THE U.S. PHASEOUT OF HCFCS:
                    PROJECTED SERVICING NEEDS IN THE U.S.
         AIR-CONDITIONING, REFRIGERATION, AND FIRE SUPPRESSION SECTORS
                           UPDATED FOR 2015 TO 2025

                                 Prepared for

                     U.S. Environmental Protection Agency
                          Office of Air and Radiation
                       Stratospheric Protection Division
                         1200 Pennsylvania Avenue, NW
                             Washington, DC 20460

                          Prepared with support from

                               ICF International
                              1725 Eye Street, NW
                             Washington, DC 20006

                             Draft, November 2013

This draft report estimates the quantity of HCFC-22 (also recognized by the American Society of Heating Refrigerating and Air- Conditioning Engineers (ASHRAE) designation, R-22), HCFC-142b, HCFC-123 and HCFC-124 needed to service air-conditioning and refrigeration equipment and the anticipated installed base of such equipment beyond 2015 in the United States. The report also discusses the uses and need for other HCFCs, including HCFC-123 use in nonresidential fire suppression. This analysis has been developed to inform the allocation of HCFC consumption allowances in 2015-2019. This report updates the 2009 version of the report of the same name that was released with the 2009 Final Rule titled "Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export," (December 2009, 74 FR 66412). This draft report also builds on the discussion included in the memo to the docket titled "Analysis of HCFC-22 Servicing Needs in the U.S. Air Conditioning and Refrigeration Sector: Additional Considerations for Estimating Virgin Demand," (Adjustment Memo, docket ID # EPA-HQ-OAR-2011-0354-0003). A description of notable updates and additions to the Vintaging Model (the model used to develop the data provided in this report) since the 2009 report can be found in Appendix C of this document.

   Questions concerning this report should be directed to:

         Elizabeth Whiteley
         Stratospheric Protection Division
         U.S. Environmental Protection Agency
         1200 Pennsylvania Avenue, NW (6205J)
         Washington, D.C. 20460
         1-202-343-9310 (phone)
         1-202-343-2338 (fax)
<EMAIL_ADDRESS>

Contents

Executive Summary	1
1.	Background: The U.S. HCFC Phaseout Schedule	5
1.1.	Report Objective	6
2.	Methodology Overview	8
3.	Overview of HCFC Use in the United States	9
3.1.	Projected HCFC Need	10
3.2.	HCFC Use in Refrigeration and Air-Conditioning	11
3.3.	HCFC Use in Nonresidential Fire Suppression	15
4.	Projected HCFC Scenarios	17
4.1.	HCFC-22	17
4.1.1.	HCFC-22 Equipment Used Beyond 2015	17
4.1.2.	Projected HCFC-22 Servicing Needs	18
4.2.	HCFC-123	19
4.2.1.	HCFC-123 Equipment Used Beyond 2015	19
4.2.2.	Projected HCFC-123 Needs	20
4.3.	HCFC-124	20
4.3.1.	HCFC-124 Equipment Use Beyond 2015	20
4.3.2.	Projected HCFC-124 Needs	21
4.4.	HCFC-142b	21
4.5.	HCFC Sources	21
4.6.	Meeting Refrigeration and AC Service Need	23
4.6.1.	Servicing Need and Recovery Projections for HCFC-22	24
4.6.2.	Need and Recovery Projections for HCFC-123	26
4.6.3.	Servicing Need and Recovery Projections for HCFC-124	27
4.6.4.	Summary of HCFC-22, HCFC-123, and HCFC-124 Servicing Need and Recovery Projections	28
4.7.	Factors Affecting Projections	29
4.7.1.	Transitioning to Alternative Refrigerants	29
4.7.2.	Recovery and Reuse Practices	31
4.7.3.	Recycling, Reuse, and Managing Inventory	31
4.7.4.	HCFC-22 Economics	32
4.7.5.	Increasing Seasonal Energy Efficiency Ratio (SEER)	32
4.7.6.	Lower Loss Rates	32
5.	Conclusion	34
Appendix A: Methodology Used to Calculate Projected Servicing Needs	36
Appendix B: HCFC Projections by End-Use	46
Appendix C: Changes to the Vintaging Model	48
Appendix D: Sensitivity Analyses	49
Appendix E: HCFC-22 Inventory Estimate	54
References	55

Executive Summary
Hydrochlorofluorocarbons (HCFCs) are a class of chemical compounds that deplete the stratospheric ozone layer, increasing the chances of overexposure to ultraviolet (UV) radiation at the earth's surface. Excessive UV radiation damages biological systems and causes malignant melanoma and other skin cancers, cataracts and other eye damage, and harm to certain crops and marine organisms. Reversing the course of stratospheric ozone depletion is crucial to human and environmental health worldwide. As a Party to the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol), the United States is subject to a cap on HCFC consumption -- defined as production plus imports minus exports -- in an international effort to protect the stratospheric ozone layer (UNEP 2000). Specifically, the United States is obligated to phase out production and consumption of HCFCs by 2030 by making graduated reductions in HCFC production and consumption by certain dates.

To meet these interim reduction targets, the U.S. Environmental Protection Agency (EPA) established a schedule for the phaseout of HCFCs. EPA phased out consumption of HCFC-141b in 2003. On January 1, 2010, the production and import of HCFC-142b and HCFC-22 were banned except for servicing equipment manufactured before January 1, 2010. The next phaseout milestone will occur in 2015 with a ban on production and import of any other HCFCs, except for use as refrigerants in equipment manufactured prior to January 1, 2020. In addition, in December 2011, Title VI of the Clean Air Act was amended to permit the use of HCFCs in non-residential fire suppression applications. Starting on January 1, 2020, there will be a ban on any remaining production and import of HCFC-22 and HCFC-142b, and production and import of other remaining HCFCs will be limited to use as a refrigerant to service existing equipment.

Thus, starting in 2015, the production and import of virgin HCFCs in the United States will be limited to servicing existing refrigeration and AC equipment, and non-residential fire suppression applications. Historically, only HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 have been used in significant quantities in these applications. Table ES 1 presents an overview of the use limitations, applications, and servicing need projections for these four HCFCs.

ES 1: Overview of HCFC Use Limitations, Applications, and Projections for 2015 to 2025
                                     HCFC
                            Regulatory Limitations
                                 Applications
                  Is Servicing Need Projected for 2015- 2025?

                                    Ref/ AC
                       Non-Residential Fire Suppression

HCFC-22
Production and import limited January 1, 2010 to use as a refrigerant in, or to provide service to, appliances manufactured prior to January 1, 2010.

                                      --
Yes.
HCFC-142b

                                      --
Not in the Vintaging Model. HCFC-142b is a component of certain blends that have limited refrigeration applications, some of which (e.g., R-409A) are not modeled.
HCFC-123
Production and import will be limited beginning January 1, 2015, to use as a refrigerant in, or to provide service to, appliances manufactured prior to January 1, 2020. HCFC-123 and HCFC-124 can also be produced and imported for use as a nonresidential fire suppressant until 2020.

                                       *
Yes.
HCFC-124

                                      --
Yes. In addition, HCFC-124 is a component of certain blends that have limited refrigeration applications, some of which (e.g., R-409A) are not modeled.
* HCFC-123 is a constituent of the Halotron I blend used in fire applications.

Table ES 2 presents the Vintaging Model's projected servicing need for HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 in refrigeration, air conditioning, and non-residential fire suppression applications. As noted above, although the Vintaging Model projects no servicing need for HCFC-142b and minimal servicing need for HCFC-124 between 2015 and 2025, other information -- such as refrigerant sales data collected by the California Air Resources Board -- suggests that HCFC-142b and HCFC-124 are still in use in niche refrigeration applications.

Table ES 2: Projected HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 Servicing Need for
Refrigeration, Air-Conditioning, and Fire Suppression, 2015-2025 (Metric Tons)
                                     HCFC
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
HCFC-22
                                                                         46,100
                                                                         41,600
                                                                         36,700
                                                                         32,300
                                                                         27,700
                                                                         22,500
                                                                          5,500
HCFC-142b
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
HCFC-123
                                                                          2,200
                                                                          2,200
                                                                          2,200
                                                                          2,300
                                                                          2,300
                                                                            600
                                                                            500
HCFC-124
                                                                              4
                                                                              4
                                                                              4
                                                                              4
                                                                              4
                                                                              3
                                                                              -
Source: Vintaging Model (2012).

Although limited production and consumption of virgin HCFC-22 and HCFC 142b can be allowed until 2020, and HCFC-123 and HCFC-124 production can be allowed until 2030 (HCFC-22, HCFC-142b), with industry effort, a significant portion of the need for HCFCs for servicing is expected to be met with previously used refrigerant that is recovered and then recycled or reclaimed. To determine the potential amounts of used refrigerant available to service equipment, EPA used its Vintaging Model to develop three scenarios of recovery to estimate: 1) the projected amount of recovered HCFCs potentially available to meet servicing need of equipment still in use; and 2) the subsequent quantity of HCFCs needed to satisfy the remaining need. Scenarios based on the Vintaging Model were not developed for HCFC-142b.

Box ES-1: Sensitivity Analysis
While EPA's assumptions are frequently updated to refine assumptions, the projections of future servicing needs for HCFC-22 can be affected by outside factors that are not fully reflected in the estimates. A sensitivity analysis performed on key modeling assumptions suggests that HCFC-22 servicing demand could be marginally to significantly lower than what is projected. In particular, servicing need may be lower if the system charge size, leak rate, and/or equipment lifetime are less than current assumptions. The projections in this report provide only some of the information necessary for determining post-2015 servicing needs.
Figure ES-1, Figure ES-2, and Figure ES-3 present the results of these lower, baseline, and higher HCFC recovery scenarios. For HCFC-22, the lower recovery scenario assumes that 35 percent of HCFC-22 from retired or retrofitted equipment is recovered and available for reuse in equipment; the baseline scenario assumes a recovery rate that is equal to the rate that is modeled by EPA's Vintaging Model; and the higher recovery scenario assumes 65 percent recovery. For HCFC-123 and HCFC-124, the recovery rate modeled by the Vintaging Model is used for all three scenarios, since it is significantly higher (approximately 80 to 90 percent).

In accordance with U.S. commitments under the Montreal Protocol, HCFC consumption (i.e., production and imports of virgin HCFCs) cannot exceed 1,524 ODP-weighted metric tons from 2015 to 2019 and cannot exceed 76.2 ODP-weighted metric tons starting in 2020. Figures ES-1 through ES-3 summarize servicing need in comparison to this U.S. HCFC consumption cap. The figures also present the amount of need that can be met by recovered and reused material (dark grey) and the remaining amount that would need to be met by virgin material.

