2023 IIAR State of the Industry Report

CONTRIBUTORS

Special thanks to all those who contributed to the State of the Industry Report.

Natasha Arnold – Industrial Refrigeration Service, Inc.

Melissa Cassell – General Refrigeration Company

Ben Dawes – IIAR

Beth Fox – EVAPCO

Trevor Hegg – EVAPCO, Inc. / Chair of the IIAR Board of Directors

Clark Jackson – Gray Construction

Werner Paulus – Refrigeration Design & Service Inc.

Joseph Schweitzer – Colmac Coil Manufacturing, Inc.

Stephanie Smith, PE – Risk Management Professionals

Mark Stencel – Basset Mechanical

The 6th Edition of the State of the Industry Report has evolved to include more information from the past IIAR Survey questions. Emerging information on industry developments and IIAR’s influence on the industry continues to grow as its international relations and guidance provided for other countries’ efforts to establish their own standards continues.

Additional information on low-charge ammonia systems is included. The recently formed Energy & Sustainability Committee is focused on establishing energy efficient metrics and developing programs to support a number of issues facing end users.

IIAR’s efforts in the government relations sector is even more important than ever. Of note, the United States has recently signed into legislation the American Innovation and Manufacturing (AIM) Act which mandates the drawn down of HFCs similar to EU standards. The United States has also ratified the Paris Agreement with the intent to create nationally determined contributions to reduce total US greenhouse gas emissions. All of which directly and greatly impact the refrigeration industry.

IIAR has expanded on the challenges for end users in the industry, the state of government relations with IIAR, and the educational resources of IIAR. Continuing in tradition is a preface from the Chair of the Board of Directors, Trevor Hegg.

preface

The IIAR State of the Industry report, now with its 6th Edition, contains valuable information and is an important resource for decision makers considering their facilities and operations regarding safety and compliance issues. This cannot be more true today as you will see reading through this comprehensive report that IIAR’s vision and mission are more important than ever to our industry with the increased pursuit of government and regulatory agencies on the transitioning use of natural refrigerants. I applaud the IIAR Marketing Committee and IIAR Staff for the countless hours of research and hard work to capture the information presented including updates on initiatives concerning the American Innovation and Manufacturing (AIM) Act, energy sustainability, the new membership structure, regulations and IIAR Standards, among other topics.

The biggest initiative taking place in IIAR is supporting the transition to natural refrigerants with the impact of the AIM Act of 2020 approaching fast and looming large. The AIM Act Task Force, under the direction of Miguel Garrido, has been moving quickly to develop content and provide guidance intended to support those that will be affected by it. The Energy & Sustainability Committee, re-energized (pun intended) under the direction of Aer Teale, is paralleling the efforts of the AIM Act Task Force and is determined to set the refrigeration industry on a pathway to making natural refrigerants the 1st choice to achieve energy sustainability. The Standards Committee, under the direction of Don Faust, continues to develop the standards necessary to make refrigeration systems using natural refrigerants the safest possible. It is clear that the work of these committees and all IIAR committee and our volunteer membership are collaboratively needed to support the transition to natural refrigerants.

It will also take more people. As mentioned in last year’s report, the new membership structure went into effect with the new membership year that began in July 2022. To date, the new program has generated 404 new members, an increase of 14%. This is a great start!

IIAR has been and will continue to work collaboratively with the Industrial Refrigeration Consortium (IRC), RETA, GCCA, ASTI, Eurammon, and other like-minded similar-mission organizations to expand on the safe use of All-Natural Refrigerants.

Thank you for your interest in this important work and let this express my gratitude to the IIAR Marketing Committee and Staff for their hard work and efforts in the development of this invaluable document. I would also like to thank all our many volunteers, contributors to the Ammonia Research Foundation, committee chairs, and the IIAR Board of Directors for all their efforts in expanding and making our industry as safe as it can be.

Sincerely,

Trevor Hegg 2022-2023 IIAR Chairman

IIAR has long sought to support its members is the best way possible In 2022, IIAR introduced a new membership model to include additional training benefits and a new membership structure. IIAR Committees have strived to meet the goals of 2022 and set lucrative goals for 2023.

