E360 Regulatory Breakfast

January 31, 2017

This presentation is intended to highlight changing developments in the law and industry topics. The law is frequently evolving and information and publications in this presentation may not reflect the latest changes in the law or legal interpretations. The statements and information provided in this presentation should not be construed as legal advice or legal opinion regarding any specific facts or circumstances, but is intended for general informational purposes only. The views and statements expressed during this presentation are the personal opinions of the presenter and do not represent those of Emerson Climate Technologies, Inc. or its affiliated companies. You should consult an attorney about your situation and specific facts and you should not act on any of the information in this presentation as the information may not be applicable to your situation. Although all statements and information contained herein are believed to be accurate and reliable, they are presented without warranty of any kind. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such use is free of patent infringement and are not recommendations to infringe on any patents. This presentation may not be copied or redistributed without the express written consent of Emerson Climate Technologies, Inc.

Disclaimer

2

Panelists

3

Dr. Rajan Rajendran

Vice President — System Innovation

Center and Sustainability

Emerson, The Helix Innovation Center

Shane Angle

Vice President & General Manager,

Commercial Air Conditioning

Emerson

John Wallace

Director — Innovation, Retail Solutions

Emerson

Refrigerant Regulations

and Alternatives

Rajan Rajendran

4

Kigali Amendment to the Montreal ProtocolOctober 15, 2016

Global Agreement on HFC Phase-Down Reached by 197 Countries of the World in Kigali, Rwanda, on October 15, 2016

0

20

40

60

80

100

120

2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

A2 Countries

(U.S., Canada, etc.) A5

Countries

Group 1

A5 Countries Group 2

(India, Iran, Pakistan, Iraq,

GCC)

A2 Countries

(Belarus, Russian

Federation, Kazakhstan,

Tajikistan, Uzbekistan)

2024 Freeze 2028 FreezeBaselines

A2 countries (U.S., Canada, etc.) –

avg. HFC consumption 2011–2013 +

15% HCFC baseline

A2 countries (Belarus, etc.) – avg.

HFC consumption 2011–2013 +

25% HCFC baseline

A5 countries (Group 1) – avg. HFC

consumption 2020–2022 + 65%

HCFC baseline

A5 countries (Group 2) – avg. HFC

consumption 2024–2026 + 65%

HCFC baseline

GW

P W

eig

hte

d C

AP

(%

of

Ba

se

line

)

5

Ref: http://conf.montreal-protocol.org/meeting/mop/mop-28/crps/SitePages/Home.aspx

Refrigerants and the EPA

6

Refrigerants and the EPA

SNAP New and Changed Listings — Final, Sept. 26, 2016https://www.epa.gov/sites/production/files/2016-09/documents/snap_action_scr_2_factsheet.pdf

7Federal Register, 12/1/16: http://bit.ly/2gKkL36

SNAP New and Changed Listings — Final, Sept. 26, 2016

Refrigerants and the EPA

8https://www.epa.gov/sites/production/files/2016-09/documents/snap_action_scr_2_factsheet.pdfFederal Register, 12/1/16: http://bit.ly/2gKkL36

Other Refrigerant Regulation Activity

Many of the Current Regulatory Proposals Target 150 GWP for Refrigeration and ~750 GWP for AC Applications.

A Global Agreement Like the Kigali Amendment Can Help Eliminate Patchwork of Refrigerant Regulations.

Environmental Canada (EC)**:

proposal November 26, 2016

Commercial application GWP limit Date

Refrigeration – centralized

systems (MT/LT racks)1,500 2020

Refrigeration – condensing units 2200 2020

Refrigeration – LT stand-alone 1,500 2020

Refrigeration – MT stand-alone 700 2020

Foams 150 2021

Mobile refrigeration 2,200 2025

AC – chillers 700 2025

Domestic refrigeration 150 2025

F-Gas (EU): effective May 20, 2014

Commercial application GWP limit Date

Self-contained refrigeration 2,500 2020

Stationary refrigeration 2,500 2020

Self-contained refrigeration 150 2022

Centralized refrigeration 150 2022

– Except top side of cascade 1,500 2022

CARB: Short-lived climate pollutant reduction strategy

— proposal Nov. 28, 2016 (comments Jan. 17, 2017)

Commercial application GWP limit Date

All refrigerant sales 2,500 ?

