TABLE OF CONTENTS - Everything R744

NORTH AMERICAns WILLING TO PAY MORE FOR NATURAL
REFRIGERANTS…
… BUT WILL ONLY TAKE A
MODERATE LEADERSHIP ROLE
Cost, or the risk of increased cost, is one of the arguments
used against the large-scale rollout of natural refrigerant
systems. Developing and changing to a new generation
of systems is generally costly for both manufacturers
and end-users, due to investments in R&D, increased
production costs, additional expenditures in up front
costs, and investment in technicians’ training. In the
past, this has led to a ‘catch 22 situation’ in which
manufacturers were not prepared to invest in the
research and development of these products without
commitments from end-users to source the technology
on a longer term basis. End-users, on the other hand,
were not willing to pay significantly higher prices for
natural refrigerant products whose market viability
hadn’t been proven yet.
For example, Minneapolis-based Target Corporation
experienced an increase in capital investment and
maintenance costs, compared to a traditional DX (direct
expansion) system using R-404A refrigerant, for the CO 2
systems it tested in two markets.
However, as with the introduction of any new technology,
there is a learning curve involved. For Target, each
additional CO 2
system installation has resulted in lower
costs than the previous one. At the same time retailers’
willingness to pay for natural refrigerant systems is
increasing. In Canada, where Sobeys has been rapidly
deploying transcritical CO 2
systems, these installations
are proving to be financially viable in addition to being
environmentally friendly. In particular, installation,
energy, and maintenance costs have been significantly
reduced, in many cases to less than the cost of a synthetic
refrigerant system.
The increase in willingness to pay for natural refrigerant
systems is reflected in the North American natural
refrigerant industry survey, where the majority of endusers
(81%) said they would be willing to pay at least
2% more for a natural refrigerant system and over half
(52%) said they would be willing to accept at least a 10%
increase in price.
While ammonia already has a strong market share in
the industrial refrigeration sector in North America, the
development of CO 2
and hydrocarbon HVAC&R solutions
began only recently. As a result, the competency of North
American companies in supplying natural refrigerant
technology to overseas and domestic markets is today
assessed as “moderate” by 47% of the natural refrigerant
experts, while only a quarter of respondents believe the
region has a “high” potential for taking on a leadership
role in natural refrigerant technologies.
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