The conflicting dynamic between natural refrigerants and synthetic refrigerants continues to be an important topic of discussion. Natural refrigerants continue to be the most sought-after refrigerants in the industry globally and have low or no Ozone Depletion Potentials (ODPs) and Global Warming Potentials (GWPs). Several non-profit and government alliance organizations are putting their efforts into advocating for natural refrigerants worldwide.

As IIAR looks to its 2023 goals, its hopeful that ongoing discussions on the safe and sustainable use of natural refrigerants will continue to grow in communities other than our direct industries served. In addition, IIAR continues to share the new membership information in the hope that more members will utilize the benefits and new members will seek out the IIAR community.

membership update

The industrial refrigeration industry is diverse. IIAR has over 3,000 members from over 50 countries around the world. Alliance organizations in Asia Pacific, Europe, Latin America, North America, and Australia make the international outreach very successful. Members of IIAR include design engineers, end users, contractors, students, scientists, and trainers.

In 2022, IIAR introduced a membership system with additional benefits and a new structure. Starting with 2022 / 2023 membership, individual and group memberships are available options in the structure. Membership includes access to the e-Library, directory, app, and Learning Management System. In addition, IIAR has included one (1) free IIAR Academy of Natural Refrigerants certificate course per member, per year and one (1) free IIAR Training Video Series per member, per year. This decision was made to meet the mission of promoting education in the industry. Also added was access to a virtual bookshelf where the IIAR Standards and other published documentation may be viewed, notated, and referenced from electronic devices. For more information, please see the Member Benefits page.

refrigerant considerations

Much debate is surrounding the industrial and commercial refrigeration communities on choosing the appropriate refrigerant per the application needed. IIAR has taken a strong stance in defending natural refrigerants in its Green Paper, republished in 2019. The paper focuses on the advantages of ammonia and carbon dioxide as refrigerants, which are the most widely used and most requested for new and retrofitted systems in the current market. Much of their benefit revolves around their environmental compatibility. Unlike their synthetic refrigerant counterparts, ammonia and carbon dioxide do not impact atmospheric ozone or contribute to climate change in the same manner. For more information on natural refrigerants and considerations for using them, please see the published Green Paper.

In response to the American Innovation and Manufacturing (AIM) Act of 2020, IIAR spearheaded the AIM Task Force. The initiative is education and promotion of natural refrigerants and their sustainable use. As more information becomes available regarding the United States Environmental Protection Agency’s (EPA’s) plan to restrict the use of certain synthetic refrigerants, the Task Force will provide information on their informational page, What is the AIM Act?, on the IIAR website. For more information or if you are interested in being involved with the Task Force, please contact IIAR Staff.

Over the last 20 years, IIAR has created strong alliances with many international associations and has been able to extend its reach worldwide through these partnerships. IIAR signed new Memorandum of Understandings (MOUs) with the Australian Institute of Refrigeration, Air conditioning and Heating (AIRAH) and Asociacion de Empresas del Frio y Sus Technologias (AEFYT) in 2021. A MOU with the Chinese Association of Refrigeration (CAR) and the Institute of Refrigeration (IoR) in the United Kingdom has been signed. IIAR’s active international alliances include those listed in the Alliances webpage. IIAR also maintains strong alliances through MOUs with many US based associates also listed on the page.

In 2021, the Brazilian Chapter focused on cooperation with industry to aid in the transition from high global warming potential refrigerants to low impact refrigerants, including efforts to expand the use of natural refrigerants. The following organizations are in the process of adopting the IIAR Standards for this countries.

• Colombian Institute of Technical Standards and Certification (ICONTEC) / IIARAsociación Colombiana De Acondicionamiento Del Aire Y De La Refrigeración (ACAIRE) Chapter

• Ministry of Production (MPCEIP) and IIAR Chapter – Ecuador

AEFYT is publishing Condenser articles in Spanish as part of an educational initiative for the industry. The Technical Standards Institute of Costa Rica (INTECO) / IIAR Chapter / Colegio de Ingenerieros Electricsitas, Mecanicos e Industriales (CIEMI)–Allied Association has adopted the IIAR Standard, translated the Standards into Spanish, and is currently in public review of the Standards.

