Trucking Industry Transitions Away from Legacy Refrigerant

Episode 309: The heavy-duty industry is evolving, and mandates are steering the industry towards more environmentally friendly solutions. In the first part of our episode, Jamie Irvine talks about mandates for reduced NOx emissions and the phasing out of internal combustion engine (ICE) vehicles and the plan to replace them with electric vehicles (EVs). But do EVs have what it takes for those long hauls?

The trucking industry is also moving away from old-school refrigerants. We interviewed Christina Spalding from Chemours and got an update on how their latest products meet the future mandates for refrigerants in the trucking industry, even though those mandates keep getting pushed farther into the future.

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Transcript

Jamie Irvine: 0:39

You're listening to the Heavy Duty Parts Report. I'm your host, jamie Irvin, and this is the place where we have conversations that empower heavy duty people. Welcome to another episode of the Heavy Duty Parts Report. I'm your host, jamie Irvin. I'm wearing my Thank A Trucker t-shirt from my good friend, len Prince. If you want a t-shirt just like this, head over to thankatruckerorg. Links are in the show notes and the proceeds to all of these t-shirts goes to a good cause, so make sure you get your version of this. You also have hats and other clothing, all thanking truckers and showing our support for the trucking industry.

Jamie Irvine: 1:24

Okay, let's talk about today's episode. In this episode, we're going to talk about how, just because it's mandated for a certain time frame doesn't mean that that thing that is mandated is going to happen in that time frame. What should we do from a heavy duty parts perspective when making decisions about our business? That's something we're going to talk about. We're also going to talk about how the trucking industry is transitioning away from legacy refrigerant. But there's a twist and we're going to end the episode by talking about how being an early adopter with any technology can be expensive. We're going to look at one trucker's experience in this week's. That's Not Heavy Duty segment, all right, so let's get started.

Jamie Irvine: 2:09

Over the last 15 years we have seen mandates that have dramatically changed the technology on commercial trucks. Think back to 2007 and 2010. Diesel emission systems radically changed the way trucks are built, the equipment that's on them, and it rose maintenance costs and repair costs dramatically for fleets and owner operators. We have an upcoming mandate in 2027 that's further going to reduce, knock sensors and change the diesel emission system once again. We also are seeing mandates around the elimination of ICE vehicles, internal combustion engines. We are looking at mandates where they're really trying to force consumers to buy BEVs, battery electric vehicles. Sometimes there's ZEVs, zero emission vehicles. Obviously there's some different technology with batteries and other technology, but the idea is to phase out ICE vehicles and bring in BEVs, zevs, whatever you want to call them. In places like California and Canada, 2035 is a date that they've set where they are saying look, we're not going to allow anybody to sell ICE vehicles beyond that date in our jurisdiction. But just because it's mandated and just because a certain timeframe has been set doesn't necessarily mean it's going to happen in that timeframe.

Jamie Irvine: 3:43

For example, with electric vehicles, there are some significant hurdles that the trucking industry is going to have to overcome in order to use BEVs across the board. For example, the ATRI, the American Trucking Research Institute, put out a report in late 22 detailing significant hurdles related to charging infrastructure and other issues related to BEVs that will have to be overcome in order to make BEVs widely used in the trucking industry. I've put a link in the show notes where you can read the full article. But the issues are not small, they are significant, and we haven't even solved things like truck parking, never mind putting out a complete new infrastructure for charging these battery electric vehicles that are now going to be expected to be used in the trucking industry. So again, just because it's mandated for a certain time, whether or not we meet that mandate is going to be largely connected to whether or not we can overcome these hurdles and what happens politically and commercially to either continue to support these mandates or to oppose them, and maybe they end up changing.

