Mrkt BUZZ: Enrad set to benefit from new F-Gas regulation

The European Council, and earlier the European Parliament, have adopted two F-gas regulations that will reduce the use of fluorocarbons faster than before. Enrad, which sells refrigerators and heat pumps with natural refrigerants, should benefit from the new legislation.

The European Council yesterday, Monday 29 January, adopted two regulations that will accelerate the phase-out of fluorinated gases (F-gases) and other substances that cause global warming and deplete the ozone layer. Furthermore, under the new rules, the use of hydrofluorocarbons (HFCs) will be completely phased out by 2050. The production of HFCs will already be reduced to 15% from 2036, as measured by the production rights for HFCs granted by the Commission.

Although existing EU legislation already significantly restricts the use of these gases and substances, the new rules will accelerate their phase-out. The EU’s motivation for the legislation is to reduce global warming to meet the requirements of the Paris Agreement.

The two regulations will be signed by the Council and the European Parliament. The regulations will then be published in the Official Journal of the EU and enter into force 20 days later.

This is a positive development for Enrad. Unlike most of its competitors, the company has designed its refrigerators and heat pumps to use natural refrigerants.

The Enrad share price rose quickly from SEK 3.90 to around SEK 5.00 following the publication of Carlsquare’s initiation analysis on Enrad on December 21. Since then, the share price has stabilized around the SEK 5 level, as shown in the chart below.

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