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Title
Challenges and Recommended Policies for Simultaneous Global Implementation of Low-GWP
Refrigerants and High Efficiency in Room Air Conditioners

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https://escholarship.org/uc/item/07j5f74s

Authors
Park, Won Young
Shah, nihar
Ding, chao
et al.

Publication Date
2019-04-01

Peer reviewed

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LBNL Report

Challenges and Recommended Policies for

Simultaneous Global Implementation of Low-
GWP Refrigerants and High Efficiency in
Room Air Conditioners
Authors:

Won Young Park, Nihar Shah, Chao Ding, Yi Qu

Energy Analysis and Environmental Impacts Division

Lawrence Berkeley National Laboratory
International Energy Studies Group, China Energy Group

March 2019

This work was supported by the Institute for Governance and Sustainable Development under Lawrence Berkeley
National Laboratory Contract No. DE-AC02-05CH11231.
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Abstract
Increasing incomes, electrification, and urbanization—as well as a warming world—are driving
up the global stock of air conditioners (ACs), particularly in emerging economies with hot
climates. AC energy consumption is expected to increase substantially as the global stock of room
ACs rises to 1.5 billion in 2030 and 2.5 billion in 2050. Hence, improving AC energy efficiency
will be critical to reducing AC energy, cost (consumer lifecycle cost, electricity generation cost,
etc.), peak load, and emissions impacts. The 2016 Kigali Amendment to the Montreal Protocol
offers an opportunity to improve AC energy efficiency in tandem with the phasedown of high
global warming potential (GWP) hydrofluorocarbon (HFC) refrigerants. Based on the most recent
information, a literature review, and interviews with manufacturers and industry experts, we find
the main barriers to deploying high-efficiency ACs include concerns about market demand and
cost, which could be mitigated by appropriately improved design of market-transformation
programs such as standards and labeling, incentive, and procurement programs. The main barriers
to the low-GWP refrigerant transition include the need for timely revision of safety standards and
associated costs for capacity-building activities allowing safe use of low-GWP refrigerants in ACs.
Policy action and the market transformation can be accelerated by advancing the refrigerant
transition and efficiency improvements in parallel.

i
ACRONYMS

AC air conditioner
AHRI Air-conditioning, Heating & Refrigeration Institute
ANSI American National Standards Institute
APF annual performance factor
AREP alternative refrigerants evaluation program
ASEAN Association of Southeast Asian Nations
ASHRAE American Society of Heating, Refrigerating and Air-Conditioning Engineers
CARB California Air Resources Board
CC cooling capacity
COP coefficient of performance
CSPF cooling seasonal performance factor
EER energy efficiency ratio
EERIDN Indonesian EER
EPA U.S. Environmental Protection Agency
EU European Union
EU SEER European Union seasonal energy efficiency ratio
GWP global warming potential
HC hydrocarbon
HCFC hydrochlorofluorocarbon
HFC hydrofluorocarbon
HFO hydrofluoroolefin
IDEA International Database of Appliances
IEC International Electrotechnical Commission
IGSD Institute for Governance & Sustainable Development
ISEER India seasonal energy efficiency ratio
ISO International Organization for Standardization
JSRAE Japan Society of Refrigerating and Air Conditioning Engineers
MEPS minimum energy performance standards
METI Ministry of Economy, Trade and Industry
MTCO2e metric tons of CO2 equivalent
NEDO New Energy and Industrial Technology Development Organization
R&D research and development
RAC room air conditioner
S&L standards and labeling
SB Senate Bill
SCOP seasonal coefficient of performance
SHINE Standards Harmonization Initiative for Energy Efficiency
ii
SMUD Sacramento Municipal Utility District
SNAP Significant New Alternatives Program
VRF variable refrigerant flow

iii
Table of Contents

Abstract ............................................................................................................................................ i

Table of Contents ........................................................................................................................... iv

Table of Tables .............................................................................................................................. vi

Executive Summary ...................................................................................................................... vii

1. Introduction ................................................................................................................................. 1

1.1 Background ........................................................................................................................... 1

1.2 Scope and Method ................................................................................................................. 2

2. Barriers and Recommendations Related to Developing and Deploying High-Efficiency ACs

with Low-GWP Refrigerants .......................................................................................................... 3

2.1. Are there technological (related to energy efficiency) and economic barriers to developing
and deploying high-efficiency ACs with low-GWP refrigerants? .............................................. 3

2.1.1 Recommendations for overcoming technological and economic barriers...................... 4

2.2. Are there other types of barriers to developing and deploying high-efficiency ACs with
low-GWP refrigerants? ............................................................................................................... 6

2.2.1 Recommendations for overcoming other types of barriers ............................................ 8

2.3. Are there examples of AC market-transformation policies and programs designed for high
energy efficiency and low GWP?.............................................................................................. 11

2.3.1 European Union: linking efficiency and GWP requirements, establishing high-GWP
refrigerant quotas ................................................................................................................... 12

2.3.2 Japan: transitioning to low-GWP refrigerants, pursuing further improvements via

industry, government, and academic efforts .......................................................................... 13

2.3.3 India: deploying ACs with flammable low-GWP refrigerant ...................................... 13

2.3.4 China: planning for high efficiency with low-GWP refrigerants ................................. 14

2.3.5 California: incentivizing efficiency and low-GWP refrigerants................................... 14

3. Summary ................................................................................................................................... 15
iv
Acknowledgments......................................................................................................................... 17

References ..................................................................................................................................... 18

Appendix A. Low-GWP Alternatives for Stationary Air Conditioning ....................................... 23

v
Table of Tables
Table 1. Selected Standards for Refrigerants and Refrigeration Systems .................................... 10
Table 2. EcoDesign Requirements for Minimum Energy Efficiency in ACs (effective January 1,
2014) ............................................................................................................................................. 12

vi
Executive Summary
Because global air-conditioner (AC) demand is expected to increase significantly, particularly in
emerging economies with hot climates, improving AC energy efficiency will be critical to reducing
AC energy, cost (consumer lifecycle cost, electricity generation cost, etc.), peak load, and
emissions impacts. At the same time, the phasedown of hydrofluorocarbon (HFC) refrigerants
under the Kigali Amendment to the Montreal Protocol offers an opportunity to keep costs
associated with energy efficiency improvement low by coordinating the transition to high
efficiency with the HFC phasedown.

