Chinese Factories Want to Make Climate-Friendly Air Conditioners. A US Company Is Blocking Them

WUHU, China—Air conditioners sped down the assembly line at the Midea appliance factory on a recent Saturday afternoon, as pop music blared over the din of fans and motors. The workers, mostly 20-somethings in crisp blue uniforms, were working quickly and on track to meet their daily target of 3,300 units.

Stretching the length of a football field, the assembly line in Wuhu was retooled in 2016 to produce hundreds of thousands of climate-friendly air conditioners per year, funded with money from the United Nations. The goal was to help reduce a class of key climate super-pollutants.

Air conditioners now use fluorinated chemical refrigerants. While each air conditioner contains only a small amount of refrigerant, the chemicals eventually make their way into the atmosphere, as the devices slowly leak or are destroyed at the end of their useful life. Those emissions add up and wreak havoc.  As greenhouse gases they are hundreds to thousands of times more potent than carbon dioxide in warming the planet. 

The U.N. money allowed Midea and other manufacturers across China to use propane as a refrigerant instead, a climate- and ozone-friendly hydrocarbon alternative that is also less expensive. 

The Environmental Protection Agency approved its use in air conditioners in 2015. Propane is 3.3 times more potent as a greenhouse gas than carbon dioxide, giving it an “ultra-low” global warming potential, relative to other refrigerants.

But an Inside Climate News investigation found that those U.N. efforts to encourage propane-cooled air conditioners have largely been stymied by safety standards set by Underwriters Laboratories, now known  as “UL” in the United States, a private company that provides independent safety certifications for thousands of consumer products.  

The standards were devised to protect profits for the U.S. chemical industry, environmentalists in the U.S. and Europe, and Chinese manufacturers told Inside Climate News. 

In the investigation, which included reviews of U.N. documents and peer reviewed studies,  environmentalists, manufacturers and other experts said in interviews that there was little  evidence that a fire risk in propane air conditioning units merited a reduction in the allowable quantity of the gas from 1 kilogram to 114 grams, as UL determined when it enacted a strict new standard in July 2015, just months after the EPA green-lighted propane’s use.  

Air Conditioner Factories

While UL standards are technically voluntary, they hold enormous sway over what products are sold in the United States. If a product does not meet UL safety standards, the manufacturer could be held liable for damages if anything were to go wrong.

“Safety is just an excuse,” said one Chinese industry expert who asked not to be quoted by name, voicing similar concerns to that of a 2017 report by the Technology and Economic Assessment Panel of the United Nations Environment Programme. 

“The United States does not want hydrocarbon refrigerants to be used prematurely in the United States,” he said. “It hopes to buy some time for its fluorochemical companies to try new alternatives.”

Using propane instead of fluorinated refrigerants, explained Daniel Colbourne, an independent refrigeration technology consultant, pulls “the rug from under the feet of the chemical industry” because propane is not patented and is much cheaper, more efficient and has a “negligible global warming impact.” 

Project Drawdown, an international group of researchers that ranks potential climate solutions, lists reducing emissions of fluorinated refrigerants as one of the most important things that can be done to limit future warming, alongside building wind farms and installing solar power.

Cooling systems, including air conditioners and refrigerators, now account for 10 percent of global greenhouse gas emissions. As demand for cooling grows, energy use from air conditioners is on track to more than triple by 2050, according to the International Energy Agency. 

By the end of the century, emissions of hydrofluorocarbons (HFCs), the fluorinated chemicals most widely used today, could contribute up to half a degree of additional global warming. That translates into a substantial additional disruption of global weather patterns. Rising temperatures also drive demand for additional air conditioning. It’s one of climate change’s tragic ironies: efforts to cool things down fuel additional warming.  

The U.N. provided more than $60 million over the last decade to retool a total of 18 production lines in China, capable of producing 7 million air conditioning units with propane refrigerants a year.  But because of restrictive standards set by UL and, to a lesser extent, the International Electrotechnical Commission, a private standard-setting organization based in Geneva whose standards are adopted by countries around the world, only 100,000 propane units were manufactured over the last year.

China produces 154 million air conditioners per year, roughly 75 percent of the global market. The UN-funded production lines converted about 5 percent of China’s manufacturing capacity, allowing the country’s manufacturers to begin to leapfrog from older hydrochlorofluorocarbon (HCFC) refrigerants that deplete atmospheric ozone and are climate super-pollutants, to propane, a climate- and ozone-friendly alternative. China plans to continue to convert additional lines to propane in the coming months and years. 

However, when a Chinese journalist working for Inside Climate News visited Midea plants in Wuhu in September, the air conditioners rolling off two U.N. funded lines contained R-410a, and R-32, two common HFC refrigerants that are short-lived climate pollutants. 

