21 February 2020

As cold as ice

F-Gas Exit: rising refrigeration system prices are putting European retailers under pressure!

Very few customers know what they are, but for many years they were essential for the refrigeration of fresh food: fluorinated gases, also known as F-gases. F-gases are refrigerants that provide excellent cooling performance, but also have such a high ‘global warming potential’ (GWP) that companies and the EU have been forced to take action. In an interview with Olaf Schulze, Director of Energy Management at METRO AG, we learn why METRO is committed to a worldwide phase-out of F-gases, what hurdles need to be overcome and where the international wholesaler stands in 2020 with its plans to eliminate the use of these refrigerants.

Frozen food

Olaf, by the time the EU regulation entered into force on 16 April 2014, it had become clear that fluorinated gases were a highly regulated market, because from 2020 onwards it will only be permissible to use recycled refrigerants that have a low global warming potential. A complete phase-out of F-gases is then targeted for 2030. Why are fluorinated gases so harmful and why does the EU see a need for strict regulation?

Fluorinated gases have the major disadvantage that they have a high global warming potential. The F-gases that we generally use have a global warming potential of 1:3,922, which means that 1 kilogram of refrigerant has the same effect as 3,922 kilograms of CO2. That’s why these gases will be banned in the EU. At METRO, 20% of our total CO2 footprint results from the leakage of F-gases, so this issue is of great importance to us if we seriously intend to achieve our climate protection goal of reducing specific greenhouse gas emissions by 50% by 2030 compared to 2011 levels

METRO has the F-Gas Exit Programme, which is part of our energy strategy. It aims to reduce F-gases by 90% in all 36 METRO countries by 2030. Now that we are in the year 2020, where does METRO stand in this process?

We have, to date, successfully converted 30% of our METRO stores worldwide to meet our 2030 goal. We launched the F-Gas Exit Programme in 2013, which means that every refrigeration system that we have to convert from 2013 onwards because it has reached its end-of-lifecycle date will be retrofitted in such a way that it can still remain on the market in 2030 in line with the stricter EU regulations.

As you just mentioned, METRO has successfully converted 30% of its stores. But we still have a long way to go to achieve our 2030 target of reducing F-gases by 90% and we only have 10 years to do it – that seems like a tall challenge to me. Can we reach our goal?

No doubt about it: we’ll make our goal! We now only build systems using natural refrigerants, and in doing so have completely dispensed with the use of F-gases. As a second measure, we are constantly improving the maintenance and servicing of our systems. We have reduced the annual leakage rate from 16% in 2013 to the current 8.3%. That’s a huge accomplishment.

 

Interview with Olaf Schulze

© METRO

The F-Gas Exit Programme sounds grand, but what does it actually involve?

We have three pillars: the first pillar is the cooling system logbook, which contains all basic and dynamic data. This means that we keep a record of every refrigeration system, the refrigerant used and how much is refilled. Our aim here is to create transparency and develop an awareness of the magnitude of what we are dealing with here.

The second pillar addresses the issue of maintenance and repair. We intend to adhere to the same stringent maintenance standards in every country. We do this not because we are particularly altruistic, but because refrigerant is incredibly expensive and it produces a huge amount of pollution. This pollution is released into the atmosphere in the form of harmful chemicals. As a company and a member of society, we are firmly committed to avoiding this and are fully aware of our responsibilities.

The third pillar involves the core exit, which means that we are retrofitting systems that we currently operate with F-gas and converting them to natural refrigerants. Regardless of whether the system is built in Russia, Germany or France, we maintain this standard worldwide.

 

Tweet about F-Gas Exit

© METRO

What are the advantages of natural refrigerants over F-gases?

A natural refrigerant is CO2, for example. This may sound alarming to anyone who is unfamiliar with the subject because everyone is talking about reducing CO2 nowadays, but the enormous advantage of CO2 as a refrigerant is that 1 kilogram of CO2 really only has the effect of 1 kilogram of CO2 in the atmosphere. Remember: the global warming potential of F-gases is 1:3,922. 1 kilogram of propene, for example, which is also used as a natural refrigerant, has the same effect as 4 kilograms of CO2. That’s quite a difference. The EU stipulates that F-gases may continue to be used after 2030, but it will limit the global warming potential to below 2,500 GWP. Natural refrigerants have a global warming potential of less than 150 GWP.