This report describes various types of barriers to the transition toward high-efficiency and low-
GWP AC systems, based on interviews with experts as well as the most recent available data and
literature. It also suggests solutions that might support the design of market-transformation
programs to accelerate the adoption of such products. The barriers to improving energy efficiency
while transitioning to low-GWP refrigerants for most ACs are primarily non-technical. Although
changing refrigerants poses some technical challenges to AC manufacturers in having systems
redesigned and facilities retrofitted to address safety issues related to flammable refrigerants, it
also presents an opportunity to redesign ACs for higher efficiency or lower cost. Results from
testing programs suggest low-GWP refrigerant alternatives can achieve higher efficiency
compared with conventional high-GWP refrigerants in ACs even with limited system
optimization.

Policy action can be accelerated by advancing the refrigerant transition and efficiency
improvements simultaneously, with maximum coordination among government officials with
jurisdiction over both types of policy. Policy solutions exist for overcoming the technological,
economic, institutional, and informational barriers to higher energy efficiency and low-GWP
refrigerants. The following are key policy recommendations to emerge from this study:

1) Stimulate the supply and demand needed to achieve economies of scale and identify cost-
effective ways to realize the market transition
i. Explore AC technical potential (maximum technologically feasible efficiency) and
economic potential (efficiency achievable if all cost-effective, commercially available
efficiency options were implemented)
ii. Fill the gap in knowledge about unrealized opportunities to improve AC energy
efficiency, adopt low-GWP refrigerants, and reduce prices, including further exploiting
the non-energy or co-benefits of high-efficiency ACs (increased comfort, transmission
and distribution loss reduction, benefits to disadvantaged communities, avoidance of
rate subsidies, and so forth)
iii. Improve financial incentive and procurement programs for energy efficiency with low-
GWP criteria as well as market-based schemes (e.g., incentives to manufacturers)
vii
 iv. Enable small manufacturers to produce efficient ACs by helping build their research and
development capacity, encouraging innovation through joint ventures with global
manufacturers, or instituting other types of technology-transfer and capacity-building
mechanisms

2) Establish appropriate standards and harmonize internationally

i. Implement AC energy efficiency standards that consider low-GWP refrigerants as well
as improvement of safety standards, including standards for storage, transport,
installation, service, recycling or disposal, and building codes
ii. Develop/improve safety standards, including training for production, installation,
maintenance, and awareness, particularly on the use of flammable refrigerants
iii. Update standards periodically to mitigate risk of obsolete technology being deployed in
markets without updated standards or with later compliance dates
iv. Harmonize national standards with international standards to help industry accelerate
the refrigerant transition
v. Close the gap between minimum energy performance standards (MEPS) and
efficiencies of commercial available ACs
vi. Implement seasonal performance metrics along with aggressive standards and labels to
move ACs toward best product performance
vii. Properly align regional energy efficiency program cycles
viii. Raise public awareness (among consumers and small and local manufacturers) about
policy and market trends driving the low-GWP transition as well as international
standards being developed to ensure safety

3) Implement efficiency and refrigerant policies in parallel

i. Implement low-GWP criteria when establishing or revising efficiency improvement
policies
ii. Consider mildly flammable and flammable refrigerants together at the planning stage
and implement those plans in series or simultaneously
iii. Improve market-transformation programs together for energy efficiency and low-GWP,
such as standards, labeling, procurement, performance-assurance requirements for
imports, and incentive programs, along with safety standards

viii
1. Introduction

1.1 Background
Increasing incomes, electrification, and urbanization—as well as a warming world—are driving
up global demand for air conditioners (ACs), particularly in emerging economies with hot
climates. Recent studies estimate the global stock of room ACs (RACs) will exceed 1.5 billion
units by 2030 and 2.5 billion by 2050, up from about 1 billion in 2015–2016 (IEA, 2018; Shah et
al., 2015). Because AC energy consumption is expected to increase substantially, improving the
energy efficiency of ACs will be critical to reducing their energy, lifecycle-cost, peak-load, and
emissions impacts. At the same time, the non-ozone-depleting hydrofluorocarbon (HFC) AC
refrigerants developed to replace their ozone-depleting predecessors—particularly
hydrochlorofluorocarbons (HCFCs)—contribute significantly to climate change because of their
high global warming potential (GWP).

On January 1, 2019, the Kigali Amendment to the Montreal Protocol came into force, establishing
a global schedule for phasing down HFCs over the next 30 years. The need to increase AC
efficiency and replace HFC refrigerants presents an ideal opportunity to accomplish both goals
simultaneously. Previous research has quantified the energy and climate benefits of leapfrogging
to high efficiency in tandem with the transition to low-GWP1 refrigerants for RACs. Research also
has highlighted opportunities for coordinating energy efficiency with refrigerant transition in the
global RAC market, and it has identified the best-performing (i.e., most efficient and low-GWP-
refrigerant using) RACs on the market (Park et al., 2017; Shah et al., 2017; Shah et al., 2015).
WMO (2018) estimates that improving the energy efficiency of AC and refrigeration equipment
during the transition to low-GWP refrigerants could double the climate benefits of the Kigali
Amendment.

