Companies nationwide are phasing out high global-warming potential refrigerants as they comply with federal and state regulatory requirements and meet their corporate ESG and climate goals. The natural refrigerant industry is prepared to meet increasing demand.

“Major OEMs are saying, ‘We’re ready. We’re excited. Let’s move forward,” said Tristam Coffin, cofounder of Effecterra and president of sustainability, policy and technical services. “I can tell you that in both commercial and industrial, the transition to alternative refrigerants is possible.”

California has been a leader in restricting the use of hydrofluorocarbons, and many in the industry are looking at regulatory requirements and transitions there in anticipation of what the rest of the U.S. will look like as the Environmental Protection Agency’s AIM Act is finalized.

“The AIM Act technology transition and proposed refrigerant management rules reflect what you’ve seen California do. While California, in a lot of respects, has looked to the European Union for guidance,” Coffin said.

THE GOLDEN STATE

California is approaching the HFC phase down from multiple angles. “They were the first state to set a 150 GWP limit on new systems. They were also the first state to set a GWP threshold for existing grocery stores requiring food retail systems >50 lbs. to meet <1400 GWP or equivalent limit by 2030,” said Danielle Wright, executive director of the North American Sustainable Refrigeration Council.

In passing SB 1206, California became the first state to institute a ban on selling and distributing virgin HFC refrigerants. “Under the same bill, the state has also established a goal to transition the state away from HFCs and to ultra-low GWP alternatives no later than 2035,” Wright said.

Starting Jan. 1, 2025, SB 1206 will prohibit the sale of virgin and new bulk HFCs with >2,200 GWP. From there, the prohibited threshold will drop to >1,500 in January 2030 and >750 in January 2033.

By 2025, the California Air Resources Board will assess how the transition is going. “Within the next year, we should see that assessment report, which will likely lead to more regulations,” Coffin said, adding that officials in California have been upfront about their intentions to do more at the state level to achieve their climate objectives.

Other states have followed California’s lead. “Washington’s rule has gone into effect,” Coffin explained. “They’re launching their program now and leaning on the California Air Resources Board’s work.”

New York’s latest proposal came out earlier this year and is even stricter than California’s, Coffin said.

“Many states have learned from California’s experience that mid-GWP refrigerants like R-448a and R-449a are short-term solutions. States like Washington and New York have sent strong market signals by structuring their regulations to leap-frog this interim step and push food retailers to adopt <150 GWP solutions as soon as possible,” Wright said.

Coffin added that the European Union has adopted new regulations to phase down fluorinated gases (F-gases). Under the new rules, HFC consumption will be completely phased out by 2050 and production of HFCs will be phased down to a minimum (15%) as of 2036.

“That takes the conversation from a phasedown of HFCs to a phase-out of fluorinated gasses. That is a trigger to the rest of the world that it is time to get us out of this circle of transitioning from one synthetic gas to another to another,” Coffin said. “The most logical solution is natural refrigerants.”

COMMERCIAL AND INDUSTRIAL ADOPTION

Many in the commercial sector are preparing to meet requirements and have shifted to increase their use of natural refrigerants, especially CO2, in new systems.

“Several national chain food retailers have committed to CO2 transcritical architecture as their standard for new refrigeration systems nationwide, and based on data from our retailer members, we expect that trend to continue to grow,” Wright said.

ALDI, a major U.S. supermarket chain, has committed to transitioning to natural refrigerants at all its 2,300-plus store locations by the end of 2035.

“Environmentally friendly refrigeration systems help keep our products fresh while limiting our impact on the planet,” ALDI CEO Jason Hart wrote in a letter. “We already use environmentally friendly refrigerants in more than 600 stores, which has helped ALDI save nearly 60% of potential carbon emissions each year and earn recognition from the EPA GreenChill program for five consecutive years.”