AIM act updates

The AIM Act of 2020 was enacted in December 2020 and provides the EPA new authorities to tackle hydrofluorocarbon (HFC) issues with three (3) new regulatory programs including: the production and consumption phase down of HFCs; HFC management; and transition to the next generation of technologies. The AIM Act lists 18 HFCs and a phase down schedule.

As the AIM Act seeks to phasedown these long-lived, highly potent greenhouse gases, synthetic refrigerant producers have introduced another class of refrigerants, hydrofluoroolefins (HFOs). These HFOs are unregulated by the AIM Act. But, in many applications, HFOs do not have the desired refrigerant characteristics and require compounding with highly potent greenhouse gases, HFCs, to be effective. These compounds have been referred to as HFO blends, though they contain HFCs as part of the composition.

In example, both R448A and R449A, HFC/HFO blends intended to replace HFCs 404A and 507A have greater percentages of AIM Act regulated HFCs than of HFOs. They both contain greater than 24% of the HFC-125 (GWP 3500), greater than 24% of the HFC-32 (GWP 677), and greater than 21% of the HFC-134a (GWP 1200) along with some HFO constituents. Go to www.IIAR.org/AIMACT for list of refrigerants that contain one or more AIM Act regulated HFC’s.

Natural refrigerant solutions, such as ammonia, carbon dioxide and hydrocarbons, exist in nature, have no blended elements that are regulated by the AIM act, and offer users refrigeration systems that are environmentally friendly and sustainable.

The Kigali Amendment to the Montreal Protocol, finalized in 2016, was ratified by the US Senate in 2022. This global agreement is intended to reduce the potential for global warming, by phasing out the production and consumption of HFCs. In addition to this, various states are also reviewing and passing their own regulations on HFCs and their management, phasedown, and technologies. According to the US Climate Alliance these states are advancing these goals through policies, regulations and legislation across sectors and issue areas. CA, CO, DE, MA, ME, MD, NJ, NY, RI, VT, WA are committed to promoting regulations addressing hydrofluorocarbons. Go to US Climate Alliance for more details.

Over the past 75 years the refrigeration industry has seen established refrigerants across industrial, commercial, and domestic refrigeration and cooling industries. One of the largest impacts and opportunities that will result from the AIM Act is an industry-wide disruption of the entire refrigeration and cooling industry. This will result in the development and market acceptance of new products that incorporate a natural refrigerant into manufacturing product lines. According to the 2019 EPA HFC consumption report over 70% of HFC refrigerants are within domestic and commercial cooling and refrigeration applications. Although these markets are typically not the focus of IIAR members it could be an area of growth for manufactures and contractors as the market evolves. The uncertainty surrounding F-Gas refrigerants and a growing public awareness of refrigerant impact on global warming will continue to mount pressure to develop long term refrigeration solutions that do not contribute to global warming.

The next phase or evolution will be the transformation of cooling and refrigeration systems to full building thermal systems that provide both heating and cooling within a facility or district of buildings. Beyond refrigerant emissions, the elimination of natural gas is paramount in reducing GHG emissions and will be a key focus to organizations Net Zero goals and targets. This will be applicable to large food manufactures, cold storage, and ice rinks as they have a large cooling load that generates a lot of waste heat.

In the past, capturing waste heat from the refrigeration system was not always economically feasible from a pure payback perspective, however; as organizations shift to incorporate GHG into their project analysis the business case can be quite attractive. Beyond the payback, another challenge has been the usefulness and availability of the waste heat from the refrigeration system. The industry is addressing this through the development of natural refrigeration heat pumps that can be used as either boosters to existing systems or standalone systems.  The combination of refrigeration phase outs/ downs, proven case studies, and the drive towards reducing or eliminating natural gas within buildings will lead to further development of solutions that maximize the waste heat from refrigeration systems. The AIM act is an important step forward to the development of thermal systems as the traditional residential, commercial, and industrial cooling and heating refrigerant changes to comply with the current regulations.

regulatory and IIAR standards update

The following IIAR Standards were updated in 2021 and 2022.