       Figure ES 1: Total Projected HCFC Demand, Lower Recovery Scenario

     Figure ES 2: Total Projected HCFC Demand, Baseline Recovery Scenario

      Figure ES 3: Total Projected HCFC Demand, Higher Recovery Scenario

The analysis demonstrates that it is possible to meet the projected servicing and new equipment needs for HCFC-22, HCFC-123, and HCFC-124 in 2015 under the baseline and higher recovery scenarios (see Figure ES-2 and Figure ES-2). Recovered refrigerant, in addition to limited amounts of virgin refrigerant (not exceeding the cap), can satisfy future servicing needs. As shown in Figure ES-1, the AC and refrigeration industry may face potential shortage risks in a lower recovery scenario.

Several other factors also influence the level of HCFC servicing need and sufficiency of recovered supply in 2015 and beyond. For example, with approximately 97 million AC and refrigeration units projected to be in use in 2015, the sooner consumers transition to equipment using alternative refrigerants, the better the chance for an adequate HCFC-22, HCFC-123, and HCFC-124 supply to satisfy the forecasted servicing need. This report explores the following market trends and how they may influence future HCFC servicing need and available supply estimates, including:

      :: the rate of market transition to alternative refrigerants in the United States;
      :: HCFC-22 cost;
      :: assumed equipment leak and servicing loss rates;
      :: increased seasonal energy efficiency ratio (SEER) standards; and
      :: quantities of refrigerant recovered for reuse, reclamation, and/or banking.

If leak rates, practiced equipment lifetimes, and charge sizes are less than what the agency currently assumes -- as suggested by some stakeholders -- servicing need, as well as necessary virgin supply, could be significantly lower than what is presented in the figures above.
Background: The U.S. HCFC Phaseout Schedule
Title VI of the 1990 Clean Air Act Amendments (CAAA) mandates the development and implementation of regulations to protect the stratospheric ozone layer and ensure U.S. compliance with the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol). Under the Montreal Protocol, the United States and other signatories have agreed to achieve progress toward the total phaseout of the consumption and production of HCFCs, which are ozone-depleting substances (ODS) and have been widely used as refrigerants, solvents, foam blowing agents, and fire suppressants. Consumption is defined as production plus imports minus exports; production is defined as the manufacture of a controlled substance minus amounts destroyed and amounts completely used as feedstock in the manufacture of other chemicals. Neither consumption nor production includes amounts that are reused or recycled (UNEP 2000).

In September 2007, the nineteenth Meeting of the Parties to the Montreal Protocol was held in Montreal, Canada, marking the 20[th] anniversary of the signing of the Protocol. At the meeting, the Parties agreed upon a strengthened phaseout of HCFCs. The adjustments call for non-Article 5 countries -- the Protocol's identifying term for developed countries -- to limit HCFC production and consumption to 25 percent of baseline by 2010, 10 percent by 2015, and 0.5 percent by 2020 -- allowing for 0.5 percent of the baseline for annual servicing over the period 2020-2030. Previously, the 2010 reduction step was 65 percent and was limited solely to consumption, not production.

Table 1-1 presents the HCFC consumption baseline and the graduated reductions (caps) to allowable HCFC consumption for the United States (and all Article 2 countries).

Table 1-1. U.S. HCFC Consumption Phaseout Schedule under the Montreal Protocol
                                     Date
                                Consumption Cap
                          ODP Weighted Metric Tons[a]
                 Quantity Expressed in HCFC-22 Metric Tons[b]
Jan 1, 1996
Baseline set at 2.8% of the 1989 ODP-weighted CFC consumption plus 100% of the 1989 ODP-weighted HCFC consumption
                                    15,240
                                   277,091
Jan 1, 2004
35% reduction from the baseline
                                    9,906
                                   180,109
Jan 1, 2010
75% reduction from the baseline
                                    3,810
                                    69,273
Jan 1, 2015
90% reduction from the baseline
                                    1,524
                                    27,709
Jan 1, 2020
99.5% reduction from the baseline
                                     76.2
                                      0[c]
Jan 1, 2030
100% reduction from the baseline
                                      0
                                       0
 [a]An ODP-weighted metric ton takes into account each ODS' relative contribution to ozone depletion. One metric ton equals approximately 2,204 pounds.
 [b]Calculated using an ODP of 0.055 for HCFC-22.
  [c]In 2020, 0.5 percent of the U.S. consumption baseline remains, but the U.S. phaseout schedule prevents any allocation to HCFC-22.

Table 1-2 details the U.S. phaseout schedule for HCFCs established under the 1990 CAAA to comply with the targets set by the Montreal Protocol (as presented in Table 1-1). The production and import of HCFC-141b, the HCFC with the highest ODP, was phased out with limited exemptions on January 1, 2003. Beginning in 2003, EPA established an allowance system to control the U.S. production and consumption (including import and export) of HCFCs and to apportion consumption allowances amongst HCFCs. Allowances are the privilege granted to an allowance holder to produce and/or import a limited quantity of an HCFC on an annual basis. Production and consumption allowances for HCFC-141b (for limited exemptions), HCFC-22, and HCFC-142b were authorized and distributed (on a kilogram basis) to certain companies (EPA 2003a). In the 2009 HCFC allocation rule, Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export, EPA authorized and distributed (on a kilogram basis) production and consumption allowances for HCFC-123, HCFC-124, HCFC-225ca, and HCFC-225cb to certain companies in addition to HCFC-22 and HCFC-142b (EPA 2009). The 2009 HCFC allocation rule was challenged in Arkema v EPA (618 F.3d 1, DC Cir. 2010) and the portion of the rule that establishes company-by-company production and consumption baselines and calendar-year allowances for HCFC-22 and HCFC-142b was vacated. All other aspects of the rule are intact. In August 2011, EPA issued an interim final rule that established new company-by-company HCFC-22 and HCFC-142b baselines and allocated production and consumption allowances for 2011 (EPA 2011). In April 2013, EPA published a final rule allocating HCFCs for 2012 through 2014.

Table 1-2: U.S. HCFC Phaseout Schedule as Implemented by EPA Under the 1990 CAAA
(to comply with the Protocol)
                                     Date
                                  Restriction
Jan 1, 2003
   * Ban on production and import of HCFC-141b.
Jan 1, 2010
   * Ban on production and import of HCFC-22 and HCFC-142b except for on-going servicing needs in equipment manufactured before January 1, 2010.[a]
Jan 1, 2015
   * Ban on the production, import, and introduction into interstate commerce or use of HCFCs except where the HCFCs are used as a refrigerant in equipment manufactured prior to January 1, 2020 or where HCFCs are used as a fire suppression agent for nonresidential applications.[a][, b]
Jan 1, 2020
   * Ban on remaining production and import of HCFC-22 and HCFC-142b.[a]
   * Ban on production and consumption of all other HCFCs except for use in servicing refrigeration and AC equipment produced before January 1, 2020.[c]
Jan 1, 2030
   * Ban on production and import of all HCFCs.[a]
   [a]Certain additional exemptions apply, including exemptions for (1) HCFCs used in processes resulting in their transformation or destruction, or (2) pre-authorized import of HCFCs that are recovered and either recycled or reclaimed.
   [b]Title VI of the Clean Air Act was amended in December 2011 to allow the use of HCFCs for nonresidential fire suppression purposes.
   [c]Article 2F of the Montreal Protocol requires that each Party shall ensure that consumption and production of hydrochlorofluorocarbons does not exceed zero; however, each Party may exceed that limit provided that consumption is restricted to the servicing of refrigeration and AC equipment manufactured before January 1, 2020.
   Source: EPA (2003a); EPA (2007); United States Congress (2011); UNEP (2000).

Effective January 1, 2010, U.S. production and import of HCFC-22 and HCFC-142b were limited to use in equipment manufactured prior to January 1, 2010, with a complete phaseout of these HCFCs by January 1, 2020. In addition to the HCFC-22 and HCFC-142b restrictions, beginning January 1, 2015, U.S. production, import, use, or introduction into interstate commerce of all other HCFCs will be banned except for use as refrigerants in equipment manufactured prior to January 1, 2020 or for use in nonresidential fire suppression. Starting in 2020, the Montreal Protocol further restricts production and import of virgin HCFCs to servicing of existing AC and refrigeration equipment. A complete ban on production and import of HCFCs goes into effect January 1, 2030.

This report evaluates the amount of HCFCs needed to ensure that the U.S. meets its international commitment under the Montreal Protocol, while also allowing for equipment owners to service HCFC-dependent equipment until the end of its useful life.
Report Objective
This report presents quantitative estimates of the projected amount of (a) units of equipment using HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 beyond 2015 in the United States and (b) HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 needed to meet servicing need beyond 2015 in the United States. This report is an update to the 2009 report The U.S. Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector that provided projections through 2020. This report estimates HCFC consumption needs for air-conditioning (AC) and refrigeration equipment (the largest HCFC market and the largest industry sector using HCFCs) that will be in use after 2015 and possible future recovery scenarios to help meet those needs. This analysis also explores, in a limited way, servicing need for HCFCs for nonresidential fire suppression applications beyond 2015.

The remainder of the report is organized as follows:

   * Section 2 provides a brief overview of the methodology used to project servicing scenarios.
   * Section 3 provides an overview of HCFC use in the United States, including projected servicing need of HCFCs, an overview of HCFC use in the AC and refrigeration sector, and an overview of HCFC use for nonresidential fire suppression.
   * Section 4 provides three projected recovery scenarios and resulting HCFC-22, HCFC-123, and HCFC-124 consumption needs. Section 4 also provides some discussion on expected HCFC-142b servicing need based on industry feedback.
   * Section 5 summarizes factors that may affect the projections presented in the report.
   * Appendix A presents further information on the projection methodology and its limitations.
   * Appendix B provides AC and refrigeration projections by end-use.
   * Appendix C provides an overview of the changes that have been made to EPA's Vintaging Model since the 2009 report The U.S. Phaseout of HCFCs: Projected Servicing Needs in the U.S. Air-Conditioning and Refrigeration Sector ("Servicing Tail Report").
   * Appendix D provides sensitivity analyses performed to determine the effect that several key assumptions may have on HCFC-22 servicing need. Assumptions considered include: system charge size, average annual equipment leak rates (i.e., loss rates), and the expected length of time a system is in operation (i.e., equipment lifetime).

Methodology Overview
This report provides projections estimating the servicing need for HCFCs for 2015 to 2025. Appendix A discusses the assumptions used to develop the supply and servicing need estimates presented in this report and the limitations and caveats inherent in the analysis. EPA's Vintaging Model is the primary tool used to perform the analysis and forms the basis for quantitative estimates of current and projected HCFC consumption. The Vintaging Model estimates the annual chemical emissions from industry sectors that have historically used ODS, including AC, refrigeration, foams, solvents, aerosols, and fire protection. Within these industry sectors, there are over 60 independently modeled end-uses. The model uses information on the market size and growth for each end-use, as well as a history and projections of the market transition from ODS to alternatives. As ODS are phased out, a percentage of the market share originally filled by the ODS is allocated to each of its substitutes. The model tracks emissions of annual "vintages" of new equipment that enter into operation by incorporating information on estimates of the quantity of equipment or products sold, serviced, and retired or retrofitted each year, and the quantity of the chemical required to manufacture, charge, and/or maintain the equipment. EPA's Vintaging Model uses this market information to build an annual inventory of in-use stocks of equipment and the ODS and non-ODS substitutes in each end-use. The model is updated on a regular basis to reflect changes in the market and new industry information. Updates to the Vintaging Model since the release of the 2009 Servicing Tail Report are summarized in Appendix C.

