Companies using R22 in their refrigeration systems are still to see the full impact of R22 price rises as the market starts to see the cost of legislative changes.
The phase out of R22 continues to hit the bottom line for those who haven’t yet converted refrigerants. From around $35kg in August last year, the ban on importation since 1st January has now seen prices averaging $75 – $100kg. Feel worse for those who are anecdotally paying up to $200kg. For a large commercial system holding a 2000kg charge that’s a lot of exposure, particularly in the event of a catastrophic leak.
The bad news is I’m picking costs will climb further this year. Larger users that stockpiled R22 are now starting to see those supplies come to an end. Further pressure will come as demand is yet to be seen from the heavy R22 users, such as larger pack houses and cool stores in rural sectors, who are working to seasonal requirements (think kiwifruit, apples).
So while it’s the smaller commercial users who didn’t have a transition strategy in place being hit hardest at present, more mainstream users will feel the costs as quotas are used up and demand climbs.
Some are attempting to defer routine maintenance and service work on R22 systems in an attempt to control costs. Unfortunately, this will only cause more pain as a key component of any strategy to retain an R22 system is to make sure it is performing at its best. If you are continuing on an R22 system, investing in proactive servicing and a strong leak detection strategy is more important than ever.
Be aware that even if you can meet rising costs, scarcity may mean R22 may not be available when you need it.
If you haven’t thought about a strategy for dealing with R22 systems do it now. Not only will cost continue to be a major factor but no one wants to have a system whose refrigerant is no longer available. If you have the right refrigeration partner they should have already worked through an appropriate strategy for you.
If the real cost of R22 is starting to hit home, time to think about a transition strategy.