• ANSI/IIAR Standard 1-2022 American National Standard for Definitions and Terminology Used in IIAR Standards

• ANSI/IIAR Standard 2-2021 American National Standard for Design of Safe Closed-Circuit Ammonia Refrigeration Systems

• ANSI/IIAR Standard 3-2022 American National Standard for Ammonia Refrigeration Valves

•

ANSI/IIAR Standard CO2-2021 Safety Standard for Closed-Circuit Carbon Dioxide Refrigeration Systems

The EPA’s RMP Reconsideration Final Rule Fact Sheet has been in effect for a couple of years. Annual notification drills in coordination with emergency responders and field exercises must be done and compliance is required by December 19, 2024. Tabletop exercises are due by December 21, 2026. The scope and frequencies of these notifications and exercises are written in the regulations. Additional regulatory changes to the RMP Program may be implemented in the near future with the EPA’s Risk Management Program Safer Communities by Chemical Accident Prevention Proposed Rule, signed on August 18, 2022. The rule proposes additional changes to the RMP Program, and the public comment period closed on October 31, 2022. IIAR submitted comments, taking input from members of the organization and in partnership with other industry organizations, to provide input to the EPA’s ruling.

IIAR continues to monitor government programs that impact the use of all refrigerants. IIAR also continues to make government agencies aware of the benefits of ammonia and other natural refrigerants for their viability and potential for future use. For more information on government programs please go to www.iiar.org/governmentandcode.

low-charge ammonia systems

As more end-users implement low-charge, or reduced charge systems, CO2 transcritical and CO2 cascade will also continue to maintain a force in the market and are currently playing a larger role in new, retrofit, and expansion projects. Hydrocarbons are getting more traction based on the regulatory environment and the industry may be seeing some more regulation in the form of building code changes in the near future. Alternatives to these new technologies could be new synthetics developed for HVAC systems, only time will tell. There are mounting concerns that current synthetics may not have transparent enough chemical data and safety records / history since limited testing or data is available at this time.

Everyday more companies are making commitments to sustainability, climate pledges and net-zero operations. While many industries rely on refrigeration for their products or processes, they may not fully understand the impact of systems options and refrigerant choices. IIAR and its members are in a fortunate position to know and understand the importance of utilizing natural refrigerants and how to evaluate options.

For those wanting a future proof solution, natural refrigeration technologies are the answer. IIAR is well equipped to assist with addressing concerns about heavily regulated ammonia. Fortunately, with the ever-changing regulation landscape, natural refrigerants are withstanding the test of time. Refrigeration applications with ammonia, even in small quantities, require management procedures for compliance and safe operations at these facilities. Ammonia Refrigeration Management for Low Charge (ARM-LC) Summary Guide and Guidelines, is intended for end users and to provide guidance on how to meet regulatory requirements and appropriately address elements needed to maintain a safe system. The Low Charge ARM package defines 12 elements that, when implemented properly, will help reduce the risks associated with a low-charge ammonia refrigeration system.

These elements are based on Occupational Safety and Health Administration (OSHA) and EPA guidance for complying with their respective General Duty clauses. The Low Charge ARM package simply outlines what to expect from those charged with developing the various parts of a management program and provides helpful templates to aid end-users. It is worth noting that many of the recommendations apply to refrigeration systems regardless of the refrigerant used. In addition, the ARM-LC guideline calls for the majority of the documentation and content be provided by the supplier if the low charge system, greatly alleviating this burden form the owner or end-user.

industry dynamics

The continued challenge for end users is the public perception of widely used refrigerants. What most of the public does not fully comprehend are the pros and cons of all refrigerants. While some may be non-toxic, they have no odor and present higher asphyxiation hazards. Others are more flammable. Some of this reportedly is exacerbated by regulators, fulfilling their job duties, but also amplifies a negative public perception by concentrating on highly hazardous chemicals used as refrigerants when they may be more efficient and marketable than other refrigerants. Ammonia is a good example of one of these types of refrigerants.

The other monumental challenge is the cost of regulatory compliance. As regulations become more complex and expand to new chemicals, the burden becomes everincreasing. Managing documentation and maintaining records can be time consuming but manageable with support from non-regulating agencies providing guidance and standards. Especially since documentation must not only be completed, but also be accurate. Any change to the system and/or management/personnel may require a documentation review and update. The ideal end goal is to be able to effectively manage the costs and burden by balancing the refrigerant used, the regulatory requirements, and the cost of running the business.