This report provides an update of HCFC-22 servicing needs for air-conditioning and refrigeration equipment, as well as an update on the estimated servicing need for other HCFCs. This analysis has undergone many revisions; key milestones include:

      * The first release of this report was on November 4, 2005 when EPA made the preliminary draft version available for comment in a Notice of Data Availability (NODA, 70 FR 67172). Based on comments received from stakeholders, EPA used the Vintaging Model to test whether servicing need might exceed supply under some circumstances.
      * On September 29, 2006, EPA's Stratospheric Protection Division held a meeting for HCFC stakeholders regarding the 2010 milestone in the HCFC phaseout. EPA issued a September 2006 version of this report at that time. This version contained one additional scenario of consumption needs for HCFC-22 based on stakeholder input on the 2005 draft report.
      * A June 2008 version of the report took into account the comments from stakeholders and provided an updated set of analyses based on the most recent Vintaging Model output. The June 2008 version of the report included the HCFC-22 estimates of a recovery rate of 15, 20, and 75 percent in addition to updating the previous scenarios of 10 and 50 percent.
      * On December 23, 2008, EPA published two proposed rules, Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export (73 FR 78680) and Ban on the Sale or Distribution of Pre-charged Appliances (73 FR 78705). Comments on both proposed rules were submitted during the public comment period in early 2009 in Docket ID No. EPA - HQ - OAR - 2008 - 0496 and Docket ID No. EPA - HQ - OAR - 2007 - 0163 respectively. The Allowance System proposed rule requested comments on the draft servicing tail analysis.
      * In December 2009, another version of the report took into account relevant comments from stakeholders. The report focused on two recovery rates scenarios (20 and 50 percent) and presented the actual allocation amounts for the 2010-2014 control periods as found in EPA's final rule.
      * In November 2011, EPA conducted research and analysis to account for the changes in the HCFC-22 market since the 2009 Final Rulemaking. The 2011 memorandum (Docket ID No. EPA-HQ-OAR-2011-0354-0003) provided additional information on virgin HCFC-22 inventory, recovery and reuse practices in large retail food, and reclamation trends and capacity.

The purpose of the projections presented in this report and earlier versions is to support the process of allocating HCFC consumption allowances. To that end, this report update focuses on the next segment of years in the phaseout -- 2015 through 2025 and the four main HCFCs of concern -- HCFC-22 HCFC-123, HCFC-124, and HCFC-142b.

Overview of HCFC Use in the United States
HCFCs have a variety of applications in the foam, aerosol, solvent cleaning, fire protection, and sterilization industry sectors; however, their largest presence is in the AC and refrigeration industries. Although the Montreal Protocol has identified numerous HCFCs under Article 2F, only those listed in Box 3-1 have been consumed in significant quantities in the United States. Starting in 2015, use of virgin HCFCs will be limited to refrigeration, AC, and nonresidential fire suppression applications.
        Box 3-1: Summary of Common HCFCs and their End-Use Applications
      *      HCFC-141b - historically used as a blowing agent in rigid polyurethane foams and integral skim foams and in aerosol solvent cleaning applications. Production and consumption phased out in 2003 except for exemption production for specific applications.
      *   HCFC-22 - used as a refrigerant in several applications such as unitary air conditioners, cold storage, retail food refrigeration equipment, chillers, and industrial process refrigeration; see Section 4 for further information. Also used (in smaller quantities) as a blowing agent for certain foam applications and as a component of some sterilant mixtures. Production and consumption phased out in 2010 except for servicing appliances manufactured before January 1, 2010.
      *   HCFC-123 - used in centrifugal chillers and portable fire extinguishers.
      *   HCFC-124 - used in sterilant mixtures and as a component in some replacements for CFCs as a refrigerant or for halon as a fire suppressant. Replaces CFC-114 in some heat pumps and special air conditioning equipment. HCFC-124 (combined with HCFC-142b) is also a component of some blends (e.g., R-409A, R-414B), which are primarily used as a retrofit alternative to CFC-12 and R-500 in refrigeration applications. Use of HCFCs as a sterilant is being phased out in 2015 by the Clean Air Act.
      *   HCFC-142b - historically used as a blowing agent in extruded polystyrene boardstock. Also used in small quantities in refrigerant blends as a retrofit refrigerant for applications such as motor vehicle ACs that previously used CFC-12 and other refrigeration applications that previously used CFC-12 and R-500. Production and consumption phased out in 2010 except for servicing appliances manufactured before January 1, 2010.
      *   HCFC-225ca/cb - used as a solvent, an aerosol solvent, and in small quantities in the adhesives, coatings, and inks sector. HCFC-225 ca/cb is a mixture of the two isomers HCFC-225ca and HCFC-225cb typically in a 45/55% by weight ratio. Use of HCFCs as a solvent is being phased out in 2015 by the Clean Air Act.
  Table 3-1. HCFC Atmospheric Lifetime (Years) and Ozone Depletion Potential
                                     HCFC
                                 Chemical Name
                                  CAS
Number
                         Atmospheric
Lifetime (years)
                                    ODP[a]
HCFC-141b (CH3CFCl2)
1,1-Dichloro-1-fluoroethane
                                   1717-00-6
                                      9.2
                                     0.11
HCFC-142b (CH3CF2Cl)
1-Chloro-1,1-difluoroethane
                                    75-68-3
                                     17.9
                                     0.065
HCFC-22 (CHF2Cl)
Chlorodifluoromethane
                                    75-45-6
                                     12.0
                                     0.055
HCFC-124 (CF3CHFCl)
2-Chloro-1,1,1,2-tetrafluoroethane
                                   2837-89-0
                                      5.8
                                     0.022
HCFC-123 (CHCl2CF3)
1,1-Dichloro-2,2,2-trifluoroethane
                                   306-83-2
                                      1.3
                                     0.02
HCFC-225cb (CF2ClCF2CHClF)
1,1,2,2,3-pentafluoro-1,3-dichloropropane
                                   507-55-1
                                      2.1
                                     0.033
HCFC-225ca (CF3CF2CHCl2)
1,1,1,2,2-pentafluoro-3,3-dichloropropane
                                   422-56-0
                                      5.8
                                     0.025
            [a]ODP values are taken from the Montreal Protocol (UNEP 2003b).

Section 3 is organized into three subsections. Section 3.1 provides a brief discussion of projected servicing need of HCFCs, including estimates in ODP-weighted metric tons. Section 3.2 presents an overview of the HCFC servicing need in the AC and refrigeration sector. Section 3.3 presents an overview of the HCFC servicing need for nonresidential fire suppression.
Projected HCFC Servicing Need
Servicing need is projected for the following HCFCs: HCFC-22, HCFC-142b, HCFC-123, and HCFC-124. An overview of the use limitations, applications, and projected servicing need for these HCFCs is included in Table 3-2.

Table 3-2. Overview of HCFC Use Limitations, Applications, and Projections for 2015 to 2025
                                     HCFC
                            Regulatory Limitations
                                 Applications
                       Is Need Projected for 2015- 2025?
                      Notes on Servicing Need Projections

                                    Ref/ AC
                       Non-Residential Fire Suppression

HCFC-22
Production and import limited January 1, 2010 to use as a refrigerant in, or to provide service to, appliances manufactured prior to January 1, 2010.

                                      --

   *  Estimated based on EPA's Vintaging Model
HCFC-142b

                                      --
                                      --
   *  For 2015 and beyond, the Vintaging Model projects no HCFC-142b servicing need, although other data suggests that HCFC-142b is still in use
   *  HCFC-142b is a component of some blends (e.g., R-409A*), which are primarily used as a retrofit alternative to CFC-12 and R-500 in refrigeration applications
HCFC-123
Production and import will be limited beginning January 1, 2015, to use as a refrigerant in, or to provide service to, appliances manufactured prior to January 1, 2020.
HCFC-123 and HCFC-124 can also be used for nonresidential fire suppression purposes between 2015 and 2020.

   *  Estimated based on Vintaging Model and other sources
   *  HCFC-123 is used as a refrigerant and as a constituent of the Halotron I blend used in fire suppression applications
HCFC-124

                                      --

   *  Sterilant use no longer allowed
   *  Projections based on Vintaging Model
   *  HCFC-124 is used in several SNAP-approved refrigerant blends (e.g., R-401A, R-401B, R-409A*, R-414A, R-414B, and R-416A)
*R-409A is not modeled in the Vintaging Model.

Figure 3-1 demonstrates projected HCFC servicing need in 2015 and 2020; as shown, HCFC-22 servicing needs constitute over 95% percent of all HCFC servicing need in 2015 and over 97% of HCFC servicing need in 2020.

Figure 3-1. Total Projected HCFC Servicing Need for Refrigeration, AC, and Fire Suppression
                                 (Metric Tons)

HCFC Use in Refrigeration and Air-Conditioning
Historically, CFCs were extensively used as refrigerants in the AC and refrigeration industries; by the 1970s, HCFC-22 and R-502 (a blend of CFC-115 and HCFC-22) were also well established refrigerants. On January 1, 1996, the production and import of CFC refrigerants, classified as Class I controlled (ozone-depleting) substances under the CAA Amendments of 1990, were phased out in the U.S. and other industrialized countries. HCFC refrigerants, which deplete the ozone layer to a lesser degree and are classified as Class II controlled substances under the 1990 CAAA, were found acceptable as substitutes for the controlled CFCs in some end use applications.

Air-Conditioning End-Uses

AC equipment can be categorized as either mobile or stationary. Figure 3-2 below illustrates these categories and identifies those AC end uses for which supply and servicing need projections are estimated in this report.

Mobile air-conditioning systems include all forms of AC that provide cooling to passenger compartments in all types of moving vehicles. This category can be further broken down into motor vehicle air-conditioning for light-duty vehicles and other mobile air-conditioning systems.

   * Motor vehicle air-conditioning (MVAC) includes AC in the passenger compartments of light duty vehicles -- both cars and trucks (e.g., pick-up trucks, minivans, sport utility vehicles). A variety of refrigerant blends, some of them including HCFCs, are approved for use in the United States by EPA as replacements for CFC-12 in MVACs. However, these blends have not been endorsed by vehicle or system manufacturers for such use, thereby capturing only a small and declining share of the retrofit market, which consists mainly of HFC-134a. HFC-134a is not an ODS; therefore, the light-duty MVAC sector is not considered further in this analysis.
   * Other mobile air-conditioning includes AC in the passenger compartments of both buses (including school, transit, and tour buses) and trains (including heavy, light, and commuter rail, and Amtrak trains). Although most bus AC systems converted directly from CFC-12 to HFC-134a, the majority of the existing fleet of transit buses, tour buses, and trains are projected to continue to use HCFC-22 in their AC systems.

