BY CHRIS COMBS

IIAR brought together more international members than ever before at the 2015 Industrial Refrigeration Conference & Exhibition in San Diego this year. And IIAR’s International Committee gathered members and delegates from around the globe to give a picture of the trends that are shaping the refrigeration industry worldwide.

Among the reports given at that meeting were in-depth overviews of energy cost and efficiency. Discussion also centered on political challenges in Australia and cold chain development in India and China, where environmental, regulatory and safety issues are often barriers to natural refrigerant adoption.

In Australia, solar energy use is booming. According to Stefan Jensen, the International Committee’s Regional Vice Chair for Australia and Oceania, nearly 40 percent of homes in that region now have solar panels. In Australia, where the unit price per kilowatt-hour of grid power continues to rise, homemade solar power – which represents only one third the cost of power from the electricity grid – has become a viable option for the country’s energy consumers.

As a result, consumption of electricity from the grid is dropping fast. And according to one large Australian cold storage company, that means that carbon neutral cold stores could become a reality within two- to five-years as battery cost falls and cold stores begin to see photovoltaics as an economically superior choice.

While investments in higher efficiency natural refrigerant systems pick up as energy unit prices climb, ammonia may begin to look like the most attractive option. To illustrate that point, Jensen cited an example where – assuming an estimated energy cost of 20 cents per kilowatt-hour – a $2 million dollar ammonia system installation would yield a return on investment in only five years.

Nevertheless, in Europe, energy is still too cheap to drive interest in efficiency in the same way it is driving the Australian market. Upgrading the power grid is a bigger priority now in Europe, where solar and wind energy sources are widely used, especially in Germany.

And the potential increase in energy efficiency alone has become a hard sell for ammonia-based systems, given the expectations for a short return on investment. Technology evolution is also making efficiency a less talkedabout issue because most system components on the market in Europe are already extremely efficient.

Instead, the European market is taking a more holistic approach to efficiency, focusing on the entire system. For example, optimization at full load design conditions, optimization for part load conditions and the use of smart controls.

And comprehensive approaches such as these are gaining attention elsewhere, including in Australia, where the Australian Refrigeration Association and other organizations launched a seminar series promoting the concept of Integrated Energy Efficiency Engineering in 2014. That series covered refrigeration and non-refrigeration costs and encompassed measurement, selection, design, integration, commissioning, operation maintenance and end of life system management.

Meanwhile, natural refrigerants face a number of political challenges to adoption in Australia, India and China where the technology offers some of the most efficient solutions for the cold chain.

In Australia, the current government eliminated its carbon tax and the associated levy on synthetic refrigerants, raising the hopes of proponents of natural refrigerants in that country and around the world.

But confused legislation, an inconsistent regulatory environment, mixed signals and lack of support from the government regarding the HFC phase down – as well as outdated standards –continue to plague Australia’s natural refrigerants market.

Other obstacles include the lack of technical expertise on low GWP refrigerants among educators and HVAC&R stakeholders and the promotion of synthetic refrigerant technologies by industry wholesalers.

Taken together, Jensen commented that these factors could mean that Australia is falling behind in terms of international efforts towards the HFC phase out.

In large developing countries like India and China, public policy continues to play a critical role in overcoming regional food industry challenges and in facilitating the development of the cold chain infrastructure.

In India, the government is increasing its support for the cold chain, but obstacles still remain for natural refrigerants. Although ammonia has been used for 100 years in the country, it is now banned in many urban areas due to safety concerns.

In addition, the country’s regulatory agencies and inspectors lack awareness about ammonia refrigeration. Complicating that issue, the country’s current standard for ammonia refrigeration, originally created in 1963, is out of date. However, progress on improving safety is being made. The Association of Ammonia Refrigeration in India, AAR, is now proposing a new ammonia standard based on IIAR standards as well as local input.

While some hurdles to natural refrigerant adoption remain in place, the Indian government does seem committed to developing the cold chain. That government’s 2014 and 2015 budgets targeted the agricultural and food chain sectors, and almost $800 million dollars were allocated in the 2014 budget for cold chain and warehousing development. A plan is also in place to allow for food production areas that are closer to cities to facilitate faster cold chain distribution.

Other 2014 items in the Indian budget that have the potential to benefit the cold chain include: rural power supply and transportation initiatives; new agricultural universities; almost $12 billion U.S. dollars for developing ports; subsidies for solar power development for refrigerated warehouses; and even the creation of a new TV channel to cover agricultural and cold chain development issues.

This year’s budget includes a number of tax reforms and incentives and other initiatives that should pave the way for increased investment in the cold chain as well as funding for a skills development program in India. Samir Shah, IIAR’s Regional Vice Chair for India and South Asia, commented that some of these initiatives should create more opportunities and tolerance for ammonia as a refrigerant.

As developing countries, India and China are advancing at breakneck speed, thanks to economic development and rising levels of affluence. Yet the barriers to natural refrigeration adoption are specific to each country.

China is also struggling with cold chain construction, yielding a high demand for efficient, low cost and environmentally friendly cold stores. But that demand is often stymied by local governments that are still reluctant to adopt ammonia in large projects.

Safety concerns surrounding ammonia are clearly part of that issue. A number of high profile ammonia incidents in 2013, which led to public hearings in 2014, have raised concerns about ammonia safety.

One byproduct of the heightened awareness around the safety issue is that CO2 could gain an edge over ammonia for future cold chain development, according to Guy Cloutier, the International Committee’s Regional Vice President for China.

Like India, China has a cold storage safety code, but it remains behind developed country standards. And complicating the safety issue, China’s enforcement of the safety code is lacking.

Nevertheless, the government has indicated it will address both of these issues with standard adoption and development.

The incentives for cold chain improvement in China are great. Due to the distances and lack of cold chain infrastructure, China’s agricultural production suffers from post-harvest losses exceeding 45 percent, which is much higher than the loss rate in India.

In addition, food safety has become a major concern in China as its population of consumers grows more sophisticated and gains more spending power.

Big challenges remain for China’s industrial refrigeration industry, not least of which is a paradoxical approach to natural refrigerants. China now clearly aims to develop a green economy and build a sustainable cold chain – where natural refrigerants could play a central role – but the country is still producing R-22 and has often prioritized economic development over the environment.

Taken together, the largest issues facing natural refrigerants in developing countries like India and China fall into three main categories: safety, energy efficiency and environmental sustainability.

The goal of IIAR’s International Committee in the coming year is to help address those issues by finding effective ways to reach relevant officials and agencies in those countries to facilitate positive developments in the cold chain through our chapters, alliances and other international programs.