Non-residential refrigeration 150 ?

AC (non-residential and

residential)

750 ?

** http://www.gazette.gc.ca/rp-pr/p1/2016/2016-11-26/html/reg1-eng.php

Comment period ends Feb. 8, 2017.

• Phase-down (NAP) option also proposed

(2019 — 90%; 2024 — 65%; 2030 — 30%;

2036 — 15%; baseline 2011–2013)

9

Refrigerant-related Changes Are Global in Scope; We Have to Stay on Top to Remain Competitive.

$5.2M partnership by AHRI, ASHRAE, DOE to study flammable refrigerant

behavior in real-world applications

Safety standards under revision to include

mildly flammable refrigerant (A2L)

accommodations

• U.S.: UL 1995, ASHRAE 15

–Target late 2017

• International: ISO 5149, IEC 60335, EN378

–Target late 2017

Building codes for mildly flammable (A2L)

refrigerants being expedited for adoption in 2021

code cycle

Evaluating revisions on increasing charge limits for

flammables• U.S. A3 charge limit from 150g to 300g–500g

Federal acquisition regulation encouraging

low-GWP usage in federal buildings

Other Refrigerant, Standards, Code-Related Activity

Section 608 revisions to refrigerant management

now include HFCs

https://www.epa.gov/section608/revised-section-608-refrigerant-

management-regulations

10

Refrigerant Options

Lower-GWP Synthetic Refrigerants, Blends and Natural Refrigerants Are Available Options in Various Applications.

11

R-410A

Like

Capacity

R-404A &

R-407/22

Like

R134a

Like

GWP Level

400–675

< 1500

~600

~300

HFO 1234yf

HFO 1234ze

ARM-42

R-410A

R-22

R-407A

R-407C

R-407F R-452A = XP44

R-452C = ARM-35

0 500 1,000 1,500 2,000

Pressure

or

R-32/HFC/HFO

Blends

R-32/HFO

Blends

HFC/HFO

Blends

R-134a

CO2

R-404A

R-507A

DR2, HFO 1233zd

R-290

NH3

A1 – Non-Flammable

A2L – Mildly Flammable

A3 – Flammable

B2L – Toxic, Mildly Flam.

R123-Like

(V. Low Pr.)

(3,922)

R-32

R-448A = N40

R-449A = XP40

R-449B = ARM-32

N20

R-513A = XP10

R-450A = N13z

R444B = L20

L40

R-454A = XL40

ARM-20bR-455A = L40x (HDR110)

R-454C = XL20

R-457A=ARM-20a

ARM-25

R-447B = L41z; R452B = XL55

L41y, R459A=ARM-71a

<150

Qualitative – Not to Scale

R-515A

Alternatives – Arkema Perspective

*Final Rule: July 20, 2015 *Final Rule: September 26, 2016

Phase-out refrigerantSupermarket

(New**)

Supermarket

(Retrofit***)

Remote

condensing

unit

(New)

Remote

condensing

unit

(Retrofit***)

Stand-Alone

Refrigerated food

processing and

dispensing

equipment

(New)

Cold storage

warehouses

(New)

Ice machines

(New)

Very low-temp

refrigeration

(New)

Positive displ.

chiller

(New)

MT < 2,200

BTU/hr. and not

contain flooded

evap.

(New)

MT ≥ 2,200 BTU/hr.

with or without

flooded evap.