Stationary air-conditioning includes a wide variety of equipment, further categorized into the following six categories.

         *       Unitary air-conditioners and heat pumps include both split systems and packaged units and are designed for air circulating, cooling, cleaning, and dehumidifying and sometimes heating in residential and small and large commercial applications. While HCFC-22 systems are still in use, new systems are largely charged with HFC-134a, R-410A, and R-407C refrigerant blends.
         *       Chillers regulate the temperature and humidity in offices, hotels, shopping centers, and other large buildings. There are two major categories of chillers -- centrifugal and positive displacement. Centrifugal chillers are centralized air conditioning systems typically used in larger buildings (e.g., offices, hotels, shopping centers, and other large buildings). Positive displacement chillers are smaller and may be water-cooled or air-cooled. There are three principle types of positive displacement chillers -- 1) reciprocating, 2) screw, and 3) scroll -- each of which is named for the type of compressor employed. HCFC-22 and HCFC-123 chillers are still in use, though a portion of the market is transitioning to R-410A, R-407C, and HFC-134a refrigerants. Historically, these chillers used CFC-12, CFC-11, CFC-114, and R-500 refrigerants.
   * Dehumidifiers are mechanical refrigeration systems designed to remove moisture from the air by drawing air first over cold evaporator coils and then warm condenser coils, causing the moisture in the air to condense onto the cold coils. Examples include indoor pool dehumidifiers and portable units used to dehumidify basements. Existing dehumidifiers still use HCFC-22 and new systems have transitioned to HFC-134a and R-410A.
   * Water and ground source heat pumps use fluid circulated in a common piping loop as a heat source/sink to cool and heat air. Water-source heat pumps typically use water pumped from a well, lake, or stream as a heat source/sink. Direct expansion geothermal heat pumps circulate refrigerant through piping in the earth. Water and ground source heat pumps historically used HCFC-22; new systems are charged with HFC-134a, R-410A, and R-407C.
   * Window units, also known as room air-conditioners, are small appliances used to condition the air in one room. Window units historically used HCFC-22; new systems are charged with R-410A.
   * Packaged terminal units are ACs or heat pumps that are mounted through the wall. They are often used in hotel rooms, dormitories, or classrooms, and historically used HCFC-22; new systems are charged with R-410A.

                 Figure 3-2: Types of Air-Conditioning Systems[a]
                        Air-Conditioning (AC) Equipment
                               Motor Vehicle AC
                          Stationary Air-Conditioning
                                   Water and
                           Ground Source Heat Pumps
                                 Dehumidifiers
                                  Residential
                               Small Commercial
                               Large Commercial
                                Other Mobile AC
                            Mobile Air-Conditioning
                                 Window Units
                      Packaged Terminal AC and Heat Pumps
                                  Centrifugal
                                   Chillers
                                   Positive
                                 Displacement
                                 Reciprocating
                                     Screw
                                    Scroll
                           Unitary AC and Heat Pumps

[a]EPA assumes HCFC refrigerants are not used in MVACs (dashed box); shaded end-uses are those for which supply and servicing need projections are estimated in this report.

Refrigeration End-Uses

Refrigeration equipment can be broken down into four categories: domestic refrigeration, refrigerated transport, industrial process refrigeration, and commercial refrigeration. Figure 3-3 below illustrates these categories and identifies those end uses for which supply and servicing need projections are estimated in this report.

Domestic refrigeration includes household refrigerators, household freezers, combination refrigerator/freezer units, and water coolers. For the majority of these equipment types, the refrigerants used do not typically include HCFCs or blends containing HCFCs. Older household freezers sometimes employed HCFC-22; however, because these units are viewed as a minor part of the domestic refrigeration market, this end-use is not further analyzed in this report.

Refrigerated transport includes refrigeration used in equipment that moves products from one place to another and includes refrigerated ship holds, truck trailers (i.e., reefer trucks), railway freight cars, and other shipping containers. Refrigerated transport units have historically used R-502 (an HCFC-22 blend), but have transitioned to HFC-134a and R-404A.

Industrial process refrigeration (IPR) systems are complex, customized systems used to cool process streams in the chemical, food processing, pharmaceutical, petrochemical, and manufacturing industries. This sector also includes industrial ice machines, equipment used directly in the generation of electricity, and ice rinks. IPR systems with HCFC-22, HCFC-123, and HCFC-124 (as R-401A) are still in use though a portion of this market has transitioned to HFC-134a, R-404A, R-410A, and R-507A. IPR systems historically used CFC-11 and CFC-12.

Commercial refrigeration can be further broken down into three end-uses:

   * Cold storage warehouses are refrigeration systems with varying designs and charge sizes. They are used to store meat, produce, dairy products, and other perishable goods before and after food processing. Cold storage units historically used CFC-12, R-502, and HCFC-22 refrigerants; new systems are charged with R-404A and R-507A.
   * Retail food systems are used to refrigerate food in commercial retail establishments, such as grocery stores. These systems can be classified as either centralized systems, condensing units, or self-contained units. Centralized retail food systems, also known as remote systems, consist of a series of compressors located in a remote machinery room, providing a cooling medium to display cabinets and cold storage rooms in other parts of the building. The most common form of centralized systems circulate refrigerant throughout the store. Alternatives to these types of systems include secondary loop and distributed systems that largely use HFC refrigerant blends. These large retail food systems historically used CFC-12 and R-502 refrigerants; new systems have transitioned to R-404A, R-507A, and R-407A. Condensing units are large- or small-size refrigeration equipment with one or two compressors and a condenser installed on the roof or in a small machine room. Examples include walk-in refrigerators, coolers, and freezers. Condensing units historically used HCFC-22; new systems are charged with R-404A, HFC-134a, and R-507A refrigerants. Self-contained retail food units, also referred to as stand-alone systems, are factory produced with all the components integrated. Examples include roll-in refrigerators/freezers, under-counter refrigerators/freezers, reach-in refrigerators/freezers, wine and beer coolers, ice cream machines, beverage vending machines, and a variety of stand-alone upright or horizontal display cases (e.g., beverage merchandisers, deli cases). Self-contained refrigeration units historically used CFC-12 refrigerants and have transitioned to HFC-134a, R-404A, R-507A, and CO2 refrigerants. HCFCs were never used in this application.
   * Ice makers are factory-made units used in commercial establishments to produce ice for consumer use (e.g., in hotels, restaurants, and convenience stores). Ice makers are not further analyzed in this report because they do not typically employ HCFCs or blends containing HCFCs. Ice makers moved directly from CFC-12 to HFC-134a.

                 Figure 3-3: Types of Refrigeration Systems[a]
                            Refrigeration Equipment

                            Refrigerated Transport
                           Commercial Refrigeration
                       Industrial Process Refrigeration
                            Domestic Refrigeration

                            Household Refrigerators
                                 Water Coolers
                              Household Freezers
                                 Retail Food
                                  Ice Makers

                                 Cold Storage
  [a]S

  [a]Dashed boxes cover end-uses that are assumed to not use HCFC refrigerants; shaded end-uses are those for which supply and servicing need projections are estimated in this report.

Table 3-3 presents projected estimates of HCFC refrigerant servicing need for the refrigeration and AC industries. As shown, HCFC-22 represents the majority of the refrigeration and AC market for 2015 to 2025. The Vintaging Model also projects continued use through 2020 for HCFC-124 and through 2025 and beyond of HCFC-123 as a refrigerant in, or to provide service to, equipment manufactured prior to January 1, 2020. Although the Vintaging Model does not project servicing need for HCFC-142b in the 2015-2025 timeframe, other information suggests that HCFC-142b is still in use in niche refrigerant blends. More detail on the projected use of each HCFC in refrigeration and AC applications is provided in the following table.

Table 3-3: Projected HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 Need for
Refrigeration and Air-Conditioning, 2015-2025 (Metric Tons)[a]
                                     HCFC
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
HCFC-22
                                                                         46,100
                                                                         41,600
                                                                         36,700
                                                                         32,300
                                                                         27,700
                                                                         22,500
                                                                          5,500
HCFC-123
                                                                          2,200
                                                                          2,200
                                                                          2,200
                                                                          2,200
                                                                          2,300
                                                                            600
                                                                            500
HCFC-124
                                                                              5
                                                                              5
                                                                              5
                                                                              4
                                                                              4
                                                                              3
                                                                              -
HCFC-142b
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
                                                                              -
Source: Based on modeling assumptions from EPA (2012).
[a]Changes to assumptions in the Vintaging Model since the 2009 Servicing Tail Report have increased projected servicing need. For more detail on the changes, please see Appendix C.

   * HCFC-22 -- Projected HCFC-22 servicing need from 2015 onward is for AC and refrigeration applications. AC applications include window units, packaged terminal units, residential and commercial unitary AC, chillers, dehumidifiers, water and ground source heat pumps, and non-light duty mobile AC in buses, trains, etc. Refrigeration applications include refrigerated transportation, industrial process refrigeration, and commercial retail food. HCFC-22 is used as both a stand-alone refrigerant as well as a component in refrigerant blends.
   * HCFC-123 -- HCFC-123 is used in the refrigeration and AC sector mainly in centrifugal chillers for industrial process refrigeration and commercial comfort AC. The production and import of virgin HCFC-123 is scheduled for phaseout in 2020 for use in new AC and refrigeration equipment, and in 2030 for use in AC and refrigeration equipment manufactured before January 1, 2020.
   * HCFC-124 -- HCFC-124 is minimally used as a refrigerant; its primary use as a refrigerant is in blends, mainly R-401A, in industrial process and transport refrigeration equipment, as well as R-409A and R-414B in commercial refrigeration applications. As a stand-alone refrigerant, it has found some niche applications that reach high condensing temperatures as well as an alternative for CFC-114 in some naval chillers. Starting in 2020, virgin HCFC-124 can no longer be used in new AC and refrigeration equipment. Starting in 2030, virgin HCFC-124 can no longer be produced or imported to service existing AC and refrigeration equipment. However, its use in blends R-401A, R-401B, R-409A, R-414A, R-414B and others is constrained because those blends also contain HCFC-22. Starting in 2020, HCFC-22 will not be produced or imported for use in these blends. HCFC-124 is also a component of R-416A, which does not contain any other ODS. While feedback from several industry sources indicates there are a minimal number of legacy systems still in use, the number is declining (U.S. HCFC Manufacturer Representatives 2013).
   * HCFC-142b -- HCFC-142b is used as a constituent of a few refrigerant blends that have historically served as replacements for CFC-12 and R-500 (a blend containing CFC-12 and HFC-152a) medium-sized refrigeration equipment. Based on refrigerant sales data collected by the California Air Resources Board (see Preliminary 2011 and 2012 Sales and Distribution Data from the California Air Resources Board's Refrigerant Management Program in the docket) and information provided by stakeholders, R-409A (composed of HCFC-22, HCFC-124, and HCFC-142b) and R-414B (composed of HCFC-22, HCFC-124, HCFC-142b and R-600a) are the most common refrigerant blend using HCFC-142b. Although servicing need for R-409A, R-414B and some other niche refrigeration needs are not currently modeled in the Vintaging Model, these sources indicate there is continuing, albeit decreasing, servicing need for HCFC-142b refrigerant blends.

