Keeping in tune with the global deal in Kigali to phase down HFCs, a class of potent warming gases used in refrigeration, Indian industry is developing cleaner alternatives.

The South-Asian market, especially India, is seen as a rapidly growing market for air conditioners. Only 4 percent of Indians have access to air conditioning today, but that number is rising fast. This makes the Indian market absolutely pivotal in the years to come for businesses as also for the environment as millions of people will buy their first air conditioner. Researchers estimate that using only less-polluting coolants and energy-efficient kit in 2030 would prevent roughly twice the amount of emissions saved by India’s 100GW solar target. It would reduce the number of power stations needed to meet peak electricity demand, the US-backed analysis from Lawrence Berkeley National Laboratory explains.

While hydrochlorofluorocarbons (HCFCs) are already being phased out through the Montreal Protocol, under the Kigali Amendment, which was agreed by all parties to the treaty in December 2016, countries have also committed to phase down HFCs according to an agreed timetable. This requires the introduction of alternative technologies by all countries.

A Forward-Looking Plan

India has launched a plan that will put India well ahead of schedule in phasing out the use of ozone-depleting HCFC gases. The ministry of environment, forests, and climate change has released the plan which will put India on track to reduce HFCs, demonstrating India’s continued progress and leadership on this issue.

India’s HCFC Phaseout Management Plan 2 (HPMP2) will run from 2017 through 2023, and focus on reducing HCFC use in air conditioning, one of the largest and fastest growing sectors for HCFC use. By 2023, the plan will help reduce 800 ozone depletion potential (ODP)-weighted tons of HCFCs, and avoid 8 million tons of CO2 emissions annually. HPMP stage 2 will keep India ahead of schedule in achieving its commitment of reducing HCFC production and consumption, cutting by almost 50 percent of 2009-10 levels in 2020 and by 60 percent in 2023. It will allow room air conditioner companies to tap into USD 45 million in funding from the Montreal Protocol’s Multilateral Fund. In addition, HPMP2 is expected to provide training to nearly 16,000 service technicians in the refrigeration industry.

Under the terms of the amended agreement, India will continue its efforts in phasing down HCFCs, but will also freeze hydrofluorocarbons (HFC) use at 2024 levels, starting reductions in 2028. HPMP2 includes plans by six of India’s largest air conditioner manufacturers to switch to a less harmful refrigerant, R-32. The move puts India well on track to gradually reduce the global warming impact of refrigerants used air conditioning, nearly a decade before any compliance for such reductions would become due under Montreal Protocol.

The challenge, as more and more Indians are able to afford ACs, will be for companies to create even more efficient machines and for domestic researchers to come up with further less-polluting coolants. US-headquartered multinationals have a head start on intellectual property in the sector. With the longer term in mind, the environment ministry had announced a research and development platform prior to the Kigali Agreement to encourage domestic innovation in research on coolants and energy-efficiency technologies, bypassing any patent problems that may arise for its domestic manufacturers.

Manufacturers Embracing Green Air Conditioning

Overall, leading manufacturers of air conditioners, both Indian companies and global companies operating in India, acknowledge the need for more efficient and climate-friendly cooling. Industry leaders are looking forward to market trends and providing cost-effective cooling solutions. Manufacturers recognize green air conditioning as an increasingly important feature and are eager to develop strategies. Almost all leading manufacturers have introduced high-efficiency models this year to tap into consumer demand for efficiency.

Need for Stronger Government Policy and Initiatives

The government is the main driver of this change. India has set the ball rolling by initiating R&D programs and several pilot projects to replace synthetic refrigerants with natural ones. One such example is to promote economies of scale on ACs that use R-32. The power ministry has put out a bid for companies to supply ACs for 200,000 ATMs across the country.

Currently, key components of air conditioners, such as heat-exchangers, microprocessors, and compressors are imported, contributing to increased costs for the consumer. Fluctuations of the currency exchange rate further add to import costs; hence, indicating the need to localize component supply. With support from the Make in India initiative, the air conditioning industry is inviting investment and collaboration with overseas component manufacturers. Investment in local manufacturing can yield benefits in redesigning air conditioners for higher efficiency while moving out of refrigerants with high global-warming potential.

Manoj Kumar Singh

“The high rate of growth in different sectors using air conditioners was on top of our mind and this was pushed very hard in negotiations. But ultimately India signed as the group also accepted that India’s situation is different and made provisions for the country to have a later deadline than others who were more developed.”

