Industry Market Trends
Life-cycle Management of Refrigerants Seen As an Asset
January 9, 2014
One major issue for businesses that use refrigerants is tracking the volume the products that go through their operations so that they know how much is getting used, how much is being wasted, and how they are impacting the environment around them. Instead of treating refrigerants as assets and trying to get the most value out of them, users -- a diverse field from process plants to supermarkets -- have traditionally regarded refrigerants as consumables and gave little consideration to their life cycle. Companies regularly buy new coolant like a commodity, replace leaked refrigerant, and pay to have used coolant safely contained and recycled. Lack of refrigerant management is also no friend to the environment, as nearly all refrigerants eventually make their way into the atmosphere. In changing that consumables mindset, a San Francisco-based company, EOS Climate, has created a product called the Refrigerant Asset System. The system is designed to allow businesses to realize economic value from refrigerants by managing them as assets, investing in their conservation and maintenance, and then monetizing used refrigerants when they have reached the end of their useful life. According to EOS Climate, the system employs a proprietary tracking technology to gain transparency into refrigerant movement through an enterprise, providing information on where the refrigerant is (on a truck, in storage, in a piece of equipment, etc), who has it, how much there is, and where it should go and when it should get there. The brand-new system by EOS Climate, a five-year-old startup company, is already in the hands of a few businesses and available at EOS's website. "What it allows our clients to do is realize the economic value of refrigerants," said Patrick Pfeiffer, who is EOS Climate's manager for the Refrigerant Asset System. "You're really investing in [refrigerants] when you treat them as assets. By investing in the refrigerants' maintenance and conservation, you're able to use them for the useful life, and now we're able to help you sell them to other customers in market." As Greenbiz.com recently reported, for more than a quarter-century, ever since the Montreal Protocol of 1987 curbed the production of chlorofluorocarbons (CFCs) to stem the depletion of the ozone layer, companies have been subject to an increasingly complex series of regulations for refrigerants. While refrigerants in production today no longer contain CFCs, the most common types found in supermarkets today have a global warming potential nearly 4,000 times that of carbon dioxide, largely because refrigerant gas molecules don't break down over time the way that CO2 molecules do. Bill Almquist, president of Almcoe Refrigeration, a Dallas-based supplier of commercial refrigeration equipment for the grocery, industrial, and cold storage segments, is already an early adopter of the Refrigerant Asset System. Almcoe bills itself as the Dallas area's biggest independent refrigeration contractor. "This is a seamless system that we can use to track that refrigerant asset," Almquist said. "Not many contractors out there are really buying into the idea of tracking refrigerant yet, but we do it in our own inventory system. It's hard to track a drum of refrigerant. The one product that's the most difficult to sell is refrigerant, but this system is going to make it a lot more valuable, to us and our customers." According to Pfeiffer, the system was developed over the past year by EOS Climate with an initial goal of addressing the problem of CFCs at the end of their life cycle. As the company began creating the system, Keilly Witman, vice president of marketing, said that customers began to "ask for more." "They wanted to be able to handle their refrigerants altogether, and said, 'Can you come up with something?'" EOS Climate's system provides real-time, user-friendly information to all company functions, including compliance data, financial data, and sustainability metrics. The information can help refrigerant users cut costs, earn money (by selling off refrigerant to reclaimers), and realize economic and brand value (by demonstrating environmental leadership). "For some clients, they'll see it as a new revenue stream, but for others it's about cost-avoidance," Pfeiffer said. "You know how expensive it is to replace refrigerant that's not working, so this is a way to catch problems earlier and not have to spend as much money." Pfeiffer explained that the average supermarket holds about 3,500 to 4,000 pounds of refrigerant, and the leak rate is about 25 percent. "That used to just be considered business as usual," Pfieffer said. According to EOS Climate, when users start treating refrigerant as an asset, they pay more attention to it and deal with leaks immediately, because they don't want an asset to go to waste. For users to think that way, "you have to have a level of transparency that hadn't existed until now," Witman said. "The foundation of our system is the software and tracking technology; for a supermarket to not have a good idea of how much refrigerant they had in the store was a real problem. Supermarkets run on a very small profit margin, and if we can minimize their spending, we can really help them a lot." Of course, to have complete transparency and manage refrigerant through the whole life cycle, that means everyone who will "touch" the refrigerant along the way will need to be on board with using the asset management system. To that end, Witman said EOS Climate is setting up partnerships with the entire refrigerant supply chain. The company declined to cite the price of the asset management system, explaining that each customer and system will be different based on its size and other factors. "Our goal is that the system is going to pay for itself in a short amount of time," Pfeiffer said. "We are telling customers that we're going to [help them] monetize refrigerants, reduce the loss of refrigerants, and reuse refrigerants. In addition to the economic benefits, the system will yield environmental advantages through better management and containment practices as a result of better tracking and information transparency. Regulatory changes in the U.S. are aiming to move refrigerant users toward using fewer toxins and, certainly, reducing the amount of greenhouse gases released into the atmosphere. EOS Climate is now said to be working with standards and certification organizations to develop a methodology that would allow companies to accurately quantify emission reductions from more effective refrigerant management, consistent with the requirements for the Global Reporting Initiative. Almquist, one of the early system adopters, is convinced. "This is going to give us a leg up on those contractors who don't use this service," he said. "So far, everyone in our company is buying in, and we're seeing immediate results."