"I just went to add refrigerant, and the maintenance shop suddenly gave me a bill for NT$ 2000[US$80]. That's really infuriating," complains an agitated taxi driver to the passenger he has just taken on.
"So expensive?! But the hole in the ozone layer is getting bigger, so it's cheaper now than it will be in the future," says the passenger, trying to get him to look on the bright side.
"The what hole? Anyway, we can't keep up this way if it makes it so hard to stay in business." retorts the cabbie with impatience.
A high price to pay:
To be sure, many people cannot understand and are unwilling to accept the link between the ozone layer, the rising price of refrigerants, and all that means for increased costs of production which make it hard to stay in business. But no matter what, it's an indisputable fact that the hole in the ozone layer is getting larger. In order to replenish the skies, it is essential to ban the use of chlorofluorocarbons (CFCs) as quickly as possible. This is an unprecedented shock to both the producers and consumers in virtually every industry.
The use of CFCs is widespread (please see the accompanying articles), and the more than ten industries with which it is closely related include home appliances, refrigeration and air conditioning, automobiles, construction, and medicine. The response in each industry is not exactly the same.
According to estimates of the DuPont Corporation of the U.S., the total value of all the facilities in the world that rely on CFCs for their operation is as high as US$200 billion. Such facilities could have been used for 20 to 40 years, but because the use of CFCs will be completely banned, their fate is still unknown. Whatever the solution--abandoning this equipment, building new gear, or developing a substitute product whose functions approximate those of CFCs so that the old machinery can stay in use--the cost will be astronomical.
Precisely because global industry's reliance on CFCs is too deep, even at the beginning of the 1980s when the hole in the ozone layer over Antarctica was already quite apparent, big business was still saying, "the hole in the ozone layer is not necessarily directly connected to chlorofluorocarbons," and making various excuses to postpone action.
Later, as agricultural production stagnated and the number of people hit by skin cancer increased, even businesses who heretofore had only had profit in mind also realized the situation was serious. In 1985, UNEP, a United Nations planning commission, finally convened a meeting of leading industrial nations to sign the Vienna Treaty, whose main purpose is protection of the ozone layer. In 1987 things were brought a step further with the signing of the Montreal Protocol which for the first time added severe compulsory punitive provisions, commanding all nations to immediately reduce the volume of CFCs used by industry.
Originally it was agreed that all use would be banned by the year 2000. With the rapid broadening of the hole in the ozone layer, however, the scope of control has been repeatedly broadened and the timetable advanced. The most recent decision was that made only last November to move the deadline for complete elimination up to 1996.
A major impact on the R.O.C.:
"To move the ban deadline forward by five years at a single stroke makes it almost impossible for industry to keep up," says Yen Pin-ho, director of the Chemical Industry Division in the Industrial Development Bureau (IDB) of the Ministry of Economic Affairs, who represented Taiwan at this international conference.
Of course, this is a global ban, that all industrial countries must observe. But for the R.O.C., which is just developing advanced industries and just now most needs the help of CFCs, the impact is naturally larger than on those countries where economic growth has already moderated.
According to statistics of the department in charge of chemical engineering at the Industrial Technology Research Institute (ITRI), the annual value of production of CFC-related industries in Taiwan is NT$200 billion per year, of which the high-export electronic information industry (which requires CFCs for cleaning in the manufacturing process) alone counts for NT$180 billion. In order to conform to the CFC ban, these industries will have to spend more than NT$5 billion per year to replace affected equipment.
At present the government phase-out program takes the 1986 volume of 10,000 metric tons of CFCs as the base line; this figure should be reduced 40% this year, so that the total volume for the year should be 6,000 metric tons. It will be reduced by 75% next year and 85% the year after, leading to a complete ban by the end of 1996.
A problem of determination:
It's easy to plan a phase-out, but whether or not domestic entrepreneurs will cooperate is another matter. Of course, CFCs originated in the Western countries, and people will look to them for examples of how to cope. Technically there are few areas that pose great headaches for Taiwan. Thus, "whether or not enterprises cooperate is not a technical issue, but one of determination," says John Lee, general director of the Union Chemical Laboratories at ITRI, which is in charge of this issue for industry.
Naturally quite pragmatic factors are most pushing business to "become determined." The first is the problem of an explosive rise in CFC prices.
"Last July the purchase price of CFC refrigerant was still fairly steady at about NT$58 per kilogram. Since the news of the complete ban has spread, prices have gone straight up sevenfold, and one kilo now costs more than NT$400," states Chen Sing-der, general manager of the Technology Department at Yue Loong Motors.
The total amount of CFCs used in an automobile, including the air conditioning refrigerant as well as as a foam for safety bars and armrests, comes to less than one kilogram altogether, so there will be only a limited increase in production costs. Still, "as the extent of the cutback in CFC use increases, you can imagine that the pressure on prices to rise will multiply many times over," adds Chen.