Various global manufacturers produce energy efficient RACs, including models with low-GWP
refrigerants available in several economies. 2 The most efficient models are significantly more
efficient (in terms of regional efficiency metrics) than the most efficient level recognized by energy
efficiency standards and labeling (S&L) programs in the economies where the models are available
(Park et al., 2017; Shah et al., 2013; Letschert et al., 2013). In addition, many studies have been
addressing expected performance and safety issues due to switching from existing high-GWP
refrigerants to low-GWP refrigerant alternatives in AC systems. However, few studies document

1
We use the term “low-GWP” to mean “lower than the baseline refrigerant being replaced.” The baseline
refrigerants HCFC-22 (R-22), HFC-410A (R-410A), and HFC-134a (R-134a) have GWPs of 1,300 or higher (see
Appendix A).
2
According to Park et al. (2017), in Europe, Japan, and Indonesia, the most efficient RAC models use low-GWP R-
32 refrigerant. In China, the most efficient RAC models use R-410A or low-GWP R-32 refrigerants. In India, the
most efficient RAC models use low-GWP R-32 or R-290 refrigerants, varying by manufacturer.
1
non-technical barriers to transitioning toward both high-efficiency and low-GWP refrigerant AC
systems. This report summarizes challenges to developing and deploying high-efficiency and low-
GWP AC systems, and it recommends policies that could facilitate this dual transition.

1.2 Scope and Method

This study focuses on RACs unless other AC systems are specified. We collected the information
used in this study via a literature review and interviews with 14 experts from global AC
manufacturers, refrigerant manufacturers, public institutions, and organizations related to research,
equipment testing, and consulting. We conducted the interviews through in-person meetings,
phone conversations, and emails. The identities of the interviewees, including three reviewers of
earlier versions of the report, and their institutions—except those who requested anonymity—are
acknowledged at the end of the report.

2
2. Barriers and Recommendations Related to Developing and Deploying
High-Efficiency ACs with Low-GWP Refrigerants
Here we present barriers and recommendations related to developing and deploying high-
efficiency ACs with low-GWP refrigerants.

2.1. Are there technological and economic barriers to developing and

deploying high-efficiency ACs with low-GWP refrigerants?
Technological perspective: There is an intrinsic gap between theoretical efficiency limits and the
efficiencies that can be achieved by commercially available RAC products, mainly because the
operation of real systems differs from the theoretical cycle in many ways: efficiency loss in the
real-world compression process, heat transfer, and so forth. Although AC technologies are
generally globally available, and there are no particular technological barriers to increased
efficiency, relatively small or local manufacturers with limited research and development (R&D)
capabilities may have limited access to certain advanced high-efficiency technologies that are
proprietary or exclusively used by large global manufacturers. Such technologies include
optimized system designs, high-efficiency compressors, high-efficiency heat exchangers,
advanced control algorithms, and so forth. For example, China is the world’s largest AC and
compressor production base. A significant portion (over 50%) of AC compressor parts is imported
into China, mainly from Japan, South Korea, and the United States.

There exists no single, ideal low-GWP AC refrigerant solution, because few refrigerants have
chemical, environmental, thermodynamic, and safety properties suitable for use in AC systems
(McLinden et al., 2017). Manufacturers must consider design changes to optimize AC systems by
changing compressors and compressor oil, heat exchangers (to accommodate high-temperature
glide), and expansion systems. Of these changes, only new compressor designs are identified as a
significant technological barrier.

For alternative refrigerants, intellectual property issues would not be a significant barrier in the
market transition. For example, R-32 and R-290 refrigerant using ACs are currently available. To
accelerate the adoption of R-32 globally, Daikin offered other companies worldwide free access
to its own 93 patents, concerning production and sale of ACs using R-32 as a single-component
refrigerant (Daikin, 2015). Intellectual property issues were not a barrier during the transition from
R-22 to R-410A. No patent exists for R-290 refrigerant production.

Economic perspective: High-efficiency AC products typically entail a temporary increase in

upfront expenditure, compared with the price of low-efficiency products. Manufacturers often
introduce such products by bundling high efficiency with other features such as occupancy sensors
and humidity controls and by targeting premium markets, which further increases the initial price

3
of these products relative to low-efficiency products. At the same time, because manufacturers
frequently require short periods over which the incremental costs of high-efficiency products are
projected to be paid back, the share of high-efficiency products on a market is typically much less
than that of relatively low-efficiency products.

Transitioning to low-GWP refrigerants also entails upfront costs to AC manufacturers, including

costs associated with system redesign R&D, retooled manufacturing lines, and retrofitting of
manufacturing/test facilities to address safety issues related to flammable refrigerants. The
material costs of alternative refrigerants may be higher (e.g., for hydrofluoroolefin [HFO]
refrigerants) or lower (e.g., for R-32) than the costs of conventional refrigerants. However, the cost
impact of refrigerants will depend, in the short term, on the relationship between supply
(refrigerant) and demand (equipment using the refrigerant) and, in the long term, on economies of
scale. Additional costs of materials or operation would include costs for new components (e.g.,
leak detectors, spark-free electric components), warranties, technician training, and consumer
awareness.

To end users, insurance premiums might increase for homes and buildings with equipment that
uses flammable refrigerants. Risks related to flammable refrigerants might require AC
manufacturers to consider the liability associated with potential incidents and human injuries.

2.1.1 Recommendations for overcoming technological and economic barriers

To address the technological and economic barriers, it is important to stimulate the supply and
demand needed to achieve economies of scale and identify cost-effective ways to realize the
market transition. The following are recommended policy actions:

1. Explore and discuss technological barriers that refer to “technical potential,” representing the
energy efficiency that could be achieved if all commercially available efficiency options were
implemented, or the maximum technologically feasible extent to which efficiency could be
improved through technology diffusion.

Specifically, many real RAC systems have a coefficient of performance (COP)—or energy
efficiency ratio (EER, in units of W/W)3—in the range of 3–4. The highest-efficiency RAC
models have a COP/EER in the range of 5–6, with fan power included, and a seasonal energy
efficiency in the range of 5–12, depending on climatic conditions applied and test/calculation
methods (Park et al., 2017). Although the highest-efficiency commercially available AC

3
The International Organization for Standardization (ISO) Standard 5151 defines EER as the ratio of the total
cooling capacity (CC) to the effective power input to the device at any given set of rating conditions, and it defines
COP as the ratio of the heating capacity to the effective power input to the device at any given set of rating
conditions. However, EER and COP have alternative definitions in certain regions.
4
 models employ state-of-the-art efficiency technologies, wider adoption of these high-
efficiency products is limited by factors related to markets, public policies, and other
hindrances to technology diffusion.

