Patton Roadshow

Kylie Farrelley

Business Manager – Forane® Aust & NZ

October 2012

Past, Present & Future of Refrigerants

Contents

About Arkema

Industry Challenges

Progression of Refrigerants

Conclusion

Questions

About Arkema

33% 34% Coating Solutions

High Performance

Materials

Sales by segment

Arkema in a Snapshot

Industrial Specialties

33%

40% 34%

Sales by region

26%

Europe

Asia and Row

North America

4

Global producer of specialty chemicals

Sales of € 6.5 bn

Worldwide no1 to no3 on 90% of our sales

14,000 employees in 40 countries

85 industrial plants

10 research centers

Forane® Refrigerants

Refrigerants are sold under the trade name Forane®

1st /2nd largest producer

Refrigerants represent 10% group

sales

3 out of the 10 R&D facilities are

dedicated to refrigerant

development

2008 commenced JV with Daikin

Industries on manufacture, sales

& marketing of refrigerant blends

Global Fluorochemical Activity

King of Prussia (PA) -USA

R&D & Application Center

USA : CALVERT

CITY (Kentucky)

Forane Production:

134a, 142b & R32

Lyon -France

R&D & Application

Center

CHINA: CHANGSHU

Forane Production: R22 & R125

FRANCE: PIERRE BENITE

Forane Production: 142b &134a

SPAIN: ZARAMILLO

Forane Production: 143a & R32

Changshu – China

R&D & ApplicationCenter end 2012

Arkema In New Zealand

Is Represented and Distributed by

Industry Challenges

Industry Challenges

The Phase Out of HCFC - Montreal Protocol

● Introduction of R22 replacements

Introduction of Carbon Tax – Kyoto Protocol

● Impact of Carbon

Refrigerant Selection and Development

HCFC Phase Out – Montreal Protocol

NZ is scheduled to Phase Out HCFC’s by 2015

Many decisions will need to be made regarding alternative refrigerants

● Suitability for application

● Versatility of R22 replacement

● Efficiency

● Oil change vs. Drop in

● GWP = Carbon Tax

● Replace equipment

No suitable HFC replacements for some products and applications

All HFC R22 replacements will be subject to Carbon Tax

R22 Replacements - GWP Values

0

500

1000

1500

2000

2500

3000

3500

4000

R22

R422A (M

O79)

R422D (M

O29)

R424A (R

S44)

R427A

R428A (R

S52)

R434A (R

S45)

R438A (M

O99)

GWP IPCC 2005

Carbon Tax

Carbon Tax will apply for refrigerants imported from 1st Jan 2013

Carbon Tax on refrigerants is directly related to the GWP

GWP/1000 x Price of Carbon Unit

134a = 1430/1000 * NZD 7.00 = NZD 10.01/kg

$ 45.29 $7.93 $ 3.972264R438A (MO99)

$ 42.77 $ 7.48$ 3.74 2138R427A

$ 41.75 $ 7.31$ 3.66 2088410A

$ 78.43 $ 13.73$ 6.87 3922404A

$ 28.60 $ 5.01 $ 2.511430134a

0001810R22

Carbon Price @ NZ$20 CO2eT

Carbon Price @ NZ$3.50 CO2eT

Carbon Price @ NZ$3.50

CO2eT with 2 for 1GWP IPCC

2005Product

Impact of Carbon on Work Practices

Identify Potential Leaks

●Flare joints

●Pipe work

●Seals

●Install permanent leak detectors

Review Commissioning Techniques

●Use Nitrogen

●Hold a vacuum

Preventative Maintenance

●The cost of not maintaining equipment is now much higher

Promote Efficiency

●Consider EEV’s where appropriate

Consider Insurance and Warranty

Progression of Refrigerants

Progression of Refrigerants

1st

Generation4th

Generation3rd

Generation2nd

Generation

CFC - R11

CFC - R12

HCFC -R22

HCFC -R123

HCFC -R141b

HFC - R134a

HFC – R404A

HFC – R410A

HFO - 1234yf

Other HFO’s

HFO Blends

Montreal ProtocolODP

Kyoto ProtocolGWP

ODP = 1 ODP = 0

GWP = >1400

ODP = 0.055 ODP = 0

GWP = < 50

Generation 3.5

Generation 3.5 has been developed as an immediate solution to reduce GWP

● Regulatory Pressure

● Social Conscience

What is Generation 3.5?

● Lower GWP alternatives to replace well known HFC’s such as 404A and 410A

GWP < 2000

-67%< 700R32**< 2100410A*

-46%< 2100407A/407F and others~ 3900404A/507

GWP ReductionGWPGEN 3.5 AlternativeGWP

GEN 3 Product

* Daikin IP

** R32 is an A2L – Low level flammability

Next Generation – Generation 4

HFO’s – Hydrofluoroolefins

GWP < 150

Various Applications

● Refrigeration

● Air Conditioning

● Aerosols

● PUR and XPS Foam

Suitable for Current Technology

More Efficient

Greater Capacity

Ultra Low GWP Refrigerant Development

0 500 1000 1500 2000 2500 3000 3500 4000 4500

134a

R22 404A

410A

Vol

umet

ric C

apac

ity

Ultra Low

GWP <10

}

}}

“134a – Like”

“404A/22 – Like”

“410A – Like”

High GWP > 2000Medium GWP < 2000

Low GWP <150

Considerations When Selecting a Fluid

Performance

Efficiency

Efficacy etc

Durability

Compatibility

Stability

Availability

Raw materials

Ease of

Manufacture

Properties

Density, Viscosity

Safety

Flammability

Toxicity

Pressure

Environmental

Ozone Depleting

Global Warming

Fluid Selection

Availability

Raw materials

Ease of Manufacture

Fluid selection requires a balance of

drivers, such as environmental impact, energy

efficiency & safety

Market Fragmentation

Not in Kind Refrigerants

CO2

HC

Ammonia

Secondary Fluids

● Water

● Glycol

● Organic Salts

Conclusions

In the next 2 years our industry will be faced with many challenges and constant change

These changes will have a major impact on the industry and will change behavior

Many decisions will need to be made including;

● Refrigerant selection

● Equipment design

● Time frame for change

Be well informed and ensure your clients are well informed

Start planning now

Questions?