Box 3-2: Summary of Several HCFCs used in Refrigerant Blends
Often refrigerants are formulated with several substances, such as hydrofluorocarbons (HFCs) or hydrocarbons (e.g., propane, butane, isobutane). Table 3-4 presents the composition of some of the more common refrigerant blends containing HCFCs.
 Table 3-4: Compositions of Common HCFC Refrigerant Blends (percent by weight)
                                     Blend
                                    HCFC-22
                                   HCFC-124
                                   HCFC-142b
                                   HCFC-123
                                     Other
R-401A
                                      53%
                                      34%

13% HFC-152a
R-402A
                                      38%

60% HFC-125, 2% propane (R-290)
R-409A
                                      60%
                                      25%
                                      15%

R-502
                                     48.8%

51.2% CFC-115

End-uses in which these refrigerant blends containing HCFCs are currently used are presented in the Table 3-5.
           Table 3-5: HCFC-Containing Refrigerant Blends by End-Use
                         Refrigeration Equipment Type
                               Refrigerant Type

                                    R-401A
                                    R-402A
                                    R-409A
                                     R-502
Retail Food
                                       x
                                       x
                                       x
                                       x
Cold Storage
                                       x
                                       x

                                       x
IPR
                                       x

Transport Refrigeration
                                       x
                                       x

                                       x

Box 3-2 presents a brief summary of HCFCs used in refrigerant blends.

HCFC Use in Nonresidential Fire Suppression
Fire-extinguishing applications can be divided into two categories: portable fire extinguishers (i.e., streaming applications) that originally used Halon 1211, and total flooding applications that originally used Halon 1301 or Halon 2402 (EPA 2006). The Significant New Alternatives Policy (SNAP) program approved the use of HCFC-22, HCFC-123, and HCFC-124 in total flooding and streaming applications; however, only HCFC-123 and HCFC-124 are used as streaming agents in practice (EPA 2012). HCFC-123 is the primary constituent in Halotron I (also referred to as HCFC Blend B in EPA regulations). Specifically, the blend Halotron I is used in commercial/industrial, maritime, and military applications in the United States (Halotron 2008). HCFC-124 has some niche fire protection applications for specialty marine systems (pleasure boats) from the 1990s that may still be in use but are not modeled by the Vintaging Model. HCFC-124 was primarily used in Europe for fire suppression applications (Hughes Associates, Inc., 2012). This analysis considers fire suppression applications using HCFC-123 only.

In December 2011, House Resolution (HR) 1540 was signed into public law. Section 320, Fire Suppression Agents, amends section 605(a) of the Clean Air Act to allow HCFCs to continue to be used after 2015 for nonresidential fire suppression purposes. Production and import of HCFCs for fire suppression can continue until January 1, 2020, when Article 2F of the Montreal Protocol limits any continued consumption of HCFCs to servicing of refrigeration and AC equipment only. Table 3-5 presents projected servicing need estimates for HCFC-123.

Table 3-5: Projected HCFC-123 Need for Fire Suppression, 2015-2025 (Metric Tons)
                                     HCFC
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
HCFC-123
                                                                            190
                                                                            200
                                                                            200
                                                                            210
                                                                            210
                                                                              -
                                                                              -
Source: EPA (2012).

Alternatives to HCFCs in the fire extinguishing industry include HFCs such as HFC-236fa; some members of the industry have begun transitioning to non-ODS alternatives (EPA 2012).

Projected HCFC Scenarios
Section 4 presents projections of the number of HCFC-containing units of equipment and the associated servicing needs for 2015 through 2025. Scenarios were developed by investigating various trends that are expected to affect future market needs. Such trends include changes in charge sizes, the transition to alternative refrigerants, changes in refrigerant recovery and reuse practices, and HCFC economics.

   * Section 4.1 summarizes the projected market size of equipment and the servicing need for HCFC-22 beyond 2015 in the United States.
   * Section 4.2 summarizes the projected market size of equipment and servicing need for HCFC-123 beyond 2015 in the United States.
   * Section 4.3 summarizes the projected market size of equipment and servicing need for HCFC-124 beyond 2015 in the United States.
   * Section 4.4 provides discussion on anticipated HCFC-142b servicing needs based on stakeholder feedback.
   * Section 4.5 discusses the various sources of HCFCs that can be used to meet servicing need, including recycled, reclaimed, and imported (used) HCFCs as well as interpollutant transfers of allowances.
   * Section 4.6 provides projections of servicing need that can be met by reuse and recovery based on three different recovery scenarios.
   * Section 4.7 discusses factors that may affect projections of servicing need and recovery, including: certain equipment specification requirements, the transition to alternative refrigerants, and the stockpiling of refrigerant.

Appendix B presents further detail on the estimates provided in Section 4, disaggregating HCFC-22, HCFC-123, and HCFC-124 containing equipment and overall servicing need estimates into end-use specific projections.
HCFC-22
The HCFC-22 equipment and servicing need estimates provided below were developed using EPA's Vintaging Model (EPA 2012). Appendix A provides more detail on the methodology used to develop these projections. Appendix B provides projections disaggregated by end-use.
HCFC-22 Equipment Used Beyond 2015
The only HCFC-22 equipment that is projected to be in use (i.e., within the installed base) from 2015 onward will be used for refrigeration and AC applications, including window units, packaged terminal units, residential and commercial unitary AC, chillers, dehumidifiers, water and ground source heat pumps, non-light duty mobile AC in buses and trains, retail food, industrial process refrigeration, and transport refrigeration equipment. As presented in Table 4-1, approximately 95.8 million units of AC equipment will be in use in 2015, decreasing from 2015 levels by about 79 percent by 2020, and by over 99 percent by 2025. Approximately 976,600 units of refrigeration equipment will be in use in 2015. The installed base of refrigeration equipment is projected to decrease from 2015 levels by about 52 percent by 2020 and 85 percent by 2025.
         Table 4-1: Projected Number of HCFC-22 Units (2015-2025)[a,b]
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total AC
                                                                     95,814,200
                                                                     81,732,700
                                                                     67,286,500
                                                                     52,551,500
                                                                     37,024,700
                                                                     20,592,800
                                                                        330,100
Total Refrigeration
                                                                        976,600
                                                                        852,700
                                                                        734,000
                                                                        639,300
                                                                        549,900
                                                                        467,500
                                                                        145,600
Total
                                                                     96,790,800
                                                                     82,585,400
                                                                     68,020,500
                                                                     53,190,800
                                                                     37,574,600
                                                                     21,060,300
                                                                        475,700
[a]Including units that use blends containing HCFC-22.
[b]Because the estimates for cold storage warehouses are expressed in cubic feet, this equipment type is not included in this table.
Source: Based on modeling assumptions using EPA (2012).
Projected HCFC-22 Servicing Needs
Refrigeration and AC equipment commonly requires servicing, which may include adding refrigerant to account for refrigerant losses that occur over time. While the production and import of HCFC-22 was banned for use in new appliances in 2010, it may be permitted for servicing and maintenance purposes until January 1, 2020. Table 4-2 presents projected HCFC-22 servicing need (including that used in blends) for servicing equipment in 2015, 2020, and 2025.

As shown in Table 4-2, approximately 46,100 metric tons of HCFC-22 are projected to be required to service AC and refrigeration equipment in 2015, of which the majority -- 27,900 metric tons (61%) -- will be used to service AC systems. EPA projects that servicing need for HCFC-22 in AC and refrigeration equipment will decrease to 22,500 metric tons by 2020 and 5,500 metric tons by 2025. The 2015 projections of servicing need exceed the U.S. consumption cap for virgin HCFCs; however, a portion of the servicing needs can be met by using recovered refrigerant, thus decreasing the need for virgin HCFC-22.

     Table 4-2: Projected HCFC-22 Servicing Need (2015-2025) (Metric Tons)
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total AC
                                                                         27,900
                                                                         24,900
                                                                         21,600
                                                                         18,400
                                                                         14,900
                                                                         11,100
                                                                            360
Total Refrigeration
                                                                         18,200
                                                                         16,700
                                                                         15,100
                                                                         13,900
                                                                         12,700
                                                                         11,400
                                                                          5,200
Overall Total
                                                                         46,100
                                                                         41,600
                                                                         36,700
                                                                         32,300
                                                                         27,700
                                                                         22,500
                                                                          5,500
Box 4-1: Sensitivity Analysis on Key Assumptions Affecting HCFC-22 Servicing Demand
System Charge Sizes: This sensitivity analysis explores the impacts of a lower 4 kg charge size for 13 SEER HCFC-22 residential unitary AC equipment rather than the current assumption of approximately 4.8 kg. This change reduces HCFC-22 servicing need by about 2-7 percent per year from 2015 to 2023.
Leak Rates: Leak rates for residential unitary AC, large and medium retail food refrigeration, and cold storage units may be lower as a result of partnership programs such as GreenChill and more careful servicing. Lower loss rates can reduce HCFC-22 servicing need by about 10-23 percent per year between 2015 and 2025.
Lifetimes: The ban on HCFC-22 in new equipment manufactured after 2010 and price increases for HCFC-22 are likely to have prompted some end-users to transition away from HCFC-22 equipment earlier than the end of the equipment's lifetime. This sensitivity analysis explores the impact on servicing need if 20 percent of residential unitary AC, industrial process refrigeration units, and retail food equipment transitions out of HCFC-22 five years earlier. These changes can reduce HCFC-22 servicing need by 9-14 percent per year between 2015 and 2025.

Source: Based on analysis using EPA (2012).
Note: Totals may not sum due to independent rounding.
While assumptions in EPA's Vintaging Model are continually updated to refine inputs, the projections of future servicing needs for HCFC-22 can be affected by outside factors that are not fully reflected in the estimates. In addition, as HCFC use decreases and the phaseout approaches, modeling with precision becomes more difficult. In recognition of these challenges, sensitivity analyses on the impact of key assumptions on HCFC-22 servicing need were conducted in response to information from stakeholders. As described in Box 4-1, altering assumptions about system charge sizes, leak rates, and lifetimes can modestly to significantly decrease projected servicing need. For example, more careful servicing practices that result in lower loss rates can reduce servicing need by up to 23 percent per year past 2020. Additional details on these sensitivity analyses are presented in Appendix D.

