Over the last few years the European Union has experienced a rash of illegal refrigerants, refrigerant thefts, smuggling, and counterfeit refrigerants. Most of the time the refrigerants affected were R-22 or HFCs such as R-134a or R-404A. This time though things are a bit different.
Last month Honeywell worked directly with the Czech Republic’s Customs Office to seize a 1234yf shipment. As most of you know, Honeywell has a patent on 1234yf manufacturing. That means they are the only ones who can manufacture this refrigerant. (Chemours can as well, but that is because they are partnered with Honeywell.) Besides these two companies no one else is able to legally manufacture 1234yf. That doesn’t stop everyone though, especially rogue companies found in China. Yes, this product that was seized came directly from China. Along with seizing the product Honeywell also took the step to file a suit against a Czech Republic refrigerant distribution company for attempting to distribute illegal product.
Earlier in the same month Honeywell did something similar to a Chinese manufacturer and distributor in Germany. And a few years back Honeywell partnered with the government out of Shanghai to sentence a man convicted of producing counterfeit 1234yf refrigerant. The man who was sentenced served nine months in jail and also paid a hefty fine for the violation.
Causation
All of the above cases were done to protect Honeywell’s monopoly on the 1234yf refrigerant. Some of you may not like that word monopoly, but that is what it is. Honeywell not only invented and patented this refrigerant but they also pushed and lobbied to have it adopted in every new vehicle across the globe. As the years go by Honeywell’s slice of the automotive refrigerant market gets larger and larger as R-134a applications begin to retire.
In Europe it has already happened. As of 2015 no newly manufactured vehicles can use R-134a. That leaves vehicle manufacturers with one of two options. They either use 1234yf or they use the experimental R-744 applications like what Daimler is doing. Most companies opt for 1234yf as it is the easier choice.
Since Europe started this conversion a few years ago it is only fair to have the first waves of counterfeit product arrive there. The price per pound on yf is quite expensive. Here in the United States it is about sixty-five dollars a pound. If we compare that to R-134a’s price per pound of three dollars we can begin to see why counterfeiting has begun. Now, I don’t know the markets over in the European Union, but I imagine yf is just as high if not higher over there. It is only natural for counterfeit product to show up.
Conclusion
There is only one real way I can see this counterfeiting to stop. Sure, Honeywell can keep playing whack-a-mole with these Chinese counterfeiters but it is not addressing the root of the problem. A counterfeit market typically exists because the price point is too high or the availability of the product is too low. By Honeywell addressing these concerns they could very well stop the counterfeit market in it’s tracks. But, that also means that Honeywell may have to lower price on their prized 1234yf refrigerant.
Over here on the Americas’ side I do not believe we’ve seen this problem yet on 1234yf. Yes, we’ve had our share of counterfeit products but that is still mostly HFCs and R-22. As the market for yf grows here we may very well have the same problems the EU is having. Remember, that when purchasing refrigerants to always ensure you are buying from a reputable supplier.