All right, everyone. Thank you for joining us
again on Did You Know, the ESCO HVAC podcast.
This episode brought to you by Hudson Technologies.
Joining us today, we have Kate Houghton from Hudson.
How are you doing? Doing fabulous. Thank you
so much for having me back once again. I absolutely
love the conversations we get into because it's
such a very fast changing industry. And when
we start talking about like refrigerants and
regulations in particular, man, it's like a whirlwind.
And if you're not partnered with the right professionals
in the industry and getting that firsthand information,
you might think you know what's going on and
you could be months behind. Yeah, you're really
right. I mean, the pace at which things are changing
and happening and legislation that starts to
happen and gets changed and issued and gets pulled
back, it's just kind of a full time. time job
to really to pay attention to it and so that's
one of the things that i love about our chats
is we try to help people with that that's exactly
it so let's think about some things that have
changed recently that people should be aware
of one that i've been getting a lot of and and
it's it's like okay i got i'll be happy to talk
to you about this one it's going to take a little
bit because we got to look some different aspects
of it they go okay so we're going to like roll
back the A.I.M. Act and we're going to start using
r410a and r22 again and new equipment right I'm
like Yeah, no. It's not going to happen. No,
that's not really on the cards. There's certainly
been a lot of, I don't know, hyperbole, if you
will, about looking at different elements. So
there was a CRA, which is a Congressional Review
Act on subsection H, which is a legal process
and incoming information could do. It was put
on the list, but as of two weeks ago, it's not
on the list for the House to even start looking
at and reviewing it. And so there's probably
40 or 50 CRAs that are actively being worked,
and the AIM Act is not one of them. Oh, that's
fantastic. So that's great news from that perspective,
absolutely. Yeah, because I wasn't even aware
of that. So that's really, really, really good
to know because there's a lot of people concerned
about it. And I also tell them, too, that even
if they did, like in the AIM Act, we're really
talking about the whole regulatory side. side
of refrigerant management and leak rates, right?
We're not talking about getting rid of the refrigerants.
We're not talking about the technology transition
rule. We're really talking about those things
that happened in those last 60 days that they
have the opportunity to go back and look at.
And the ones that would have been or potentially
would have been the most threatened would have
been leak rates. regulations tracking. Yeah,
absolutely. So it was at subsection H, which
was the last, and it was really in the CRA by
a number, the CRA period by just a number of
days. It was really very close. So yes, the allocation
system. solid yeah not not being nothing can
happen there the technology transition rule also
very solid um so it really was the subsection
h refrigerant management rule as i said it's
not a priority it's way it's not even on the
list at this point to actually go through reviews
oh wow so really when we look at the grand scheme
of things um even if it was to go through It
would be some changes, but it wouldn't be like
this industry changing, you know, actions that
people have been worried about, which that's
why we do these podcasts to help. break that
fiction. Absolutely. So, you know, 454B, 32,
513, 514, all of those new refrigerants that
were marching forward with that, sunsetting the
new 410A equipment, it can still be installed
for the rest of the year. And 410A is not sunsetting.
You know, you and I have talked about the incredibly
large installed base that's around the country.
So 410A as a refrigerant isn't going away. How
you get it, what it... source of it might be
different, but the refrigerant itself will be
here for 20 plus years to come. Yeah, exactly.
And so getting that refrigerant back is like
the most important thing. I mean, we have to
reclaim. We have to be very responsible in getting
that refrigerant back so you can turn it into
new refrigerant for us so we can put back in
service. Absolutely. I mean, as you start to
think about not just the AIM Act and the requirements
for reclaimed refrigerant in certain sectors,
you look at what's happened in California and
their regulations starting January 1, you have
to have reclaimed refrigerants. All state -owned
buildings have to be serviced with reclaimed
refrigerant. What happened in New York wasn't
well organized. Boy, that's a whole conversation.
That's a podcast, just New York. That's a podcast
in itself, exactly. But New York is doing that,
which California has done, and they're going
to clean that up. Washington is looking at the
same thing. So all of these regulations are going
to add and continue to build. And the most important
thing any one of us can do is recover every pound
of refrigerant because every pound is valuable
at this point. And we really have to reach those
folks who are unaware of that importance and
grow not just the amount of pounds that the folks
reclaiming now are doing, recovering now are
doing, but really reaching a larger audience
and getting more participation. It's becoming
so much more critical. You know, I thought I
had an understanding of what reclamation looked
like at a distributor level because I spent them.
quite a few years in that level where I had all
my contractors bringing me refrigerant. We had
lots of these open conversations. And I did a
training class for a distributor. It's been about
four or five months ago. And it was a really
good distributor. And it was in a state that
I'd not been in before. And I was having this
discussion as part of my A2L training, right?
