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Eco-Fridge revolutionises food transport

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Howard Pedolsky (left) receives his award from UK Member of Parliament Peter Ainsworth.

Eco-Fridge transport: no noise, no greenhouse gas emissions.

With renewed climate change warnings in the headlines thanks to the recent release of the UK government’s Stern report on climate change economics, cleaner energy technologies are receiving increased attention.

This is good news for Ukram, a Ukrainian-American group of companies backed by the EBRD, which has developed a patented system that is set to revolutionise the transport of perishable goods. Leading international food producers, shippers and retailers including Nestlé Schöller, Kroger, TFE and leading UK supermarkets have already shown interest in the technology developed by an ex-NASA space scientist and Ukrainian physicists and engineers.

Their ‘eco-Fridge’ is a silent and environmentally-friendly refrigerated transport system that uses liquid nitrogen as the accelerant in the cooling process. Nitrogen is a component of air and does not produce any hazardous emissions. In comparison, traditional diesel-fuelled refrigerated transport systems add to current levels of carbon dioxide and hydro fluorocarbons (HFCs), primary contributors to global warming and the depletion of the ozone layer. 

Silence is golden

Recounting an episode during a test-run of eco-Fridge, Howard Pedolsky, the company’s CEO, illustrated the other major benefit of the new system: the potential to radically reduce noise pollution. “I was chatting to the driver during an eco-Fridge trailer demonstration when he said ‘Listen to this!’ I had no idea what he was talking about so I said: ‘Listen to what?’ ‘We’re talking in normal voices,’ said the driver. ‘Normally I have to scream!’ ”

The secret behind the silence is the absence of moving parts in the cooling system, and the fact that it does not require a mechanical engine, unlike traditional diesel-fuelled refrigerated trailers.

The UK-based Noise Abatement Society (NAS), which encourages companies to help protect the environment from noise pollution, considers this development to be revolutionary and gave Ukram its 2006 John Connell Technology Award.

NAS trustee Gloria Elliot described eco-Fridge as a fantastic step forward. “It solves the problem of delivering refrigerated goods to supermarkets at night, which is currently banned due to the high noise pollution of traditional refrigerated trailers,” she said. “With the eco-Fridge system, we can combine the growing necessity for 24-hour delivery of goods and reap the environmental benefits!”

Funding innovation

During the first five years of the company’s life, the EBRD invested $4.7 million in equity and debt funding for the production of eco-Fridge pilot test units, pilot testing and commercial manufacturing of the units. Donor funding in support of eco-Fridge totalled almost €150,000 and came from the European Union, the UK and US governments.

NAS’s Mrs Elliot praised the Bank’s belief in the eco-Fridge, as did CEO Mr Pedolsky. “I would like to thank the EBRD for its patience, foresight and financial support. Without money, as we all know, nothing can be accomplished,” Mr Pedolsky said during the NAS award ceremony in the British House of Commons.

A former NASA scientist, Mr Pedolsky initiated and co-developed eco-Fridge with Roland Gavrylov, a Ukrainian who was a Director at the Institute for Low Temperature Physics and Engineering (ILTPE) in the Ukrainian Academy of Science in Kharkov, Ukraine.

They needed a business partner to provide capital and make eco-Fridge commercially viable. The opportunity came at the 1998 EBRD Annual Meeting in Kiev, where Mr Pedolsky presented his business plan to EBRD Banker Lesia Haliv.

Because earlier attempts to use nitrogen in refrigeration had failed due to high cost and the fact that earlier systems ran fewer than eight hours, “the project seemed high risk,” Ms Haliv remembers. However, eco-Fridge’s potential was so great that the Bank decided to get involved. It was one of the first companies in which EBRD acquired an equity stake under its Direct Investment Facility; at the time, the Bank mainly loaned money to companies rather than investing in shares.

Slow but steady progress

In March 2006, eco-Fridge received EU ATP certification, meeting all the EU requirements for refrigeration. This allows the company to sell its product for cross-border trade in Europe. The EU limits the use of HFCs in refrigeration and will enforce a complete ban from 2015, forcing companies to look for new solutions. Currently, only eco-Fridge meets these regulations. Similar bans are expected in parts of the USA.

The Bank has worked with eco-Fridge to help it make the shift from being essentially a research and development operation, to a fully commercial business. Eco-Fridge has hired a new finance director and a new Non-Executive Chairman, Steve Back, former CEO of Somerfield Plc, the UK’s fifth largest supermarket chain. Ukram’s search for ‘green tech’ venture capital to help fund its next phase of growth should be complete by the spring of 2007.

Reaping the benefits

Ukram is doing well. Five units are being readied for delivery to TFE, a major French transportation company. A test system has been installed at Kroger, the largest US food retailer. And some of the world’s biggest food companies, including UK giants Tesco and Sainsbury’s, have expressed interest in the technology.

Ms Haliv takes satisfaction in seeing her gamble on eco-Fridge start paying off. “Eco-Fridge shows that the region can produce some cutting edge technology which is environmentally friendly and is in demand in Europe and the US.”

Board member Will Newton emphasises the project’s environmental significance: “The project shows that you can reconcile making money and saving the planet. As highlighted in the Stern report, environmentally-friendly products will only be developed and supported if people can make money out of them.”

By Claire Vogt, EBRD Communications Consultant
Contact: EBRD Communications Department

29 November 2006