Jamie Irvine: 4:59

Now, when you look at other hurdles connected to electric vehicles, I think of the consumer reaction to electric vehicles thus far. Sure, there are some people who really like electric vehicles. They're early adopters, they bought them and you know they have experienced some challenging things about owning those electric vehicles, which is causing pause for a lot of consumers on the light vehicle side. So I've included a link to a US Today article that really talks about those concerns, and those concerns are basically centered around several things. So one, the vehicle itself is very expensive to buy, but after you buy it there are some other expenses that come with owning and maintaining the vehicle over the first five years that are really turning people off. And the additional people in general on the consumer side still are having a hard time with the charging infrastructure, the time for charging and whether or not that's really feasible to use that vehicle in their day to day life. So consumers have not been buying electric vehicles at the rate that I think some people who are really pushing for these mandates would like to see.

Jamie Irvine: 6:13

On the trucking side of it of the equation, the sentiment is arguably even more strong against EVs. The Globe and Mail reported that drivers say they don't believe electric vehicles can produce the sustained power needed for the loads and the distances that have to be traveled here in North America. And, worse yet, when you need to refill the batteries, truckers are concerned about the length of time. One person interviewed in that article said it would take half a day to recharge the battery. So obviously these things are a moving target. The technology is evolving all the time and the manufacturers of EVs are trying to solve these problems and no doubt in time they're going to solve a number of them.

Jamie Irvine: 6:58

The question isn't whether or not we should go with EVs or not. In my mind, the question is can we build a product that works, that supports the trucking industry, makes the trucking industry not only more, let's say, environmentally conscious, but also can it make us more efficient? Can it lower our total cost of operation? The reality is right now, the answer to that is leading towards no, or maybe will be in the future, but again, these things have not really worked themselves out. The challenges we have to overcome to make this electric vehicle charging infrastructure and the production of these vehicles and truly lowering the cost of operation all of these factors have to come together for this to be successful. And will this all come together by, let's say, 2035? Time is going to tell.

Jamie Irvine: 7:59

So we at the Heavy Duty Consulting Corporation have been advising our heavy duty parts clients to not make radical changes to their business model just yet, and the reason is this especially if you're in the all makes or aftermarket side of the business, we lag behind new vehicle sales by roughly about five years, basically the length of the warranty. So even if all new vehicles were only zero emission vehicles or battery electric vehicles by 2035, even if that mandate happens, that timeframe, we're able to get there in time and it becomes reality, it's still 2040 before we're really seeing the entire aftermarket have to adapt to that change. So, although it is prudent to keep an eye on it and to make logical choices to move our companies towards a future where maybe ICE vehicles are not even in production, we don't want to make radical changes to our business model now in 2024 and really hurt our financial position, which will eliminate our ability to adapt in the future. So we have to be logical about this and the reason I bring this up is simply because we are starting to see, as we approach, as the days and weeks and months go by and we start to approach these hard deadlines that some governments have mandated, we're starting to see that maybe adjustments will have to be made. So again, I'm not really speaking of whether I personally am for or against this. I'm more talking about what's the reality on the ground in the trucking industry.

Jamie Irvine: 9:45

I definitely think of myself as a realist, so let's not overreact, let's not make radical changes. That's going to disrupt our businesses today. Let's keep an eye on it, let's see what the reality on the ground actually is and let's build strategies that put us in the best position possible today and that are flexible enough that we can adjust as things truly do start to change on the ground. There's absolutely no doubt in my mind that in the future, we are going to see either the complete elimination of ICE vehicles, depending on what happens with the technology on the other side of the equation or we're going to see a drastic reduction and maybe there's some middle ground there that we operate in for 10, 15, or 20 years until finally the technology allows us to completely eliminate ICE vehicles from the trucking industry. So we have to be realists. We have to not panic, not overreact. Let's just take things as they come and let's look at what's happening on the ground. In my featured interview in today's episode, we see a great example of where a mandate and the original timeframe needs to be adjusted in order to adapt to the realities on the ground. So my featured guest this week will explain what's going on, and it really illustrates my point that sometimes we will just need to wait and see what the reality is before we start reacting.