(New)

LT

(New)

LT and MT

(Retrofit***)

R-404A/507A Jan. 1, 2017 July 20, 2016 Jan. 1, 2018 July 20, 2016 Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 July 20, 2016 Jan. 1, 2021 Jan. 1, 2023 OK OK Jan. 1, 2024

R-410A OK - OK - Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 - Jan. 1, 2021 Jan. 1, 2023 OK OK Jan. 1, 2024

R-407A/C/F OK OK OK OK Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 OK Jan. 1, 2021

R-407C/F OK

R-407A:

Jan. 1, 2023OK R-407C only

Jan. 1, 2024

R-407C

HFC-134a OK OK OK OK Jan. 1, 2019 Jan. 1, 2020 OK OK OK OK OK -

Likely alternatives

R-449B OK OK OK OK OK OK OK OK

R-452C

ARM-25

Indirect

R-457A

Indirect

ARM-42

Indirect

R-459A

* Abbreviated – For complete Listing, see EPA final rules; go to: https://www.gpo.gov/fdsys/pkg/FR-2015-07-20/pdf/2015-17066.pdf https://www.gpo.gov/fdsys/pkg/FR-2016-04-18/pdf/2016-08163.pdf

** Includes ice machines connected to a supermarket rack refrigeration system.

*** EPA uses term “retrofit” to indicate the use of a refrigerant in an appliance that was designed for and originally operated using a different refrigerant.Term does not apply to upgrades to existing equipment where the refrigerant is not changed.

OK = SNAP approved for application

= Areas of possible use in the future

12

Alternatives: Chemours Perspective

*Final Rule: July 20, 2015 *Final Rule: September 26, 2016

Phase-out refrigerantSupermarket

(New**)

Supermarket

(Retrofit***)

Remote

condensing

unit

(New)

Remote

condensing unit

(Retrofit***)

Stand-Alone

Refrigerated food

processing and

dispensing

equipment

(New)

Cold storage

warehouses

(New)

Ice machines

(New)

Very low-temp

refrigeration

(New)

Positive displ.

chiller

(New)

MT < 2,200

BTU/hr. and not

contain flooded

evap.

(New)

MT ≥ 2,200 BTU/hr.

with or without flooded

evap.

(New)

LT

(New)

LT and MT

(Retrofit***)

R-404A/507A Jan. 1, 2017 July 20, 2016 Jan. 1, 2018 July 20, 2016 Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 July 20, 2016 Jan. 1, 2021 Jan. 1, 2023 OK OK Jan. 1, 2024

R-410A OK - OK - Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 - Jan. 1, 2021 Jan. 1, 2023 OK OK Jan. 1, 2024

R-407A/C/F OK OK OK OK Jan. 1, 2019 Jan. 1, 2020 Jan. 1, 2020 OK Jan. 1, 2021

R-407C/F OK

R-407A:

Jan. 1, 2023

OK R-407C onlyJan. 1, 2024

R-407C

HFC-134a OK OK OK OK Jan. 1, 2019 Jan. 1, 2020 OK OK OK OK OK -

Likely alternatives

XP40: R-449A OK OK OK OK OKMT:

LT: OKOK OK OK OK

XP10: R-513A OK OK OK OK OK OK OK OK OK OK OK OK

XP44: R-452A

XL10: R-1234yf - Indirect - Indirect OK

XL40: R-454A - Indirect - Indirect OK

XL20: R-454C - Indirect - Indirect OK

XL55: R-452B

XL41: R-454B

OK = SNAP approved for application

= Areas of possible use in the future

13

* Abbreviated – For complete listing, see EPA final rules; go to: https://www.gpo.gov/fdsys/pkg/FR-2015-07-20/pdf/2015-17066.pdf https://www.gpo.gov/fdsys/pkg/FR-2016-04-18/pdf/2016-08163.pdf

** Includes ice machines connected to a supermarket rack refrigeration system.

*** EPA uses term “retrofit” to indicate the use of a refrigerant in an appliance that was designed for and originally operated using a different refrigerant.Term does not apply to upgrades to existing equipment where the refrigerant is not changed.

Alternatives – Honeywell PerspectiveFinal Rule: July 20, 2015 Proposed Rule: April 18, 2016^

Phase-out

refrigerant

Super-

market

(New**)

Supermarket

(Retrofit***)

Remote

condensing

unit

(New)

Remote

condensing

unit(Retrofit***)

Stand-Alone

Refrigerated food

processing and

dispensing

equipment

(New)

Cold storage

warehouses

(New)

Ice machines

(New)

Very low-temp

refrigeration

(New)

Positive displ.

chiller

(New)

MT < 2,200 BTU/hr.

and not contain

flooded evap.

