Germany paves way for EU to rule on Honeywell car refrigerant

FRANKFURT Wed Nov 6, 2013 11:46pm IST

A view of the corporate sign outside the Honeywell International Automation and Control Solutions manufacturing plant in Golden Valley, Minnesota, January 28, 2010. REUTERS/ Eric Miller

A view of the corporate sign outside the Honeywell International Automation and Control Solutions manufacturing plant in Golden Valley, Minnesota, January 28, 2010.

Credit: Reuters/ Eric Miller

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FRANKFURT (Reuters) - Germany's final report on risks posed by a new car coolant made by Honeywell (HON.N) has been issued to the European Commission, clearing the way for a decision on whether Berlin had sufficient cause to allow Daimler (DAIGn.DE) to ban it and flout EU law.

Daimler banned from its luxury cars the air-conditioning refrigerant made by Honeywell and its partner DuPont (DD.N) which has a far lower potential to warm the climate than an older chemical still used by Daimler's Mercedes brand despite an EU-wide phase out that began in January.

The EU's scientific research arm JRC is expected to analyze the report by the German federal motor transport authority KBA in the next few weeks and advise whether the coolant is indeed flammable enough to cause material risks, as Daimler says.

The new Honeywell chemical, dubbed HFO-1234yf, is designed to fulfill an EU directive, which governs the use of harmful greenhouse gases in mobile A/C, or MAC, systems in cars.

"The ball is now in Brussels' court," a spokesman for Germany's transport ministry said on Wednesday.

The Commission was not available for comment, but a source familiar with the matter confirmed that it had received a copy of the KBA's report, which it was now examining.

At stake is not just a potentially embarrassing infringement process against Berlin for allowing Daimler to disregard the EU's so-called "MAC Directive", but - should it be deemed hazardous - the possible loss of billions of dollars in future revenue for Honeywell and Dupont, who have secured an effective monopoly on its supply until 2030.

In mid-October, DuPont's President of Chemicals and Fluoroproducts, Thierry Vanlancker, called on German authorities to conclude their investigation into the safety of HFO-1234yf quickly, because the EU was still waiting on the final report by the KBA before making a decision.

The KBA said in early August the refrigerant posed no material risk to occupants even if it is more dangerous than the older alternative HFC-134a that is being phased out to meet the MAC directive.

Honeywell said in a statement that the "overdue" final report showed HFO-1234yf could be used safely in cars but served also as a reminder that a single carmaker delayed compliance with the MAC Directive for far too long.

Daimler, which is developing an A/C system that uses carbon dioxide as a refrigerant, said on Wednesday the report confirmed the greater dangers the carmaker cited versus HFC-134a.

(Reporting by Christiaan Hetzner; editing by David Evans)

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