Jamie Irvine: 11:17

Before we get a chance to listen into my featured guest, let's take a break and hear from our sponsors. Are you deferring maintenance because of filter cost or availability? Or, worse yet, are you trading down to no-name filters to try to save a few bucks? Either way, you're rolling the dice. The good news there's a new premium filter option for fleets Hanks Filtration. If you're responsible for a fleet, you won't believe how much using Hanks filters will save you. But you've got to go to heavydutypartsreportcom slash Hanks to find out more. It's heavydutypartsreportcom slash H-E N-G-S-T Head there.

Jamie Irvine: 11:54

Now this episode of the Heavyduty Parts Report is brought to you by Find it Parts, your ultimate destination for heavy-duty truck and trailer parts. Discover a vast range of parts at finditpartscom. Don't spend hours a day looking for parts. Instead, visit finditpartscom and get them right away. Okay, we're back from the break and now we are going to listen into my interview, where we talk about the transition away from legacy refrigerant. My guest today is Christina Spalding. She is the marketing manager at the KeyMores company. Christina has more than 25 years of experience in the refrigerants industry to provide a diverse range of customer solutions rooted in tried and true chemistry formulated for today's most demanding performance and environmental needs. Christina is a returning guest. She was originally on the show in episode 237. Links are in the show notes if you'd like to go back and watch that original interview. Christina, welcome back to the Heavy Duty Parts Report.

Christina Spalding: 12:57

Hey, jamie, thank you so much. It's good to see you again.

Jamie Irvine: 12:59

So, Christina, can you tell us exactly what your role is again for the company?

Christina Spalding: 13:04

Yeah, absolutely so. I've been working in the refrigerant space for over 25 years and currently I'm the marketing manager for automotive refrigerants business in the America. So both North America, south America are aftermarket and OEM customers.

Jamie Irvine: 13:19

Well, that's great. That is a large territory and you've got many years of experience, so I think you're the right person to talk about this subject. The thing that I wanted to start our conversation off with today is just that the trucking industry is going through a transition away from legacy refrigerant and, for those who maybe don't understand why that's happening, I'd like you to give us a little bit of background on why it is that we are transitioning with refrigerant today.

Christina Spalding: 13:47

Yeah, absolutely so. If you think about air conditioning systems on either heavy duty trucks or even your own light duty commercial vehicle, it's one of the few things that's changed the least in an automotive vehicle. There have only been three refrigerants in the history of automotive vehicles. It started out with R12, which was an ozone depleting potential refrigerant, and that was regulated away to R134A, which has been the legacy air conditioning refrigerant for light duty and heavy duty fleets and, starting in Europe in around 2011, and then moving to the US, in North America around 2013, the industry started to move away from R134A for light duty vehicles. So if you think about that, they moved away from R134A, which no longer causes ozone depletion potential but does have global warming potential or GWP that's kind of what you'll hear everyone in the refrigerant world refer to it, as is HFC.

Christina Spalding: 14:43

Refrigerants like R134A are global warming potential products. So in the light duty fleet, the US began converting to a product called R1234YF and it is non-ozone depleting potential and it is non-global warming potential, and that transition has been underway heavily in the US since 2013. So today in the light duty fleet, over 95% of all vehicles are manufactured today with 1234YF. There's still a demand for R134A in the light duty fleet because there are so many cars still in service that were filled with 134A. But this is a transition that again has been going on for years on the light duty commercial side and is now going to be moving into heavy duty. So it's new and newer for folks that are in the medium duty, heavy duty and on and off road space. That transition is just now starting for that segment of the market.

Jamie Irvine: 15:40

So what model years would we see some of this newer style refrigerant already being used? Do you have an idea of that?

Christina Spalding: 15:47

Yeah, so from a regulatory perspective, starting in model year 2025, all light duty vehicles will transition away from 134.