Manoj Kumar Singh,
Joint Secretary,
Ministry of Environment, Forests, and Climate Change

Sales of efficient, 5-star rated air conditioners are currently less than 20 percent of total air conditioner sales in India. Consumers tend to look for lower upfront costs, often unaware of the lifetime of energy bill savings offered by 5-star products. Star rating program developed by the Bureau of Energy Efficiency (BEE) is being strengthened by adding annual operating costs to the product label to better inform purchasers.

The Indian government has recognized the opportunity for green air conditioners with the new procurement announcement by Energy Efficient Services Limited (EESL). Institutional buyers such as banks, hospitals, and hotels are moving quickly to integrate energy efficiency into their buildings. This procurement program presents a huge opportunity for manufacturers of efficient air conditioners to increase sales while generating greater energy savings for these buyers by bidding for large sales volumes while meeting high-efficiency requirements at a competitive price.

India seeks to cooperate with the EU to learn from the European experiences of refrigeration, cold chain, and AC to invite investments in its efforts to advance the country’s green cooling efforts; and to engage in collaborative R&D to make the Kigali Agreement a success. The India-EU Green Cooling Conference took place in New Delhi on April 27, 2017, with the aim to discuss and brainstorm solutions for eco-friendly refrigeration and air conditioning and cold chain in India, under the purview of India-EU Clean Energy and Climate Partnership.

Ozone2Climate (O2C) Technology Roadshow following the Kigali Agreement to the Montreal Protocol on Substances that Deplete the Ozone Layer was organized by the ministry of environment, forest and climate change, government of India, and the UN Environment (UNEP) OzonAction’s Compliance Assistance Program (CAP) in association with the Refrigeration and Air Conditioning Manufacturers Association (RAMA), Indian Polyurethane Association (IPUA), Energy Efficiency Services Limited (EESL), GIZ, and UN Development Programme (UNDP). The technology roadshow was organized for the first time as part of the annual network meeting for ozone officers of South Asia organized in Agra, India, from May 23 to 26, 2017, with financial support from the Montreal Protocol’s Multilateral Fund.

The O2C technology roadshow had 13 exhibitors that promoted ozone and climate-friendly alternative technologies to HCFCs and HFCs in the refrigeration and air conditioning (RAC) sector. The technology roadshow showcased current refrigeration and air conditioning equipment designed to be more energy efficient, hence with a double benefit of saving money for consumers, and with a much lower impact on the environment. Over 200 refrigerant technicians, national ozone officers, business representatives, and government officials attended the roadshow.

India has adopted the Energy Conservation Building Code (ECBC) which sets minimum efficiency requirements for commercial buildings. Compliance with the building energy code serves twin purposes – buildings are constructed to reduce heat gain, which makes air conditioners more effective; and the code provisions ensure that chillers, commonly used for central cooling in commercial buildings, conform to minimum energy-performance standards. Most manufacturers have played an active role in setting the ECBC standards and are interested in a robust compliance framework. Building energy codes also promote passive, low-cost technologies such as cool roofs which not only increase occupant comfort but, implemented on a large scale, can mitigate urban heat island effect, thus leading to energy savings for the entire city.

Way Forward

Just 6 percent of households in India have a room air conditioner, but that number is expected to double in the next three years. Given the average lifetime of air conditioners as 10 years or more, moving the market to high efficiency can lock in savings for years to come. With climate change, as heat waves increase in frequency and intensity, transitioning to more efficient, climate-friendly cooling protects health of India’s citizens and saves money and energy while being a smart business choice for the industry. 

Plans put forward by the industry in room air conditioner sector show that the transition to ozone – and climate-friendly technologies is well underway and makes business sense. The Montreal Protocol has the institutions, mechanisms, and implementing agencies in place to address the challenges faced by smaller businesses and the servicing sector in making the transition and India’s HPMP2 makes good use of the opportunities offered by the agreement.

There is a lot of industry movement toward using medium-GWP coolants such as R-32. That is in part being driven by the BEE 5-star labeling system. Consumers are more likely to purchase the energy-efficient ones, driving the companies to produce more efficient products as a result. Indian industry has been in it right from the start, and has seen many phasedowns, and is well equipped to handle this change. 

With the Kigali Agreement now in place, the industry has a clear signal to focus its efforts on research and development for new products in sectors where alternatives are emerging or are yet unproven. Meanwhile, the rich ecosystem enabled by Montreal Protocol is already helping Indian companies surge ahead and switch to next-generation technologies today.