Summary of the comparison: Freon cold storage It has lower initial investment costs ranging from 15% to 25%, suitable for mini warehouses and commercial warehouses under 500 tons in urban areas. Conversely, Ammonia (NH3) cold storage With a total cost of ownership (TCO) over 15 years that is 30% – 40% cheaper thanks to high energy efficiency (COP) saving 15% – 25% in electricity costs per month, super cheap NH3 refrigerant charging costs (1/10 the price of Freon), and an industrial compressor unit lifespan of up to 25-30 years. For capacities of 1,000 tons or more or IQF freezing systems, NH3 cold storage is a superior optimal choice.
When preparing investment estimates for the construction of cold storage facilities for food, agricultural products, seafood, or a logistics warehouse, the biggest question for investors, CEOs, and CFOs is: Should you choose a cold storage technology that uses Freon gas or ammonia (NH3) refrigerant?
Many businesses make the mistake of focusing only on the initial investment cost (CAPEX) while overlooking the operating costs of electricity and maintenance (OPEX) over the 15-20 year lifespan of the warehouse. In the industrial refrigeration industry, electricity costs account for a significant portion of the cost. 70% – 75% Total operating costs. Below is a comprehensive technical and financial comparison table compiled by our technical experts. Tan Long Refrigeration and Electrical Engineering It is based on actual construction data from over 120 major projects.
1. Comparison matrix table of 12 criteria between NH3 and Freon cold storage.
| Assessment criterion | NH3 (R717 – Ammonia) cold storage | Freon (R404A / R507A / R134a) cold storage |
|---|---|---|
| 1. Initial investment cost (CAPEX) | Higher than 15% – 25% on a small scale, but equal to or cheaper on a super-large scale (> 5,000 tons). | Lower costs are available at small and medium scales due to the availability of standardized condensing units. |
| 2. Thermodynamic Efficiency (COP) | Very high (COP = 3.5 – 4.2). Latent heat of vaporization 1,262 kJ/kg (7 times that of Freon). | Average (COP = 2.6 – 3.2). Efficiency decreases rapidly as condensing temperatures increase in the summer. |
| 3. Monthly electricity consumption (OPEX) | Save between 15% and 25% on your electricity bill each month compared to Freon with the same cooling capacity. | It consumes significantly more electricity because the compressor has to run longer and the compression flow rate is higher. |
| 4. Cost and expense of refrigerant charging | Very cheap (around 35,000 – 45,000 VND/kg). Abundant domestic supply from nitrogen fertilizer factories. | It is very expensive (300,000 – 500,000 VND/kg for genuine R404A/R507A) and tends to increase in price due to environmental protection tax. |
| 5. Compressor and equipment lifespan | 25-30 years (using Mycom, Kobelco, and Sabroe industrial screw compressors under continuous heavy load). | 10-15 years (using semi-hermetic compressors such as Bitzer, Dorin, or Scroll Copeland). |
| 6. Piping and condenser materials | Seamless steel pipes for pressure resistance, aluminum or stainless steel SUS304 pipe systems (NH3 corrodes copper, the use of copper is strictly prohibited). | Standard copper tubing with aluminum fins. |
| 7. Area and requirements for the computer room | It is mandatory to construct a separate compressor room, equipped with an emergency exhaust fan and a leak cleaning tower. | Flexible, the compressor-condenser unit can be placed outdoors, on the factory roof, or in a tight space. |
| 8. Detecting refrigerant leaks | Extremely easy to detect even at very low concentrations (5 ppm) thanks to its characteristic pungent odor, and quick to resolve. | Colorless and odorless, leaks are difficult to detect, leading to complete loss of the refrigerant before it's discovered. |
| 9. Environmental Impact (ESG / Net Zero) | ODP = 0, GWP = 0. Not prohibited or restricted under the Montreal and Kigali Protocols. | ODP = 0 but GWP is very high (R404A = 3.922). Currently subject to import quota reductions. |
| 10. Fire safety and occupational safety standards | Strict inspection according to QCVN 02:2019/BLDTBXH and QCVN 06:2022/BXD. Certified engineers are required to operate the facility. | The regulations are simpler because Freon is non-flammable and has low toxicity under normal conditions. |
| 11. Deep freezing capability (-40°C to -50°C) | Excellent, fast freezing time, suitable for IQF conveyor belts and blast freezers for shrimp and fish. | High efficiency is difficult to achieve at temperatures below -35°C due to the suction pressure dropping significantly towards a near-vacuum. |
| 12. Return on Investment (ROI) | The project broke even after 2.5–3.5 years of operation thanks to electricity savings and low refrigerant costs. | The accumulated electricity costs after 5 years will far exceed the initial cost of purchasing the equipment. |
Mycom industrial screw compressor unit running on NH3 refrigerant – a machine that has worked reliably for 25 years at NECS Cold Storage.