Figure 4-1 displays the breakdown of HCFC-22 servicing need by AC and refrigeration equipment type for 2015 and 2020. As shown, residential AC, retail food refrigeration equipment, and IPR are projected to account for over 90 percent of HCFC-22 servicing need in 2015. By 2020, these three end-uses are still projected to account for 90 percent of HCFC-22 servicing need although IPR's portion of servicing need is slightly higher than 2015 and residential AC is slightly lower. This trend is partly the result of the modeled lifetimes for these end uses; EPA assumes an average lifetime for residential AC of 15 years, while IPR systems are assumed to last 25 years. Differences between modeled average lifetimes and practiced lifetimes can impact actual servicing need for residential and AC equipment, as examined further in Box 4-1.

Figure 4-1: HCFC-22 Need for Servicing Refrigeration and AC Equipment, by End-Use[a]
                                     2020
                  Total Consumption for Servicing: 22,500 MT
                                     2015
                  Total Consumption for Servicing: 46,100 MT

[a]Other Equipment" includes window units, packaged terminal units, water and ground source heat pumps, other mobile AC, and refrigerated transport.
Source: Based on data analysis using EPA (2012).

HCFC-123
The HCFC-123 equipment and servicing need estimates provided below were developed using EPA's Vintaging Model (EPA 2012). Appendix A provides more detail on the methodology used to develop these projections. Appendix B provides projections disaggregated by end-use.

HCFC-123 Equipment Used Beyond 2015
HCFC-123 is used in the refrigeration and AC sector mainly in centrifugal chillers for industrial process refrigeration and commercial comfort AC. The production and import of virgin HCFC-123 can be continued for use in refrigeration and AC equipment manufactured prior to 2020; by 2020 its remaining permissible use is for the servicing of this equipment until 2030, when all production and import is banned. A 2011 amendment to section 605(a) of the Clean Air Act also allows HCFC-123, a component of Halotron I, to be used for nonresidential fire suppression applications. Halotron I is used for commercial/industrial, maritime, and military applications in the United States (Halotron 2008).

Stakeholders consulted for this report indicated that there are currently no chemical substitutes for Halotron I. While bromotrifluoropropene (BTP) has been explored for use in the aviation sector, it is reportedly more toxic and expensive than Halotron I and, as such, is not regarded as a viable substitute. Stakeholders indicated that they plan to sell extinguishers with virgin material until 2019 and to continue selling extinguishers with recycled material in 2020 and beyond.

As presented in Table 4-3, approximately 47,600 units of AC equipment using HCFC-123 are estimated to be in use in 2015. The number of HCFC-123 AC units is projected to decrease from 2015 levels by 16 percent by 2025. Approximately 12,600 units of HCFC-123 refrigeration units are estimated to be in use in 2015, decreasing by approximately 5 percent by 2025. EPA estimates 1,422,100 Halotron fire suppression units in use in 2015, which is expected to decrease to 871,100 by 2025. This estimate for fire suppression is similar to the estimated of number of units provided by a stakeholder in the industry.

Table 4-3: Projected Number of HCFC-123 Refrigeration, AC, and Fire Suppression Units (2015-2025)
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total AC
                                                                         47,600
                                                                         48,900
                                                                         50,400
                                                                         50,900
                                                                         51,400
                                                                         49,500
                                                                         39,800
Total Refrigeration
                                                                         12,600
                                                                         13,300
                                                                         13,900
                                                                         14,400
                                                                         14,800
                                                                         14,300
                                                                         12,000
Fire Suppression
                                                                      1,422,100
                                                                      1,464,800
                                                                      1,508,700
                                                                      1,554,000
                                                                      1,600,600
                                                                      1,487,800
                                                                        871,100
Total
                                                                      1,482,300
                                                                      1,527,000
                                                                      1,573,000
                                                                      1,619,300
                                                                      1,666,800
                                                                      1,551,600
                                                                        922,900
Source: Based on analysis using EPA (2012).

Projected HCFC-123 Needs
Table 4-4 presents projected HCFC-123 need for charging and servicing equipment before 2020 and for servicing equipment only after 2020. Table 4-4 also provides the projected HCFC-123 servicing need for nonresidential fire suppression systems from 2015 to 2020. In 2015, approximately 2,200 metric tons of HCFC-123 will be required for servicing and charging refrigeration, AC, and fire suppression units, of which the majority -- 1,200 metric tons (55%) -- will be used to service AC systems. Servicing need for HCFC-123 in AC and refrigeration equipment is projected to decrease to 470 metric tons by 2025. The Montreal Protocol prohibits the production and import of virgin HCFCs for fire suppression beginning January 1, 2020, thus fire suppression servicing need is modeled as zero after this date.

Table 4-4: Projected HCFC-123 Refrigeration and AC Servicing Need (2015-2025) (Metric Tons)
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total AC
                                                                          1,200
                                                                          1,200
                                                                          1,200
                                                                          1,200
                                                                          1,200
                                                                            220
                                                                            180
Total Refrigeration
                                                                            770
                                                                            800
                                                                            830
                                                                            850
                                                                            860
                                                                            370
                                                                            290
Total Fire Suppression
                                                                            190
                                                                            200
                                                                            200
                                                                            210
                                                                            210
                                                                              -
                                                                              -
Overall Total
                                                                          2,200
                                                                          2,200
                                                                          2,200
                                                                          2,200
                                                                          2,300
                                                                            600
                                                                            500
Numbers may not add up due to independent rounding.ting a placeholder here in the meantime.t the same valueseparate analysis.2) Source: Based on analysis using EPA (2012).
Note: Numbers may not sum due to independent rounding.
HCFC-124
HCFC-124 servicing need is projected by the Vintaging Model through 2020 (EPA 2012). Appendix B provides projections disaggregated by end-use.
HCFC-124 Equipment Use Beyond 2015
HCFC-124 is used in the refrigeration sector mainly in industrial process refrigeration and medium retail food refrigeration (small condensing units). The production and import of virgin HCFC-124 can be continued for use in refrigeration equipment manufactured prior to 2020; by 2020 its remaining permissible use is for the servicing of this equipment until 2030, when all production and import is banned.

As presented in Table 4-5, approximately 27,400 units of refrigeration equipment using HCFC-124 are estimated to be in use in 2015. The number of HCFC-124 refrigeration units is projected to decrease to zero by 2025.

    Table 4-5: Projected Number of HCFC-124 Refrigeration Units (2015-2025)
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total Refrigeration
                                                                         27,400
                                                                         26,500
                                                                         25,200
                                                                         23,500
                                                                         21,400
                                                                         18,900
                                                                              -
Total
                                                                         27,400
                                                                         26,500
                                                                         25,200
                                                                         23,500
                                                                         21,400
                                                                         18,900
                                                                              -
Source: Based on analysis using EPA (2012).
Projected HCFC-124 Needs
Table 4-6 presents projected minimal HCFC-124 need for charging and servicing equipment before 2020 and for servicing equipment only after 2020. In 2015, approximately 4 metric tons of HCFC-124 will be required for servicing and charging refrigeration units. Servicing need for HCFC-124 in AC and refrigeration equipment is projected to decrease to zero metric tons by 2025.

Table 4-6: Projected HCFC-124 Refrigeration Servicing Need (2015-2025) (Metric Tons)
                                Equipment Type
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2025
Total Refrigeration
                                                                              5
                                                                              5
                                                                              5
                                                                              4
                                                                              4
                                                                              4
                                                                              -
Total
                                                                              5
                                                                              5
                                                                              5
                                                                              4
                                                                              4
                                                                              4
                                                                              -
Source: Based on analysis using EPA (2012).

While the Vintaging Model predicts minimal servicing need for HCFC-124, feedback from stakeholders and refrigerant sales data collected by the California Air Resources Board indicates the servicing need may be higher than projected (see Preliminary 2011 and 2012 Sales and Distribution Data from the California Air Resources Board's Refrigerant Management Program in the docket). This difference is in large part a result of servicing need for R-409A and R-414B in refrigeration applications, which is not modeled in the Vintaging Model.
HCFC-142b
HCFC-142b is predominantly used in refrigerant blends that serve as replacements for CFC-12 and R-500 medium-sized refrigeration equipment. The production and import of virgin HCFC-142b is allowed until 2020 for servicing refrigeration equipment manufactured prior to 2010.

The Vintaging Model projects that servicing need for HCFC-142b will be zero after 2015 (EPA 2012); however, the Model does not include servicing need for some niche HCFC-142b blends such as R-409A. According to refrigerant sales data collected by the California Air Resources Board, R-409A equipment is still in use (see Preliminary 2011 and 2012 Sales and Distribution Data from the California Air Resources Board's Refrigerant Management Program in the docket). HCFC manufacturers have also indicated that there will be continued, declining need for HCFC-142b in niche refrigerant blends beyond 2015.

HCFC Sources
Since January 1, 2010, only existing sources of HCFC-22 and a controlled quantity of virgin HCFC-22 (limited through allowance allocations distributed by EPA) are available to the AC and refrigeration industry to meet servicing need. Virgin HCFC-123 and HCFC-124 will be permitted for use in appliances manufactured prior to January 1, 2020 and virgin HCFC-142b will be permitted for use in appliances manufactured prior to January 1, 2010. Beyond 2020, only existing sources of HCFC-123 and HCFC-124, and a controlled quantity of virgin HCFC-123 and HCFC-124 (limited through allowance allocations distributed by EPA), will be made available to meet servicing need. Existing sources of HCFCs for servicing equipment include:

         1.    HCFC refrigerants that are recovered and either recycled or reclaimed before reuse. Under EPA regulations at 40 CFR 82.156, refrigerants containing HCFCs must be recovered. After the recovery process, the refrigerant held in the storage container may be:
         a.	Recycled (i.e., cleaned through the use of recycling equipment) and recharged back into the equipment from which it came;
         b.	Recycled and used in other equipment of the same owner; or
         c.	Reclaimed (shipped to an EPA-certified reclaimer) prior to resale to a new owner.
         2.    Import of used HCFCs that companies can acquire, if the import is preauthorized by EPA, through a petition process.
         3.    The conversion of allocations from other chemicals to HCFCs as allowed under the final allocation rules.

Each of these existing sources of HCFCs is described in more detail below.
Recycled HCFC Refrigerants
Recovered HCFC refrigerants are often recycled prior to being used again in equipment. The recycling process cleans the refrigerant for reuse without meeting all the requirements of reclamation, discussed further below. HCFC refrigerants are commonly recovered from a piece of equipment, adequately cleaned, and then recharged into the same piece of equipment using a recycling device (EPA 2003b).