The IIAR SOI Surveys from the past few years provided great insight into what other challenges end-users face in their operations. Overall, respondents are concerned that the regulatory community is putting too much burden on facilities that is not constructive. Suggestions included regulatory agencies taking a more constructive and helpful approach to facilities that are struggling with compliance, requiring that non-compliance fines be applied to improvement projects rather than just funding the regulatory agency and more alignment between state and federal agencies. There were also a few suggestions that regulatory agencies spend additional time training the inspectors for consistency on regulation interpretation/enforcement and specifically on ammonia facility operations, so they have more specific education on these types of systems.

IIAR has supported the Government Support Portal for many years. The portal allows access to IIAR’s most current Standards and the Basic Ammonia Refrigeration and Safety Series to Regulatory agents/officers. IIAR sponsors a regulatory training program through the Industrial Refrigeration Consortium (IRC) and also works with the Global Cold Chain Alliance (GCCA) and World Food Logistics Organization (WFLO) to support an OSHA Alliance training program for regulators. There is also a coalition between IIAR, the American Safety Training Institute (ASTI), the Refrigerating Engineers and Technicians Association (RETA), and GCCA to support a formal Safety Day training program which caters to first responders and the regulatory community. In addition, IIAR staff members are in contact with numerous government agencies to ensure they are aware of IIAR’s presence in the industry and the objectives of the organization.

Nation-wide licensing requirements for trained operators and maintenance personnel was also a common response in past surveys. While there are no regulatory requirements for licensing, there are licensing programs and certification programs available to establish a corporate hiring or promotion policy. By far, the biggest challenge identified by end-users revolved around staffing and qualified operator availability. Lack of skilled and qualified workers remains a challenge in the industry as apprenticeship programs graduates, skilled trades graduates, and college graduates are all still lagging in numbers due to the challenges of remote learning during the pandemic.

The IIAR Marketing Committee is currently completing work on a refrigeration informational portal. This portal will give members access to regulatory information, an avenue for sharing ideas and solutions to common issues, and general information about changes within the industry.

energy savings in industrial refrigeration systems

Results from past IIAR SOI Surveys indicated a number of different ways manufacturers, designers, and end users are increasing their energy efficiency. Several of the largest cold storage providers are increasing their investments in the adoption of solar panel arrays onsite throughout their network of facilities to reduce overall energy consumption. Additionally, new cold storage buildings are utilizing more automation systems to improve the efficiency of the storage process and reduce the amount of energy needed to keep stored products at the correct temperature. Although, most facilities rely on equipment efficiency vs. operational efficiency. These methods included installing low charge systems, utilizing different heat transfer technologies, and converting controls to modulate operation rather than operate in an “on/off” mode.

End users are also utilizing newer technologies on individual units (condensers, evaporators, compressors, etc.) that increase overall energy efficiency of the refrigeration system. One of these technology trends is the increased use of electronically commutated (EC) fan motors for evaporators and condensers. EC fans have built-in variable speed capability to adjust the fan speed on the evaporator or condenser to match the cooling load, further reducing energy consumption. In addition, effective operational changes included cleaning/maintaining equipment at different intervals, using operational changes to raise the suction in a system, controlling the capacity of compressors or utilizing equipment in a different manner with different operational limits, and overall monitoring performance of the system better.

Regulatory pressure is increasing the adoption of energy efficient equipment in industrial refrigeration systems. As stated in other sections of this report, State and Federal energy regulations in the US have increased their focus on industrial refrigeration systems in recent legislative sessions. Regulations such as Title 24 in California have further expanded the building codes energy efficiency targets on industrial refrigeration systems. Manufactures of condensers and gas coolers must provide specific efficiency ratings that meet the efficiency requirements outlined in Title 24 to meet compliance with this standard. Industrial refrigeration systems are becoming more energy efficient through a combination of proper system design, utilizing solar automation, advanced controls, regular maintenance, the use of a variety of natural refrigerants, and regulatory pressure to increase energy efficiency.