2. Practical Financial Problem: Analysis of Total Cost of Ownership (TCO) after 10 years
To illustrate this clearly, consider the investment problem of cold storage for preserving frozen seafood with a certain capacity. 3,000 tons (Design temperature -20°C):
- Option 1 (Freon R404A System):
- Initial investment and installation costs (CAPEX): Approximately 10 billion VND.
- Average monthly electricity bill: 220 million VND (2.64 billion VND/year).
- Cost of refilling leaking gas and regular maintenance: 150 million VND/year.
- Total cost after 10 years: 10 billion + (2.79 billion × 10) = 37.9 billion VND.
- Option 2 (Tan Long EPC Two-Stage NH3 Compression System):
- Initial investment cost for equipment and server room (CAPEX): Approximately VND 12.5 billion (2.5 billion higher).
- Average monthly electricity bill: VND 175 million (reduced by 20.5% thanks to high COP, equivalent to VND 2.1 billion/year).
- Cost of NH3 gas refill and compressor oil maintenance: 40 million VND/year.
- Total cost after 10 years: 12.5 billion + (2.14 billion × 10) = 33.9 billion VND.
👉 Result: Although the NH3 option required a higher initial capital of 2.5 billion VND, it was only available after a short time. 3.8 years, The amount of electricity saved completely offset the investment difference. After 10 years, the NH3 system helped the business. net savings of up to 4 billion VND And the Mycom NH3 compressor system still has another 15-20 years of service life, while the Freon system is beginning to enter a major failure phase and faces the risk of ceasing operation.
3. When should businesses choose Freon, and when is it mandatory to choose NH3?
You should choose FREON cold storage when:
- Warehouse capacity under 500 tons or volume under 2,500 m³.
- Warehouses are located in residential areas, city centers, or retail supermarkets.
- The warehouse is located on an upper floor of the commercial building.
- Businesses that lease factory space for short periods of less than 5 years need to consider the flexibility required for dismantling and relocation.
It is mandatory/recommended to choose NH3 cold storage when:
- A large-scale logistics warehouse or processing plant with a capacity exceeding 1,000 tons.
- Quick freezing system: IQF conveyor belt, blast freezer with a capacity of > 5 tons/day.
- The company owns the factory land long-term and aims to optimize its electricity costs.
- Seafood processing plant for export, dairy factory, beer and soft drink factory.
4. Consulting on the selection and design of optimal refrigeration systems with Tan Long.
As a professional contractor, we possess the capability to execute projects using both technologies. Freon and NH3, Tan Long Refrigeration and Electrical Engineering always considers the long-term economic efficiency of the investor to provide the most optimal solution without favoring any particular system:
- Conduct field surveys and calculate the precise thermal balance of the main load using specialized software.
- Prepare a detailed investment cost and payback period spreadsheet for each compressor option (Mycom, Bitzer, Kobelco, Hanbell).
- The fire safety system design, automatic NH3 concentration sensors, and leak gas absorbent tanks have met state inspection standards.
For in-depth technical advice and detailed comparative cost estimates, please contact us directly:
TAN LONG ELECTRICAL AND REFRIGERATION JOINT STOCK COMPANY
Factory address: Lot B2-01, Duc Hoa 1 – Hanh Phuc Industrial Park, Long An | Headquarters: 86 Chien Thang Street, Ward 9, Phu Nhuan District, Ho Chi Minh City
Technical Support & Quotation Hotline: 0933 357 058 Email: tuvan@tanlongvn.com
Is your business in need of a survey, upgrade, or new design for your industrial refrigeration system?
With over 18 years of practical experience leading more than 29 major national projects, Tan Long's team of HVAC engineers is committed to providing accurate thermal load calculations, optimizing the COP efficiency coefficient, switching between natural refrigerants NH3/CO2, and saving 20–30% in operating electricity costs.
Engineer Nguyen Toan Thinh (Technical Director)
With over 18 years of practical experience in directing, consulting, designing, and constructing heavy industrial refrigeration systems, ASRS automated warehouses, and IQF freezing systems across more than 29 major national projects.