(New)

MT ≥ 2,200 BTU/hr.

with or without

flooded evap.

(New)

LT

(New)LT and MT(Retrofit***)

R-404A/507A 01/ 2017 July 20, 2016 01/ 2018 July 20, 2016 01/ 2019 01/ 2020 01/ 2020 July 20, 2016 ^Jan. 1, 2021 ^Jan. 1, 2023 OK OK

R-410A OK - OK - 01/ 2019 01/ 2020 01/ 2020 - ^Jan. 1, 2021 ^Jan. 1, 2023 OK OK

R-407A/C/F OK OK OK OK 01/ 2019 01/ 2020 01/ 2020 OK ^Jan. 1, 2021

R-407C/F OK

R-407A:

^Jan. 1, 2023OK R-407C only

HFC-134a OK OK OK OK 01/ 2019 01/ 2020 OK OK OK OK OK -

Likely alternatives

R-450A OK OK OK OK OK OK OK OK OK OK OK - OK

R-448A OK OK OK OK Appr. Pending Appr. Pending OK OK OK Appr. Pending OK - -

R-455A - - - - SNAP in Prep SNAP in Prep SNAP in Prep - - - - - -

R-515AFuture

AlternativeFuture Alternative

Future

Alternative- Future Alternative Future Alternative Future Alternative - Future Alternative Future Alternative Future Alternative - -

R-1234yf - - - - Appr. Pending Appr. Pending Appr. Pending - - - OK - -

R-1234ze(E) - - - - Future Alternative Future Alternative Future Alternative - - - OK - OK

R-1233zd(E) - - - - - - - - - - - -OK

(Centrifugal)

R-447B/

R-452B - - - - - - - - - - - -Future Alternative

.

ǀ Refrigerants

14

*Abbreviated – For complete listing, see EPA final rule; go to:

https://www.gpo.gov/fdsys/pkg/FR-2015-07-20/pdf/2015-17066.pdf

See proposed rule; go to: https://www.gpo.gov/fdsys/pkg/FR-2016-04-18/pdf/2016-08163.pdf

** Includes ice machines connected to a supermarket rack refrigeration system.

*** EPA uses term “retrofit” to indicate the use of a refrigerant in an appliance that was designed

for and originally operated using a different refrigerant.

Term does not apply to upgrades to existing equipment where the refrigerant is not changed.

Refrigeration Application Alternatives

Emerson’s Approvals in Progress or Complete

Volumetric

Capacity /

Pressure

NaturalsMildly Flammable (A2L)

HFO and Blends

Lowest GWP Non-flammable

(A1) HFC/HFO Blends

Today’s Non-flammable

(A1)

HFCs

Elevated

Medium

“R-404A like”

Low

“R-134a like”

GWP 0–5 0–150 350 –1,300 1,300–4,000

R-744 (CO2)

1

R-290 (Propane)

3

R-717

(Ammonia)

0

R-455A (HDR-110)

146

R-454C (XL20)

146

HFO-1234yf

<1HFO-1234ze

<1

R-449A (XP40)

1,282

R-448A (N40)

1,273

R-513A (XP10)

573R-450A (N13)

547

R-507A

3,985

R-407A

1,923

R-134a

1,300

R-407F

1,674

R-407C

1,624 R-404A

3,943

A1 – Non-flammable

A2L – Mildly flammable

A3 – Flammable

B2L – Toxic, mildly flam.

R-515A

392

R-457A (ARM-20a)

139

R-449B (ARM-32)

1,296

ARM-42

131

15

This List Is Subject to Change. Please Check Publication Form 93-11 or With Emerson Representatives for the Most Current Approvals in Progress.

