The Global F-Gas Bomb is Ticking

Can carbon offsets defuse our refrigerant problem?

2024 has been unbearably hot … and it’s only June. Temperature records are being broken around the world. Air conditioning sales are booming.

Air conditioners and other cooling technologies are helping people adapt to rising temperatures. They’re also accelerating climate change. We’ve blogged about this double-edged sword before, focusing on the cooling-induced increases in electricity demand. But there’s another important climate concern running around inside our cooling equipment.

The hydrofluorocarbon (HFC) refrigerants we’re using to keep us cool pack a serious climate punch when they leak into the atmosphere. To mitigate this problem, 157 countries + the EU have committed to phasing down the production of potent refrigerants. This Kigali Amendment is a big climate deal that should significantly reduce the future flow of high-warming potential refrigerants. But it does not address the growing global stock.

Globally, this installed stock of refrigerants has been estimated at 24 billion CO2-equivalent metric tons. To put this number into perspective, the U.S. electricity sector emits 1.65 billion metric tons of CO2e annually. Under business as usual, many of these fluorinated refrigerants (or “F-gases”) will leak into the atmosphere and wreak climate havoc. The economics of responsible refrigerant management appear to be broken. Can they be fixed?

The global F-gas bank

Using refrigerants in our air conditioners, heat pumps, and refrigerators does not have to result in refrigerant emissions. HFCs circulate within a closed loop in our cooling systems, taking heat from one place and expelling it somewhere else. In principle, this means we could enjoy the cooling benefits that refrigerants provide and then recycle or destroy these gasses when our appliances are retired. 

In practice, things are way messier. Refrigerants are leaking into the atmosphere at alarming rates. The graph below estimates that much of this leakagehappens at the end of an appliance’s life when refrigerants are routinely vented into the air.

Source: Refrigerant Code Updates U.S. Environmental Protection Agency (EPA) California Air Resources Board (CARB). The graph estimates operating leakage rates in blue and end-of-life leakage in yellow. “EUL” is the “end of useful life (i.e. the assumed life span of the appliance).
Source: DNV slide deck. Refrigerant Code Updates U.S. Environmental Protection Agency (EPA) California Air Resources Board (CARB). The “effective useful life” (EUL) numbers estimate the median number of years that the measures installed under the program are still in place and operable.

Although many countries- including the U.S.- have passed laws to prohibit end-of-life venting and mandate more responsible refrigerant management, enforcing these rules is hard and the incentives to comply are weak. In response to these challenges, the Kigali Amendment mandates a phase-down for the most GHG-intensive HFCs. As of this year, production of potent HFC refrigerants has been capped in all participating countries and significantly reduced in countries like the U.S. Amazing!  If successful, it’s estimated that the Kigali Amendment will avoid 80 gigatons of CO2e through 2050 and avert 0.3–0.5°C of warming by 2100

The figure illustrates the phase-down schedule defined by the “Kigali Amendment” which operates like a global cap-and-trade program for potent refrigerants.

This global effort represents an important step in the right direction. But to finish this job, we need to manage the global stock of fluorinated gasses that are sitting in air conditioners and refrigerators and stockpiles around the globe, ready to leak. It’s difficult to assess how many tons of refrigerant are out there. This NRDC report estimates that this “F-gas bank” currently amounts to 24 billion tons CO2e. Under global Kigali targets, this bank could exceed 60 billion tons of CO2e by mid-century.  

The social costs of HFC emissions (are massive)

Just how hard should we be working to track down and contain these refrigerants? Recent work by Lisa Rennels (Go Bears!) and her co-authors use state-of-the-art climate modeling to estimate the social cost per ton of HFC emissions. To contextualize these estimates, a typical grocery store refrigeration system holds about 1.8 tons. Your residential air conditioner might hold 10-12 lbs. Social cost estimates for two of the most common refrigerants are summarized below:

Ton for ton, the social cost of HFC emissions dwarfs the social cost of CO2. In 2030, for example, the estimated social cost per ton of HFC-125 is estimated to be $500,000 — over 2,500 times the damage associated with a ton of CO2. In other words, refrigerant leaks have big climate consequences and we should be trying harder to prevent them. 

Refrigerant reclamation and destruction

As I understand it, there are two ways we can approach this messy, high-stakes challenge.

Reclamation involves recovering refrigerants and reprocessing them so they can be reused. According to the US EPA, which has been collecting data from certified “reclaimers” since 2017,  we are reclaiming only 2-3 percent of our annual HFC consumption in the United States. As the Kigali constraints start to bind more tightly, HFC prices will rise. This should make HFC reclamation more lucrative. But reclamation could just defer – versus eliminate – HFC emissions.

Destruction offers a more permanent solution. HFCs can be incinerated at high temperatures in special kilns. The technology is not complicated. There are already organizations out there working to collect and destroy both HFCs and HCFCs. But the scale of these operations is currently very small relative to the massive F-gas bank we need to draw down. 

Carbon offsets to the rescue?

Estimates of what it costs to collect/transport/destroy HFCs are hard to find. An outdated 2009 report suggests that destruction could be cost-effective at carbon prices in the range of $10-$20/ton. If these estimates are close to correct, end-of-appliance-life refrigerant destruction looks like a highly cost effective GHG abatement opportunity.

Mandating the destruction of potent refrigerants is unlikely to work well, especially in countries where enforcement is limited. Paying for verified refrigerant destruction – via carbon offsets- could offer a more effective approach. Currently, HFC destruction is ineligible for offset crediting under major registry protocols. One reason likely has to do with past experience. Earlier efforts to incentivize HFC destruction with carbon offsets have been fraught. Many will remember the scandalous case of HFC-23 where carbon offsets were so lucrative that firms in China and India perversely increased HFC production so they could get paid for HFC destruction. 

Critics are right to be skeptical of carbon offsets for HFCs, and to be concerned that the GHG reductions they deliver could be illusory. But carbon offset markets have the potential to incentivize diffuse climate solutions that standard policies and regulations struggle to access. Destroying, versus venting, refrigerants is one important example. The Biden Administration, seeking to harness offset markets as a source of capital for this kind of climate solution, recently issued a statement of policy and principles for high-integrity carbon offset markets. Given the climate stakes, a more concerted effort to improve the transparency and verification of carbon offsets could provide the tools we need to tackle this problem.

Follow us on Bluesky and LinkedIn, as well as subscribe to our email list to keep up with future content and announcements. 

Suggested citation: Fowlie, Meredith. “The Global F-Gas Bomb is Ticking” Energy Institute Blog, June 10, 2024, https://energyathaas.wordpress.com/2024/06/10/the-global-f-gas-bomb-is-ticking/

By default comments are displayed as anonymous, but if you are comfortable doing so, we encourage you to sign your comments.