IIAR educational resources

IIAR has expanded its educational content and offerings to include online and on-demand education resources through the IIAR Learning Management System (LMS), available only to members. This online resource has been critical in helping IIAR achieve its mission of education and training via a virtual medium. IIAR Certificate Courses are currently available through the IIAR LMS, which support critical training for the refrigeration industry and provide ongoing education credits and qualifications. Courses have expanded to include Mechanical Integrity, the Piping Handbook, guidelines outlining the proper use of personal protective equipment (PPE), insulation, and operating ammonia refrigeration systems.

IIAR continues to work with our chapters and alliance partners to establish events and education offerings throughout the world via its international events.

where is the industry headed?

With the phase-down of HFCs and the push for reduced amounts of high-GWP refrigerants, end-users are in a situation where they must decide which regulations they will choose to be governed by, rather than if they can remove their facility from an under a regulatory agency by restricting their inventory or using alternative refrigerants. R448, R449, R513, R1234YF, R454C, and R32 (R22 replacement) are all HFO blends and are becoming more popular across industries. Some large questions remain. What is the health and safety data of these new HFOs on the market? Do we have enough data to make sound decisions about the toxicity or health implications of these new refrigerants? Can HFOs, like other synthetic materials, be point sources or considered forever chemicals?

Manufacturing of refrigerants and equipment, food supply and management, pharmaceuticals, logistics, technological advances, etc. will likely all see a significant impact in the next few years. The resiliency and stability of IIARs membership, community, and involvement in the industry will continue to be necessary to help hold it all together.

IIAR’s global reach will also continue to be of utmost importance with so many unknowns in the near future.

survey questions

Each year we ask our members participate in a survey created to serve as a year over year benchmark for our industry. We appreciate the response we received from past surveys. Your input has helped create the discussions in this report year-over-year. We would appreciate everyone’s feedback and look forward to hearing from more members each year.

Question 1: In regards to the challenges of qualified personnel availability, what has your organization considered or implemented to overcome recruiting challenges? What has your organization done to ensure retainage of your current personnel?

Question 2: (For End-Users) – How does your business feel about remote or automated systems / off-site personnel and how it may impact your business?

Question 3: (For Regulators) – Do you perceive any challenges for end-users utilizing remote or automated systems in their operations? Do you have any input on how facilities should implement this practice?

Question 4: Has your facility implemented any upgrades / capital projects for improvement or does your facility have any planned upgrades or system / design expenditures for 2023 / 2024? If so, what?

Question 5: What specific changes would you suggest to the IIAR’s education system to improve it?

Question 6: Are there any safety challenges at your facility that you feel could be fixed or improved and what are those items? What do you think the best solution is?

Question 7: What information would you like to see in future reports?

Question 8: What new innovations do you anticipate will have the greatest impact on the natural refrigeration/industrial refrigeration industry over the next decade and how do you think it will change the industry?

To participate in the survey, go to www.iiar.org/iiar/stateoftheindustry Email publications@iiar.org for more information.

participate in IIAR committees

IIAR is the world’s leading advocate for the safe, reliable and efficient use of ammonia and other natural refrigerants. IIAR members share their collective knowledge and experience to produce consensus documents that address various aspects of the natural and industrial refrigeration industry. IIAR has broad industry representation including manufacturers, design engineers, contractors, end users, academics, scientists, and trainers. IIAR sets the standard for providing advocacy, education and the most up-to-date technical information to the ammonia and natural refrigeration community. We help professionals develop their skills and further their careers by promoting the common interests of members.

A list of our committees and how to be involved in on the Committees webpage

IIAR is the world’s leading advocate for the safe, reliable and efficient use of ammonia and other natural refrigerants. IIAR members share their collective knowledge and experience to produce consensus documents that address various aspects of the natural and industrial refrigeration industry.

IIAR has broad industry representation including manufacturers, design engineers, contractors, end users, academics, scientists, and trainers. IIAR sets the standard for providing advocacy, education and the most up-to-date technical information to the ammonia and natural refrigeration community.

We help professionals develop their skills and further their careers by promoting the common interests of members.

OUR VISION AND MISSION

Our vision is to create a better world through the safe and sustainable use of natural refrigerants

Our mission is to provide advocacy, education, and standards for the benefit of the global community in the safe and sustainable design, installation and operation of ammonia and other natural refrigerant systems.