EPA regulations allow for the recharge of used refrigerant without subsequent reclamation for refrigerants that are recovered and charged back into the same appliance or to another appliance if those appliances have the same owner. Several companies, such as supermarket chains, employ recycling plans through which the refrigerant is recovered when dismantling or converting one establishment's equipment and reused to service equipment at another facility with the same ownership. Stakeholder feedback has indicated that recovery and direct reuse is a widespread practice amongst supermarkets in large retail food equipment (ICF 2011). Some supermarkets have sufficient recovered HCFC-22 in-stock for servicing such that there is no anticipated need for virgin material before their equipment is retired (ICF 2011). EPA does not collect quantitative data on the amount of HCFC-22, HCFC-123, HCFC-124, or HCFC-142b that is recycled.
Reclaimed HCFC Refrigerants
Refrigerants that are resold to be used in other equipment must be reclaimed to a standard level of purity based on the AHRI Standard 700. EPA certified reclaimers are approved to reprocess used refrigerant to at least the purity level based on the AHRI 700 Standard.

In 2012, the amount of HCFC-22 reclaimed by EPA-certified reclaimers totaled approximately 4,264 metric tons, or 9.4 million pounds (EPA 2013). Reclamation of HCFC-22 increased by approximately 13 percent between 2011 and 2012; the higher price of HCFC-22 is a likely factor in encouraging increased reclamation of the refrigerant. Fewer quantities of the refrigerant blend R-502, composed of 48.8 percent HCFC-22 and 51.2 percent CFC-115, are also being reclaimed, with only 14 metric tons, or 30,748 pounds reported for 2012 (EPA 2013). The amount of HCFC-123 reclaimed in 2012 totaled approximately 143 metric tons, or 316,340 pounds (EPA 2013). Reclamation data from 2003 to 2012 is presented in Table 4-7.
       Table 4-7: Reclaimed HCFC-22 and HCFC-123 by Year (Metric Tons)

                                     2003
                                     2004
                                     2005
                                     2006
                                     2007
                                     2008
                                     2009
                                     2010
                                     2011
                                     2012
HCFC-22
                                                                          1,976
                                                                          3,280
                                                                          2,800
                                                                          3,872
                                                                          3,716
                                                                          4,556
                                                                         3,422
                                                                         3,622
                                                                         3,776
                                                                          4,264
R-502
                                                                             41
                                                                             48
                                                                             25
                                                                             52
                                                                             34
                                                                             40
                                                                             62
                                                                            13
                                                                            19
                                                                             14
HCFC-123
                                                                            50
                                                                           114
                                                                           145
                                                                           144
                                                                           103
                                                                           124
                                                                           198
                                                                           165
                                                                           154
                                                                            143
  Note: HCFC-124 and HCFC-142b reclamation data is not available.
  Source: EPA (2013).

As 2015 approaches, both the price of HCFC-22 and reclamation of HCFC-22 may increase. Stakeholders report reclamation capacity of 19,700 MT or more that can be mobilized to meet service need, should the price of HCFC-22 increase or the availability of HCFC-22 decrease sufficiently to provide increased market incentive for recovery and reclamation (ICF 2011). A more detailed discussion on HCFC-22 economics and recovery and reuse practices is provided in Section 4.5, "Factors Affecting Projections."
Imports of Used HCFCs
Unlike virgin HCFCs, used HCFCs are not subject to Montreal Protocol or Clean Air Act restrictions on consumption or use. However, in creating the allocation system for the use of HCFCs, EPA developed a shipment-by-shipment petition process for importing used HCFCs as described in 40 CFR 82.24 (EPA 2003a).The petition process ensures that HCFCs have been used (and were not newly produced) prior to import. For each shipment of used HCFC greater than five pounds, the importer needs to petition EPA at least 40 working days before the shipment is to leave the country of export. EPA reviews and verifies data in the petition and issues either an objection notice or a non-objection notice to the prospective importer. The projections in this report do not specifically include the potential future quantities obtained from the import of used HCFC-22, HCFC-123, HCFC-124, or HCFC-142b.
Interpollutant Transfers of Allowances
Another source of HCFCs can result from allowance holders transferring their allowances from one HCFC to HCFC-22, HCFC-123, HCFC-124, or HCFC-142b which is permitted on an annual and ODP-weighted basis. Section 607 of the Clean Air Act permits year-by-year inter-pollutant transfers of production and consumption allowances. Section 607(b) requires that EPA's rules are to permit "a production allowance for a substance for any year to be transferred for a production allowance for another substance for the same year," plus a 0.1 percent offset to benefit the environment. For example, converting 10,000 allowances of HCFC-124 (with an ODP of 0.022) would result in 3,996 allowances of HCFC-22 (with an ODP of 0.055). Allowance holders have converted their allowances to meet market needs historically; this practice is expected to continue, however, the projections in this analysis do not quantitatively assess the potential future quantities that could be obtained from converted allocations.
Meeting Refrigeration and AC Service Need
Although limited production of virgin HCFCs may be allowed to service appliances until 2020 and 2030 through production and consumption allowances, this analysis indicates that, with industry effort, a significant portion of the need for HCFCs for servicing can be met with previously used refrigerant that is recovered and then recycled or reclaimed. Increased amounts of recovered HCFCs are a source made available as a result of the venting prohibition EPA has established under Section 608 of the CAA (EPA 2004a).

To determine the potential amounts of used refrigerant available to service equipment, EPA used its Vintaging Model to develop three theoretical scenarios, representing low, baseline and high recovery, to estimate: 1) the amount of recovered HCFCs potentially available to meet servicing need of other equipment still in use; and 2) the subsequent remaining quantity needed to satisfy servicing need. The three scenarios investigated are summarized in Table 4-8. Because no servicing need is projected in the Vintaging Model for HCFC-142b, no recovery scenarios are modeled for this HCFC.

As shown, for HCFC-22, different recovery rates are modeled for the baseline, lower, and higher recovery scenarios. For HCFC-123 and HCFC-124, the recovery rate modeled by the Vintaging Model is used for all three scenarios. The baseline recovery rates for HCFC-123 and HCFC-124 are significantly higher (90 percent for HCFC-123 and between 80 and 90 percent for HCFC-124) than for HCFC-22, given HCFC-123 and HCFC-124's primary use in larger systems, including chillers, IPR, and medium retail food.

Table 4-8: Summary of Recovery Scenarios
                                   Scenario
                           Assumptions for 2015-2025

                                   HCFC-22
                            HCFC -123 and HCFC-124
Lower Recovery
35 percent of refrigerant from retired or retrofitted equipment is recovered and available for reuse in equipment (i.e., a 35 percent recovery rate). The remaining 65 percent is not available for reuse.
The percentage of refrigerant from retired or retrofitted equipment that is available for reuse in equipment is equal to the recovery rate modeled by EPA's Vintaging Model (approximately 80 to 90% industry-wide).
Baseline Recovery
The percentage of refrigerant from retired or retrofitted equipment that is available for reuse in equipment is equal to the recovery rate modeled by EPA's Vintaging Model (approximately 50% industry-wide).

Higher Recovery
65 percent of refrigerant from retired or retrofitted equipment is recovered and available for reuse in equipment (i.e., a 65 percent recovery rate). The remaining 35 percent is not available for reuse.

Note: HCFC-123 has a recovery rate of 90% and HCFC-124 has a baseline recovery rate of 80%.

In developing the scenarios using the Vintaging Model, EPA projected the amount of recovered HCFC based on the quantity available from decommissioned or retrofitted equipment. While refrigerant recovered from equipment during servicing can also be available for reuse in other equipment, this potential source is not included in these scenarios for several reasons. First, it is projected to be minimal in net terms (i.e., refrigerant recovered during service would likely be returned to the same equipment from which it was recovered). Also, according to industry sources, refrigerant recovered during service events primarily originates from commercial and industrial equipment (i.e., equipment with relatively large charges). Refrigerant is rarely recovered during the servicing of small equipment because these units tend not to be overcharged or leaking (Home Energy Center 2006, Airgas 2006). Additionally, only a small portion of all servicing events conducted on commercial and industrial equipment involve the refrigerant circuit, and when recovering refrigerant to perform repairs is necessary, often only a section of the refrigerant charge is isolated and recovered, not the entire charge.

To estimate refrigerant recovery and reuse, EPA assumed that a certain percentage of refrigerant is recovered from decommissioned or retrofitted equipment. It is important to note that not all refrigerant is assumed to be recovered. While EPA has regulations prohibiting intentional venting, for the purposes of this analysis it is appropriate to create scenarios that assume less than the full charge of refrigerant is recovered at equipment end-of-life. For example, in many instances, equipment is disposed of after a catastrophic failure, which might have resulted in a large or even complete loss of the refrigerant. Also, when equipment is removed from service, there can be losses associated with previous leaks and during attempts to recover the remaining refrigerant. It is also possible that owners or technicians disposing of a piece of equipment might not comply with the regulations and might vent the refrigerant.

This analysis then assumes that the entire pool of recovered refrigerant re-enters the market (see Appendix A for more details) and can be used to meet a portion of the servicing need for HCFCs. The results of the three recovery scenarios are presented in the sections that follow.
Servicing Need and Recovery Projections for HCFC-22
Table 4-9 to Table 4-11 summarizes the projections for HCFC-22 under each recovery scenario. Table 4-9 shows that modeled HCFC-22 supplied from recovery or reuse that is available under a Lower Recovery Scenario would meet 32 percent of servicing need in 2015, 72 percent in 2020, and 100 percent of servicing need by 2023. Under this scenario, the quantity of recovered HCFC-22 projected to be available before 2023 is inadequate to meet all of the projected servicing need. Given the ban on remaining production and import of virgin HCFC-22 in 2020, these modeling results suggest that industry may face a shortfall for 2020, 2021, and 2022. Shortfalls in 2015 and 2016 also exist based on limits set under the Montreal Protocol (see Section 4.6.4).

For the Baseline Recovery Scenario (Table 4-10) and Higher Recovery Scenario (Table 4-11), the modeled amount of recovered material is sufficient to meet total servicing need for HCFC-22 equipment starting in 2020 and 2019, respectively. In the Baseline Recovery and Higher Recovery Scenarios, the amount of recovered material is more than double the servicing need starting in 2024 and 2023, respectively.

As noted in Section 4.1.2, the sensitivity analyses conducted on key modeling assumptions suggests that HCFC-22 servicing need could be marginally to significantly less than what is presented in the following tables, depending on the extent to which leak rates, charge sizes, and equipment lifetimes are lower than what the Vintaging Model currently assumes. Information provided by stakeholders indicates that increasing prices for HCFC-22 may have motivated servicing technicians to be more careful with refrigerant and equipment owners to move more rapidly to alternatives. While the impact of these sensitivity analyses on HCFC-22 recovery or reuse has not been explicitly modeled, the results suggest that the need for virgin HCFC-22 may also be less than what is presented in the following tables.

