Larger supply of CO2 components needed in China - David Zhang (Part Two)

By Huiting Jia, Sep 06, 2013, 11:03 3 minute reading

In the second part of R744.com’s interview with David Zhang, owner of Fute, one of the leading suppliers of CO2 refrigeration in China, he draws attention to the insufficient supply of CO2 components, arguing that this one of the largest barriers for the rapid development of CO2 refrigeration in China. According to Mr Zhang, the Chinese government could also consider rewarding end-users that adopt green technologies in the future.

R744.com: How do you evaluate the market for CO2 refrigeration in China in 2013 compared to 2012?

David Zhang: Compared to 2012, the HVAC&R industry in China is more interested in CO2 refrigeration technologies. For example, a large-scale NH3/CO2 cascade cold storage was opened in Dalian earlier this year. People appear to be more confident now when they talk about CO2 refrigeration. Industry stakeholders in China have realised that CO2 is not only feasible, but is also an environmentally friendly refrigerant. In particular, global consumer brands like Nestlé and The Coca Cola Company have made public commitments to use only HFC-free technology in China. The commitments of these foreign companies to only use refrigerants like NH3 or CO2 in their future refrigeration system construction projects sends a positive signal to the CO2 refrigeration market. 
 
R744: How do you assess the supply of components in the Chinese market what barriers exist when it comes to importing technology? What would you advise system and component suppliers and manufacturers interested in this field?

David Zhang: In the Chinese market, there is an inadequate supply of CO2 components. This is because even though there are several suppliers of CO2 compressors such as Bitzer, Dorin and GEA Bock, who do not produce compressors in China, their products are available through their Chinese branches or other distribution channels. Furthermore, Alfa Laval and SWEP are the major suppliers of heat exchangers in the market. However, they only provide low-pressure products mainly for subcritical systems. The heat exchangers needed for transcritical systems need to be imported from abroad. In terms of system controls, Emerson, CAREL and Danfoss supply many of the products we need, but we still end up importing systems. It thus emerges that many of the production lines for CO2 components have not yet been introduced to China. 
 
I would argue that one of the key reasons for the slow development of CO2 technology in China is the lack of supply of CO2 components. As a result, many contractors and engineering companies do not have access to the right channels to obtain the necessary components. Large international manufacturers and suppliers need to support the CO2 market by introducing more CO2 technology and production to China. I would advise system and component suppliers and manufacturers who are interested in the CO2 market to vigorously pursue this field because as confidence in this field increases, there is likely to be significant growth and investment opportunities in the future. People need to understand that low returns today do not necessarily mean low returns tomorrow.  
 
R744.com: What are the key barriers to the large-scale adoption of CO2 technology today?
 
David Zhang: One key barrier comes from the manufacture of HFCs in China. Some so-called low GWP refrigerants like R407F are already limited available presenting a direct challenge to the promotion of CO2 technology. For many businesses who have the choice between CO2 technology and traditional refrigerants, the question is one of economic viability.
 
The transformation to more modern refrigeration technology in China has only occurred very recently, but a culture of continued education and knowledge on latest refrigeration technology is definitely needed. There is a pervasive lack of awareness and technical know-how, especially among young engineers and technicians and especially when they are made to quickly learn the intracacies of a new technology. The level of knowledge of some government departments about using CO2 as a refrigerant is still low. China needs to strengthen its capacity-building and advocacy in support of CO2 technology.
 
R744.com: As a small private firm, what are your expectations from governments in terms of promoting CO2 refrigeration in the industry?

David Zhang: I believe that national rules regulating and stimulating the use of CO2 refrigerant are necessary. In the future, I would like to see the Chinese government introduce a fair reward system that encourages end users to adopt green technologies. China could learn from the carbon tax policies that have been applied in other countries and reward entrepreneurs who use green technologies.
 
R744.com: Thank you for your insights.

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By Huiting Jia

Sep 06, 2013, 11:03




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