This is what we have to do. This is how you're
going to have service gas. So get that refrigerant
back. And I had a contractor raise his hand and
he said, Who buys our gas? Wow. And I went, whoa.
And then I looked over at my distributor. I said,
aren't you involved in reclamation? No, we don't
have a program here. And I went, what? Yeah.
So I hate to hear that because it really takes
every piece of the chain. It's not just reclaimers
such as Hudson who are going to solve the problem.
It's not just contractors or technicians. It's
distributors. It's OEMs. It's everybody throughout
that chain all really has to participate. And
it starts with education. And then it goes to
facilitating, making it as easy as possible.
And we all have a role to play. Yeah, we really
did. And that was what really made me think that
even as much as we talk about this, I don't think
we're talking enough about it yet. Yeah, you
know, it's funny. I was talking to somebody at
breakfast this morning and said, you know, you
could argue there's about 500 ,000 technicians
in the country as a number. I feel like maybe
I've spoken to 75 ,000, but the 425 still need
to hear the message. And they don't know. And
they don't know that they don't know. Yeah. And
because like many of you that are listening to
us today, you've probably heard one of our other
podcasts. So you at least know that something
is going on. You know that there's a buzz in
the air. And so you've been paying attention.
And we're diving pretty deep into this. But think
about all of your friends. that have never listened
to one of these podcasts that we've done. We've
done these for over a year, almost two years.
I think you and I have been podcasting for two
years at least. Yeah, and then to think that
there's that many people who have never listened
to what we're helping you understand. So make
sure when you're listening to this that you find
that one of your friends and go, did you know
about this? Did you know? If not, we got a source.
You can find out. No, I mean, absolutely, right?
Because, again, it comes back to it takes all
of us. We have to help educate everyone, and
there's lots of ways to do that. There's lots
of contracting networks. The folks that you know,
as you say, do you know. Yeah. So for those that
are listening, let's think of some maybe misperceptions
that they've heard within the industry. One.
Definitely not going back to R410A. Nope. Not
going back to R22. Not at all. We're pushing
forward. And so that being said, let's think
about some of the misperceptions that maybe technicians
have had in the past about the value, the importance
of reclaiming. How it can affect service gas
long term. So when we look at things like the
HFC phase down that we're going through, right,
that's for new refrigerants. And if we were to
look at that alone, we would say, well, we've
got about a decade of even our new refrigerants
for residential, R32 and 454B, both being affected
by the HFC phase down for newly manufactured
refrigerant. So on the service side, a technician.
could make all the difference in the world between
having service gas in 10 years and not. It's
absolutely right. So every single technician
out there holds the fate of every system owner
in their hands. That's a really powerful way
to think about it. Because if every individual
technician standing at a unit doesn't make the
choice to recover that refrigerant... and then
send it through the reclamation process, then
somewhere at some point there's going to be a
system owner that needed that pound of refrigerant
that can't get it. Yeah, that could have been
their brother. My sister, grandma, aunt, uncle
that is going to call them and go, hey, my contractor
was out here and they said that they can't get
any refrigerant to service my system. Do you
know anything about that or did you have anything
to do with that? Tell me about it because I'm
going to bring you here to Christmas and we're
going to have a conversation about what you're
doing. Yeah, and you're going to buy me a new
refrigeration system. And you're going to buy
me something new because they wanted $1 ,000
a pound for this stuff. Why is it that high?
Yeah. No, I mean, it really is that simple in
some respects. I mean, if you think about, and
I think we've talked before, there's still hundreds
of thousands of pounds of CFCs circulating through
the reclamation business to keep systems operating
that haven't been manufactured since 1995. So
contractors today are still able to install a
residential 410A unit. That person buying the
unit. wants to get 15 years from that unit's
lifetime. Oh, absolutely. And if we don't have
that recovered gas and we're not doing the reclamation,
somewhere along the line, we will get to a point
where that practically brand new system may not
be able to be serviced. Wouldn't that be a hard
conversation to have? It would be a very hard
conversation. And think forward, too. If you're
a contractor or a technician that's not recovering,
And all of these mandates for states or federal
or lack of availability, and someone says, well...
what refrigerant did you send me for recovery?
I can't sell you any reclaimed refrigerant because
you didn't put it into the pool. So you can't
take out of the pool. And I think it's something
that it's in this phase down is very different
than previous. And I think it's probably going
to be a reality for some folks if they don't
start to participate. It's already. So I've talked
to one distributor that they are putting into
plan their A2L disbursement to their contractors.
Those contractors are going to be required to
be reclaiming and returning refrigerant to be
on the supply list. Wow. Now that's a big statement.
That's a huge statement, but props to them. Yeah.
Right, of really tying the two things together.
