13:44 PM | August 16, 2013 | Robert Westervelt
Resistance by German automaker Daimler to a hydrofluorocarbon (HFC) replacement developed by DuPont for refrigerant applications makes placing a valuation on DuPont’s fluorochemicals business challenging, says Ray Will, a director with IHS Chemical’s consulting practice.
DuPont announced 23 July that it is exploring the sale or spin-off of its $7-billion/year performance chemicals unit, which includes its fluorochemicals, titanium dioxide, and specialty and industrial chemicals business. DuPont’s fluorochemical sales in 2012 were $2.3 billion. Roughly half was fluoropolymers with the other half split among other fluorine-based chemicals, including refrigerants.
The HFC replacement, hydrofluoroolefin-1234yf (HFO-1234yf), developed jointly with Honeywell, was expected to become a lucrative franchise. The European Union’s Mobile air-conditioning (MAC) directive requires air-conditioned vehicles sold in EU countries to use a refrigerant with a significantly lower global warming potential (GWP) was forcing a phaseout of HFC-134a in new vehicle models, with HFO-1234yf meeting the lower GWP criteria, Will says.
Daimler, however, raised safety concerns in September 2012, and has said it would not use the product. Other German automakers have also voiced concerns about using the replacement product. Daimler, the maker of Mercedes-Benz, says its safety tests show that HFO-1234yf is flammable when dispersed at high pressure near hot engine or exhaust components, conditions that correspond to a serious head-on collision. Daimler wants to continue to use HFC-134a refrigerant while it transitions to a next-generation carbon dioxide (CO2)–based automotive refrigerant system by 2017, a move that would end use of fluorine-based refrigerants, Will says. France has recently taken steps to block registration of new Mercedes’ vehicles and the EU is reviewing Daimler’s action.
Honeywell and DuPont maintain that the product can safely be used in automobiles and has been extensively tested. "Honeywell continues to stand firmly behind the safety of HFO-1234yf, and it will continue to supply its customers to enable them to comply with the MAC directive," Honeywell said earlier this month.
The market impact across the fluorine supply chain could be significant, Will says. Not only is the potential demand for HFO-1234yf at risk, but ongoing work by European automakers to develop CO2 MAC technology could freeze fluorine-based refrigerants out of the automotive market in Europe, Will says.
Current HFC-134a use in Europe for auto air conditioning is about 30,000–35,000 m.t./year, Will says. That is equivalent to 46,000–54,000 m.t./year of fluorspar—or a medium-size fluorspar mine. If North America and Japan follow German automakers, HFC-134a use for auto air conditioning applications of 71,000–75,000 m.t./year is also at risk. That is equivalent to 110,000–115,000 m.t./year of fluorspar—a large-size fluorspar. A phaseout would free more than 2% of global fluorspar consumption, he adds.
US EPA has not banned HFC-134a but is encouraging a shift away from the product by giving automakers that use HFO-1234yf credit toward stricter Corporate Average Fuel Economy standards that take effect in 2017.