The climate super-pollutants persist in the atmosphere for approximately 15 years instead of hundreds of years, as carbon dioxide does, but they are 4,340 and 2,530 times, respectively, more potent as greenhouse gasses over the near term.

The Montreal Protocol Meant Higher Industry Profits 

CFCs, the first fluorochemicals, began to be used in refrigerators in the 1930s, soon after the appliance began to make its way into homes. They replaced the early use of hydrocarbons like propane, which were considered dangerous. 

Decades later, in 1974, scientists discovered that the chemical refrigerants were depleting atmospheric ozone, essential for protecting earth from the sun’s damaging ultraviolet radiation. U.S. chemical manufacturers responded by attacking not only the science, but the scientists behind it. 

One article published at the time in Aerosol Age, an industry trade journal, accused the scientists who discovered the chemicals’ damage to the ozone layer of being KGB agents out to destroy capitalism. In what later became a common refrain from fossil fuel companies, chemical manufacturers suggested that natural forces such as volcanic activity were instead to blame for the ozone depletion.  

DuPont, then the world’s largest producer of chlorofluorocarbons (CFCs), fought calls for a ban on the chemicals for more than a decade. During that time, the company developed a new generation of patented fluorinated refrigerants. Able to protect their profits, they embraced the Montreal Protocol, an international agreement phasing out CFCs that was championed by President Ronald Reagan and adopted in 1987.

Midea assembly lines in Wuhu, China were converted to make propane-based air conditioners starting in 2014. The company has since reverted to filling its products with fluorinated chemicals that are thousands of times worse for the climate. Credit: Feng Hao

After the Montreal Protocol went into effect, DuPont and others manufactured HCFCs, which were less harmful than CFCs to atmospheric ozone but still highly potent greenhouse gases. 

In 1991, the United Nations Environment Programme warned that the development of new chemicals like HCFCs, which were incrementally better for the environment, could block an immediate transition to low cost, ozone- and climate-friendly alternatives like propane.

The chemical industry had no incentive to pursue hydrocarbon alternatives, but recognizing the potential for a different path forward, Greenpeace Germany did. The global environmental organization, known for its high-profile stunts, decided to get into the refrigerator business. They went looking for a manufacturer that would produce refrigerators that used the hydrocarbon isobutane, which was cheaper, ozone-friendly and much less warming.  

By then technological advances had made hydrocarbons much safer than they had been when they were phased out in the 1930s. But none of the major refrigerator manufacturers were interested at first in Greenpeace’s proposal. 

In 1992, Greenpeace approached DKK Scharfenstein, a former East German manufacturer that had fallen on hard times after reunification and was facing bankruptcy. The company agreed to manufacture the refrigerators, and Greenpeace helped the company market the new “Greenfreeze” units, selling tens of thousands of refrigerators across Europe that used isobutane.

“Their part of the deal was they change technology, and our part of the deal was we look for customers,” said Wolfgang Lohbeck, a former organizer with Greenpeace Germany who led the Greenfreeze effort for the organization in the 1990s. 

The German company that sets safety standards approved the ”Greenfreeze” refrigerators, noting, “There are no dangers in the use, transport and storage of this refrigerator due to the use of the liquid gas as a cooling agent.”

More than 1 billion refrigerators now use isobutane as their refrigerant worldwide, protecting both the ozone layer and the climate. Lohbeck said the experience made the chemical industry all the more determined to not let hydrocarbons gain a toehold in other markets.

“It was a clear strategic point for them that they never again lose such a battle,” Lohbeck said. 

A Chinese Request to Sell Climate-Friendly Units in the U.S. 

In 2013, a Chinese industry trade group and five of the country’s leading air conditioning manufacturers sought permission from the U.S. Environmental Protection Agency to sell climate-friendly, propane-cooled air conditioners in the United States, thereby maneuvering around the chemical industry to avoid using HFC refrigerants. 

The Chinese companies had a strong financial interest in using propane. The gas is a byproduct of natural gas and crude oil refining, and not subject to patent. At roughly $1.50 per pound, it is 5 to 50 times less expensive than synthetic refrigerants. Propane’s high thermal conductivity increases heat transfer, making the energy efficiency of propane-based air conditioners better than many of its competitors.

Underwriters Laboratories had already approved the use of up to 1 kilogram of propane, depending on room size and other factors, for window and wall-mounted air conditioners two years earlier. The Chinese manufacturers only needed to secure EPA approval under the agency’s Significant New Alternatives Policy.  

Incremental Improvements

EPA officials, who knew UL was considering a more restrictive propane standard, concluded nonetheless that the risk of fire from propane refrigerants was “minimal,” as  long as air conditioners were installed in accordance with standards and regulations. The agency approved the use of propane in a regulation that took effect in May 2015. 

