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HFC Workshop India. Tom Catania Vice President Government Relations Whirlpool Corporation February 2011 . Why is Whirlpool still using HFCs in USA?. Cost of transition Energy efficiency advantages of HFC 245fa trumps GWP impact - PowerPoint PPT Presentation

Transcript of HFC Workshop India

Title, Arial 28 pt., bold Sub-title, Arial 28 pt., non-bold

HFC Workshop IndiaTom Catania Vice President Government RelationsWhirlpool CorporationFebruary 2011

#1Why is Whirlpool still using HFCs in USA?Cost of transitionEnergy efficiency advantages of HFC 245fa trumps GWP impactCheapest and least consumer utility compromise for achieving high efficiencyHFCs can be used responsibly and recoveredHCs still are subject to VOC emissions rulesEven modest litigation risk in USA when using isobutane refrigerant in a no-frost refrigerator can not be taken lightly in the US litigation, class action environment

Most importantly, new chemicals/technologies on short term horizon that may have positive characteristics of HFCs without the negatives of HCs or HFCs

RETOOLING FATIGUE

#Simple Message: TEWI (Total Environmental Warming Impact)The Use Phase of a long lived residential refrigerator and the power plant emissions associated with that use has a more significant environmental impact than the manufacturing phase or end of lifeespecially if the refrigerants and blowing agents are responsibly managed and recovered.

The ideal combination of refrigerants and blowing agents in residential refrigerators would have zero ODP, very low GWP, low toxicity, be safe AND BE ABLE TO DELIVER THE HIGHEST POSSIBLE LEVEL OF ENERGY EFFICIENCY AT THE LOWEST POSSIBLE COST OR COMPROMISE OF CONSUMER UTILITY

HYDROCARBON FOAM INSULATION AND BLOWING AGENTS MAY NOT BE THE BEST/LAST ANSWER

Refrigeration manufacturers have retooling fatigue. - CFCs-HCFCs-HFCs-HCs-HFOs-?- continuous retoolings steal capital from investment in new environmental breakthroughs in the important areas of energy efficiency and smart products on smart grids, for example

#HCFoam HFC / HCFC / NEW TECHNOLOGY?High GWPEnergyODPGWPENERGY EFFICIENCYCFCHCFCHFCHFOHFCHCFCCFCHCHFOHFOHCFCHFCCFCZero High Low Best Worst HCIdeal Equation for longer run would be 0 ODP , Low GWP , High Energy Efficiency

Foaming agents used today have elements of all 3 , but not all the best characteristics

Managing proper disposal & usage of VOCs ( Hydrocarbons ) during service , transport etc

HFCs have been used extensively , however have a high GWP impacting the environment

HFOs to provide the best new solution moving forward for energy & environmental benefitsIdeal Opportunity

#Showing ideal case scenario Highlighting HFC usage in relation to GWP impact HFO highlight4GDP / GROWTH / PENETRATION / POTENTIAL India CaseRefrigerators are a ~6.2 mn units industry, growing aggressively YOYCurrently, only 14% of the market is penetrated, expected to grow to 25% by 2015

Most of the Indian market is Direct Cool (78%)DC market is growing faster than the Frost Free market, driving refrigerator penetration in IndiaGrowth of low income purchasers and total volume requires solutions that dont drive the wrong behavior

CAGR 11.5%CAGR 8%Indias Economic ProsperityIndian Consumers buying potentialHigher sales of refrigerators ( e.g. DC ) products on the marketNeed to make the right selection of Blowing Agents and refrigerants with the broader & longer environmental picture in mind+=Potential Equation

#78% of the consumer in India purchases a DC product with GDP growth , better purchasing power more products to be sold ( 11% growth expected in the next few yrs) DC consumer is very price sensitive , and buys a ref for primarly cooling food items Need to be sure we are providing the best foam & energy benefits to assist with the Indian govts initiatives under energy & environmental5Providing value to the massesEntry-level consumers for both Direct Cool and No Frost are extremely price-conscious, seeking value for moneyEnergy efficiency / Eco moved up from 8th to 4th place in importance in purchasing an appliance (behind brand, price & color)

HCs significantly increase the GWP effect on the environment moving forwardEarly tests not in optimized refrigerator and assumes full venting of HFCs

Consumers Understand Energy Efficiency, not GWP Continue To Seek Value

Direct Cool sales in INR

No Frost sales in INRBULK SALES ON ENTRY LEVEL PRICES POINTS

Source : DuPontHFOHFC - 245HCHFC - 134

#Most sales are lower price point Cost , Cost , Capacity are the most important factors while purchasing products Energy & environmental has picked up over the years but needs to be managed carefully to prevent any offset6 Risk of converting too early? HIGH ODPLOW GWPZERO ODPZERO ODP . LOW GWP , ENERGY EFFICIENCYCFCHCFCHFCHCBLENDSHFOManufacturers globally as well as in India to comply with global regulations for material usage ( HFC etc )

