When I mention illegal refrigerants to acquaintances outside of our industry, I typically get a raised eyebrow and a grin. To the average person, the topic of illegal trade and smuggling evokes images of drugs, exotic gems, and the like—not something as ubiquitous as refrigerants.
It’s at this point that I share with my friends a story from the 1990s, when the phaseout of chlorofluorocarbons (CFCs) ramped up in the U.S. At that time, cocaine smugglers actually started using their routes and equipment to bring in illegal R-22, realizing the risk-reward for refrigerants was more appealing.
Why bring this up 30 years later? Because the market for illegal and counterfeit refrigerants is real—and a new wave could be on the horizon now. As the North America phasedown of high global warming potential (GWP) hydrofluorocarbon (HFC) refrigerants continues, we expect that the limited supply will cause illegal activities to increase in the U.S. and Canada.
Fortunately, by drawing on lessons from the past, we can take proactive steps that allow everyone invested in HVACR to be prepared and to protect their people, customers, and businesses.
To start, let’s look at the dynamics that brought us to this point. This past January, the industry experienced a significant phasedown in HFCs under the American Innovation and Manufacturing (AIM) Act. The next phasedown will require an additional 30% reduction in HFC production and consumption, starting Jan. 1, 2024. The progression of phasedowns—reducing the supply of HFCs available for equipment service and maintenance—will elevate the risk of illegal materials coming into the country.
- For more on the refrigeration transition, read the author's related story from last fall here.
We saw this happen at some level when hydrochlorofluorocarbons (HCFCs) were phased out in the U.S. More telling, however, are recent developments in the European Union (EU), where the HFC phase down began in 2015. According to the European Chemistry Industry Council, authorities in the EU seized hundreds of metric tons of illicit HFCs in 2019 and 2020. Certainly, we hope that we won’t see illegal activities to this extent here driven by the AIM Act phasedown.
Unfortunately, while a significant number of players in the industry—from contractors and OEMs to refrigerant innovators and manufacturers—are investing in and supporting an orderly transition away from HFCs to lower-GWP hydrofluoroolefin (HFO) refrigerants, there are still entities seeking to capitalize on the situation by offering illegally imported refrigerants. Awareness and efforts to avoid these illegal activities, coupled with enforcement protocols, can help everyone avoid unnecessary “hassles” and potentially devastating harm.
Understanding the Impact
To put it bluntly, the use of illegally imported refrigerants can be damaging to your people, your business, your reputation, the environment, and your bottom line. Let’s break that down a bit more.
First, illegal imports can be extremely dangerous. Illegal products may have unknown flammable contents, such as hydrocarbons, impurities, and other contaminants. In addition, to increase profitability, individuals may mix the HFC with alternative refrigerants that are less expensive to buy. This creates significant safety risks for the technicians working with them and for the end user. To see just how damaging this can be, do a quick internet search on “unapproved refrigerant explodes.”
Second, poor quality can wreak havoc on equipment and performance. Testing has demonstrated that the quality of illegal imports is poor at best, but the AIM Act requires that all virgin or reclaimed refrigerant products sold in the U.S. meet AHRI 700 standards. One test I recently observed on an illegal import revealed a moisture level that was so high that the refrigerant probably would have burned out in under three months if put into use. So system performance, energy efficiency, and overall system life can all be negatively affected by poor quality.
Third, we must consider the purpose of the phasedown—to protect the environment. Illegal products upend regional, national, and global efforts to ensure a sustainable, healthy planet. The more unregulated volumes of product that enter the market, the greater the delay in meeting climate objectives in the U.S. and Canada.
Keep in mind, illegal imports are, in fact, illegal. The EPA, in coordination with Customs and Border Protection and other agencies, has initiated enforcement protocols to stay ahead of illegal activities. Moreover, under the AIM Act and Ozone-depleting Substances and Halocarbon Alternatives Regulations (ODSHAR), import, distribution, and/or sale of illegally imported HFCs are subject to penalties including confiscation, imprisonment, and fines.
Steering Clear of “Illegals”
Step one is to be wary of an unbelievably low price, an “unlimited supply” suddenly being available in a market undergoing reduced production, internet “deals,” and other too-good-to-be-true situations. Be wary of any offer you get that doesn’t align with current industry pricing.
Next, follow these five golden rules:
- Make sure to select a reputable refrigerants distributor for all purchases;
- Don’t leave it up to chance; ask for a genuine refrigerant;
- Closely examine refrigerant packaging to find key security features and authentication labels. (All Chemours cylinders include an anti-counterfeiting security shrink sleeve, while disposable cylinders also include an Izon® security label;)
- Take a moment to ensure the authenticity of a refrigerant’s package by scanning the QR code on the Izon® security label or by entering its seven-digit code at GenuineRefrigerants.com;
- Don’t wait until it’s too late. The danger with illegal refrigerants is that you have no way of telling what’s actually in that cylinder until the damage is already done. So, it is imperative to rely only on wholesalers with whom you have a proven relationship, and to only use brands you trust.
Lastly, if you see something, say something.
The EPA website (echo.epa.gov) offers resources for reporting environmental violations, including a hotline (1-800-424-8802). Plus, if you are worried you’ve come into possession of a questionable refrigerant product, consult with a different, trusted source. Several refrigerant manufacturers, including Chemours, are invested in preventing the damage illegal imports can do to our industry, customers, and environment. So, one discussion can mean all the difference in protecting your people, customers, and business.
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Based in Wilmington DE, the author is Americas Marketing Manager, Stationary and Specialty Applications, for The Chemours Company. He holds an MBA from Maryville University of St. Louis and a BS in HVAC Design Technology from the Pennsylvania College of Technology. An experienced refrigeration engineer, Marshall is now focused on helping the HVACR industry to navigate the complex technological and regulatory landscape and to implement new and intelligent systems that will reduce impact on the environment.