Table 4-9: Lower Recovery Scenario: 35% Recovery Rate
Summary of Projected HCFC-22 Supply, Servicing Need, and Shortfall (Metric Tons)[a]

                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                    2025[b]
Total HCFC-22 Servicing Need
                                    46,100
                                    41,600
                                    36,700
                                    32,300
                                    27,700
                                    22,500
                                    17,900
                                    13,700
                                    10,100
                                     6,900
                                     5,500
Modeled HCFC-22 Supplied from Recovery or Reuse
                                    14,600
                                    14,000
                                    14,700
                                    14,400
                                    15,000
                                    16,200
                                    14,300
                                    12,100
                                    10,900
                                     9,500
                                     4,800
Estimated Supply Needed to Satisfy Remaining Servicing Need
                                    31,500
                                    27,500
                                    22,000
                                    18,000
                                    12,700
                                     6,300
                                     3,600
                                     1,700
                                       0
                                       0
                                      800
% of Total Servicing Need Supplied by Modeled Recovery/Reuse
                                      32%
                                      34%
                                      40%
                                      44%
                                      54%
                                      72%
                                      80%
                                      88%
                                   >100%
                                   >100%
                                      86%
[a]Based on analysis using EPA (2012).
[b]The values presented for 2025 do not take into account the possibility of carrying over surplus HCFC-22 from 2023 and 2024. The carryover of surplus HCFCs could help meet the total servicing need for HCFC-22 in 2025.

                  Table 4-10: Baseline Recovery Rate Scenario
    Summary of Projected HCFC-22 Supply and Servicing Need (Metric Tons)[a]

                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
Total HCFC-22 Servicing Need
                                    46,100
                                    41,600
                                    36,700
                                    32,300
                                    27,700
                                    22,500
                                    17,900
                                    13,700
                                    10,100
                                     6,900
                                     5,500
Modeled HCFC-22 Supplied from Recovery or Reuse
                                    21,300
                                    20,800
                                    21,800
                                    21,100
                                    21,800
                                    23,100
                                    20,700
                                    18,100
                                    17,000
                                    15,600
                                    10,800
Estimated Supply Needed to Satisfy Remaining Servicing Need
                                    24,800
                                    20,700
                                    14,900
                                    11,300
                                     5,900
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
% of Total Servicing Need Supplied by Modeled Recovery/Reuse
                                      46%
                                      50%
                                      59%
                                      65%
                                      79%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
[a]Based on analysis using EPA (2012).
Note: Totals may not sum due to independent rounding.

Table 4-11: Higher Recovery Scenario: 65% Recovery Rate
Summary of Projected HCFC-22 Supply and Servicing Need (Metric Tons)[a]

                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
Total HCFC-22 Servicing Need
                                    46,100
                                    41,600
                                    36,700
                                    32,300
                                    27,700
                                    22,500
                                    17,900
                                    13,700
                                    10,100
                                     6,900
                                     5,500
Modeled HCFC-22 Supplied from Recovery or Reuse
                                    27,200
                                    26,100
                                    27,300
                                    26,700
                                    27,800
                                    30,100
                                    26,500
                                    22,400
                                    20,200
                                    17,700
                                     8,900
Estimated Supply Needed to Satisfy Remaining Servicing Need
                                    18,900
                                    15,500
                                     9,400
                                     5,700
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
% of Total Servicing Need Supplied by Modeled Recovery/Reuse
                                      59%
                                      63%
                                      74%
                                      83%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
[a]Based on analysis using EPA (2012).
Note: Totals may not sum due to independent rounding.
Need and Recovery Projections for HCFC-123
Table 4-12 summarizes the projections for HCFC-123 under the Baseline Recovery rate scenario. HCFC-123 need is modeled for both servicing and initial charging of new AC equipment and fire suppression systems; however, only servicing need is assumed to be able to be met by recovered material. The table provides the modeled servicing need for HCFC-123, the amount of HCFC-123 servicing need that can be met by recovery/reuse, as well as additional need for new equipment.

As shown in Table 4-12, the projected amount of recovered and reused HCFC-123 will meet total servicing need needs starting in 2020. Chillers and IPR equipment have high baseline recovery rates (90%), thus larger volumes of refrigerant can be reused for servicing. Unlike HCFC-22, HCFC-123 servicing need is not expected to decrease significantly over the 2015 to 2025 timeframe.

Table 4-12: Baseline Recovery Rate Scenario
Summary of Projected HCFC-123 Supply and Servicing Need (Metric Tons)[a]

                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
Total Servicing Need (MT)
                                      610
                                      600
                                      590
                                      600
                                      610
                                      580
                                      560
                                      540
                                      520
                                      490
                                      470
Additional Servicing Need for Charging New Equipment (MT)[b]
                                     1,600
                                     1,600
                                     1,600
                                     1,600
                                     1,700
                                      -
                                      -
                                      -
                                      -
                                      -
                                      -
Anticipated HCFC-123 Supplied from Recovery or Reuse (MT)
                                      330
                                      330
                                      330
                                      820
                                      920
                                      970
                                     1,020
                                     1,030
                                     1,040
                                     1,050
                                     1,060
Estimated Supply Needed to Satisfy Remaining Servicing and New Equipment Need
                                     1,900
                                     1,900
                                     1,900
                                     1,400
                                     1,400
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
% of Total Servicing Need Supplied by Anticipated Recovery/Reuse
                                      15%
                                      15%
                                      15%
                                      36%
                                      40%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
[a]Based on analysis using EPA (2012).
[b]Servicing Need for Charging New Equipment" refers to need associated with new refrigeration and AC units (before 2020) and charging fire suppression systems. Use of HCFC-123 for fire suppression will not be permitted as of January 1, 2020.
Note: Totals may not sum due to independent rounding.

Servicing Need and Recovery Projections for HCFC-124
Table 4-13 summarizes the projections for HCFC-124 under the Baseline Recovery rate scenario. HCFC-124 need is modeled for servicing of new refrigeration equipment. The table provides the modeled servicing need for HCFC-124 and the amount of HCFC-124 servicing need that can be met by recovery/reuse.

As shown, the projected amount of recovered and reused HCFC-124 will meet total servicing needs starting in 2020. Medium Retail Food and IPR equipment have high baseline recovery rates (80%), thus larger volumes of refrigerant can be reused for servicing.

                  Table 4-13: Baseline Recovery Rate Scenario
   Summary of Projected HCFC-124 Supply and Servicing Need (Metric Tons)[a]

                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
Total HCFC-124 Servicing Need
                                       5
                                       5
                                       5
                                       4
                                       4
                                       4
                                       3
                                       2
                                       1
                                     <1
                                       -
Modeled HCFC-124 Supplied from Recovery or Reuse
                                     <1
                                       1
                                       1
                                       1
                                       2
                                       9
                                      17
                                      14
                                      11
                                       7
                                       4
Estimated Supply Needed to Satisfy Remaining Servicing Need
                                       4
                                       4
                                       4
                                       3
                                       2
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
% of Total Servicing Need Supplied by Modeled Recovery/Reuse
                                      8%
                                      16%
                                      24%
                                      31%
                                      41%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                   >100%
                                       -
[a]Based on analysis using EPA (2012). As mentioned previously, feedback from stakeholders and CARB data indicate this number is low.
Note: Totals may not sum due to independent rounding.

Summary of HCFC-22, HCFC-123, and HCFC-124 Servicing Need and Recovery Projections
Figure 4-2, Figure 4-3, and Figure 4-4 illustrate the projected supply of recovered refrigerant available to meet servicing need under the Lower Recovery Scenario, the Baseline Recovery Scenario, and Higher Recovery Scenario, as well as its subsequent importance in meeting future servicing need. These figures display servicing need and supply projections of HCFC-22, HCFC-123, and HCFC-124 summed together and expressed in ODP-weighted quantities to compare to the ODP-weighted HCFC consumption cap for the United States. The solid line indicates the total HCFC projected servicing need between 2015 and 2025 while the dotted line indicates the U.S. HCFC consumption cap (the value of the HCFC consumption cap does not change between the three scenarios). Shading in the figures represents supply. The dark grey shading indicates the portion of projected supply that is available through recovered and reusable HCFCs under the scenario in question. The remaining portion of servicing need that cannot be met is shaded a lighter grey to represent virgin supply that would be required to meet modeled servicing need.

Figure 4-2 illustrates that a virgin supply that exceeds the U.S. HCFC consumption cap would be necessary to meet modeled servicing need during some years between 2015 and 2025, given the amount of material recovered under this scenario. Virgin HCFCs are needed to meet modeled servicing need under the Lower Recovery Scenario through 2022 and in 2025.

Figure 4-3 and Figure 4-4 illustrate that, between 2015 and 2020, the projected supply from recovered HCFCs combined with a smaller supply from virgin material that is below the U.S. cap is sufficient to meet modeled HCFC servicing need under the Baseline Recovery and Higher Recovery Scenarios. In addition, beyond 2019, the projected supply from recovered HCFCs exceeds the HCFC servicing need projections.

       Figure 4-2: Total Projected HCFC Demand, Lower Recovery Scenario

  Note: In 2025, HCFC-22 recovery is not projected to fully meet service need under this scenario.

      Figure 4-3: Total Projected HCFC Demand, Baseline Recovery Scenario

       Figure 4-4: Total Projected HCFC Demand, Higher Recovery Scenario

Factors Affecting Projections
Several market dynamics affect the projections of future servicing needs for HCFCs. Certain equipment specification requirements, the transition to alternative refrigerants, surplus inventory of refrigerant, as well as equipment manufactured with HCFCs for sale after the phaseout can all potentially alter the projected servicing scenarios. Each of these issues is discussed further below.
Transitioning to Alternative Refrigerants
A wide range of alternative refrigerants found acceptable under EPA's SNAP program are available in the AC and refrigeration sector. Hydrofluorocarbon (HFC) alternatives, including HFC-134a, R-410A (composed of HFC-32/HFC-125), R-407C (composed of HFC-32/HFC-125/HFC-134a), R-404A (composed of HFC-125/HFC-143a/HFC-134a), and R-507A (composed of HFC-125/HFC-143a), are most widely used in refrigeration and AC equipment. Other alternatives -- found acceptable under EPA's SNAP program for specific end-uses, and sometimes with use conditions -- are not only ozone-friendly but also climate-friendly, including hydrocarbons, carbon dioxide, ammonia, and lower-GWP fluorinated refrigerants, such as HFO-1234ze(E). The pace of transition to equipment using these alternatives has varied by industry and type of equipment.

Production and import of new refrigeration/AC equipment using HCFC-22 has been prohibited in the United States as of January 1, 2010. Several AC and refrigeration equipment manufacturers had discontinued production of new equipment using HCFC-22 well before this phaseout date (Hill Phoenix 2009; Hussmann 2009; Kysor/Warren 2009; Johnson Controls 2009). Such actions were consistent with those taken in the mid-1990s, when the refrigeration and AC industries phased out CFC refrigerants from new production chillers, refrigerators, motor vehicle air conditioners, and other products two or more years before the 1996 CFC consumption phaseout.