Commercial refrigeration owners can make money by transitioning to natural-refrigerant-based systems, according to John Tinsley, Vice President and Co-Founder of Therm, a U.S.-based company specializing in the creation and trading of refrigerant carbon credits.

Similar to utility rebates, refrigerant carbon credits can reward owners of refrigeration and cooling systems – such as supermarkets and cold storage facilities – for replacing climate-damaging refrigerants like HFCs with natural refrigerants like CO2 (R744).

The concept was presented by Tinsley the ATMOsphere (ATMO) America Summit 2022 on natural refrigerants. The conference, which took place June 7–8 in Alexandria, Virginia, was organized by ATMOsphere, publisher of

According to Tinsley, refrigerant carbon credits help pay for the higher capital costs associated with natural refrigerant equipment, driving down project costs and accelerating the adoption of natural refrigerants.

How refrigerant carbon credits work

By upgrading refrigeration and cooling systems to use natural refrigerants instead of HFCs, system operators are preventing the emission of greenhouse gases. According to Therm, they should be rewarded for “doing the right thing.”

“Refrigerant projects are expensive and challenging,” said Tinsley. “When you do them, there are substantial emissions impacts, and our goal is to accelerate natural refrigerant adoption. We think that carbon credits can help overcome these challenges.”

“Refrigerant projects are expensive and challenging… We think that carbon credits can help overcome these challenges.”

John Tinsley, Therm

Refrigerant carbon credits can be earned by undertaking projects like ODS destruction, HFC reclamation, retrofitting HFC systems with natural refrigerants, new builds with natural refrigerants or leak detection.

Either during the project planning stages or up to two years after the completion of a natural refrigerant upgrade, Therm can create refrigerant carbon credits on behalf of the system owner for the emissions reductions created by the project. The credits can then be sold on the voluntary carbon market to Fortune 500 companies with climate goals. This income can help offset the cost of the refrigerant upgrade.

System owners can also choose to retire the credits against their own climate goals or hold them as a longer-term financial investment.

Selling refrigerant carbon credits

If carbon credits are sold, a supermarket could receive US$60,000–US$100,000 (€57,000–€95,000) for retrofitting its R404A refrigeration system with a CO2-based system, according to Tinsley’s presentation. Similarly, a new grocery store could receive US$$80,000–US$140,000 (€76,000–€133,000) for choosing R744 over an HFC. For a 120,000ft2 (11,150m2) storage facility, Tinsley says that replacing R22 with ammonia/NH3 (R717) could raise US$160,000–US$260,000 (€152,000–€247,000).

While system owners receive the money from refrigerant carbon credits, OEMs and contractors can also benefit from the concept by factoring rebates into the bidding process, making them more competitive in the market.

While the process is “relatively complex” on Therm’s side, Tinsley says that it is “extremely simple” for owners and contractors, starting with some basic data to assess the financial opportunity. From start to finish, the process takes around three to four months. To get comfortable with the process, Therm recommends piloting it with a completed project where the economics are already accounted for.

According to Therm, scale is necessary to drive maximum carbon-credit financial return for system owners due to the cost of the credit development process. To combat this cost, the company recommends pooling smaller projects together to achieve an economy of scale. Therm is responsible for aggregating projects during the process and currently has around 400 projects in development.

“We want to enable the folks who are doing one or two projects at a time to get those dollars,” explained Tinsley. “The way we do that is by pooling a number of customer projects together to change the economics for everyone.”

The current carbon market is currently worth around US$1 billion (€953 million), but according to McKinsey, it could reach upward of US$50 billion (€47.5 billion) by 2030. According to Tinsley’s presentation, this demand is being driven by an increase in corporate carbon pledges.

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