1. 1 Fake Refrigerants Should we worry? UNEP Webinar, July 25 th 2012 Mark Bennett Triton Container International

2. 2 Disclaimer The opinions I express today are my own and do not necessarily reflect the views of the Container Owners Association, Triton Container or any other party.

3. 3 Agenda COA – Container Owners Association Vietnam Industry Reaction Testing Fake Gas – When & Why Actions Conclusion

4. 4 COA – Container Owners Association Industry forum to represent the interests of owners of all ISO marine freight containers Members include: – Most major shipping lines – Container leasing companies – Service depots – Manufacturers of containers and refrigeration machinery

5. 5 Refrigerated Containers World fleet: – c.30 million containers of all types (TEU) – 1.3 million refrigerated containers (units) Reefers are mostly 12m/40 length, 67m3 cubic capacity and 30T cargo capacity Reefer machines contain 4 to 5 kg of refrigerant – most use HFC R134a

6. 6 Vietnam - 1 Likely that pure R40 (methyl chloride) was disguised as R134a Added to reefer machines it made a perfect blend to create dangerous bi-products like TMA R134a added or circulated at startup may have reacted with TMA in compressor possibly causing a hydrogen fluoride reaction Vietnam explosions brought the danger of fake refrigerants to our attention

7. 7 Vietnam - 2 Explosions to units can be traced back to service work done at 2 terminals in Ho Chi Minh 1181 units serviced there from January-September 2011 Users were notified and units isolated. Isolated units now being tested for contamination. Of some Vietnam units tested so far: – 18% have some chloride contamination – 6% contain significant quantity of R40 These 1181 units are considered high risk until tested

8. 8 Initial Industry Reaction Maersk Line notify World Shipping Council (Oct 11) ILWU union arbitration prevents handling Vietnam reefers November – COA conference at European Intermodal Manufacturers & labs experiment to find cause Search for suitable test methods for R40 December, February, March, June: COA Forums Shipping lines start to test gas bottles on vessels Vietnam depots flame halide test all gas bottles before use

9. 9 Reefer Containers - 2012 so far No explosions or other dangerous incidents reported c.2.5M pre trip tests performed Depots worldwide begin to test gas bottles Testing gas samples from at-risk units begins Testing off-hire units by leasing companies Random testing of units by some depots

10. 10 Testing Program Data Database of tests indicates: Estimate of 5000 chloride tests done so far Possible contamination of 10-15% of world fleet Fake gas found being used in SE Asia, Africa, Southern Europe, Central and South America – including R40 R40 found in 1% to 2% of machines tested R22 and R142b most common contaminants

11. 11 Test Methods Flame Halide Lamp: burning a tiny sample of suspect gas, chloride can be detected down to 0.03%. Users report it is reliable and cheap to buy/use but requires training and safety issues to be followed. Gas Sniffer Tubes: Can detect chloride down to 0.001%. Some users suggest it is over sensitive and may need further development to improve reliability. Portable electronic devices: less sensitive with R40 detectable reliably only above 5% on current models.

12. 12 Secondary Tests Gas bottles identified as chloride contaminated – sent for recycling or destruction. Reefer machines – samples sent for lab analysis. Gas Chromatography Mass Spectrum tests can accurately identify chemicals present in the sample Finding suitable laboratories difficult in some locations Database being built up to show range of chemicals used in fake refrigerants

13. 13 Decontamination HCFC / CFC contamination – Cleaned by evacuation and recharging with R134a – Oil checked for damage or changed – Long term system damage unknown R40 contamination – Methyl chloride likely to damage aluminum and rubber in the system – Higher concentrations / longer time, greater damage & increased risk of dangerous bi-products – Cleaning/neutralisation methods for low level R40 contamination under development but not fully proven

14. 14 Fake Gas – when and why? 2010: 75% reduction in HCFC use in advanced economies (Montreal Protocol) R134a price spikes at end 2010 (supply/cost – DuPont) Surplus HCFCs for recycling rebottled as R134a for easy international movement and sale (UNEP info) Sources from new material bought cheaply, blended and labeled as branded R134a (UNEP info) New or recycled HCFCs – fraction of the cost of R134a Fake R134a sold at half the price of pure R134a Hugely profitable for criminal smugglers…

15. 15 COA Action Encourage all 600+ reefer service companies to test gas supply before use to prove it is chloride free Reminder that certificates of origin etc are as easily faked as refrigerant bottles and should not be relied on Keep a public database of all service companies Machinery manufacturers – we believe they may advise Service Centres to test gas before use Shipping line and leasing companies - audit their service companies gas testing procedures Shipping lines - test gas bottles on ships

16. 16 Global Action Publicise the prevalence of fake refrigerants to increase the awareness of its dangers by users. Coordinated action by international bodies to identify and prosecute fake refrigerant smugglers. Encourage legislation to induce sellers of refrigerant to prove its purity to customers.

17. 17 Conclusion Recent air conditioning explosions in Brazil (2 people reported killed) are a reminder that fake refrigerants including R40 are widely available and without ongoing global testing of supply, container explosions could be repeated. All owners/users of reefer containers, machinery manufacturers and service depots that support them have to accept the new reality of near-global fake refrigerant availability and to work together to eliminate its use.