Refrigerant Leak Detection

John Wallace

16

Refrigerant Leaks Have a Broad Impact

http://www2.epa.gov/sites/production/files/greenchill/downloads/FinancialImpactCalculator.xls

http://www2.epa.gov/sites/production/files/greenchill/downloads/GreenChillCalculator.xlsx

Based on:

• Yearly calculations

• 100-site chain

• R-404A

• 3,500 pounds per site

• 20% leak rate (vs. 0%)

• Leak 700 pounds/year

• Avg. $7/lb for R-404A Climate impact (direct)

124,500 M tons CO2

Equal to 24,000+ cars

or 10,600 homes

Economic impact

$500K+ refrigerant

customer disruptions

Equipment impact

Life cycle cost

Energy impact

Potential based on amount of loss

Use the EPA

calculators for

your specific

circumstances.

17

Existing Section 608 Key Elements

• Part of the Clean Air Act

• Addresses stationary refrigeration and air conditioning (CFCs, HFCs)

• Key elements

– Prohibits venting

– Requires certification

– Provides for safe disposal

– Requires recordkeeping

– Corrective actions required for leak rates above 35%

New advanced copy of 608 update final rule just issued.

New final rule effective January 1, 2017!

https://www.epa.gov/sites/production/files/2015-08/documents/section_608_of_the_clean_air_act.pdf

http://www3.epa.gov/ozone/title6/608/leak.html https://www.epa.gov/sites/production/files/2016-09/documents/608_final_rule_pre-publication_copy.pdf18

EPA Finalizes Updates to Section 608 and Section 612 of the Clean Air Act

https://www.epa.gov/newsreleases/epa-finalizes-two-rules-reduce-use-and-emissions-potent-greenhouse-gases

• Strengthening the refrigerant management program under 608

• Incorporates some of the key elements of CARB

• Changes in leak rate triggers

• Mandates inspections or monitoring in certain instances

• Effective January 1, 2017

19

The Benefits of Detecting a Leak Early

Tota

l re

frig

era

nt

lost

Time

Dedicated leak

detection

Liquid level

alarms

Temperature

alarms

Performance

impact

(energy)Excess

capacity masks

(climate impact)

System capacity

impact

(food safety)

Detection technology

20

Where Are the Leaks?

http://www2.epa.gov/sites/production/files/documents/leakpreventionrepairguidelines.pdf

% T

ota

l le

aks

0

5

10

15

20

25

30

35

40

45

Racks Cases Condensers Field Piping Walk Ins AC Units Condensing Units Remote Headers

Major causes of leaks:

• Vibration

• Corrosion

• Flare nuts

• Valve fittings

• Thermal stress

• Installation techniques

21

Key Elements of a Leak Detection Program

Detection

Notification

Monitoring

• Technology choice based on

requirements

• Installation of leak detectors

• Location

• Local versus remote notification

• Importance of thresholds and alarming

• Receiving and recording events

• Taking appropriate actions

• Correlating with fill events, etc.

• Calculating leak rates

• Understanding overall impact

• Focus programs to eliminate leaks

22

Characteristics of Leak Detection Technologies

“Active” “Passive” Indirect

• “Sniffer technology”

• Multiple zones

• Tubing to each zone

• Multiple refrigerants

• Connection to monitoring

system for notification

• Potential to use for CARB

automatic leak detection (ALD)

• Passive infrared technology

• Single zone

• Multiple refrigerants

• Connection to monitoring system

for notification

• Potential to use for CARB

automatic leak detection (ALD)

• Generally uses existing sensors

and HW

• Site- or “cloud”-based

• Analyzes data (i.e., temperatures,

pressures, etc.) to detect leaks

• Potential to use for CARB

automatic leak detection (ALD)

23

Combining Technologies for Best Results

Direct Indirect

Notification and monitoring

For early indication of a problemTo provide an indication

of the location

24

Additional Information

General references:Emerson.com

EmersonClimate.com/E360

EmersonClimate.com/en-us/products/electronics_systems/leak_detection/

http://www3.epa.gov/

http://www2.epa.gov/greenchill

http://www.arb.ca.gov/cc/rmp/rmp.htm

Specific information used in this presentation:

http://www2.epa.gov/sites/production/files/documents/leakpreventionrepairguidelines.pdf

http://www2.epa.gov/sites/production/files/documents/gc_averagestoreprofile_final_june_2011_revised_1.pdf