2. Use consumer (i.e., end-user) economics to estimate the “economic potential” of high-
efficiency ACs—that is, the efficiency achievable if all efficiency improvements were
implemented that are (or are projected to be) cost-effective from the consumer point of view.

For example, Shah et al. (2016) analyzed, for India, efficiency improvement potential,
increases in retail AC prices, consumer bill savings over the lifetime of the ACs, consumer
payback period, and the return on consumer investment given the bill savings, showing that
the modest price increases required to cover the cost of efficiency result in significant bill
savings and a short payback period. Abhyankar et al. (2017) calculated that if, starting in 2018,
the average RAC efficiency in India improves by 6% per year, about 39 GW of peak load
(equivalent to about 80 power plants of 500 MW each) and more than 64 terawatt-hours per
year of energy could be saved by 2030. The net present value of the consumer benefit between
2018 and 2030 would range from US$600 million (in a price-increase scenario) to US$25
billion (in a no-price-increase scenario). Although there have been concerns about the rebound
effect4 that could reduce the financial benefit of efficiency improvements, the overall consumer
welfare benefit would increase regardless of the effect (Chan and Gillingham, 2015;
Borenstein, 2014).

3. Fill the gap in knowledge about unrealized opportunities to improve AC energy efficiency,
adopt low-GWP refrigerants, and reduce prices.

Unrealized opportunities may include further exploiting the non-energy or co-benefits of low-
GWP high-efficiency ACs, for example, increased comfort, transmission and distribution loss
reduction, benefits to disadvantaged communities, avoidance of rate subsidies, and so forth. In
addition, redesigning ACs for use with low-GWP refrigerants could enable higher efficiency.
Laboratory tests indicate that low-GWP refrigerants, including R-32 and R-290, have
comparable or better efficiency performance compared with R-410A and R-22 (Abdelaziz and
Shrestha, 2016; OTS, 2016; Abdelaziz et al., 2015). In Europe, Japan, and Indonesia, the most
efficient RAC models use low-GWP R-32 refrigerant. In China, the most efficient RAC models
use R-410A or low-GWP R-32 refrigerants. In India, the most efficient RAC models use low-
GWP R-290 or R-32 refrigerants, varying by manufacturer.

4
Increasing AC efficiency could result in lower-than-expected energy savings if the improvement causes energy use
to “rebound,” for example, owing to consumers running their ACs more often or at colder temperatures.
5
 Higher-efficiency products tend to have a wider range of market prices compared with lower-
efficiency products, partly because high-efficiency models are often sold as premium products
bundled with other non-energy features (Park et al., 2017). The price of high-efficiency
products decreases as energy-efficient components achieve economies of scale. For example,
Phadke et al. (2017) found that inflation-adjusted prices in RAC markets (e.g., Japan, South
Korea, and India) have continued to fall over time, even with increases in efficiency.

4. Improve financial incentive and procurement programs for energy efficiency with low-GWP
criteria as well as market-based schemes. Enable small manufacturers to produce efficient ACs
by helping build their R&D capacity, encouraging innovation through joint ventures with
global manufacturers, or instituting other types of technology-transfer and capacity-building
mechanisms.

Such policies will encourage manufacturers to improve AC performance further. Driven by

advances in information technology and semiconductor manufacturing, the global AC market
has moved rapidly towards variable-speed (i.e., inverter-driven) ACs across multiple product
types. Transitioning manufacturing from inefficient fixed-speed ACs to efficient variable-
speed ACs does not entail many changes to existing fixed-speed AC manufacturing lines
beyond adding manufacturing capacity for semiconductor chips. A review of AC incentive
programs in China, India, Indonesia, Mexico, and the United States found that such programs
are particularly effective when they target emerging technologies that have low market
penetration (de la Rue du Can et al., 2015). Incentive programs for manufacturers can help
manufacturers reduce production costs via economies of scale and learning effects enabled by
higher-volume production of emerging high-efficiency/low-GWP technologies—thus
enabling policymakers to accelerate efforts aimed at deploying these technologies, particularly
when the incentive is passed through to consumers.

2.2. Are there other types of barriers to developing and deploying high-
efficiency ACs with low-GWP refrigerants?
Market/technological/institutional perspective: Flammability risks are the most significant
barrier to deploying low-GWP refrigerant ACs across multiple perspectives. Although R-32 and
R-290 are used in commercially available RACs, R-32 may not be a long-term solution owing to
its higher GWP compared with other alternative refrigerants (see Appendix A). To use R-290
(classified as flammable) in ACs, safety standards must consider a larger charge limit (the
maximum amount of flammable refrigerant allowed in a product or system). Hence, flammability
risks need further R&D efforts that develop alternative low-GWP AC refrigerants with attractive
performance and risk characteristics, including lower-flammability refrigerants (such as R-452B,

6
a blend containing R-125, R-1234yf, and R-32) and natural refrigerants.5 Although comprehensive
research and testing programs provide useful information on a wide range of low-GWP refrigerant
candidates, such a wide range of options requires AC manufacturers to consider many
technological, cost, and supply-chain scenarios (including the possibility of a few refrigerant
suppliers dominating the market)—which increases uncertainty and risk for the manufacturers.
Overall, the framework shaped by current institutions and technical knowledge may offer AC and
refrigerant manufacturers little incentive to transition rapidly toward low-GWP ACs, mainly
because of both refrigerant flammability issues and a lack of clear benefits stemming from the
transition.