Coffin, who previously served as the director of sustainability and facilities at Whole Foods, said Whole Foods launched a completely synthetic refrigerant-free store in the U.S. in 2013. “For everything with a drop of refrigerants, we found an alternative more than a decade ago,” he said. “We proved it could be done, and if it was possible then, it is more than possible now.”

In recent years, many grocers have retrofitted from high GWP HFCs, such as R-404a and R-507a, to mid-range GWP refrigerants like R-448a and R449a. “However, the combination of the state refrigerant ban under SB 1206 and the AIM Act Subsection H proposed rulemaking has many searching for more future-proof alternatives like natural refrigerants,” Wright said.

NASRC’s recent retailer survey forecasts over 300% growth in CO2 systems in new and existing facilities. “Given the large impact of refrigerants on Scope 1 emissions, food retailers cannot meet climate targets without addressing refrigerants.”

Surprisingly, Wright said, there is still a large volume of industrial and cold storage systems in California using R-22 that will need to be addressed given price increases and limited availability.

Peter Thomas, president of Resource Compliance Inc., said he hasn’t seen significant growth in the number of companies in California retrofitting systems or decommissioning older equipment and installing new.

“It is happening but there are still a lot of synthetic refrigerants being used,” Thomas said, adding that he is concerned some end users in California aren’t as focused on upcoming requirements as they should be. “They’re just plugging along and not paying attention and it is all going to come to a head. They will be forced to make a decision, and it could be an expensive one.”

Thomas added that end users need to give themselves enough time to source, install and train employees on new equipment.

When selecting new refrigeration equipment, Wright said companies should consider the business risks associated with HFCs. “What are the annual costs of refrigerant leaks as prices increase? What are the costs associated with refrigerant reclaim programs? What are the risks of lagging behind the market as competitors move to climatefriendly refrigerants? Natural refrigerants are the only future-proof alternative that can effectively address these risks,” she said.

CHALLENGES REMAIN

Even with regulatory requirements and corporate sustainability goals driving the adoption of natural refrigerants, challenges remain. “Are there challenges to adoption and transition? Yes, but those challenges are no more complicated than maintaining the status quo,” Coffin said.

The lack of available service technicians is an ongoing issue the refrigeration industry faces. “That is not specific to this transition. It is overall,” he said. “Do we need to uptrain technicians? Absolutely.”

In fact, Coffin said natural refrigerant systems could attract new talent to the service industry. “The advanced systems are more sexy than the old systems,” he explained. “If you look at CO2, you’re electrifying and digitizing a lot of the components. It is more appealing to the next generation,” he said. Looking Ahead

The first final rule of the AIM Act, which focuses on the phasedown of production and consumption, took effect on Jan. 1, requiring a 40% reduction in supply. “We know that in Europe, dramatic price spikes for HFC refrigerants began around this threshold, so we are expecting to see a similar impact in the U.S.,” Wright said.

Under the AIM Act, the EPA is authorized to phasedown production and consumption of HFCs in the U.S. by 85% by 2036. The AIM Act’s second rule, which focuses on technology transitions, puts GWP limits on specific refrigerant applications. “We’re looking at 150 GWP for commercial refrigeration, for example, by Jan. 1, 2027, and then there is a whole list of applications in terms of their dates and when they transition to the GWP thresholds that are going into place,” Coffin said.

Between 2025 and 2028, there will be restrictions on the sale of high GWP applications ranging from AC to commercial and industrial refrigeration. Wright said she expects the final subsection h rule under the AIM Act, which will have significant implications on refrigerant management and reclaim, to be released this year.

Additionally, Coffin said those in the industry should keep an eye on regulations related to poly- and perfluoroalkyl substances, known as PFAS. The European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) proposal related to PFAS will be finalized in 2025.

“They may ban 10,000 chemicals that have PFAS. We are already seeing states talking about how they’d regulate PFAS,” Coffin said. “That would also directly impact refrigerants, including the synthetic alternatives coming to the table as approximately 95% of them would be classified as PFAS.”