Unintended consequences: Europe faces endless whack-a-mole against refrigerant smugglers

The European Union’s ambitious HFC phase-down continues to yield unintended consequences, with the lucrative black market for R134a and other regulated high global warming potential (GWP) products showing no signs of slowing down as smugglers capitalise on sky-rocketing prices caused by legislated quotas that restrict supply. 

Quota System Creates a Perfect Storm

The EU’s fluorinated gas (F-gas) regulation, implemented in 2015, aims to gradually reduce the use of high-GWP refrigerants over 15 years through a quota system.

It works by assigning a CO2-equivalent import and production quota to each refrigerant based on its GWP, which shrinks every three years, thus affecting the availability and affordability of high-GWP refrigerants.

The quota for R134a, a commonly used refrigerant in cars and other applications over the last 30 years, has already reduced to 31 per cent of the baseline set in 2015.

As quotas become increasingly stringent, refrigerant smuggling expected to intensify.

The Rise of the Illegal Trade

Evidence of a refrigerant black market surfaced in 2018, when the availability of HFCs through online platforms like Amazon and eBay surged.

Sales of non-refillable disposable refrigerant cylinders – themselves banned by the EU in 2007 – containing refrigerants like R134a, R404A, and R407C raised suspicions and the alarm was raised about the lack of clear sourcing, questionable container quality, and the potential for harmful mixtures that represented significant safety risks.

European suppliers also experienced a surge in refrigerant theft, with incidents ranging from individual thefts to large-scale operations involving organised crime.

Poland: A Major Entry Point for Illegal Refrigerants

In 2018, Polish authorities in Łódź also uncovered a criminal refrigerant trade, seizing a record-breaking 25 tonnes of R134a, R404A, and R410A concealed in unauthorised disposable cylinders valued at €600,000.

The shipment, originating from Ukraine and intercepted due to missing permits would have impacted the Polish Treasury by €7 million in lost taxes and fees. 

Sophisticated Smuggling Techniques

Smugglers employ a diverse range of methods to move refrigerants, using everything from large commercial trucks loaded with containers to small passenger cars with hidden compartments or fuel tanks containing refrigerant.

Refrigerated trucks, buses with luggage compartments, and even boats are used to conceal the valuable refrigerant cylinders, while some smugglers even attempt to disguise their operations by transporting a few containers alongside legitimate loads.

The methods used reflect the smugglers’ creativity and resourcefulness, highlighting the complexity of combating this growing criminal enterprise.

Poland’s Fight Escalates

Poland’s relatively old vehicle fleet, with an average age exceeding 15 years – 25 per cent older than the EU average – has created a booming black market for R134a refrigerant, which remains legal for servicing older equipment.

It is thought this is at least partially to blame for the increasing flow of illegal refrigerant imports entering the European market through Poland’s borders. 

This lucrative trade is fuelled by a surge in unlicensed imports, primarily from China and Turkey, which enter Poland through various routes, including the Ukrainian border and a circuitous path through Romania, Bulgaria, Hungary, and Slovakia.

 Most recently, Poland’s fight against refrigerant smuggling escalated, with customs officials in Terespol near the border with Belarus thwarting seven attempts to smuggle R134a refrigerant hidden within modified LPG tanks of vehicles. Over a month, officers seized a total of 1450 litres of refrigerant from drivers who claimed ignorance, stating they were merely transporting the vehicles across the border for a brief period to undisclosed locations in nearby Biała Podlaska, Kałuszyn (an hour east of Polish capital Warsaw), or Terespol itself.

This is not a new tactic; similar smuggling attempts have been detected as far back as 2018.

Lublin Customs and Fiscal Office in Biała Podlaska initiated fiscal criminal proceedings in each of these recent cases.

Industry Calls for Action

The automotive industry in Poland is now calling for more decisive government action in the fight against a tide of illegal R134a.

The Association of Automotive Parts Distributors and Manufacturers (SDCM) has highlighted the deepening issue of a grey zone in the trade where banned imports, primarily from non-EU countries, are flooding the Polish market.

SDCM argues that this illegal trade not only undermines fair competition by enabling unscrupulous operators to offer lower prices or enjoy higher profit margins than legitimate companies but also poses serious risks to both the environment and consumers.

Illegal R134a can be contaminated, leading to irreparable damage to air-conditioning systems and potentially posing health and safety hazards.

The association emphasises that the use of such refrigerants can lead to costly repairs and even legal consequences, including financial penalties and criminal liability. SDCM is urging the Polish government to take decisive action to address the issue, as the continued proliferation of bootleg R134a is creating a dangerous situation for both the industry and consumers. 

Addressing the Problem

While authorities play whack-a-mole against increasingly incentivised smugglers, a move toward safe low-GWP refrigerant retrofits as covered in Issue 34 of SightGlass could eventually encourage the criminals to move on.

If demand for R134a is quashed by the ability to use safe alternatives, the profit motive for smugglers will be diluted.

However, the European experience could provide an early warning for the Australian market, where quotas have been introduced without equipment bans, potentially leading to a crunch situation where, like Poland, the amount of equipment requiring high-GWP refrigerants for service outstrips the amount that can be legally imported.

This could be compounded by Australia’s steadily ageing car fleet, which reached 11.2 years in 2024 compared with 9.8 years in 2017.

Had Australia introduced EU-style equipment bans on R134a air-conditioning systems for new cars in 2017, a significant portion of the nation’s ongoing R134a demand could have been avoided.

Will this result in an illegal refrigerant trade Down Under? 

Australia’s remoteness and relatively small market might cause smugglers to think twice but consider that in April 2019 an automotive workshop in Victoria was caught with 26 disposable cylinders of R134a.

The same year, VASA spotted a selection of illegal R134a DIY one-shot cans for sale online.

Perhaps the smugglers are already operating here?