Every step requires a large investment from a manufacturer that affects product cost , design etc Investments need to be recouped from sales resulting in possible price increases

Unique situation in India as compared to mid 1990s CFC phase outEnergy Regulations are very stringent from 2012 2014 ( 60% jump )Environmental regulations force manufacturers to comply for chemical phase outSHOULD NOT FORCE THE USE OF A CHEMICAL RATHER SUPPORT THE DEVELOPMENT OF THE RIGHT CHOICE FOR THE ENVIRONMENTIdeal Opportunity3-4 years until mass production ( est. 2014 / 15)

#Impact on the Indian energy gridAnalysis of the impact of energy standard changes on the overall energy consumption

Note: Illustrative calculations only, qualitatively correct; Market penetration & growth have been factored in

Need to Promote Energy Efficiency & Eco Conscious Lifestyle for the Indian ConsumerCurrently, on average, Indias average buying is ~3.7 energy efficiency level

If they move up by 20%, then overall energy consumption will come down (GREEN)

If average buying behavior does not change due to cost, overall energy consumption will increase (RED)

Today

#Consumer behavior needs to change.if not the impact of regulations would be negated on the grid & environment !8Conclusion India should not rush into a sub-optimum solution that limits potential use phase emission reductions*Our Proposal for residential refrigerators: Modest delay (1-2 years) in HCFC phase outIndia could lead rest of the world in development and export of next generation solution

*Or has the unintended consequence of consumers trading down to less expensive, but less efficient models

#Thank you !

#HFC Consumption Globally & India View79% of refrigeration / AC appliances consumed HFCs in 2010 across the world Over 1.5-1.8 Billion refrigeration appliances in global operation last year aloneEach refrigerator possibly has 1.5 kg of refrigerant & foaming agentsHFC have a high GWP ranging from 1000-1400

6-7% CAGR of refrigeration appliances in India ( Source : Euromonitor ) 85% of refrigerator sales were in the < 142 lt ( ~5 cu.ft ) category Indias growth lies in its masses with people purchasing refrigerators as a basic need Need to monitor & select right chemical for the environment as refrigerators last 10-15 years

Source : EPA (http://www.epa.gov/ozone/downloads/EPA_HFC_DomRef.pdf)

#Synergy between Energy Efficiency & TEWIENERGY

EFFICIENCYATMOSPHERIC EFFECTSKEY TAKEAWAYSENERGY EFFICIENCY

20% JUMP IN 2012

40% JUMP IN 2014RESPONSIBLE USE OF MATERIALS

2013 phase out for HCFC

Overall goal by Montreal Protocol to reduce carbon emissions by 2030INDIA FACED WITH CHALLENGES OVER THE NEXT FEW YEARS TO LOWER OVERALL ENERGY INTENSITY WHILE PHASING OUT HCFCSRIGHT BALANCE NEEDS TO BE ACHIEVED AND NOT MUTUALLY EXCLUSIVE

#-Overview of the situation in India over the next 2-4 years- Energy Efficiency & Environmental effects are two pieces of a puzzle that complement each other to get the best benefits under each space

12TODAYS LANDSCAPE BUT NEED TO LOOK FURTHER?CFCHCFCHFCHCHFOTimeEnvironmental ImpactEnergy Benefits : MediumHighLowNo ideal BA found that has 0ODP , low GWP , and high energy benefitsUse of HFCs growing however still has a high GWPINNOVATION UNDER THIS SPACE TO PROVIDE MOST IDEAL BLOWING AGENT SOLUTION FOR THE ENVIRONMENT Aim to drive right investments for an ideal blowing agent !

#Swift changes in regulations leading to bandaid approach , that is not entirely benefiting the environment Innovative challenges under this space , have shown that with some more testing & development one could have the ideal BA13Unique Issues to the Indian Market Supply Base Impact if moved to a foam that impacted energy & environment:

Use of High Efficiency components like VIPs , VCC compressors to meet energy regulations 2012-2014 Diminishing returns and high costs could potentially lead to higher product cost Consumers forced to purchase lower energy efficient product These steps would negate entire purpose of reducing energy & environmental impact in the country Lack of Incentives for higher energy rated & environmentally friendly products

Lack of incentives by the govt to drive higher sales of energy & environmentally friendly products Manufacturers forced to comply to standards however unsure on consumer behavior Funding opportunities present in multiple regions like Mexico ( e.g. UNIDO funding ) Infrastructure Concerns

Servicing of VOCs Incremental increase in material costs & import duties Other?

#- Issues that persist today & perceived in the future14Opportunities for India Infrastructure

Government & Manufacturers partnership in developing low cost components for the World Foam s , refrigerants , etc

Providing incentives for manufacturers to assist in the Indian governments goal to help reduce energy efficiency &