Institutional/informational perspective: The connection between efficiency metrics and market-

transformation policies in various regions has a major effect on the deployment of high-efficiency
ACs. Seasonal energy efficiency metrics have been designed to estimate AC performance based
on part- and full-load operation at multiple temperature conditions depending on climate.
However, most developing economies still use the EER metric (non-seasonal), which hinders the
introduction of high-efficiency variable-speed ACs. In addition, regional test standards adopting
seasonal energy efficiency metrics vary by region or country; hence, manufacturers adopt different
design strategies according to regional circumstances. Because it is difficult to directly compare
one region’s seasonal efficiency with another’s, policymakers lack information on the global
market’s best-performing products. Such differences in energy efficiency standards and
mismatches between industrial product-development cycles and some regional energy efficiency
program cycles can hinder rapid deployment of high-efficiency ACs.

Market/institutional/informational perspective: In some countries, minimum energy

performance standards (MEPS) are very low compared with the average efficiency of ACs
available on the market. For example, based on data from Lawrence Berkeley National
Laboratory’s International Database of Appliances (IDEA), about 89% of 335 models available in
Indonesia have efficiencies equal to or greater than Indonesian EER (EERIDN)6 2.9, the ASEAN
SHINE 7 requirement effective in 2020 (Park et al., 2017; Letschert et al., 2017). Indonesia’s

5
For example, the low-GWP alternative refrigerants evaluation program (AREP) of the Air-conditioning, Heating &
Refrigeration Institute (AHRI) is an industry-wide cooperative research and testing program to identify suitable
alternatives to high-GWP refrigerants. Reports from the program are available at http://www.ahrinet.org/arep. In
Japan, the Japan Society of Refrigerating and Air Conditioning Engineers (JSRAE)—with support from the Ministry
of Economy, Trade and Industry (METI) and the New Energy and Industrial Technology Development Organization
(NEDO)—conducted a comprehensive risk assessment of mildly flammable refrigerants between 2011 and 2015,
and it is conducting another risk assessment of flammable refrigerants.
6
Indonesian S&L define EERIDN as a weighted average of EER at full load (35°C) and EER at half load (35°C). For
fixed-speed ACs, Indonesian EER is equivalent to the traditional EER we use throughout the study.
7
The Association of Southeast Asian Nations (ASEAN) countries in the ASEAN Standards Harmonization
Initiative for Energy Efficiency (SHINE) program—including Indonesia, Malaysia, Philippines, Singapore,
Thailand, and Vietnam—have recently agreed to set a minimum EER (or a weighted EER such as the Indonesian
7
average EERIDN of 3.4 is much higher than its MEPS EERIDN of 2.6. The highest-efficiency RAC
has an EER of 5.7 and an EERIDN of 6.16. Governments tend to set non-stringent MEPS mainly to
protect small local manufacturers that might not be competitive against others in providing high-
efficiency and low-price products. If local manufacturers can only meet MEPS, governments
might still be justified in keeping MEPS low.

Public understanding of the transition to low-GWP ACs is also important. Addressing consumer
concerns about flammability risks is important in particular. More broadly, public awareness
(among consumers and small and local manufacturers) should be raised about policy and market
trends driving the transition toward low-GWP refrigerants as well as the international standards
being developed to ensure safety.

2.2.1 Recommendations for overcoming other types of barriers

To address the barriers discussed above, it is important to establish appropriate standards and
harmonize internationally. The following are recommended policy actions:

1. Implement AC energy efficiency standards that consider low-GWP refrigerants as well as

improvement of safety standards, including standards for production, storage, transport,
installation, service, recycling or disposal, and building codes.

In-depth understanding of the product- and building-level risks and risk-mitigation strategies
are key to accelerating the market transition to low-GWP refrigerants. For example, in the
United States, gas furnaces are typically found next to refrigerant lines, which could increase
the potential to ignite the refrigerant. Proper AC installation by qualified technicians would be
more important for flammable refrigerant equipment than for non-flammable refrigerant
equipment, particularly in countries where contractors (rather than manufacturers) install AC
systems. National/regional standards and regulations may need to consider quality-assurance
programs such as technical training and certification. In addition, safety standards could
require manufacturers or installers to add leak detectors to their AC systems and use spark-free
electric components to address the flammability issue.

2. Update standards periodically to mitigate risk of obsolete technology being deployed in

markets without updated standards or with later compliance dates, and harmonize national
standards with international standards to help industry accelerate the refrigerant transition.

EER) of 2.9 (or a minimum cooling seasonal performance factor [CSPF] of 3.08) by 2020 as a mandatory MEPS for
all fixed- and variable-speed ACs below 3.52 kW in CC and to use a test method based on ISO 5151 and CSPF
defined in ISO 16358-1.
8
In 2016, the Parties to the Montreal Protocol adopted the Kigali Amendment to the Montreal
Protocol, which establishes a global schedule for phasing down HFC refrigerants. Countries
(and sometimes regions within countries) have their own processes and timelines for
development of standards.

In the United States, the American Society of Heating, Refrigerating and Air-Conditioning
Engineers (ASHRAE) has been leading the development of voluntary standards and guidelines
that govern the application and use of all types of refrigerants. The International
Electrotechnical Commission (IEC) Standards for A2L and A3 refrigerants are currently under
revision, and new standards are expected to be available in the next several years. At present,
several standards covering use of flammable refrigerants, charge limitation, and related
equipment are available in IEC 60335-2-40, EN 378-1, and the latest UL 484 (see Table 1).
The current charge limit for R-290 or any other flammable refrigerant is 150 g. If the allowable
charge limit for safe use increases to 1 kg, the maximum capacity of mini-split units could
reach 7 kW, which would enable RACs using R-290 to target 80% of the global market (Zeiger
et al., 2014). Table 1 summarizes existing standards relevant to low-GWP refrigerants.