In order to avoid having to bring the production line to a close because of the unavailability of chlorofluorocarbons, the search for a substitute refrigerant has been pushed up, and is being tried out on the production line. This has already become a major activity for all domestic auto manufacturers.
Red label = black label:
Secondly, if companies do not phase out the use of CFCs, exporting industries will immediately face tariffs and trade boycotts by the advanced industrial nations, which would be a major blow to export competitiveness.
Take the U.S. for example. Beginning in 1990, the States will add a surtax to imported products according to the number of pounds of CFCs used in the manufacturing process, which will increase steadily over time. For example, in 1992 the surtax will be US$1.67 for each pound, US$2.65 in 1993, and so on.
According to the calculations of Lin Ming-yao, Factory Manager for Acer Computers, the leading local computer maker, ordinarily a single personal computer (plus monitor) uses 2.4 pounds of CFCs in the cleaning process. If another substitute method is not devised, starting this year the price of each computer will go up by more than six US dollars in taxes. For the computer industry, where price competition had already cut profits to the bone, this is like "frost on top of snow."
Not only this, starting in mid-May this year, the U.S. anticipates adopting a "red label" system. This means that a label saying something along the lines of "this product uses ozone-destroying chlorofluorocarbons" will be affixed to products which employ CFCs in manufacturing or use, so that consumers with a relatively elevated environmental consciousness could reject them.
In principle, the red label system would be undertaken by the importing enterprises themselves relying on their "honesty." If "dishonest" behavior is discovered in a random check, then this will leave a disadvantageous "criminal record." Most factories don't take this lightly; presently ITRI is helping manufacturers to analyze the chemical compound of their products and issuing certifications. More and more companies have come forward to apply for this service with each passing day.
Don't buy an old machine by mistake:
Another motive pushing companies to hurry up and replace their CFC-related equipment is to be the first to come up with new products and seize the business opportunities. This mainly applies to the home appliance and automobile industries, which use refrigerants. For example, if consumers who have one experience of "paying NT$2,000 for adding refrigerant" are made to understand that this isn't a temporary shortage, but is something that is going to be banned permanently, then in selecting their car they will naturally choose the one that has already switched to using a new cooling system.
Similarly, consumers who buy CFC-related refrigerators, dehumidifiers, central air conditioning, freezers, and so on will unfortunately find themselves hopping mad in the future.
Captains of industry know full well that "reminding consumers to open their eyes a little and not buy the wrong type of equipment" is the incontestably best method to encourage enterprises to speed along development of new machines. But in order to avoid "throwing a rock onto the person who has just fallen into a well," for industries which face economic difficulties, this information for the protection of consumers has not been spread very widely and thus it has not yet generated enough public awareness to exert pressure on corporations.
Change if you can:
Though there are indeed pressures coming from all directions encouraging operators to hurry along and replace CFCs, there is still considerable resistance from business. Some businesses know what they should do, but refuse to go along. They hope to use "bootleg" CFCs to keep their old machines running. Others have already made plans to move elsewhere, relocating their factory in some developing nation like mainland China which enjoys a ten year grace period.
Chou Shi-hai, a researcher at the Union Chemical Laboratories at ITRI, is at the front line of guiding industry. He notes that while it is hard to accept the procrastinating attitude of some companies, in fact known substitutes for CFCs are not cheap, and the replacement technology is not very mature, so factories worry about whether rushing in to something might not affect product functions, or whether there might not be side-effects.
Chou emphasizes that substitute products cannot actually directly replace CFCs but can only be used after going through a manufacturing process and after the equipment in which they will be used is revised. No wonder small and medium sized enterprises, by nature lacking in capital and R&D personnel, are trying to figure all the angles, and can't just switch over to something else whenever they want.
John Lee points out that companies will have to prepare themselves psychologically. Most of the CFC substitutes or replacement technologies in fact have been known for a long time, but were dispensed with because they could not compete with CFCs. Unless these old methods can be renovated, none will ever be as easy to use, safe, and inexpensive as CFCs.
In order to reach the targets for reduction, even before formal limits are reached, the IDB began working in product areas with easy substitution and convenient technology. For example, starting in 1983, spray cosmetics were banned, since in any case the old spray or application methods aren't that much more demanding in time or effort. In 1990, CFC sprays were banned for agricultural pesticides and insecticides, choosing instead other types of carbon-hydrogen compounds.
Chen Hsiung-wen, director-general of the Bureau of Air Quality Protection and Noise Control at the Environmental Protection Administration, explains that of the more than 7,000 tons of CFCs used last year in Taiwan, spray use accounted for only 5%, since this was the easiest and least troublesome item to cut back. However, the remaining small amount is for medical use, which has stringent requirements for product ingredients, and while there is still no substitute additive that will not affect the functioning of the medication, these products will still require the help of CFCs.
