Shifting Regulations and Sustainability Goals Drive Equipment Demand
increase amid uncertainties around tariffs, geopolitical disruptions, and supply and demand.
“We see both contractors and end users nervous about what tariffs will do to pricing on equipment parts and availability,” said Erik McMillan, CEO of Genemco Inc.
Harold Streicher, principal innovation officer at Hansen Technologies Corp., said lead times for equipment, compressors and valves have largely returned to normal. “Over the last three years or more, there has been a recovery,” he said, adding that while equipment is available, it may cost more.
McMillan noted that equipment prices have been on an upward trend since the COVID-19 pandemic. He added that extended lead times continue to impact certain equipment, including screw compressors, evaporative condensers, ice machines, and evaporators.
MONITORING DEMAND
In the U.S. market, CO2 equipment is ramping up fast in areas where people want an alternative to ammonia, said Monika Witt, managing director of special projects for WITT.
“The phase-out of synthetic refrigerants is just a matter of time, and, meanwhile, prices of synthetic refrigerants will increase significantly,” Witt said. “It is becoming more economical to use CO2 not only because the refrigerant is cheap, but system technology has improved, and more and more technicians have learned to handle CO2 properly.”
Today, the European market is dominated by equipment for natural refrigerants. “Since refrigerants with high GWP are becoming extremely expensive and unavailable and HFOs are threatened by the PFAS regulations, only equipment for ammonia, carbon dioxide and hydrocarbons will be of interest,” Witt explained.
Witt added that she doesn’t foresee an equipment shortage, but the availability of CO2 equipment could become an issue if demand explodes. “Equipment for ammonia should not be a problem since enough reliable suppliers are available for decades,” she said.
TRACKING TRENDS
In the U.S. market, McMillan has observed a shift among end users replacing reciprocating compressors with screw compressors. “Many clients prefer to retain some reciprocating compressors because they offer greater flexibility in ramping capacity up and down, whereas screw compressors require more stability,” he explained.
Another key trend is the move away from halocarbons and Freon-based refrigerants in industrial engine rooms, with many companies transitioning to ammonia. However, McMillan pointed out that regulatory restrictions or long approval times for ammonia systems can sometimes limit this transition. “I’m also seeing increased PSI requirements for evaporators and vessels as regulations evolve to enforce higher safety and testing limits,” he added.
Additionally, more companies are open to sourcing equipment from China. “This trend is particularly pronounced in Central and South America due to cost considerations, but we’re also beginning to see more U.S. projects incorporate Chinese equipment,” McMillan noted. “However, this could shift if new tariffs on Chinese imports to the U.S. are enacted.”
TAPPING INTO THE SECONDARY MARKET
When faced with long equipment lead times, end users and contractors often turn to used equipment as an immediate solution. “Purchasing second-hand or refurbished equipment—whether removed from an operational plant or rebuilt with a warranty— can be a great way to get back up and running quickly,” McMillan said.
Recently, McMillan has observed a growing trend of companies utilizing used evaporative condensers to replace units with leaks or failures in the field. However, he noted that the key challenges include quickly locating a suitable replacement, ensuring timely delivery, and confirming that the unit will perform as required for the application.
To address these challenges, Genemco is developing a priority spares program, maintaining mission-critical, rebuilt equipment in stock for rapid shipment when needed. “If you have $10 million in inventory that needs to stay frozen, why take the risk of losing product due to a compressor failure?” McMillan said.
Witt said that ammonia equipment should be available second-hand without any issues. However, since carbon dioxide is relatively new to the U.S. market, used equipment is most likely difficult to get.
In Europe, users can utilize rental equipment during unexpected downtimes or short remodeling periods of the system. However, rental costs are fairly high. “A permanent, good-designed system should pay off within a short period of time,” Witt added.
QUICK TIPS FOR ACCESSING USED EQUIPMENT
When new equipment is difficult to source, used equipment can provide a faster solution to keep operations running. Erik McMillan, CEO of Genemco Inc., shared key strategies for securing the right used equipment quickly.
- Buy refurbished, rebuilt, and tested used equipment with a warranty or guarantee. Installing a quality used option can get operations back online quickly.
- If possible, repair and rebuild the failed equipment to have it delivered as a backup, ensuring redundancy in case of future failures.
- Use a phased replacement approach. Install a used unit to restore operations while waiting for new equipment to arrive. Once the new equipment is available, replace the used unit and either:
- Retain the used equipment for redundancy or deploy it in another facility, or
- Sell or trade the used equipment if no longer needed.
- Consider short-term rental agreements. If the need for temporary equipment is timesensitive, work with a used equipment provider to establish a rental agreement, including shipping and pickup logistics.
These strategies help mitigate downtime, provide backup solutions, and offer flexibility in managing equipment transitions.
