Morristown, N.J..-based Honeywell (NYSE:HON) is investing to make the world "greener."
On Tuesday, the industrial conglomerate announced that it (and its key suppliers) will spend $300 million to increase their capacity to produce a new automotive refrigerant for use in car A/C systems, dubbed HFO-1234yf.
Honeywell boasts that the new refrigerant has "a global-warming potential (GWP) of less than 1 [which is] 99.9 percent lower than that of HFC-134a, the current refrigerant in use, and even lower than that of carbon dioxide." Andreas Kramvis, president and chief executive officer of the company's Performance Materials and Technologies division, calls the new refrigerant "a safe, effective and robust solution to address global warming and fuel efficiency."
Honeywell is building a new high-volume manufacturing plant at its existing Geismar, La., refrigerants manufacturing site, and expects the new plant to come on-line in 2016. The new plant's size has not yet been determined. Much of its production will be destined for the European automotive market and so, if customer demand justifies it, Honeywell said it may build a plant somewhere in Europe at a later date. The company is already packaging this refrigerant for use in Asian markets, in Japan.
Honeywell notes that the new refrigerant is being adopted by automakers in part to meet the EU MAC Directive, "a landmark piece of legislation that aims to reduce greenhouse gas emissions of air-conditioning systems in passenger cars and light commercial vehicles." In the U.S., Honeywell expects to receive greenhouse gas credits from the Environmental Protection Agency for producing the refrigerant, because it has a GWP 1,300 times less than that of the prevailing HFC-134a refrigerant.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.