But then, two months later, UL revised its standard. It reduced the allowable amount of propane in household air conditioners by almost 90 percent, from 1,000 grams (1 kilogram) to 114 grams. The move effectively negated the EPA’s approval, and killed the use of propane in air conditioners across North America, and perhaps, beyond. 

 The ‘Protectionist’ UL

The process by which UL arrived at its new standard remains opaque. The committee that passed the new standard included no representatives of chemical companies. Instead, it was made up of mainly air conditioner producers and suppliers, including Chinese manufacturers. But the subcommittee that produced a key report that served as the basis for the new standard had broad representation by chemical manufacturers. DuPont alone had four representatives on the subcommittee, more than any other company other than UL. 

The report recommended a steep reduction in the volume of propane based on a worst case scenario where an air conditioner quickly leaked all of its propane while it was being stored in an unventilated closet or other small space. The report also assumed the unventilated space had an open flame such as that from a water heater. In such a scenario, a volume of propane greater than 114 grams could catch fire. 

Mark Roberts, the former senior counsel and international policy advisor for the Environmental Investigation Agency, a non-profit environmental organization based in London and Washington, D.C. said the conditions were unrealistic for a number of reasons. First and foremost, he said, was that wall mounted “split” air conditioners, the largest and fastest growing type of home air conditioners worldwide, are permanently fixed to the wall in the room where they are being used and therefore would not be stored in a closet part of the year as may be the case with window units. 

A split air conditioner with 400 grams of propane posed very little risk,  having a 1 in 100 million chance of catching fire over a 10-year period according to a peer reviewed study published by Colbourne in the International Journal of Refrigeration in 2015. 

UL did not respond to specific questions about the decision-making process, but provided a general comment. “UL’s mission is to work to make the world a safer place. As the global safety science leader, UL helps companies to demonstrate safety, enhance sustainability, strengthen security, deliver quality, manage risk and achieve regulatory compliance,” it said in a written statement. “As technology continues to advance, we continue to revise our standards not only to keep people safe but also to protect our planet as we live out our mission to make the world a safer, more secure and sustainable place.”

Roberts joined the UL committee for air conditioners in 2015 after the committee published the new standard. He was representing the Environmental Investigations Agency. Founded in London in 1984 and supported by philanthropies and private donors, EIA  conducts research and works to protect the environment, often going undercover to expose wrongdoing. 

From his seat on the UL committee, Roberts challenged the stricter propane standard. He called it an undemocratic and protectionist measure based on unsubstantiated risks. He asserted that the ruling would act as a barrier to the use of hydrocarbon air conditioners in the U.S. He was joined in his appeal by representatives of a Chinese air conditioning manufacturer and a European manufacturer, who were also serving on the committee.   

Soon after he filed the appeal in October 2016, he said he was voted off the committee, in part for what he was told at the time was his lack of “technical skills.”

Roberts said he feels the real reason he was asked to leave was because he pushed back against the interests of U.S. chemical manufacturers, which he said held sway over the committee.

UL did not respond to a question about Roberts being voted off the committee, but noted that another member of EIA is now on the committee. In a 2017 white paper on flammable refrigerants, UL stated the reduction to 114 grams “was not without controversy and is an ongoing subject of … discussion.” 

The impact of UL standards aren’t limited to the United States, said Li Tingxun, a professor at Sun Yat-sen University in Guangzhou, China and a product development consultant for Midea. 

“If the products do not meet UL standards, there is no way for them to enter American markets, not only in the U.S., but also the whole North American market,” Li said. “Moreover, the status of the United States and the ripple effect of the U.S. market lead to world-wide influence. This is a disaster from a global point of view.”

Colbourne, who is also a member of the Montreal Protocol’s Refrigeration, Air Conditioning and Heat Pump Technical Options Committee, said UL’s more restrictive standard was an attempt by fluorinated chemical manufacturers to protect their market.

When Montreal Protocol members realized that the standards set by UL and other international standards organizations were delaying the transition to more climate-friendly refrigerants, they decided to investigate the matter. 

A report published in 2017 by the Technology and Economic Assessment Panel of the United Nations Environment Programme found that relatively few stakeholders participate in the safety standards process for household air conditioners  “and an even smaller number effectively dominate the SC [Subcommittee] and WG [working group] activities,” due to “onerous investment costs and resources needed for active participation.” 

The report, which looked at international safety standard organizations in general and did not focus solely on UL, concluded, “The standards will be biased by the organisations funding the participation of experts for standards development.” 

Industry Seeks ‘First Mover’ Advantage in International Markets 

As the Montreal Protocol members investigated safety standards, Mark Vergnano, the chief executive of the American chemical manufacturer Chemours, met with then-EPA Administrator Scott Pruitt in May 2017 to discuss hydrofluoroolefins (HFOs), the company’s newest fluorinated chemical refrigerants.