Christina Spalding: 15:56

So, there's still a few out there, but 2025 and beyond, everything in the light duty space is going to be migrating to 1234YF. In the heavy duty space, the technology transition rule, which is a part of the AIM Act, and the AIM Act is the way the EPA manages the phase down of HFC refrigerants, so that's 134A. Those vehicles are required to make a change model year 2028. So there's still a little bit of time Now.

Christina Spalding: 16:25

When you and I talked about this at the APEC show a year ago, the initial proposal was to transition sooner, but I think what happened is the EPA did receive a lot of feedback from manufacturers and OEMs in the heavy duty space that said we need a little bit more time to get ready for this transition, to do it in a way that makes sense for our companies and for our customers, and so that date was moved to 2028. So the good news is you've got this legacy of experience in the light duty fleet to help bridge the heavy duty end users, and you also have a couple more years for the industry to get ready for that, and that really is going to involve the OEMs and the equipment manufacturers starting to prepare to transition from 134A to 1234YF in those heavy duty fleets.

Jamie Irvine: 17:14

Okay, and that makes sense to me because they're already going to have to reformulate the way the engines are built and operate for that 2027 change in NOxA emissions where they're doing another big reduction. So this gives the time for the OEMs to get the engine platforms where they can both accomplish both those goals. Is that correct?

Christina Spalding: 17:36

That is correct, and there's two things that have to happen as well, because you also have to have EPA SNAP approval. And SNAP approval is the significant new alternatives program and basically what it is is EPA will give approval for a product to replace an existing incumbent refrigerant in an application and or potentially in a retrofit application, and that's already been done for medium duty and heavy duty pickup trucks, but that SNAP approval still is in play for heavy duty on highway vehicles. So there's still a little bit more time for some of the bigger vehicles to get SNAP approval, and then they will also have a transition date that will likely be mandated beyond 2028. So the good news is it gives the industry plenty of time to prepare.

Jamie Irvine: 18:23

Christina, I think you did a great job of giving us an update on where we are with this transition away from legacy refrigerant we're now moving towards this 2027 for NOx and 2028 for refrigerant, where engine platforms will be updated by the manufacturers. This then will roll out into the industry and we're all going to have to deal with it. So first of all, let's talk about the product specifically that your company manufactures now for automotive. That will also be available for heavy duty.

Christina Spalding: 18:53

Now, absolutely so, Camors. We were formerly DuPont refrigerants, so if you are familiar with DuPont refrigerants, we manufacture HFC products under our Freon trademark, so 134A big product used in the heavy duty space. That is our Freon 134A product. We make that in Texas and then we also manufacture R1234YF, which will be the refrigerant of choice for heavy duty moving forward, and that product is also manufactured in Corpus Christi, Texas. So we have a long legacy of producing products not just for automotive refrigerants but for your home air conditioning system, for commercial refrigeration, for supermarkets that you walk into every day. This is a part of our portfolio that has been a strong part of our business for decades.

Jamie Irvine: 19:41

Okay, that makes sense. So if I'm going to be in the position of someone who's selling this across the counter, I'm going to be selling it to my customers, who maybe are some large fleets. When this product comes out, I assume it'll be available in different sizes so you can sell it in some sort of bulk format. You can sell it over the counter to people who need it individually for their trucks, correct?

Christina Spalding: 20:04

Yeah, absolutely so. If you think about it, there's a part of our business that sells to the equipment manufacturer. So when the vehicles are made and they're initially charged, they're charged with 1234YF, and then the service side, when they need service work, we sell through traditional distribution networks. So anyone who is buying 134A today will have an opportunity to work with their distributor to buy 1234YF. And for the commercial fleet, where they're already comfortable using recovery machines, are our machines designed for 134A. Those machines are already manufactured and are available to purchase for 1234YF. It's a different machine because it's a different refrigerant, but we sell that refrigerant in 10-pound cylinders and 25-pound cylinders and they are designed to fit with and work with the existing RRR machines that are available to shop owners that are servicing heavy-duty 134A equipment today.

