Everything you need to know about illegal refrigerants

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Who are the HFCs smugglers and how do they operate?

The legitimate supply chain for HFCs works as follows:

    • HFCs are imported in large tanks (15 – 20 T) 
    • Importers sell HFCs to Distributors or directly to large scale Industrial Users, either as straight product or after blending
    • Distributors repackage HFCs in smaller cylinders (typically 5 – 60 L) and sell to Wholesalers or large Contractors
    • Contractors service Refrigeration, (automotive) Air-Conditioning and Heat Pump equipment using HFCs
    • Distributors charge a deposit on the cylinders which assures that they are returned after use

    In Europe, HFC imports are controlled by managed quotas and supervised by border controls, customs officers and local law enforcement.

    But, criminal organisations by-pass the supply chain, for example by offering non-refillable cylinders on e-commerce platforms or by using Customs Transit arrangements to hide bulk shipments. According to findings by Kroll, these products are even being sold on mainstream online platforms.

    Through these relatively straightforward avenues, criminals make huge profits on the black market by importing HFCs outside of the quota. New research shows that this black market could be up to 31 million tonnes CO2 equivalent in size or around one third of the legal HFC market in 2019 alone.

    They can do this because often, customs does not have adequate resources, equipment or knowledge to trace HFCs, or identify non-quota HFC gases. Quite literally, inadequate screening checks can leave borders wide open and susceptible to illegal trade.

    Through these open unchecked borders, illegal HFCs enter Europe. They are picked up by legitimate traders who unknowingly deliver them to legitimate businesses. They then end up in air conditioning systems in our offices and cars, and in the refrigeration systems in our supermarkets. And we have no way of knowing if our workplaces, food or transport are cooled with illegal HFCs.

    One of the most common methods, according to investigative agency Kroll, is misdirected transhipments. In other words, illegal HFC canisters are declared to be in transit through the EU to other destinations, but instead they are placed on the EU market.

    So, illegal HFCs quickly become a part of the legitimate supply chain. And once they enter the supply chain, it is extremely difficult to identify and trace which HFCs are illegal and which are legitimate. What this means is that gas from unknown sources may end up being used in cooling systems. These products could contain hazardous or flammable components that pose significant risks for their users.   

    It is equally difficult for traders to spot the difference. Key indications include non-refillable cylinders and price, as non-quota HFCs are often cheaper.

    Traders often say yes to a good, quick deal. But when they say yes, they also might also be saying yes to organised crime. This is dangerous for all of us.

    Report illegal HFCs trading to our Action Line.