Chemours, a spin-off of DuPont, had developed HFOs to meet the Montreal Protocol’s most recent requirements. While the Montreal Protocol has largely succeeded in mending the so-called “ozone hole” that formed over Antarctica, the generations of new fluorinated chemicals it helped spawn to protect ozone remain potent greenhouse gases, hundreds to thousands of times worse for the climate than carbon dioxide.

A 2016 update to the Protocol, known as the Kigali amendment, requires countries to phase down the use of HFCs over the coming decades. HFOs developed by Chemours and others do not harm ozone and are less potent greenhouse gases. 

Chemours sought EPA’s assistance with their latest generation of fluorinated chemicals “to help protect U.S. leadership in this space and protect significant new U.S. investments the company has made,” according to a letter Chemours shared with the agency prior to the meeting. The letter was obtained through a public records request by the Natural Resources Defense Council and previously reported by The Intercept

The company warned that Chinese companies “have announced plans to commercialize alternative refrigerants. Without U.S. leadership and support for domestic technologies, these foreign-based alternatives to U.S. technologies could gain support, displacing our ’first mover’ advantage in international markets.”

Chemours spokesperson Thom Sueta said in a written statement that “the past meeting with then EPA Administrator Pruitt was exclusive to the Chemours’ support for the Kigali amendment to address climate change.”   

Sueta added that Chemours “supports an inclusive regulatory structure that provides the complex HVAC and refrigeration market with flexible options to support their broad range of needs. ”

Chemours sold $1.3 billion worth of fluorinated chemicals in 2019, according to the company’s financial reports. Having developed this new generation of refrigerant, Chemours and other chemical manufacturers now strongly support the Kigali amendment and have repeatedly urged President Trump to ratify the agreement, which has already been approved by more than 100 countries.

A 2018 report by two U.S. air conditioning and chemical manufacturing industry trade groups found that by 2027, the Kigali amendment would increase U.S. manufacturing jobs by 33,000 and increase U.S. exports by $5 billion.

The amendment would allow U.S. chemical manufacturers to roll out another round of patented, synthetic chemicals. However, low-cost alternatives that do not deplete atmospheric ozone and have virtually no impact on global warming already exist.

Natural refrigerants such as propane and isobutane are “where emerging economies want to go because they are tired of paying for the use of successive rounds of patented, fluorinated gases,” said Roberts.

One Percent Capacity

When the Midea plant in Wuhu, a city in southeastern China along the Yangtze river, halfway between Wuhan and Shanghai, retooled the first of two assembly lines in 2014 to use propane refrigerant, Wang Zhiran, a Midea manager with short, spiky hair, personally filled the first 10 units himself.  

“I showed the workers and proved that it was safe,” Wang said. “After that, they had the courage to operate it by themselves.” 

During the recent visit to the plant, a bell sounded and the assembly line, including overhead lights, powered off, signaling the start of a 15-minute break. Maskless workers—mandatory controls to protect against Covid-19 ended in April as the country brought the pandemic under control—grabbed their phones out of a “mobile parking lot,” where they had left them at the beginning of their shift. Some stepped outside for a breath of fresh air. Others logged on to WeChat to message with friends.

While U.N. funding had helped Midea and other manufacturers across China convert 18 assembly lines with the capacity of producing 7 million propane-filled air conditioning units per year, the United Nations Environment Programme noted in a November 2020 assessment that only 1 percent of that capacity was met. 

A 2019 report by the United Nations Environment Programme listed safety standards as a key reason for the low output.  

China’s safety standards for appliances sold in China are based on standards set by the International Electrotechnical Commission (IEC), whose standards for air conditioners allow up to 1 kilogram of propane depending on the size of the room that is being cooled.

The standard is less restrictive than the UL standard, but still limits propane’s use and the efficiency of propane-based air conditioners. 

Midea hasn’t produced any propane-based air conditioners on the two converted lines since July, due to lack of demand and new regulations in China requiring higher energy efficiency for air conditioners, company officials said.  Chinese manufacturers have, however, produced more than 1.5 million smaller air conditioners and dehumidifiers that use less propane on other assembly lines over the past several years.  

An IEC safety standard committee recently passed a measure that would make it easier to use more propane in air conditioners. The proposal passed a committee vote in October and the organization is now reviewing comments submitted by IEC member countries.

If the measure is formally adopted by the IEC, China and other countries around the world that base their national safety standards on those set by the IEC could soon adopt the new, less restrictive limits. Standards set by IEC are also often adopted by UL for appliances sold in North America.

A revision of IEC’s safety standards for flammable refrigerants could be a significant boost for propane-based air conditioners. For now, however, Wang says Midea will continue to use fluorinated chemicals.  

“Now our company is most concerned about efficiency,” Wang said. “If it cannot be compatible, the company will die.”  

Phil McKenna, an ICN staff reporter, reported from the United States.

Feng Hao, an environmental journalist based in Beijing, reported from Wuhu.

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