400% Price Increase for Freon? Are you Kidding Me?! (Phaseout Series, Part 1)

We recently contacted our commercial and residential customers about the phaseout of Freon, or R22 refrigerant. The topic is really difficult to do justice to in a newsletter article or even a letter, so we decided to publish a series of blog posts to try and dig a little deeper into the issue. This first post will eventually become an index to the series, as I come back and talk more about each issue I will do my best to add links so you can follow along. Today we’ll just hit on the major issues and the key players.

Freon, or R22, was the most widely used substance in air conditioning refrigeration prior to scientific research linking chloroflourocarbons (CFC’s) to ozone depletion, which we have all heard about. If your air conditioner was manufactured before 2010 (and the further away you go, the more likely this is), there’s a possibility that it uses this refrigerant.  The replacement for Freon is known as Puron, or R-410A, and is already widely available. Unfortunately, you can’t just take one out and put the other one in. That would be too easy, right? We will talk more about these substances and what you need to do about them later on, but before we go into details, I want to introduce a few key concepts and players.

The first is what’s known as the Montreal Protocol. This treaty is part of a larger international agreement known as the Vienna Convention for the Protection of the Ozone Layer. These two pieces of  international agreement are very (very!) long ways of saying:  “We all agree that willfully punching holes in the environment is a bad thing, and we promise to knock it off. Eventually. In pieces.  As long as it doesn’t slow us down too much…”

The United States, along with the European Union and the rest of the United Nations member-states, is a signatory to this treaty. Older legislation known as the Clean Air Act already started us down this path, and the international treaties set benchmarks for the phasing out of CFC’s.

Remember what I said earlier about “manufactured before 2010”? That was one of those benchmarks. We’re no longer producing, or allowing production intended for the United States, equipment that uses Freon. And following the end of equipment production is the gradual end of production of any Freon at all. By 2030, it will be gone forever. And at this point, the manufacturers, dealers, and service companies like Oliver, become players. We are tasked with balancing the high demand for Freon with the decreasing supply, which any freshman econ major can tell you means serious pain in someone’s pocketbook. This is where that scary 400% number comes in (and don’t worry, this is NOT an announcement of an Oliver rate increase!)

What happens next is a lot of crystal ball gazing at this point. There are things that we know will happen. There are things that we think will happen. I will do my very best to make a distinction for you in these posts about the “thinks” and the “knows”.  I hope that you will add your comments to each piece, because these are really important issues that should be discussed. The topic is as small as that gray box in your backyard, and as big as the Earth itself. . I hope this series helps explain some of the big issues, and leaves you at the end with a feeling that you are confident with any decisions you need to make going forward. So please, chime in, let me know what you think.

Until next time,