Not yet "feeling the pinch"?
Another item that can easily be changed is the foam used in the manufacturing process for styrofoam. One section chief at Kao Fu Chemicals, a major domestic producer of styrofoam, points out that two-thirds of the styrofoam used in Taiwan is molding, which has always used petroleum ether as a foam, so it is completely unaffected by the CFC issue. The factories that produce the remaining one-third of the "extrusion" styrofoam, which uses CFCs as a foam, as early as two years ago--when CFC prices began to rise--began shifting over to the old method of using inexpensive natural gas, so that adjustment here has also been relatively smooth.
"Companies have moved very quickly," says Lucky J.S. Lii of the Union Chemical Labs, with a tone of respect for the nimbleness of domestic industries. "At present none of the styrofoam used in Taiwan includes CFCs," he says. Unfortunately, gas is not as stable as CFCs, and if handled by someone without proper training, could cause explosions or fires.
Because there are these products for which CFCs are easily replaceable and for which entrepreneurs will, given cost considerations, move naturally to adopt replacement technology, as early as two years ago we had already reached the shining achievement of reducing CFC consumption by 30%. In contrast, progress last year was rather moderate, and many businessmen could not help but admit: "The remaining 70% is all used in areas with more difficult substitute technology, so you can't just make things change by saying they should."
Yen Pin-ho of the IDB points out, however, that industry has not yet reached the pinch. It will only be in the future, as the scope of the ban expands, that the adaptability of factories will be tested.
Quality is Job 1:
Of course, the complete phasing out of CFCs is inevitable. Thus no matter how difficult it may be or whatever the cost, business must come up with ways to stay alive. For instance, in the area of "electronics cleaning," recently Acer has made a major step.
In the past, cleaning of electronics circuit boards was a major way in which CFCs were used. Acer used to need more than 500 gallons of CFC cleaning fluid per month for this task, and the expense for this went up thrice-over last year, jumping from about NT$200,000 per month to NT$700-800,000.
"Fortunately a year and a half ago Acer had researched the feasibility of producing a circuit board that required no cleaning," notes Chen Chun-chieh, head of quality control. Beginning in January of this year, Acer's Hsinchu plant expects to completely convert to these cleaning-free boards, thus saving the costs of the labor and the CFC cleaning fluid, making things cheaper than ever.
To accommodate cleaning-free methods, changes have to be made in many parts and aspects of the manufacturing process, which can only be ready for the production line after being tested one by one. Since this is the case, worries that there will still be residues on the boards which affect their performance or life expectancy cannot be avoided.
Like a duck in the water:
New methods will require new operating conditions, and "quality control will have to be extremely rigorous in the cleaning-free board manufacturing process," explains Chou Shi-hai. For example, the labor in some small cottage industry type operations is of mixed quality, often having the situation that even after a board is soldered by one person, others have to follow up and fix this or that. Under such a process, there will be residues all over the board, so it's hard to imagine they could be "cleaning-free."
There are no fewer than 1,000 electronic operations large and small in Taiwan, and "perhaps less than 100" do not use CFCs for cleaning, estimates Chou. In particular, for some small factories without specialized personnel, they aren't even sure themselves whether the kind of cleaning fluid they use will be banned. Others might just refuse to admit they use CFCs to try to avoid the tax. What's more, some traders are importing new machines or cleaners that "are supposed to be able to serve as substitutes," but don't give the least explanation of how, so that there is suddenly a great deal of misinformation.
Despite this, Chou still has great confidence in the ability of businesses here to adapt. "Most companies are watching and waiting on the one hand, and on the other have made it an urgent task to collect information and weigh their options," he reveals. He uses the analogy of a swimming duck to describe the actions of business at present (placid above the water, kicking like crazy below). The only thing is, the production process differs in each factory, and application of new methods will require a period of testing and alteration.
Still worries:
As for substitutes for CFC refrigerants, most of the electronics factories or automobile factories that use CFCs act in cooperation with foreign (especially Japanese) parent factories. For example, Yue Loong Motors cooperates with Nissan Motors, and Teco Electric and Machinery Company works with Mitsubishi. At the same time they can get support from ITRI, so that the technology is not a problem. The only concern is that trial and application of the technology on the production line will unavoidably come three to six months later than in large factories in Japan or other advanced nations, and only then will new products come on the market.
Currently the refrigerant substitute most highly regarded around the world is the previously developed hydrofluorocarbon compound HFC-134a. However, its refrigeration effect is not as good and is more energy consuming, so making equipment smaller will be essential to new designs. And to adapt to this new refrigerant, there will have to be major changes in many parts of the car, including belts and lubricants.
