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7 Foam

Summary

Rigid foams blown with HFC or HCFC have superior insulating and foam formulation properties to alternative blowing agents but are more expensive to produce. An HFC mixture is being used by at least three companies but the high price (3 to 5 times higher than the HCFC) makes it uneconomic for most purposes.

Three tonnes of HFC were used in 2006 and total emissions were 0.4 tonne but there could be major emissions growth as the main HCFC is due to be phased out in New Zealand by 2015.

Importers of products containing HFC foam (like refrigerators) could be made points of obligation to be consistent with equipment refrigerant points of obligation. It is difficult to see sufficient benefits to justify the administrative complexity of calculating the liability for a large range of products.

HCFC is well suited to foam-blowing and it is likely to be used for as long as possible until the 2015 phase-out. Consequently the ETS impact on the foam industry could be major in the medium term since there are few practical alternatives to HFCs once HCFCs are phased out.

Internationally, HFCs are increasingly used as replacements for CFCs and HCFCs in foam applications such as insulating, cushioning, and packaging. For open-cell foam, emissions of HFCs used as blowing agents are likely to occur during the manufacturing process. In closed-cell foam, emissions occur over a longer period (e.g. 20 years).

Rigid foams blown with HFC, HCFC or CFC have superior insulating and foam formulation properties to alternative blowing agents like water/CO2 but are more expensive to produce. HCFC-141b is licensed because of its ozone depleting potential and is due to be phased out in New Zealand by 2015. A HFC-245fa / 365mfc mixture is being used by at least three companies but the high price (three to five times higher than HCFC-141b) makes it uneconomic for most purposes.

The inventory study concluded that 3 tonnes of HFC-245fa / 365mfc were used in 2006 and total emissions were 0.4 tonne (CRL Energy 2007).

7.1 Stakeholders and potential points of obligation

Pacific Urethanes was discussed in Bulk Chemical Importers Section 2.1 because it was importing annually 1 to 3 tonnes of the high-cost HFC-245fa / 365mfc mixture for co-foam-blowing with HCFC-141b. In 2006, as well as its own use, it supplied the HFC to at least two other companies. Three other foam-blowing chemical suppliers (Huntsman, NZ Urethanes, Polymer Developments) had imported small amounts of HFC-245fa / 365mfc for customer trials but found little demand because of the high price.

So currently there would probably be just one importer as a point of obligation because the other three companies might fall below even a 100 tonnes CO2-equivalent annual HFC threshold. However, it is very difficult to predict how foam-blowers will cope with the transition away from HCFC in future.

It is possible that importers of products containing HFC foam (like refrigerators) could be made points of obligation to be consistent with equipment refrigerant points of obligation. It is difficult to see sufficient benefits to justify the administrative complexity of calculating the liability for a large range of products.

7.2 Export implications

Fisher & Paykel expressed a view that if the ETS is to reflect reality, it should recognise that closed cell foams would retain most of their HFC for around 20 years so there should be ETS rebates or exemptions for clear cases of long-term storage (Roke 2008). A similar argument was addressed in Section 2.1 and could be applied to products sold in New Zealand. While there would be an advantage of linking the ETS to actual emissions, the disadvantage would be the administrative complexity of calculating the exemptions for a large range of products.

However, as for all bulk chemicals, there should be provision for any exported bulk HFC to be exempted from ETS coverage for consistency.

7.3 Compliance costs

Pacific Urethanes commented that reporting costs would not be a problem (Blakeley 2008). No consideration had been given to the costs of market participation.

7.4 Potential for alternatives

Pacific Urethanes commented that large companies like Rheem might follow the example of those who have invested the large capital cost for using pentane (Blakeley 2008). For most companies, HFC-245fa / 365mfc is currently the only realistic alternative to HCFC-141b that meets the increasing insulation requirements for closed cell foams. Some concerns have been expressed about the flammability of the Ecomate alternative (CRL Energy 2007).

7.5 Price impacts

Pacific Urethanes has been experimenting with various HFC mixes for its customers. A 13% mix of HFC-245fa / 365mfc in the drum of polyol, isocyanate, catalyst and water increases the cost of the mix by $1.50/kg compared with a HCFC-141b mix cost of $6.50/kg.

There are no IPCC (1996) Global Warming Potentials for HFC-245fa / HFC-365mfc but if IPCC Third Assessment Report (2001) GWPs are assumed for a 50:50 mixture, the basic price increase from a $30 per tonne CO2 price would be $28/kg. The current price of this HFC is $20/kg compared with just $3/kg for HCFC-141b. Therefore the relative increase from shifting from HCFC to HFC would be much greater than the approximate doubling of the HFC price from a $30 per tonne CO2 price.

This underlines the fact that HCFC-141b is well suited to foam-blowing and it is likely to be used for as long as possible until the 2015 phase-out. Consequently the ETS impact on the foam industry could be major in the medium term since there are few practical alternatives to HFCs once HCFCs are phased out (apart from hydrocarbons for large manufacturers). CRL Energy assesses that HFC emissions in 2015 could be more than 50% lower than BAU because of ETS pricing (depending on the alternatives available).

7.6 Uncertainties

For the inventory study, there was a poor level of understanding among foam-blowing companies of whether they were using HCFC or HFC blowing agents. It would be important to investigate this issue further before decisions could be made about the impacts of ETS coverage.

A key question that needs to be resolved is whether it is appropriate for foam-blowing HFCs to be covered by the ETS without agreed GWPs.

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