Long-term growth projections for the acid-grade fluorspar
(acidspar) market are likely to require revision in the wake of
plans being developed by the world's two biggest economies to
reduce hydrofluorocarbon (HFC) emissions.
Multilateral coordination between the US and China, who
together account for up to two-thirds of global HFC production,
will reshape acidspar's largest end-market as the two nations
oversee the move from ozone depleting HFCs to more
environmentally friendly replacements.
The fluorocarbon market accounted for 45% of total acidspar
consumption in 2012 (1.71m tonnes), however demand from the
sector has stagnated in recent months. This has had a
substantial impact on acidspar production which fell by 5% in
A lull in demand accompanied by turbulence in the global
economy has incited continual acidspar price decreases, leaving
a number of prices rooted at their lowest point since
Similarly bleak short-term market forecasts undermine the
prospects of any immediate upturn in the industry, with
IM Data sources suggesting a recovery is
unlikely before Q4 2013 at the earliest.
Although the promise of restrictions in the fluorocarbon
market is unlikely to starve this eventual recovery in the
short term, political pressure alongside the existing Montreal
protocol framework promises to redefine the HFC market going
Coordination between the US and China will be conducted
through The Montreal Protocol on Substances that Deplete
the Ozone Layer, a treaty established in 1989 to phase out
the production of materials responsible for ozone depletion,
notably halogenated hydrocarbons.
Efforts to tackle the production of these substances have
dictated the direction of the fluorocarbon industry and
subsequently the potential size of the acidspar market for over
Following the successful suppression of chlorofluorocarbon
(CFC) and hydrochlorofluorocarbon (HCFC) production, the
Montreal protocol is now being redirected towards HFCs due to
their high global warming potential (GWP).
The White House has stated that a multilateral downscaling
in HFC production could lead to a reduction of emissions by up
to 90 gigatonnes of CO2 equivalent
(GtCO2e) by 2050.
Considering that in 2010 HFC emissions were only thought to
be 760 MMt GtCO2e, plans are clearly being put in place to
mitigate an expected surge in output over the coming
The United Nations Environmental Programme (UNEP) estimates
that total greenhouse gas emissions will increase from 50.1
GtCO2e in 2010 to 58 GtCO2e by 2020.
Emissions attributed to fluorinated gases (f-gases) as a
proportion of this total are expected to grow from current
levels of around 2%, meaning annual f-gas related emissions
will exceed 1 GtCO2e by the end of the decade.
Despite these growth forecasts international pressure on the
industry to reform is expected to have some impact on the
profile of the market if not the size. Just as the suppression
of CFCs and HCFCs fostered greater HFC production, so too will
Sino-American cooperation to reduce HFC output lead to the
introduction of chemical alternatives.
The form these chemicals take will define whether an
evolution of the market will be to the benefit or detriment of
the acidspar industry.
Global warming potential of
*Derived from the Bern carbon cycle model
**The global warming potential for methane includes indirect
effects of tropospheric ozone production and stratospheric
water vapour production
Source: United Nations Framework Convention on Climate
GWP is expressed relative to CO2. The time horizon
variables therefore signify the equivalent CO2 emissions that 1
tonne of a respective chemical will have over a specified time
period. Chemical emissions throughout the time horizon depend
on its average lifetime, after which point an increasing amount
of the gas is destroyed.
Source: International Energy Agency
A new generation: what will replace
Industry experts have told IM Data that
many potential out-of-kind substitutes for HFCs (e.g.
non-fluorinated refrigerants such as CO2, butane, ammonia etc)
still have problems with toxicity, flammability or alternative
Consequently, any feasible reduction in HFC emissions is
expected to involve the use of in-kind substances (i.e.
fluorinated chemical compounds) to supply commercial markets,
which will require either equal or greater levels of fluorine
This evolution is already underway prompted by various
regional policies which have targeted HFCs with particularly
International guidelines, such as the European Mobile
air-conditioning systems (MACs) directive, have focussed their
attention on high emission f-gases. As a result, major
producers have already begun reducing their output of many HFCs
and adopted alternative halogenated hydrocarbons with lower GDP
such as HFC-32, which is being used in place of HFC-125.
Similarly HFC-134a, which was introduced to replace the CFC
dichlorodifluoromethane, has also come under scrutiny. Although
pressures to phase-out the chemical have prompted a shift away
from HFCs in this particular sector, alternatives have arisen
in the shape of hydrofluoroolefins (HFOs). Despite these
chemicals being derived from a different compound, they remain
gases which naturally require fluorine as a feedstock.
International demands have therefore begun, and will
continue to, create a more fragmented market; however the
overall effect this will have on acidspar demand from the
fluorocarbon industry shows little sign of being
Instead, the size of the industry and its subsequent demand
for acidspar will continue to be more immediately dependent
upon the industries' historic driving force; economic
As the global economic crisis subsides, growth in
fluorocarbon output will follow due to the interdependence of
demand with GDP growth and particularly the processes of
industrialisation and urbanisation.
Fluorocarbon production, as with the majority of fluorspar's
end uses, is extremely sensitive to growth in downstream
Substantial expansion of the market relies directly on
income growth which feeds demand for fridges and air
Consumption of upstream materials such as fluorspar depends
on the economic progression of the lower classes in vastly
populated developing nations such as China and India. The
emergence of a middle class with money to spend is therefore
the primary fuel for the industry.
The relative impotence of market restrictions compared to
these economic pressures has been exemplified by the growth in
fluorspar production over the past decade in the face of
substantial environmental regulations.
Acidspar production has increased 35% in the last ten years
despite pressure from the Montreal and Kyoto protocols which
have succeeded in minimising CFC and HCFC production, once
major sources of acidspar demand.
A lack of viable alternatives has always previously
insulated the acidspar industry from these pressures and this
promises to continue for the foreseeable future.
This will only hold true if the refrigerant and
air-conditioning sectors continue to use fluorinated gases.
Fluorspar markets are likely to benefit from the economic
recovery leading up to 2020, however upheaval of the
fluorocarbon market is a constant threat to the industry's
For now at least, environmental restrictions look set to
provoke an evolution to chemical alternatives rather than a
revolution away from the use of fluorine based compounds.