HFC Quotas Are Tightening: How to Specify Ammonia and CO₂ Refrigeration Packages in 2026

For most of the last decade, refrigerant selection on an industrial project was a comfortable conversation. Hydrofluorocarbons were available, cheap and well understood, and the phase-down schedules sat comfortably beyond the plant's commissioning date. In 2026 that conversation has changed, and it changed in the space of about eight months.

China's Ministry of Ecology and Environment fixed the 2026 HFC production quota at 797,800 tonnes and completed the exit of HCFC-141b. In the United States, the EPA's Technology Transitions rule under the AIM Act applied a GWP limit of 700 to cold storage equipment from 27 July 2026, with a hard installation cut-off for higher-GWP systems on 1 January 2027. In Europe, the recast F-Gas Regulation drives the HFC quota to zero by 2050, with the steepest step change arriving in 2027.

None of these are consultation documents. They are procurement constraints, and they are already visible in pricing: mainstream HFCs including R32 have climbed steadily since late 2025 as demand continued to grow against a capped supply.

This article sets out where each of the three regimes actually bites, how ammonia, CO₂ and hydrocarbons divide the engineering duty between them, and what we have learned specifying and integrating natural refrigerant packages — drawn from the 130-plus industrial refrigeration units we have delivered since 2016, more than half of which run on ammonia, propylene or propane.

1. The 2026 Compliance Squeeze: Three Markets, One Direction

China — quota management enters its third year. The 2026 allocation plan holds HFC production at 797,800 tonnes, an increase of just 5,960 tonnes over 2025, and that increment is concentrated in specific grades such as HFC-245fa. HCFC production falls to 151,400 tonnes, down 12,100 tonnes year on year. The one genuine relaxation is administrative rather than volumetric: the ceiling for cross-substance quota transfers rose from 10% to 30%. Total volume is capped; only the internal structure moves.

United States — the AIM Act reaches its installation deadlines. Under 40 CFR Part 84, cold storage equipment falls under the 700 GWP transitional limit from 27 July 2026, tightening further to 150/300 in 2032. Systems above 700 GWP face an installation cut-off of 1 January 2027, and their components must have been manufactured or imported before 1 January 2026. The EPA's final revisions issued on 26 May 2026 granted extensions for narrow segments — process chillers serving semiconductor manufacturing among them — but left the framework untouched. For anyone exporting packaged equipment into North America, the compliance question is now about a specific date, not a policy direction.

European Union — F-Gas III is the most aggressive. Regulation (EU) 2024/573, in force since March 2024, drives the HFC placing-on-market quota to zero by 2050, with a sharp acceleration from 2027. For contractors supplying packaged plant into the EU, refrigerant choice has become a market access question rather than an engineering preference.

The three regimes use different instruments — production quota, installation deadline, market quota — but they converge. Specify a high-GWP working fluid today on a 20 to 25 year asset and you have made a decision that a future engineering team will have to unmake.

2. Where the Kigali Amendment Actually Bites

The Kigali Amendment to the Montreal Protocol was adopted in 2016 and entered into force in 2019 with a single objective: to bring HFC production and consumption down on a fixed schedule. For Article 5 Group 1 parties, including China, that schedule is a freeze at baseline in 2024, a 10% reduction in 2029, 30% in 2035 and 80% in 2045. Non-Article 5 parties move earlier, reaching an 85% reduction by 2036.

A freeze sounds mild. In practice it is not, because underlying demand has continued to grow while supply is fixed. The gap clears through price, and that is precisely what the HFC market has been showing since late 2025. Owners running large HFC charges should read the price trend as a leading indicator of the quota curve rather than as normal commodity volatility.

The market has responded on the supply side as well. Global natural refrigerant demand grew from roughly USD 1.63 billion in 2025 to USD 1.76 billion in 2026, a compound rate of 8.3%, with industrial refrigeration the largest segment and ammonia the fastest-growing category.