9
 Table 1. Selected Standards for Refrigerants and Refrigeration Systems
Recent update
Standard Title

ANSI/UL 60335-2-40
2nd Ed. – aligned with IEC 60335-2-40 5th Ed.
CAN/CSA-C22.2 No. 2017
3rd Ed. – aligned with IEC 60335-2-40 6th Ed.
60335-2-40

ASHRAE/ANSI
Designation and Safety Classification of Refrigerants 2016
Standard 34

ASHRAE/ANSI
Safety Standard for Refrigeration Systems 2016
Standard 15

Refrigerating systems and heat pumps. Safety and

EN-378-1 environmental requirements. Basic requirements, 2016
definitions, classification and selection criteria

Household and similar electrical appliances - Safety -

IEC 60335-2-40 Part 2-40: Particular requirements for electrical heat 2018
pumps, air-conditioners and dehumidifiers (6th Ed.)

ISO 817 Refrigerants - Designation and safety classification 2014

Refrigerating systems and heat pumps - Safety and

ISO 5149 2014
environmental requirements

UL Standard 484 Standard for Room Air Conditioners 2014

Goetzler et al. (2010) provide a review of international/regional regulations and standards for the use of
refrigerants in AC systems.

3. Encourage manufacturers to produce efficient ACs by closing the gap between MEPS and
commercially available AC efficiencies, implementing seasonal performance metrics along
with aggressive standards and labels to move ACs toward best product performance, and
properly aligning regional energy efficiency program cycles.

Even small local manufacturers could easily produce units that surpass existing MEPS in many
developing economies. Adopting seasonal performance metrics, along with more stringent
energy efficiency S&L (mandatory rather than voluntary), would promote deployment of high-
efficiency, variable-speed RACs, by enabling manufacturers to further optimize AC
performance for specific climate conditions (Park et al. 2017; Goetzler et al., 2016; Lord,
2013). Gallaher et al. (2017) noted that AC manufacturers differentiate their product lines by
energy performance—the highest-priced (highest-profit-margin) product lines being the most
efficient—pointing out the effect of stringent standards is to push manufacturers to incorporate
the energy-efficient designs into lower-priced (lower-profit-margin), larger-market product
10
 lines sooner than they otherwise would. Stretch tiers for labels can recognize the contribution
of some efficiency improvement options that are not fully captured by efficiency standards and
existing test procedures. For example, variable-speed units with advanced system control
algorithms could increase AC energy savings by 30%–40%,8 but these savings are not fully
captured by existing standards.

4. Raise public awareness (among consumers and small and local manufacturers) about policy
and market trends driving the low-GWP transition as well as international standards being
developed to ensure safety.

2.3. Are there examples of AC market-transformation policies and programs

designed for high energy efficiency and low GWP?
The refrigerant transition has been an international effort driven by environmental concerns, while
AC efficiency improvement typically has been driven by regional energy efficiency policies.
However, because refrigerant and efficiency changes require redesigning AC systems and
retooling manufacturing lines, coordinating the implementation of both types of changes can keep
costs low for consumers, manufacturers, and utilities. Shah et al. (2015) found that implementing
refrigerant transition and energy efficiency improvement policies in parallel for RACs roughly
doubles the benefit of either policy implemented separately. Specifically, governments can do the
following:
 Implement low-GWP criteria when establishing or revising efficiency improvement
policies as, for example, the European Union (EU) has done.
 Consider mildly flammable and flammable refrigerants together at the planning stage, and
implement those plans in series or simultaneously. For example, China and Japan have
allowed mildly flammable refrigerants to be used in RACs and are considering market
adoption of flammable refrigerants, while India has considered mildly flammable and
flammable refrigerants at the same time.
 Improve financial incentive programs for energy efficiency and market-based schemes,
such as emissions trading, so the industry can identify cost-effective ways to realize the
market transition. For example, the EU has established high-GWP refrigerant quotas, and
California recently launched a utility pilot program to incentivize use of low-GWP natural
refrigerants in commercial refrigeration systems.

Here we present selected regional practices that provide insight for improving relevant policies.

8
A literature review by Cheng and Lee (2016) showed that the energy-savings potential of ACs improved from 11%
before 2000 to 30% after 2000 owing to advancements in sensor technologies.

11
2.3.1 European Union: linking efficiency and GWP requirements, establishing high-
GWP refrigerant quotas
In the EU, Regulation (EU) No. 517/2014 requires an HFC phasedown. The EcoDesign Directive
supports this phasedown by establishing lower MEPS for RACs that use low-GWP refrigerants
(Table 2). Effective January 2025, the European Commission will ban refrigerants with GWP
greater than 7509 for residential split ACs with less than 3 kg of refrigerant charge.

Table 2. EcoDesign Requirements for Minimum Energy Efficiency in ACs (effective

January 1, 2014)
ACs, except double-
Double-duct ACs Single-duct ACs
and single-duct ACs
CC GWP EU SEER EU SCOP EER COP EER COP
GWP >
4.60 3.80 2.60 2.60 2.60 2.04
<6 150
kW GWP ≤
4.14 3.42 2.34 2.34 2.34 1.84
150
GWP >
4.30 3.80 2.60 2.60 2.60 2.04
6–12 150
kW GWP ≤
3.87 3.42 2.34 2.34 2.34 1.84
150
SCOP = seasonal coefficient of performance
Source: Commission Regulation (EU) No.206/2012

Regulation (EU) No. 517/2014 also includes a quota for producers and importers placing at least
100 metric tons of CO2 equivalent (MTCO2e) of HFCs in bulk on the market in a calendar year
(effective January 1, 2015). HFC pre-charged refrigeration, AC, and heat pump equipment are
covered under the quota system effective January 1, 2017. In a recent report, the European
Commission observed a general upward trend of prices since 2014, with a larger increase for HFCs
with higher GWP (EC, 2017). The European Commission report also noted that the costs of
obtaining authorizations for importing HFC equipment appear to be similar to bulk HFC price
increases at the distributor level. EIA et al. (2018) found that this policy led to an HFC shortage
and price increases of about €20/MTCO2e by December 2017. Midea, which has launched R-290
ACs in Europe, stated that the cost of addressing R-290 safety issues could be lower than the cost
of purchasing the equivalent emissions allowances in a few years, given the increasing price
(JARN, 2018).

