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New Energy Economics: Trading More Expensive Auto Air Conditioning for Lower Car Fuel Mileage?

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Cole Gustafson, NDSU Biofuels Economist Cole Gustafson, NDSU Biofuels Economist
In essence, car manufactures will be allowed to sell cars with poorer fuel mileage if they upgrade air conditioning systems to R-1234yf.

By Cole Gustafson, Biofuels Economist

NDSU Extension Service

Repairing 2013 car air conditioning systems is going to get much more expensive due to new Environmental Protection Agency policies that encourage the use of a new cooling refrigerant. The EPA has developed this policy in an effort to reduce harmful greenhouse gas emissions that have been linked to global warming.

When automotive air conditioning systems were introduced, Freon R-12 refrigerant was used for cooling. However, R-12 is one of the most harmful greenhouse gases when released into the atmosphere, according to the EPA. In 1993, automobile manufacturers were required to convert to R-134a, which was viewed as an improvement. Conversion kits were available for older automobiles, trucks, tractors and combines using R12.

Now, the EPA has determined that R-134a also is a harmful emission and is trying to phase it out. However, the EPA is not dictating the use of the new refrigerant R-1234yf as it has done in the past. Instead, the EPA is providing an incentive and encouraging adoption by giving credits to automobile manufactures for meeting the stricter Corporate Average Fuel Economy (CAFE) mileage standard of 35.5 miles per gallon.

In essence, car manufactures will be allowed to sell cars with poorer fuel mileage if they upgrade air conditioning systems to R-1234yf. It is all based on greenhouse gas (GHG) emissions, which are a priority of the Obama administration. The administration believes GHG emission reductions will be greater with the new refrigerant than by burning less fuel and meeting the 2013 CAFE target.

The switch to R-1234yf will not be cheap. First, current wholesale prices for this new refrigerant hover around $45 per pound, which is 10 times the price of R-134a. In addition, R-1234yf is less efficient. To get the same level of cooling in automobiles, manufacturers will have to install a new device that will act as a heat exchanger to improve system performance. The average cost per car is expected to be $100 per unit.

Europe is ahead of the U.S. and already is requiring the new systems. However, the problem is that there only is one plant in China that is capable of producing R-1234yf. Once that plant becomes fully operational, supplies should increase and prices moderate a bit.

Given the EPA’s emphasis on GHG emissions, the Obama administration could achieve the same outcome of lowering emissions if it required greater use of renewable energy instead of gasoline. Present consumption of renewable motor fuel is about 15 percent. New, advanced biofuels have the potential to reduce GHG by 50 to 60 percent or more, so the proportion of renewable fuel required to be blended in cars for transportation would not be burdensome to consumers. Moreover, many of the new, advanced biofuels have energy content equaling gasoline, so mileage would not suffer.


NDSU Agriculture Communication – June 15, 2011

Source:Cole Gustafson, (701) 231-7096, cole.gustafson@ndsu.edu
Editor:Rich Mattern, (701) 231-6136, richard.mattern@ndsu.edu
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