There are few industries more risk averse than insurance. This is because insurers are in the business of calculating risk.
In fact, they do it so well their calculations actually generate profit.
Insurance companies are a bit like the TAB – the risk is all yours. One risk that has insurers currently reviewing coverage is the massive price hike for refrigerant gas.
News emerged in recent weeks that insurers are concerned about the impact of the refrigerant levy on the repair cost of gas in commercial cold storage and air conditioning units.
This concern has led to a 'review', but we all know what a review means – it's insurance-speak for an increase in commercial premiums.
It’s not exactly surprising most industry pundits predicted the cost burden of the levy to be passed down the supply chain.
Insurers are also concerned about the rapid move to natural refrigerants and the use of ammonia in buildings.
Evidence is already emerging that the levy is having an impact with GEA's Tony Kimpton
claiming the levy is accelerating the take up of natural alternatives.
The problem is that insurers want to know if technical competencies are being adopted at the same pace.
Since my last editorial, I have received a number of letters from readers insisting that reported price hikes for refrigerant gases are very real, not exaggerations. One reader even accused me of being a card-carrying member of the ALP!
Let me clarify: firstly, I am not a member of any political party. The point I tried to make last month is that Australia’s low carbon future is here, it has already arrived and we need to get on with the job of transitioning to this new economy.
This means reducing emissions, instead of complaining. While I do not have a problem with carbon pricing per se, I am critical of certain aspects of the levy.
For example, the levy is expected to raise a whopping $300 million but not a single penny will be returned to the HVAC&R sector; instead, it will be devoured by general revenue.
It will also be interesting to see if a black market in refrigerant gases does emerge in the wake of the levy.
A number of letters I have received in recent weeks have raised this very issue, warning that there are plenty of punters keen to avoid the levy completely.
Each year Australia imports more than 5,700 tonnes of refrigerant gas in bulk cylinders and equipment.
Even AIRAH has warned of a refrigerant black market warning that such massive price increases provide a strong incentive to avoid paying the levy.
AIRAH said the end result will be “unsafe practices and flouting of the law”.
While we are on the subject of black markets and all things hidden and unseen, did you know that building services engineers and refrigeration engineers do not exist?
Refrain from the letter writing for one second and let me explain. AIRAH is in the process of getting the occupation of building services engineer formally recognised by the Australian Bureau of Statistics (ABS).
Currently everyone is broadly referred to as a mechanical engineer.
AIRAH says this term goes beyond the HVAC industry, whereas mechanical building services engineer specifically covers air conditioning, heating and ventilation.
Once ABS recognition is achieved for this title, the next step is official recognition for refrigeration engineering.
Now onto something that does exist, in fact it is here to enhance our existence, and that is the Climate Control News web site.
The site is up and running and everyone who has registered is already receiving our weekly online newsletter.
Readers no longer have to wait for the magazine to arrive, simply go to www.climatecontrolnews.com.au for the latest news, interviews, product announcements, case studies and so much more.
The initial response from subscribers has been overwhelming. Thank you so much for your wonderful support!