Yeah, because they're looking at it, they're
going, okay, so we're going to have reduced supply
of this going forward. Who are we going to sell
it to? It's not about we're going to have this
ample supply and we can sell all we want to everyone
and continue making profit. No, it's about you're
going to have an allocation. And it's going to
have to be used appropriately. So what's the
most appropriate use? Well, the most appropriate
use is to get it in the hands of the most qualified
contractors, the most responsible contractors
that's going to be bringing reclaimed gas back
so that I can work with Hudson to get it reclaimed.
And I can bring that back into my own distribute
network. And so the distributor is now looking
at it as equity. That's an asset for them to
make sure they're. getting that reclaimed gas
through them yeah and and that concept of it
being an asset applies all through the chain
for the contractor for the technician for the
wholesaler if everybody thinks about that pound
of refrigerant as an asset we'll change the reclamation
market overnight yeah No, I absolutely would.
You know, I can reflect back on my days when
I was in grocery refrigeration and we still had
a lot of R22 medium temp racks, a lot of them.
And then we had all of our R22 rooftop units
that were coming down. And so it was required
for us to document to the ounce the amount of
refrigerant that was recovered out of those rooftops
when they were repaired or when they went through
the replacement. And then we would use companies
that would come in. do the recovery for us but
then we actually took that back and had it processed
and brought it right back into our own internal
storage and so we were actually creating our
own circular environment of refrigerant and it
didn't affect our supply very much because we
had refrigerant around because we were repurposing
it for all of the right reasons and so i started
thinking about our industry and like if if we
follow that model That's that's success. Absolutely.
Yeah. And absolutely. If we don't, it's failure.
Yes. When could coal possibly, you know, a disaster
as well? Yeah. All right. OK, so if we start
thinking about the technicians, we start thinking
about our contractors, our business owners and
our local distributors and in our equipment manufacturers,
we're all a part of this environment. And I think
it's important for everyone to know that there's
going to be a time in the near future where reclaimed
gas is actually going to be going into new equipment
as requirements. Yeah, yeah. It's kind of an
interesting new dynamic, right? A little bit
of that happened with the California regulation
for OEMs before the A2Ls came in. And so a number
of OEMs actually did put Reclaim into their brand
new equipment. So the path has been forged already.
But under subsection H, yes, fast forward a few
years and that's the path that we're heading
down is that Reclaim Refrigerant would actually
go into brand new equipment. before it gets commissioned.
Yeah. And you know, I had a conversation, which
I thought was really intriguing when we were
talking about refrigerant. So when we're manufacturing
something new, we know the ingredients that are
going into it. And so we put those ingredients
into it and we package it up and we send it off,
right? That's how manufacturing works for, if
I go buy a box of cereal, I know the ingredients
that goes into that cereal, it gets packaged
and it gets sent out. It doesn't mean that every
box is sampled. right right yep exactly so when
we start talking about reclaimed refrigerant
that's a whole different story it absolutely
is and every every pound of every um reclaimed
refrigerant is part of a batch and every batch
is tested against a hri 700 so every single element
of that process is documented, is tested, is
certified, has to be certified by an AHRI 700
lab to be able to call it reclaimed refrigerant,
and it has to meet AHRI 700. So as Hudson, we've
invested in AHRI lab certification. We're not
the only ones. There's a few companies that are
out there. But as you're kind of saying, brand
new production doesn't have to be AHRI certified.
reclaimed does and you get that surety that you
know exactly what you're getting for the purity
the components and the acidity the moisture all
of that is very well documented so when folks
say well we're not really sure if we could use
it in new equipment if you put a pound of reclaimed
refrigerant next to a pound of virgin you couldn't
tell the difference unless i told you which one
was which yeah that's that's super important
because then we started thinking okay Well, if
it gets to the point where we're going to need
some of our service gas for new equipment, that
means our service gas gets even more scarce,
which amplifies the importance for us to recover.
Yeah. All roads are leading to recovery through
reclamation will be critical for our industry.
There's a lot of change going on right now. There
really is. There really is. Keeps me up at night
sometimes. I know it does. People are like, wow,
what's changing this week? I'm like. Let's talk
about what changed today. We'll start there.
Well, Kate, this is wonderful. I just, I always
love our conversations because it's so stimulating
to see what's happening in our industry. And
you're always bringing like the freshest perspective
of what's going on in your side of the industry.
And I encourage everyone to learn more about
Hudson. Where can we learn about Hudson? So visit
us on www .hudsontech .com. H -U -D -S -O -N
-T -E -C -H. And my Australian accent comes right
through on the HSA. Yeah, we've got a lot of
information. And so sign up for our newsletter.
We send a lot of information about regulation,
how it's going to affect what's happening in
the industry, talking about reclamation, talking
about service and things like that. So a lot
of stuff there. And thank you as always for having
me on. I really enjoy it. I appreciate your time.
Absolutely.