HVAC Refrigerants in Mexico

A couple of US exporters have asked me about the opportunities to sell refrigerants in Mexico, I thought is was a good idea to post what I know and my opinion on that regard.

We may start by emphasizing that Mexico is signatory of the Montreal Protocol  on Substances that Deplete the Ozone Layer and has committed to reducing 35% of harmful agents by 2018 and continue on to 50% reduction by 2020 and 67.% by 2022. Mexico’s work reducing chlorofluorocarbons (CFC) and hidrofluorocarbons (HFC)  started back in 2008.

By 2014, SEMARNAT, the Mexican equivalent to EPA in the US, had developed policies that promoted the eradication of harmful refrigerant gases. Those policies include recommendations to migrate to natural refrigerants such as ammonia (NH4+), recycle the gas into the same units or to use alternative environment friendly equivalents.

Mexican manufacturers of HVAC and cooling systems have stopped making units based on R22 or R141b for its high CFC content; Mexico is replacing, retrofitting or discontinuing all R-12, R-22, R502, R401A, R402, R406 and R408 based units. These gases, although still in use today, are only utilized to maintain old HVAC units. For the same reason,  importation of these gases into Mexico have been restricted by custom authorities and are expected to phase out completely by 2030.

Mexican government has funded projects to develop environmentally friendly refrigerants investing $50 million through companies like Quimobasicos, Mexichem, Dow Mexicana, Chemour and others.

The largest users of refrigerant low toxicity gases include Whirlpool, Danfoss, LG, Bohn, DAIKIN, Mabe, among others who have been manufacturing high energy efficient units for over 20 years now.

The Mexican HVAC market is consuming large volumes of R438A, R404A and R410A refrigerants which are more environmentally friendly, most of which are sourced locally from Mexican manufacturers. The lack of R22 equivalents is allowing illegal practices to import from countries like China and others.

The Mexican market for HVAC refrigerants is very competitive and any foreign exporter should first consider that Mexico based manufacturers have a large distribution network covering almost any point of the vast territory.  Secondly,  it is important to consider the large number of old units still in service which were built to work on R22; and thirdly, the high price differentials. Just as an example, an R22 13 lb container is bought in Mexico for $182 USD and a R404A 24 lbs container is sold for $435.00 USD.

Mexican importers of refrigerant gases must first request a one year volume allowance to SEMARNAT, have approval from COFEPRIS (somethin like US’s FEMA), and to provide the right paperwork to customs prior to shipping; a process that is well-know by Mexican distributors.

In light of the above, new and environmentally friendly refrigerants may find a very receptive Mexican market but large competition as well.

 

 

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