The Path to Drawdown: Refrigerant Management
Refrigerators and air conditioners contain chemical refrigerants that absorb and release heat to enable chilling. These refrigerants, particularly chlorofluorocarbon (CFC) and hydrofluorocarbon (HFC), have between 1,000 and 9,000 times greater global warming potential than carbon dioxide.
Because scientists in the 1980s found that these refrigerants were responsible for depleting the ozone layer, governments adopted international treaties to phase them out. High-income countries have already started phasing out HFCs in 2019. Some low-income countries will follow suit in 2024, and others in 2028. Thanks to the availability of substitutes with much lower greenhouse gas potential like propane and ammonium, this phasing out is expected to be smooth.
Still, the stock of HFCs will keep growing until all countries stop their use. This is where refrigerant management comes into play. Refrigerant management is the recovery, recycling, and destruction of refrigerants at the end of life. Refrigerants can be purified for reuse or transformed into other chemicals that don’t exacerbate global warming. And since 90% of refrigerant emissions happen at the end of their life, those currently in circulation need to be properly disposed of.
Hudson Technologies (stock ticker: HDSN) is a refrigerant service company that provides environmentally sustainable solutions. These solutions start with the initial sale of refrigerant gas through recovery, reclamation and reuse, on-site equipment service to ensure energy efficiency, and end with the final refrigerant disposal and carbon credit trading. Headquartered in Pearl River, New York, Hudson has stock points and reclamation centers across the United States.
HDSN's Role in Drawdown
Hudson Technologies sells, reclaims and recycles, and properly destroys used refrigerants. They offer one of the largest selections of refrigerants in the US, ranging from CFCs to HFCs, as well as specialty refrigerant gases.
Hudson’s buyback and reclamation service is nearly net-zero global warming potential solution that displaces virgin production. This service enables Hudson to supply the refrigeration and air conditioning industry with refrigerants that are no longer manufacturer but a
Hudson reclaimed 6 million pounds of HFCs in 2019. They expect this figure to grow to 40 million pounds by 2024 (p. 8) because virgin HFC will be phased down under the American Innovation and Manufacturing Act of December 2020.
Hudson’s products and services (p. 1) are primarily used in commercial air conditioning, industrial processing and refrigeration systems. Their customers include the US military: Hudson was recently awarded a five-year fixed price contract by the US Defense Logistics Agency for the management and supply of refrigerants, compressed gases, cylinders and related items to the US military.
CHCs that are not intended for use are destroyed, ensuring that they’re not released into the atmosphere. Hudson provides certification of the disposal of CFCs for you in their customers’ environmental sustainability reporting.
Hudson’s overall revenue has been growing steadily, increasing at 6.95% annually since 2016. The COVID-19 pandemic and the resulting closure of public venues and companies negatively impacted their sales (p. 17), but refrigerant reclamation is expected to grow in the coming years.
HDSN: What We Like
Hudson has a dominant position in the refrigerant reclamation and recycling industry, and they’re further consolidating their position through acquisitions and partnerships to both increase market share as well as to become more sustainable:
- In 2017 Hudson acquired Airgas Refrigerants, a leading refrigerant distributor and EPA-certified reclaimer in the US
- In October 2020, Hudson began a partnership with Bluesource, a leading carbon offset developer and retailer, to scale GHG emission reductions associated with HFC refrigerants. The partnership will initiate carbon projects to develop and market high quality, voluntary carbon offsets from the reclamation of HFC refrigerants. In doing this, they’ll use the American Carbon Registry’s Certified Reclaimed HFC Refrigerants protocol
As of 2021, Hudson accounted for 35% of the refrigerant reclaim market (p. 15)