U.S. chemical manufacturer Honeywell announced on October 8 a plan to spin off its Advanced Materials business, which includes Solstice-branded HFO refrigerants technology, into an independent, publicly traded U.S. company, with a target to be completed by the end of 2025 or early 2026.
The Solstice products line notably includes HFO-1234yf, which is used in air-conditioning systems in millions of cars worldwide, as well as in numerous HFO/HFC blends used in commercial and industrial HVAC&R applications. However, HFO-1234yf is regarded as a PFAS (per- and polyfluorinated substances), or “forever chemical” that does not break down in the environment. Its atmospheric degradation product, trifluoroacetic acid (TFA), is absorbed in rainfall and has proliferated throughout the natural environment, such as in water supplies. TFA’s effect on human health is still being investigated, but German authorities have linked it to reproductive toxicity.
EU’s European Chemical Agency (ECHA) plans to consider regulating f-gases as PFAS in March 2025 under the EU’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation. On October 7, at the Chillventa Congress in Nuremberg, Germany, Mary Walsh, Lead Environmental Policy, Europe, for Honeywell denied that f-gases such as HFO-1234yf and its degradation product trifluoroacetic acid (TFA) represent “an unacceptable risk” that would justify their regulation as a PFAS under REACH.
Honeywell’s separation of its refrigerants business parallels a move made by DuPont in 2015 when it spun off its refrigerants business into an independent entity called Chemours.
“We are confident now is the right time for this business to grow independently, leveraging its leading technologies and deep customer relationships,” said Vimal Kapur, Chairman and CEO of Honeywell. Kapur added, “Today’s announcement is the latest step in the optimization of the Honeywell portfolio, a key priority I laid out in my first year leading the company.”
Honeywell said that both it and the Advanced Materials business will benefit from “a simplified strategic focus” and “a greater financial flexibility to pursue prioritized organic growth opportunities throughout investment cycles.” Advanced Materials is expected to have fiscal year 2024 estimated revenue of between $3.7 billion and $3.9 billion with an EBITDA margin greater than 25%.
The Advanced Materials business also manufactures Spectra, a fiber used in protective armor technology in law enforcement and military applications, Hydranal, used in titration, and Aclar, a pharmaceutical packaging material used to preserve prescription drugs.