9
GWP is a measure of the radiative forcing of a pulse of emissions of a given greenhouse gas relative to the
radiative forcing caused by an equal mass of carbon dioxide in the atmosphere; hence, it is unitless.

12
Further, the EcoDesign requirements shown above do not account for the fact that low-GWP
refrigerants such as R-290 with GWP < 150 are actually more efficient than baseline refrigerants
such as R-22 or R-410A. This has the unintended consequence of making the minimum efficiency
requirements even less stringent (and therefore less effective) for such refrigerants. In the future,
if such criteria for low-GWP refrigerants are developed, we recommend that the actual energy
efficiency improvement (or reduction) be taken into account when setting the minimum energy
efficiency requirements. In the case of the EU, this would imply that the EcoDesign requirements
for GWP < 150 be set roughly 5%–10% higher than those for GWP > 150.

2.3.2 Japan: transitioning to low-GWP refrigerants, pursuing further improvements

via industry, government, and academic efforts

Japanese manufacturers have been investing in alternative refrigerant R&D. Daikin launched the
first R-32 RACs in 2012. Now nearly all RAC products and about 40% of commercial ACs in
Japan have transitioned to R-32 (Okada, 2018; Park et al., 2017).

METI, NEDO, and JSRAE—together with academic and industrial partners—have led the
comprehensive “Technology Development of High-efficiency Non-fluorinated Air-conditioning
Systems” project to support development of high-efficiency equipment using low-GWP
refrigerants, development of new high-efficiency/low-GWP refrigerants, and evaluation of the
performance and safety of mildly flammable and flammable refrigerants (Suzawa, 2015).

2.3.3 India: deploying ACs with flammable low-GWP refrigerant

Flammable refrigerants (e.g., R-290) have not yet satisfied national safety standards in most
countries, except for models with small CCs (and thus small charges). However, Deutsche
Gesellschaftfur Internationale Zusammenarbeit (GIZ) has implemented R-290 RAC production in
China and India, with more projects underway worldwide. In India, Godrej launched the first R-
290 RAC models in 2012, resulting in cumulative sales of 120,000 units through the end of 2016
(Park et al., 2017). A recent study showed that R-290 is better suited than the high-GWP R-410A
for use in hot climates, as a replacement for the R-22 refrigerant currently dominating India’s RAC
market (Rajadhyaksha et al., 2013). Although the energy efficiency S&L for ACs do not favor
low-GWP refrigerants, the most efficient current model uses R-290 to achieve an India seasonal
energy efficiency ratio (ISEER) of 6.15, 37% higher than the highest S&L (5-Star) rating of ISEER
4.5.

13
2.3.4 China: planning for high efficiency with low-GWP refrigerants

In China, R-32 RACs are commercially available, but R-290 RACs are not. However, Chinese
manufacturers—including Gree, Midea, Haier, and TCL—have completed retrofits of production
lines for R-290 RACs and have registered R-290 RAC models for China’s S&L program (Park et
al., 2017). China is currently revising its RAC energy efficiency S&L, which could be improved
by considering the efficiency improvement potential of low-GWP refrigerants.

2.3.5 California: incentivizing efficiency and low-GWP refrigerants

California has long been a U.S. leader in energy efficiency. Currently, California utilities offer
approximately $1 billion in energy efficiency incentives each year (CPUC, 2016). With regard to
low-GWP refrigerants, California’s Senate Bill 1383 (SB 1383) requires the state to reduce HFC
emissions by 40% below 2013 levels by 2030. Because the California Air Resources Board
(CARB) estimated that California’s HFC reductions related to Kigali Amendment compliance will
only achieve 37%–48% of the total reductions required by SB 1383 (CARB, 2017), CARB adopted
new regulations in March 2018 that prohibit new HFC use in the state. In addition, the Sacramento
Municipal Utility District (SMUD) recently launched a first-of-its-kind utility pilot program to
incentivize use of low-GWP natural refrigerants in commercial refrigeration systems. The program
offers up to $150,000 for avoided greenhouse gas emissions at the rate of $25/MTCO2e during a
system lifetime (SMUD, 2017).

14
3. Summary
This report describes multiple types of barriers to the transition toward high-efficiency and low-
GWP AC systems, based on interviews with experts as well as the most recent available data and
literature. Some reports—including Goetzler et al. (2014), Colbourne et al. (2010), and ACRIB
(2001)—discuss similar issues.

The barriers to improving energy efficiency while transitioning to low-GWP refrigerants for most
ACs are primarily non-technical. Although changing refrigerants poses some technical challenges
to AC manufacturers in having systems redesigned and facilities retrofitted to address safety issues
related to flammable refrigerants, it also presents an opportunity to redesign ACs for higher
efficiency or lower cost. Results from testing programs suggest low-GWP refrigerant alternatives
can achieve higher efficiency compared with conventional high-GWP refrigerants in ACs even
with limited or no further system optimization.

Deployment of high-efficiency ACs can be accelerated through appropriately designed policies

such as more stringent S&L programs or incentive and procurement programs. The following are
key policy recommendations to emerge from this study:

1. Stimulate the supply and demand needed to achieve economies of scale and identify cost-
effective ways to realize the market transition by (a) exploring the technical and economic
potential of high-efficiency ACs; (b) filling the gap in knowledge about unrealized
opportunities to improve AC energy efficiency, adopt low-GWP refrigerants, and reduce
prices; (c) improving financial incentive and procurement programs for energy efficiency with
low-GWP criteria as well as market-based schemes; and (d) helping small manufacturers build
their capacity to perform R&D and otherwise adopt innovative technologies.

