiffs and noting that China failed to abide by the organization’s rules for such fees. They also noted that the Chinese government “failed to justify those measures as legitimate conservation measures, environmental protection measures, or short supply measures.”
In view of the ruling, China still has options. It can change the government policy, or work out a settlement with the individual plaintiff nations. Under the rules, it can also appeal the initial decision to the Appeals Board, and (later) even appeal that board’s decision. Or it can defy the international community and keep on the present course. But any appeal or settlement will stretch out over a year or more, and refrigerant makers really can’t wait too much longer.
Writing in Motor Magazine’s e-newsletter, MACS convention correspondent Bob Chabot observes:
An adequate supply of automotive refrigerants and their raw materials will continue to be needed. A good portion will continue to be sourced from China, whether directly from Chinese plants or indirectly via raw materials shipped to other Chinese manufacturing facilities elsewhere. It boils down to China having what the rest of the world wants.
In the short term, that means there will be upwards pressure on automotive refrigerant wholesale pricing; even more so, should China take a “so what?” posture to the WTO decision and action. In dollars, that may result in double-digit increases for R-134a cylinders, which will translate to triple-digit increases for R-1234yf cylinders. [… ]
Anticipated higher R-1234yf refrigerant costs have also resulted in automakers designing tighter systems that use and leak less refrigerant. These systems also have much smaller refrigerant reserve charges — typically only 100 to 350 grams. The loss of that reserve determines ‘time until service.’
You can (and should) read all of Bob’s refrigerant articles at: www.motor.com/newsletters/20110824/WebFiles/20110824_MotorEnews.html
When having your mobile A/C system professionally serviced, insist on proper repair procedures and quality replacement parts. Insist on recovery and recycling so that refrigerant can be reused and not released into the atmosphere.
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The 32nd annual Mobile Air Conditioning Society (MACS) Worldwide Convention and Trade Show will take place January 18-20, 2012 at the Rio All Suite Hotel and Casino in Las Vegas, NV.