Thursday, December 29, 2011

China’s Leading Air Conditioner Companies Shift to R290

In China’s first technology roadmap for the home appliance industry, replacing HCFCs with new refrigerants will be the main task of China’s air conditioning industry in the future. As profits margins have become tighter, China’s leading air conditioner companies have shifted their attention to R290 (propane) to reduce costs and increase competitiveness.
China’s air conditioning industry has passed its peak development period to enter into a period of constant growth. In recent years, facing the pressure of rising raw materials cost and labour, excessive production capacity and intensified inflation, reducing costs while increasing core competitiveness becomes the main task of most companies.
Reducing profits space calls for lowering costs and new technologies
According to the financial reports of five major household air conditional companies, the average gross profit of 2010 was 19.6%, 4% lower than that of the previous year. Price wars in China’s air conditioning market continue to put pressure on companies' profit margins. Therefore, the country’s big companies are gradually shifting their attention to adopting new technologies to gain profits again. As the amount of R290 needed in refrigeration system is 30-40% less than R22 many companies bet on propane as the future of the industry.
China’s A/C leaders bet on R290
Concretely, this year, China’s two leading air conditioner manufacturers Gree and Midea have released their research and application results of alternative refrigerant products. Gree announced the completion of the world’s first hydrocarbon refrigerant R290 split-type air conditioner demonstration production line. Key products of Midea using R290 have passed quality testing and manufacturing standards, and are ready to be commercialised. Both Gree and Midea have exhibited their new R290 products at major international HVAC shows.
Roadmap aims to replacing HCFCs with HCs
Besides big air conditioner companies, hydrocarbon technologies are also encouraged by industrial associations. In December 2011, the China Household Electrical Appliances Association (CHEAA) issued China’s first technology roadmap for the home appliance industry with puts a focus on replacing HCFCs with new refrigerants. By 2015, the roadmap plans to reduce the consumption of HCFC-22 by 10% compared with the average amount of 2009 and 2010.
More importantly, it aims to realise the industrialisation of hydrocarbon technology and complete the replacement of HCFC-141b among companies producing refrigerators, freezers and electric water heaters. It calls upon the industry to widely adopt low GWP refrigerants and blowing agents such as CO2 and R290. By 2020, the use of R744 (CO2) as natural refrigerant in production of freezer will meet requirements of “Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment” (RoHS). Overall, by 2015, the roadmap aims to increase refrigerator energy efficiency by 20%, and by 2020 by another 15% based on 2015.