Why is Europe an important market for Hudson?

One of the main goals of the EU is reducing energy consumption and improving energy efficiency. Hudson Technologies, Inc. (“Hudson”) has developed proprietary and innovative remediation and energy optimization services for commercial and industrial air conditioning and refrigeration systems. Through Hudson’s participation in Hudson Technologies Europe, these remediation and energy optimization services will offer solutions to EU businesses to help them meet energy use and emissions targets.

Why are the Middle East and Africa markets important?

Hudson Technologies Europe, using Hudson’s patented, proprietary equipment, will gain access to the Middle East and Africa, areas where the demand for air conditioning and large scale refrigeration is growing and where regulations and the phase-out of CFC refrigerants are just beginning. With Hudson’s services and know-how, Hudson Technologies Europe will be positioned to support these developing markets.

What is the regulatory environment in Europe?

Europe is ahead of most geographies in regulating energy use and emissions. Among the regulations that affect the use of refrigerants in the EU:

The Montreal & Kyoto Protocols: The EU has made commitments under this protocol for the disposition of gases which cause ozone depletion and global warming.

“20/20/20 Plan”: By 2020, the EU plans to cut greenhouse gas emissions by 20% from 1990 levels; to increase renewable energy usage by 20% and cut energy consumption by 20% through improved energy efficiency.

Energy Performance of Buildings Directive: Requires all EU countries to enhance their building regulations and introduce energy certification plans. Also requires all countries to institute inspections of air conditioning systems.

These energy policies are designed to reduce the carbon footprint through direct emission reductions of both ozone depleting substances (“ODS”) and greenhouse gases (“GHGs”) and through indirect methods such as increasing energy efficiency and lowering the specific energy intensity of industrial and commercial facilities.

How can Hudson capitalize on the regulatory environment?

Hudson believes that these regulatory mandates have caused European companies to seek the type of solutions that Hudson can provide. Hudson’s ability to identify and capture energy savings in steam, chiller and refrigeration systems, typically the largest energy users for commercial or industrial facilities, will enable customers of Hudson Technologies Europe to improve their energy efficiency, save money, create reliable and verifiable emissions offsets and better comply with European government initiatives.

Additionally, Hudson participated, as one of the US Technical Advisory Group members, in creation of ISO 50001: 2001 Energy Management Systems. The ISO 50001:2011 standard will provide all types of organizations and companies with a practical and widely recognized approach to increase energy efficiency, reduce costs and improve their environmental performance by addressing both the technical and management aspects of rational energy use. The standard is intended to be broadly applicable to various sectors of national economies, including utility, manufacturing, commercial building, general commerce, and transportation sectors, which together represent as much as 60 percent of the world’s energy demand.

What is the refrigerant phase out schedule in Europe?

The production of hydrochloroflourocarbons (HCFCs, R-22) has been 100% phased out in Europe and existing R-22 operating systems can only be served by reclaimed refrigerant.

Hudson Technologies Europe will be uniquely positioned, using Hudson’s patented, proprietary equipment, to recover, reclaim and resell R-22. Also, since many of the fire suppression gases are CFC or HCFC based, Hudson’s reclamation technology can help support the fire suppression industry’s transition from these gases.

Additionally, Europe and many developing nations comply with both the Montreal and Kyoto Protocols relating to the disposition of ODS and GHGs, respectively. Hudson believes that the need for compliance with these protocols will lead to a long term opportunity for the recovery and reclamation of refrigerants identified as harmful by these protocols. Similarly, many developing countries, including many nations in the Middle East and North Africa, are just now undertaking the phase out of CFC based refrigerants and, therefore, can also benefit from Hudson’s experience with the U.S. phase out of CFCs, which took place more than 15 years ago. Refrigerant phase outs represent a significant opportunity for Hudson to grow market share.

What is the competitive landscape of the EU reclamation market?

The reclamation market in Europe is very fragmented. Recovery and simple recycling of refrigerants from cooling circuits of refrigeration, air conditioning and heat pump equipment is currently done in the EU by small to medium-sized contractors carrying out installation, service and maintenance of the equipment. Refrigerant reclamation, however, is not widespread and very few facilities are able to meet the purity and performance standards achieved through reclamation.

Hudson Technologies Europe will provide needed capacity and infrastructure for refrigerant reclamation, packaging and separation services and will leverage the established customer base of its joint venture partners as identify sources of refrigerants.