Refrigeration system inside the store

© METRO

The EU regulation pertains solely to the European legal context. Why has METRO nevertheless decided to implement these high standards and introduce the use of natural refrigerants at all METRO stores worldwide?

Our world is unique and we at METRO are a part of it. Of course we could continue to use F-gases as refrigerants in countries like China and Russia because there are no regulations there, but that’s not what we want. Last year, we successfully replaced the last R22 system in Russia, which was operated with an HFC refrigerant. In the EU, this refrigerant is been banned since 2015. In just 5 years, we have also managed in Russia to replace the refrigerants that have been banned in the EU. We didn’t have to take this step so quickly, but we wanted to do it and made a conscious decision to do so.

What’s important, and we can’t lose sight of this, is that we have made clear commitments and we have done so for a clear reason. It is our conviction – for us as METRO, for us as employees, for our families and above all for our customers – that we must not exceed the 2°C or, better still, the 1.5°C limit of global warming, and METRO is doing everything in its power to actively contribute to achieving this objective.

On the other hand, an average global warming of 2°C will result in least a 4°C increase at its peak, which translates into extremely hot summers. Every extremely hot summer means that refrigeration systems have to be much more effective to provide reliable cooling for, say, 1 week when outdoor temperatures reach 40°C. Whenever a refrigeration system has to continuously operate in a 40°C environment, you automatically need much more expertise, pressure, hardware and above all energy. The CO2 technology is altogether more heat-resistant than conventional systems, which are already working beyond their limits at an outside temperature of 40°C and, as a logical consequence, will simply break down. So the new technology is not only beneficial in terms of energy savings, but also generally much more reliable and robust. This enables us to guarantee consistent food quality, and that is exactly the primary purpose of a well-functioning refrigeration system.

What are the main obstacles to achieving the self-imposed targets by 2030?

Currently, our budget is the main limiting factor. We can’t just print money whenever we need it (laughs). At present, we are concerned about the rapidly increasing need for investment. Retailers are under pressure in Europe because the EU regulation already took effect from 1 January 2020. What’s more, they have 20%–30% higher costs for the same components compared to what they had to pay 3 years ago, which is a massive increase. As I see it, costs are even likely to continue to rise. This is driven by the demand for the materials used in the new refrigeration systems. For instance, stainless steel, copper and platinum, all of which are precious metals. It’s ultimately the gold of the modern age that is being processed here, and resources are limited, and that drives up prices.

Olaf, today’s energy market is a highly regulated area. What would you wish for in terms of energy policy and what would help us as a wholesaler?

From 2020 onwards, only recycled refrigerants with a low GWP may be used within the EU, but there are of course F-gas systems that could still be operational in 2030. So my message to political decision-makers would be to keep F-gas systems up and running that produce no emissions or very low emissions. After all, refrigeration systems are not problematic because of F-gases, but because of leakages. So if leakages could be prevented from occurring over a long period, the environmental impact would be considerably reduced. Our 12 refrigeration systems in Austria have a steady leakage rate of 2%, which means that 8 installations produce no emissions at all and 4 produce a small quantity of emissions. In my opinion, it would make sense to continue operating these systems and then replace them with new ones at a later date.

My second request to the politicians would be that we somehow get rewarded for this extensive research and development work, for example, through subsidies. As a wholesaler, we have taken a pioneering path towards achieving the F-gas exit, and we have done this in all 36 METRO countries. This has cost us an enormous amount of resources. Finding an approach here to make this path a little easier for retail companies and honouring innovation and research in the process would be a concession in itself.

Thank you for this interview, Olaf – and good luck on the home straight to the 2030 target.

 

Refrigeration system inside the store

© METRO

Have you met Olaf?

At METRO, Olaf Schulze is known as Mr. Energy. As Director Energy Management METRO AG, he is responsible for the company’s energy procurement and energy efficiency programs, the F-gas exit program, new mobility concepts and the photovoltaic program. He studied law sciences, lives with his family in Erfurt and loves to take cold showers – energy with passion, of course.

Portrait Olaf Schulze

Olaf Schulze, Director Energy Management METRO AG; © METRO

 

 

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