Guest Post:The Indian Room Air Conditioning Industry: the Business Case for Phasing-Down Potent Greenhouse Gases in India and Globally
As part of our ongoing research projects, NRDC and CEEW are engaging discussions with leading room and mobile air conditioning manufacturers in India and the market outlook toward phasing down high global warming potential (GWP) hydroflourocarbons (HFCs). In this first post, we describe business perspectives and progress in achieving an HFC phase down in India with a focus on the room air conditioner market.
Co-authored by Bhaskar Deol and Nehmat Kaur
This week, NRDC and our partners are at the 34th Montreal Protocol Open Ended Working Group (OEWG) meeting in Paris to discuss global efforts to phase down emissions of ozone depleting substances. A host of countries are taking strong action against phase down of emission of hydrofluorocarbons (HFCs) – manmade chemicals with high global warming potential (GWP) used for refrigeration and air conditioning. They have an outsized global warming impact – often thousands of times that of CO2 – when released into the atmosphere due to leakage, poor maintenance or venting at the end of equipment life.
A decision by the Indian environment, forests and climate change secretary to not send the top-level negotiating team for this meeting in Paris, has sent the Indian refrigeration industry rushing to the national capital to protect its interests. As reports highlight, the decisions taken at the OEWG meeting could cost the Indian industry significantly.
The Indian refrigeration industry is in the midst of a transformation. After four of years of relatively low growth, market outlook is just beginning to look positive, with the new government taking proactive steps to revive the economy. India’s recently announced 2014-15 union budget – the new government’s first – contains provisions for supporting the manufacturing sector. After a surge in import costs caused by weakening of the Indian rupee, there are signs of recovery, bringing a much needed breather to industries relying on high value imported inputs such as room AC manufacturers, who rely mainly on imports of key components needed by them. At this time, more than ever, it is important for the Indian policymakers and industry to work together to protect industry interests and make their contribution in safeguarding the global environment.
There is rising global consensus that room and automobile air conditioning industries play a significant role in achieving reduction in emissions of HFCs. HFCs belong to a category of pollutants called short-lived climate forcers, (SLCFs) which, if left uncontrolled, have the potential to contribute to 20% of all CO2 emissions by 2050. Rapid growth of HFCs could quickly undermine CO2 emission savings achieved by ambitious national goals, such as the National Solar Mission or India’s proposed National Wind Mission. India has to walk the tightrope of meeting growth aspirations of its consumers and industry, while ensuring its efforts for achieving a low-carbon growth are not negated by increasing emissions elsewhere.
Room Air Conditioner Market
In global climate negotiations, India has cited lack of availability of commercially proven alternative as the key argument against controlling emissions of HFCs by amending the Montreal Protocol. But the Indian room air conditioner industry is ahead of the policy leaders and is already bringing commercially proven, economically viable alternatives to consumers at prices competitive with refrigerant HFC-410a (GWP 2060) that was first introduced in developed countries to replace ozone depleting substances a decade ago.
During a round table discussion last week, leading room AC manufacturers, the two main points discussed were: the need for further clarity on intellectual property rights for use of R-32 by Indian companies, while flagging new technologies that reduce the amount of charge required by air conditioners, e.g. use of micro channel heat exchangers; and limitations of application of R-290 based air conditioners and the 1.5 tonne size ceiling resulting from the refrigerant’s flammability. The multilateral government process through an amendment to the Montreal Protocol would provide a productive avenue to discuss and resolve these points.
The roundtable also discussed our initial analyses on evaluating the environmental impact of refrigerant choices made by China and India respectively. The key takeaways are:
- The India-market specific analysis, shows that irrespective of the growth trajectory, the Indian room AC market, transition to HFC-410a would drive up significant direct and indirect emissions from AC use. Alternatives such as R-32 and R-290, if adopted at large scale can provide significant CO2 savings compared to a scenario where HFC-410a is the dominant choice of refrigerant.
- For India and China, both analyses demonstrated that in the absence of a policy framework for servicing and recovery of refrigerant in ACs during operation and end of lifecycle, emissions resulting from HFC refrigerants remain a significant contributor to lifecycle CO2 emissions. The only scenario where servicing and recovery do not significantly add to emissions is if the industry transitions to R-290 due to its very low-GWP.
- For the Indian market, transition to a low-GWP refrigerant coupled with energy efficiency improvements has the potential to reduce the Indian residential AC sector’s CO2 emissions by as much as a third. It is possible that even greater savings could be achieved if a more ambitious energy efficiency roadmap is adopted.
Our report Cooling India with Less Warming discusses technically proven alternatives that can help industry continue its growth trajectory, while addressing the challenges posed by climate change. The report also articulates barriers and opportunities faced by companies trying to bring these alternatives to market. Companies have carefully evaluated options available to them, but are pressured by a challenging business outlook, rising input costs, conflicting consumer demands of low cost and high efficiency. Manufacturers asked for technically proven, commercially viable alternatives and a policy roadmap for energy efficiency improvement that could be delivered cost effectively.
As global negotiations move forward in Paris this week and later this year, it is a crucial opportunity for Indian industry and government to come together to announce that they are ready to take on the challenge of transitioning to an environmentally friendly energy-efficient future.
Bhaskar Deol is a chemical engineer based in New Delhi and works as an India representative and consultant. Nehmat Kaur is an economist based in New Delhi and works as an India representative and consultant.