2. Establish appropriate standards and harmonize internationally by (a) implementing AC energy

efficiency standards that consider low-GWP refrigerants as well as improvement of safety
standards; (b) developing/improving safety standards, including training for production,
installation, maintenance, and awareness, particularly on the use of flammable refrigerants; (c)
updating standards periodically to mitigate risk of obsolete technology being deployed in
markets without updated standards or with later compliance dates; (d) harmonizing national
standards with international standards to help industry accelerate the refrigerant transition; (e)
closing the gap between MEPS and commercially available AC efficiencies; (f) implementing
seasonal performance metrics along with aggressive standards and labels to move ACs toward
best product performance; (g) properly aligning regional energy efficiency program cycles;
and (h) raising public awareness (among consumers and small and local manufacturers) about
policy and market trends driving the low-GWP transition as well as international standards
being developed to ensure safety.

15
3. Implement efficiency and refrigerant policies in parallel by (a) implementing low-GWP criteria
when establishing or revising efficiency improvement policies; (b) considering mildly
flammable and flammable refrigerants together at the planning stage and implementing those
plans in series or simultaneously; and (c) improving market-transformation programs together
for energy efficiency and low-GWP, such as standards, labeling, procurement, performance-
assurance requirements for imports, and incentive programs, along with safety standards.

16
Acknowledgments
The Institute for Governance & Sustainable Development (IGSD) funded this study. The authors
thank a number of people who provided inputs, insights, comments, and/or data, including:

 Ashok Sarkar (World Bank)

 Balaji Natarajan (Multilateral Fund)
 Bassam Elassaad (Independent Consultant)
 Brian Holuj (United Nations Environment Programme)
 Chun-Cheng Piao (Daikin)
 Dae Hoon Kim, Jinho Yoo, and Hee Jeong Kang (Korea Refrigeration and Air-
conditioning Assessment Center [KRAAC])
 Dietram Oppelt (HEAT International GmbH)
 Fabio Polonara (Università Politecnica delle Marche)
 Gabrielle Dreyfus (IGSD)
 Gregory Rosenquist (Lawrence Berkeley National Laboratory [LBNL])
 Iain Campbell (Rocky Mountain Institute)
 Jun Young Choi (Korea Testing Laboratory [KTL])
 Shaofeng Hu (United Nations Environment Programme)
 Omar Abdelaziz (Clean Energy Air and Water Technologies, FZE)
 Philipp Munzinger and Philipp Denzinger (Deutsche Gesellschaft für Internationale
Zusammenarbeit [GIZ] GmbH)
 Qiao Lu (B/E Aerospace)
 Shaobo Jia (Heatcraft)
 Samuel Yana Motta (Honeywell)
 Tetsuji Okada (Japan Refrigeration and Air Conditioning Industry Association [JRAIA])
 Zidu Ma (Carrier)

We also thank Elizabeth Coleman for the administrative support, and Jarett Zuboy for editing
support. Any errors or omissions are the authors’ own.

17
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Zeiger, B., B. Gschrey, and W. Schwarz. 2014. Alternatives to HCFCs/HFCs in Unitary Air
Conditioning Equipment at High Ambient Temperatures. Frankfurt: Öko-Recherche.
https://ec.europa.eu/clima/sites/clima/files/f-
gas/legislation/docs/alternatives_high_gwp_annex_en.pdf

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 Appendix A. Low-GWP Alternatives for Stationary10 Air Conditioning

Table A1. Examples of Low-GWP Alternatives for Stationary ACs

Type Chemical Safety GWPb Flamma- Comments

Classa bilityc
HCFCs HCFC-22 A1 1,760 1
HFCs HFC-410A A1 1,900 1
HFC-134a A1 1,300 1
Low-GWP Alternatives
HFCs HFC-32 A2L 677 2L Small self-contained AC systems available.
Small split AC systems also available in parts of
Asia, India, and Europe.
HFOs HFO-1234yf A2L <1 2L Considered for ducted and rooftop units, subject
HFO-1234ze A2L <1 2L to safety standards and codes.
HFO- A1 2 1 U.S. EPA SNAP approved in 2016 for use in
1336mzz(Z) industrial process AC (new equipment).
HFO/HFC R-446A A2L 460 2L Newly developed blends being developed for
Blends R-447A A2L 570 2L small split ACs. Also for multi-splits, VRF
R-452B A2L 680 systems, and ducted systems subject to safety
R-454B A2L 470 2L standards and codes.
R-450A A1 550 1 Possible alternatives for ducted and packaged
R-513A A1 570 1 rooftop units.
R-513B A1 540 1
Hydrocarbons HC-290 A3 3 3 Limited availability for small split ACs in
(HCs) HC-1270 A3 2 3 Europe and parts of Asia owing to flammability
concerns.
Ammonia R-717 B2L 0 1 Used only for chillers with small capacities
owing to costs.
Water (H2O) R-718 A1 N/A 1 Limited to special applications for chillers.
CO2 R-744 A1 1 1 Limited applicability for stationary AC systems
and chillers based on reduced efficiency in high
ambient temperatures. Market may not support
development cost of components.
a ASHRAE 34 safety classification where A1 is lower toxicity/no flame propagation, A2/A2L is lower toxicity/low flammability,
A3 is lower toxicity/higher flammability, B1 is higher toxicity/no flame propagation, B2/B2L is higher toxicity/low flammability,
and B3 is higher toxicity/higher flammability.
b 100-year time horizon GWP relative to CO from the Fifth Assessment Report (AR5) of the Intergovernmental Panel on
2
Climate Change.
c Refrigerant flammability classified based on ASHRAE 34 where 1 is no flame propagation, 2L is lower flammability, 2 is

flammable, and 3 is higher flammability.

Source: de Larminat and Wang (2017), Seidel et al. (2016)

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Stationary AC systems are used for residential, commercial, and industrial cooling applications. Self-contained
AC systems include sealed units used for cooling small rooms in residential and commercial buildings. Split AC
systems include small split AC systems used to cool single rooms in residential and commercial buildings. Large
AC systems include large and multi-split systems, variable refrigerant flow (VRF) systems, and ducted and
packaged rooftop systems that cool air supplied to a room or to a whole building (Seidel et al., 2016).

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