3. Why Ammonia and CO₂ Came Back

It is worth being precise about what changed. Ammonia did not become a better refrigerant in 2024 — it has been the thermodynamic benchmark for more than a century. What changed is that the commercial argument for synthetic fluids, which rested on convenience and unlimited availability, no longer holds.

Three properties now do the heavy lifting in a technical justification:

• Regulatory permanence. Ammonia has a GWP of zero, CO₂ of one, and hydrocarbons approximately two. No plausible future regulation removes them from the market, which means no mid-life refrigerant conversion needs to be provisioned.
• Thermodynamic performance. Ammonia's volumetric refrigerating capacity and its efficiency around −33 °C remain difficult to beat, and the efficiency margin widens as evaporating temperature falls.
• Ecosystem maturity. A century of industrial use means the codes, the components, the service technicians and the operator training are all already in place. This is not an emerging technology being pushed into service by regulation.

4. Choosing Between Ammonia, CO₂ and Hydrocarbons

The three natural routes are complements, not competitors. The engineering decision is usually settled by occupancy, temperature band and what is already inside the process.

Parameter	Ammonia R717	CO2 R744	Hydrocarbon R1270 / R290	HFC R507A
GWP	0	1	≈ 2	3,985
Safety class	B2L (toxic, mildly flammable)	A1	A3 (flammable)	A1
Typical duty band	−50 °C to +5 °C	Cascade low stage, −54 °C to −5 °C	−45 °C to +5 °C	−45 °C to +10 °C
System pressure	Moderate	Transcritical, >100 bar high side	Moderate	Moderate
Regulatory outlook	Secure long term	Secure long term	Secure long term	Quota declining

Ammonia is the easiest case to justify in heavy process industry. Petrochemical and chemical plants already operate mature hazardous-materials management systems, so ammonia's toxicity is a controlled parameter rather than a disqualifier. Where ammonia meets resistance is in occupied or public-adjacent space, and in insurance and permitting where charge inventory drives the risk assessment.

CO₂ covers exactly the gap ammonia leaves. Being non-flammable and non-toxic, it belongs in cold store aisles, food processing halls, marine spaces and anywhere personnel density makes an ammonia leak scenario unacceptable. The price is pressure: a transcritical high side above 100 bar raises the pressure rating required of vessels, valves and heat exchangers by a full class. This is where the NH₃/CO₂ cascade has become the mainstream compromise for large low-temperature cold storage — ammonia confined to the machinery room high stage, CO₂ circulating into the occupied space.

Hydrocarbons are already the incumbent inside petrochemical units. Propylene (R1270) and propane (R290) are frequently process streams in the plant itself, and hazardous-area design is routine engineering for these facilities. In our own delivery record, R1270 packages are the single largest category. This route has more than a decade of service history in Chinese polyolefin plants and tank farm refrigeration.

5. Field Data: Natural Refrigerant Packages at −38 °C

Trend analysis is easy. What matters to a specifying engineer is whether the technology has been made to work at the duty point in question. A few representative deliveries:

Rectisol unit, direct-expansion ammonia, −38 °C. In 2020 we supplied four direct-expansion ammonia refrigeration packages for the low-temperature methanol wash unit of a coal chemical new-materials project in Fujian, each rated 5,600 kW at −38 °C with a 1,600 kW main motor. Rectisol duty is unforgiving on continuity — losing one package derates the entire gas purification train — so the units were configured N+1 with bumpless transfer between machines.

A second Rectisol duty, all-ammonia by owner mandate. In 2021 a leading Chinese polyurethane producer procured two R717 condensing packages of 1,700 kW with 1,500 kW motors for the same service. The technical specification opened by ruling out synthetic refrigerants outright: 25 year plant life, no acceptance of mid-life refrigerant conversion risk. That clause is now common in Chinese owner specifications and it is worth noting how early it appeared.

Hydrocarbon duty at scale. Four R290 packages of 3,168 kW went into the continuous catalytic reforming unit of a large refining and petrochemical complex in Shandong in 2021, followed in 2022 by a propane refrigeration system of 5,045 kW at −38 °C for a North China oilfield. Both remain in normal service.