Already the major luxury cars in the U.S. and Europe, like Mercedes and BMW, have switched over to models that employ HFC-134a. Japan is just slightly behind, with about 5% of autos having made the switch. As for Taiwan, manufacturers like Yue Loong only expect to see new models coming off the line in the middle of this year.
What about the performance of these new model cars? Because they have been rushed onto the market, and there was inadequate time for testing, many operators still have a reserved attitude about the new refrigerant. Only one thing is for certain--even if the new refrigerant can be mass produced, the cost will be more than ten times higher than the old. In the future, car-lovers will be faced with the inescapable fact that it will cost more than NT$1,000 to refill with the stuff.
As for appliance refrigerant, the only good news is that the refrigerant used in most home-use air conditioners is HCFC-22. This differs from CFC's in having the addition of the element hydrogen, and has very little destructive effect on the ozone layer, so that it will only be completely banned in the year 2020. So home air conditioner manufacturers can breathe a sigh of relief, and devote their attention to altering the design of tougher cases like dehumidifiers and refrigerators.
Proton, the company which accounts for the largest share of the domestic market in dehumidifiers, has announced that, because it exports 56,000 units a year to the U.S. and wishes to avoid the CFC surtax, three years ago it cooperated with Matsushita of Japan to develop an HCFC-22 refrigerant compressor for use exclusively in Proton dehumidifiers. Most of the Proton dehumidifiers exported are of this new variety. Because the results have been excellent, Matsushita also expects to begin mass production of this type of compressor next year, and at that time factories producing Kolin and Sony labels can reap the benefits.
Nevertheless, the control of the manufacturing of compressors is in the hands of Japanese corporations, a fact that is a major worry for domestic auto and appliance manufacturers. Proton engineer Chen Chin-fu states that after the new-style Japanese compressor hits the market, they will naturally give priority to Japanese factories; because the new type is not widespread, inevitably fewer factories will be able to produce it, and under conditions of an imbalance in supply and demand, shortages and struggles for products can be anticipated. Thus, a group of domestic manufacturers including Yue Loong and Proton have become tougher on "controlling the source of new compressors in the future."
Recycling rare products for sustainableuse:
At the same time as operators are putting out new products and striving to dominate the new market, what concerns millions of consumers even more is the problem of maintenance and replacing refrigerant in old machines.
Generally speaking, refrigerant in compressors in alternately cooled and heated so that it is kept in constant use. If there is no leak in the hoses, then the refrigerant should last five to eight years without needing to be refilled. But cars that see a lot of time on the road easily develop leaks from the vibrations, so the refrigerant drips out and needs to be replenished about every three years, which presents a bigger problem.
"To resolve this problem, speaking simply, there are only two ways: new sources and conservation," says Yue Loong's Chen Hsin-teh. Socalled "new sources" means replacing the old A/C system with one using a new refrigerant. The energy resources laboratory at ITRI has already developed replacement technology that costs only NT$4,000-5,000 to manufacture, and even if with labor figured in auto body shops are asking for US$10,000, most car owners should be able to cope with that.
In terms of "conservation," Chen points out that even after CFCs are completely banned, many old machines will require the old refrigerants to stay in operation. Thus the United Nations has stipulated that recycled CFCs will not fall under the ban, and can be used indefinitely by operators. Thus advanced countries are all recycling and reprocessing, with sustainable use being considered a major method of dealing with the ban.
In the past when the auto mechanic added refrigerant to your car, he would just open up the cap and release the residual refrigerant without a second thought. Now many car manufacturers in Taiwan ask repair shops to install "refrigerant recycling machines," storing used CFC refrigerant like a precious scarce resource for later use at any time.
To be sure, whatever new substitutes come on the market after CFCs have been banned, no matter how cheap and effective the chemical compounds may be, the era of massive overuse should be a thing of the past. Cherishing of scarce materials, recycling and sustainable use--rather time-tested precepts--may be the biggest lessons that the class in CFCs could yield for industry.
[Picture Caption]
p.49
It's already imperative to repair the hole in the ozone layer; the photo shows the ozone conditions for each October from 1979 to 1990. The purple part over Antarctica is the "hole." (photo courtesy of NASA, rephotographed by Vincent Chang)
p.51
With the hole in the ozone, people might have to give up sunbathing at the beach. (photo by Cheng Yuan-ching)
p.52
Spraying is one of the major uses for CFCs; fortunately these have by now mostly been replaced by other methods. (photo by Pu Hua-chih)
p.53
(right) To keep circuit boards clean, Acer has already introduced "cleaning-free" soldering technology from abroad.(photo by Vincent Chang)
p.54
The three million old vehicles in Taiwan have a startling amount of air conditioning refrigerant. Refitting or recycling are two ways to resolve the problem, but both are thorny. The photo shows refrigerant recycling equipment at San Yang Motors.
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If the refrigerant inside can be recycled, old fridges might still have some value.
