Frozen meat firms face soaring refrigerant costs

Rocketing refrigerant costs are in store for companies running freezers and chillers, including distributors of temperature-controlled meat products, according to Star Refrigeration, which counts top meat suppliers among its clients. 

Using R404a refrigerant as an example, Dr Rob Lamb, group sales and marketing director at the refrigeration engineering company, told delegates at a roadshow event in London’s Canada Water earlier this month: “The price started to go up around the middle of this year.”

In previous years, the price of refrigerant – the substance used to cool refrigeration systems – had tended to go up by five percent to 10% year-on-year, he said. “From May, we saw 30%, 40%, 50% increases month-on-month for R404a and R507. All of a sudden, people were being quoted thousands of pounds a bottle.”

Other, greener equivalents were also going up in price, but at a slower rate, he said.

Prices had risen to such an extent that they were eclipsing the cost of employing staff to service refrigeration plant, said Lamb. “A kilogramme of R404a or R507 refrigerant now typically costs more than the hourly rate for an engineer.”

The continued progress of EU F Gas Regulation (EC) 517/2014, which imposes growing restrictions on the use of environmentally damaging fluorinated greenhouse gases lay behind the phenomenon, he said.

As suppliers scaled back on HFCs and supplies of sanctioned variants remained scant, prices were naturally rising, he claimed.

From 2020, newly refrigerants with Global Warming Potential of 2,500 or more [measured against the impact of carbon dioxide as a benchmark] used to service or maintain equipment with a charge size of at least 40t of CO2 equivalent will be banned. That means alternatives must be sourced.

The legal requirement stems from global commitments called for by the United Nations Framework Convention on Climate Change, which the UK supports, to cut greenhouse gas emissions to 95% below 1990 levels by 2050. Therefore, Brexit would not change UK rules.

Lamb warned although in theory reclaimed or recycled banned gases would still be sanctioned until 2030, sources were cutting back or stopping the manufacture of those already, so users couldn’t rely on them. In addition, suppliers of refrigerants banned from being produced from 2020 were already stopping their production, he said.

Lamb urged those using refrigeration systems to get their heads around the requirements and supply issues as soon as possible. “It’s all about preparation. The increasing price of refrigerants is really focusing people’s minds.”

Refrigerants R404a and R507 were subject to the largest price increases and the restricted availability of refrigerant could cripple businesses that had not taken precautions, he said.

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