http://www2.epa.gov/sites/production/files/greenchill/downloads/FinancialImpactCalculator.xls

http://www2.epa.gov/sites/production/files/greenchill/downloads/GreenChillCalculator.xlsx

http://www3.epa.gov/ozone/enforce

http://www3.epa.gov/ozone/title6/608/leak.html

http://www.arb.ca.gov/cc/rmp/rmp.htm

http://www.arb.ca.gov/cc/rmp/RMP_QA_Guidance_Document.pdf

https://www.epa.gov/sites/production/files/2015-08/documents/section_608_of_the_clean_air_act.pdf

https://www.epa.gov/newsreleases/epa-finalizes-two-rules-reduce-use-and-emissions-potent-greenhouse-gases

https://www.epa.gov/section608/revised-section-608-refrigerant-management-regulations

https://www.epa.gov/sites/production/files/2016-09/documents/608_final_rule_pre-publication_copy.pdf

All links are subject to change. Contact John Wallace for details.

25

Commercial AC Megatrends

and Regulations

Shane Angle

26

Megatrends Driving Change in Commercial Air Conditioning

Trend Emerson Response

• Building Automation / Connectivity

• Energy Efficiency and Sustainability

• Comfort and Air Quality

• Modulation Technologies– Compression and controls

• Low-GWP Refrigerants– A2L compression

– Next gen compression

• Efficiency retrofits– Equipment controls / monitoring

• Air Management– Latent vs. sensible

– IAQ

27

Rooftop Efficiency Standards and Low-GWP Refrigerants Are

Key Dynamics in Commercial HVAC

28

On 1/1/2018, the DOE Will Adopt the 90.1-2013 IEER Levels Nationally While Significant Industry Activity Is Underway to Evaluate Future, Low-GWP Refrigerants.

Light Commercial Efficiency Standards Low-GWP Refrigerants Emerging

11.4 11.2

10.1

12.912.4

11.6

14.814.2

13.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

6-10 Ton 11-20 Ton 21-63 Ton

+13%

+30%

+11%

+27%

+15%

+31%

Note: ASHRAE 90.1 also has an EER component not shown here.

To

da

y

20

18

20

23

IEER Minimums for Rooftop AC Units

Technology Solutions to Optimize System Part Load Efficiency — IEER

29

Multi-speed blower fans

Multi-speed condenser fans

Modulating compressors

Larger coils, heat exchangers

Controls

Technology Levers Higher IEER

Various Regulations Are Driving Need for Compressors and Other Components

Optimized for New LGWP Refrigerants

30

Key Events and Regs ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25

A2L — IEC/UL/ASHRAE Safety Stds.

A2L Into Bldg. Codes

DOE Residential SEER Std. 1/1/23

DOE Commercial RTU’s IEER Std.1/1/18

EL1

1/1/23

EL3

EPA Proposal — Delist Chillers1/1/24

Chill

OEM Chiller Launches

A2L System Designs Start

Compressor

Re-designs Start

Compressor

Re-designs Start

A2L System Design Starts

Residential and RTU’S

Chillers

Residential/RTU Launches

EPA Delist

for Chillers

Now Final

Emerson Confidential and Proprietary

Flammable LGWP Refrigerants Emerging Globally in HVAC Applications

in the Next 5 Years

31

Application China Japan Rest of Asia Europe US/NAMiddle East &

Africa

Residential Air To Air Split

AC/HP

Residential Air To Water

Heating

Residential Geothermal

Lt Commercial Rooftop

Lt Commercial PAC

Scroll Chillers

Large Chillers

PTACs / Window Units

A2L Active

Programs

A3 / A2L

Beyond 2021

A3 Active

Programs

Questions?

DISCLAIMER

Although all statements and information contained herein are believed to be accurate and reliable, they are presented without guarantee or warranty of any kind, expressed or

implied. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments, and the user assumes all risks and liability for

use of the information and results obtained. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such

use is free of patent infringement and are not recommendations to infringe on any patents. The user should not assume that all toxicity data and safety measures are indicated

herein or that other measures may not be required.

Thank You!

32