Christina Spalding: 20:58

R134a is a safety classification A1 non-flammable refrigerant. R1234yf is an A2L refrigerant. So if you think about it, a1 non-flammable, a3 is like propane, butane highly flammable, high burning velocity, easy to ignite. But these A2L refrigerants are a separate safety classification. But because they are mildly flammable they do require different equipment, which is why a shop owner is going to need a separate recovery machine for 1234YF. And 1234YF is left-handed threaded so that you don't confuse it with your 134A equipment. So it's designed specifically to be obvious. In its use it's different from 134A but again, just as the new equipment will be designed to handle 1234YF, the recovery machines are designed to handle it as well.

Jamie Irvine: 21:51

Okay, so that was what I was going to say is, when I was selling parts, one of the things that I sold was oil, and every time the oil was updated to a new spec, they made it reverse compatible and because of this difference in chemical composition and safety rating, this is not a reverse compatible type product. This, literally, you're going to have to run one set for R134 and you have new equipment for this new type of refrigerant. That's what it sounds like.

Christina Spalding: 22:21

Absolutely correct. That's how it's set up. Today in the commercial space you can purchase cans of 1234YF. If you're a DIYer and you want to go into a local parts retail shop, cans are provided. You don't need a 609 certification for the cans, but you do need a 609 certification for 1234YF if you're going to be buying cylinders the 10-pound cylinders or the 25-pound cylinders, same as it is today for 134A Anybody who's working in the commercial space and they're buying 30-pound 134A cylinders, same certification is needed. It's following the exact same pattern that 134A followed. The industry should be very comfortable and familiar with what the requirements will be.

Jamie Irvine: 23:03

It sounds to me like there's going to be a window of time, something in the ballpark of 10 to 15 years here, where there's going to be equipment out in the field that is running the older R134A because, let's say, it was manufactured in 2026 or 2025. But if you're a fleet and you're running new equipment, you're probably going to have this five-year window or so, or however long you keep that equipment for, before your entire fleet is switched over. Is there going to be any obvious performance differences? Sometimes, when we move in this direction, it doesn't necessarily mean that the performance characteristics stay the same. Sometimes they get worse, sometimes they get better. What are we going to see there when it comes to the actual performance of this new style of refrigerant?

Christina Spalding: 23:48

Yes, what you'll find is any of the performance criteria will be addressed in the equipment design itself. When the commercial light duty fleet went from 134A to 1234YF, the refrigerant and the refrigeration capacity of those two fluids are very similar, but for the 1234YF vehicles an internal heat exchanger was added to the equipment so that it can essentially deliver identical performance. In the equipment design portion of this process, as the OEMs evaluate the transition, they'll take care of that on the equipment side. Then from a service perspective, it will be very similar. The good news is, as a refrigerant manufacturer, we have a lot of experience in educating the market, one of the things we've done for years. We work with a lot of the various different organizations that support the automotive aftermarket. I think one of the things everyone should get prepared for is they're going to start getting more and more education on these products. We do that typically several years in advance of when those products are launched, so that folks are able to ask the questions that they have and get comfortable with these products.

Jamie Irvine: 24:59

I'm thinking of three people. You've got the outside salesperson that has to be able to answer questions for their customers. You've got the parts person who has to be able to make recommendations. Then you have the fleet maintenance people, whether it's a repair technician or a maintenance manager, who are going to need to be able to understand the implications of the choices that they're making at that time. This is good that we have the time, because the education curve on that it sounds like it might be a little steep at the beginning.

Christina Spalding: 25:24

Yeah, it is One of the things. People may not even realize. They may already be driving around in a vehicle that's using 1234YF. Perhaps they haven't had to take it in for service. But every vehicle, if you pop open your hood and you look at your SAE sticker on your hood, it's going to tell you what refrigerant is in your vehicle and what that charge size is and what oil to use and what's compatible with it. I would also encourage folks, if this is brand new to them, take a look at your own vehicle. You may have been driving around in a YF-cooled car for the last three to five years and didn't even realize it, because you may not have had any issues or concerns or had to take it in for repair maintenance.

