Illegal Trade in Refrigerants

Fluorinated gases (F-gases) are man-made chemicals used in a wide range of sectors including as refrigerants, aerosols, foam-blowing agents, solvents, and fire suppressants, among others. Many F-gases including chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs), and hydrofluorocarbons (HFCs) are controlled globally under the Montreal Protocol and national regulations due to serious concerns about their impacts on humans and the environment. However, as these substances are phased out or phased down, the illegal trade of these super pollutant substances continues to be a serious and growing threat. EIA’s Illegal Trade Bulletin highlights recent cases to raise awareness and vigilance about suspicious practices, and opportunities to strengthen enforcement and implementation.

Black market refrigerants harm both the environment and businesses, and can undermine performance and safety of cooling and heating systems. The influx of illegal refrigerants into the U.S. threatens American businesses by creating unfair competition for companies that comply with regulations and best practices. System owners risk equipment failure, as illicit refrigerants are more likely to be overcharged or contain impurities, contaminants, or unsafe refrigerant mixtures that do not meet equipment specifications and certification standards. 

Refrigerants are classified as dangerous goods, and have specific requirements for safe handling and transport, but illegal refrigerants are more likely to be improperly handled, packaged, or labeled. These all increase the likelihood of leaks and system failures, causing avoidable super pollutant emissions. The presence of black market refrigerants exposes businesses to the risk that they purchase and use illegal refrigerants, incurring steep fines and legal liabilities, harming their reputation, and jeopardizing the safety of their technicians and customers.

EIA US investigators being shown barrels of illegally produced CFC-11 at a factory in China in 2018. Our investigations revealed the wide-spread illegal production and use of CFC-11 in China to supply the rigid polyurethane (PU) foam insulation sector, in particular in the building and construction subsector.

The illegal trade of substances controlled under the Montreal Protocol is not a new issue, but one that continues to demonstrate the importance of public-private cooperation towards strong implementation and enforcement of international and national environmental regulations.

While a range of responses by the Parties to the Montreal Protocol have contributed to curbing the problem, there is still a need to strengthen monitoring, reporting, and verification (MRV) under the global treaty and build capacity for stronger national implementation and enforcement. The ongoing illegal trade in HCFC and HFC refrigerants continues to evade national and international environmental laws to control and reduce emissions. In the 2000s, illegal HCFC imports were a growing concern in the U.S., and now, with the HFC phase-down under the AIM Act, similar challenges are emerging, and targeted by enforcement efforts.