Longevity evidence. Two ammonia packages with 1,120 kW motors delivered in 2018 to a chemical plant within our own group have now run for eight years through one major overhaul, with no recorded corrosion or leakage on the vessels.

Across the portfolio, the boundary conditions we can evidence are a lowest evaporating temperature of −54 °C and a largest single-package capacity of 14,400 kW. We have supplied equipment into duties of this type for operators including Wanhua, Hengli and Zhejiang Petrochemical — as an equipment supplier within those projects, not as the process licensor or contractor.

6. A 2026 Selection Checklist for Owners and EPCs

Four practical positions, based on where we see projects gain or lose time.

Make the natural refrigerant the base case in the FEED. Carry the HFC option as the comparison case if the owner requires it, but write the refrigerant supply and quota risk over the asset life into the justification document explicitly. Reviewers increasingly reject refrigerant selections that do not address the phase-down curve, and rebuilding that argument at detailed design costs weeks.

Do not panic-replace an existing HFC plant. The mechanical life of an installed R507A or R404A package is unaffected by quota policy and it can run to natural end of life. The exposure is in top-up refrigerant pricing, which belongs in the maintenance budget as a rising line item. The correct response is to put conversion on the medium-term capital plan and evaluate it against a scheduled turnaround window, not to replace healthy machines.

For ammonia, the permitting battle is charge inventory. Low-charge design — skid-mounted packages, plate heat exchangers, optimised pump circulation — reduces the inventory to a fraction of a traditional flooded system. Combined with leak detection interlocks, this is the configuration that both permitting authorities and insurers currently accept most readily. Budget for it in the concept phase rather than negotiating it during approval.

Assess suppliers on duty points, not on claims. Three questions do most of the filtering: What is the lowest evaporating temperature you have actually delivered? What is your largest single-package refrigerating capacity? How many years has your longest-running ammonia package been in service? A supplier without immediate, specific answers has limited operating history behind the brochure.

7. What Lmart Builds — and What We Don't

Clarity on scope is more useful to a buyer than a broad capability claim, so it is worth stating plainly what sits inside our factory and what does not.

We manufacture pressure vessels to ASME BPVC Section VIII Division 1 and to PED 2014/68/EU, and shell-and-tube heat exchangers — evaporators, condensers, oil coolers, economisers — designed to TEMA. We integrate complete screw compressor refrigeration packages: the compressor block is a bought-in item, and we engineer and build everything around it, including the oil system, the heat exchangers, the vessels, the piping, the control panel and the skid. We deliver the package shop-assembled and tested, which is what keeps site integration scope small on congested brownfield plots.

Our refrigerant coverage spans ammonia, propylene, propane and the HFC range, so the selection conversation can stay on the engineering merits rather than on what we happen to be able to build.

On certification, Suzhou Lmart Energy Equipment holds the ASME U-Stamp for Section VIII Division 1 pressure vessels, PED 2014/68/EU certification for CE marking, and ISO 9001. For marine and offshore duty we hold CCS Type and Works Approval, together with works approval from DNV, LR, BV, NK and RINA, and KGS certification for the Korean market.

We do not expect HFCs to disappear overnight, and low-GWP synthetic blends will retain legitimate niches. But the quota curve is fixed and the engineering maturity of the natural fluids is established, so this is the direction in which we continue to invest.

Conclusion

Between 2024 and 2026 the Kigali Amendment moved from a long-term commitment to a present-tense constraint: China caps production volume, the United States enforces installation deadlines, and the European Union compresses market quota toward zero. The natural refrigerant market has answered with 8.3% annual growth.

For a new plant, ammonia, CO₂ and hydrocarbons are now the default rather than the adventurous option. For an existing plant, this is the year to move refrigerant exposure out of the maintenance log and into the asset plan. If you are working through a refrigerant route for a specific duty, our engineering team will review your operating conditions and return a technical proposal with GA drawings and budget pricing within 48 hours.