Jamie Irvine: 26:02

Yeah, what about people who work in both commercial trucking and also supply service and parts for off-road, so agricultural equipment, mining equipment, those kinds of things, construction equipment like the big cat loaders and things like that? Does it affect them as well, or is this specifically just for class, let's say six through eight trucks?

Christina Spalding: 26:25

No. So non-road vehicles are also going to be required to make this change in 2028. So, as a refrigerant manufacturer, we're already talking to them. It's now approved already in those applications and it's also part of the technology transition rule. So it also will fall under that 2028 timeline and we're already engaged in having conversations with OEMs who are starting to prepare for this well in advance and they'll see the same thing. So it will start to impact multiple classifications of vehicles.

Jamie Irvine: 26:57

Well, thank you so much for coming on the show and giving us an update. I think that it's important that we get ahead of this. We're going to include links in the show notes to take people right through to your product landing page so that they can learn more about the product themselves. They'll be able to reach out through their distributors to be able to get access to training materials as well. I really appreciate it, christina. It's so nice to see you again. Thanks again for coming in and updating us.

Christina Spalding: 27:22

Always good to see you, always glad to be on the show. Thank you.

Jamie Irvine: 27:25

I really enjoyed my conversation with Christina today. I think it's fascinating to see how things are rolling out with this transition away from legacy refrigerant. We thought we were going to have to deal with this a lot sooner than we actually do. This is now something that won't really take effect until after that 2027 mandate is in place. For us in the aftermarket, that means we won't even have to deal with this change in legacy refrigerant until those vehicles are starting to be repaired by the independent service channel. We might be talking about, let's say, 2030 to 2032, before we even have to deal with that in the aftermarket. Great example of how, just because something is mandated and a specific timeframe is set initially, things may have to change in order to adapt to reality. All right, let's conclude today's episode with that's Not Heavy Duty. And in today's segment of that's Not Heavy Duty, I want to play a video for you from at TikTok Truckering, where he shared his experience at a repair center on November 7th 2023. Let's watch the video.

Speaker 2: 28:38

Here's one of those EV trucks I was telling you about. Apparently, they do break down a lot. This particular one is blocking my truck, which I just got in service, and then this other truck, a CNG truck, is also blocking it. So I paid $3,000 and hopefully I can get it out of here soon.

Jamie Irvine: 29:10

Okay. So he counted over 20 EVs in the yard that day, and a couple of the reasons that those EVs were there and broken down was because they had run out of battery charge and therefore, when they ran out of charge, there was some issue. They weren't able to recharge them and get them going again, so they had to bring them into a repair center to get them fixed and get them back on the road. I think what this video illustrates to me is that you know, when I think of being heavy duty, I think of being tough, resilient and ready to go to work, and these early EVs definitely have their issues and in time there is no doubt they're going to get better. But it may be very expensive right now to be an early adopter, another reason why I think, if you can, it's probably a good idea to be patient, to wait and see how things go and to pick the right time to make the transition from ICE to BEV for your fleet All right. Well, that brings us to the conclusion of today's episode. Last week I was in New Orleans attending the Technology and Maintenance Council's TMC annual meeting. We had a great time in New Orleans. We recorded a number of interviews that we are going to start sharing with you in April.

Jamie Irvine: 30:30

So, if you haven't already, head over to heavydutypartsreportcom and make sure that you click that follow button. Sign up to our weekly email so you never miss out. We'll send you one email a week. That's it, so you never miss out on any of the content that we are publishing. And in addition to that, if you follow us on the podcast player of your choice, make sure you hit that follow button. Give us a review and five stars if that app allows that. And also, if you like to watch the video version on YouTube, don't forget to hit the subscribe button and that bell notification. So, again, you don't miss out on any of our content. Thank you so much for listening and watching this week. We really appreciate it and, as always, I want to encourage you to be heavy duty.