EU says Honeywell, DuPont car refrigerant deal may be illegal

(Adds Honeywell and Dupont's comments)

By Foo Yun Chee and Barbara Lewis

BRUSSELS, Oct 21 (Reuters) - U.S. firm Honeywell International Inc's joint venture with chemicals company DuPont to produce a new refrigerant for car air conditioning systems to meet new environmental rules may be anti-competitive, the European Commission said on Tuesday, following a near-three year probe.

The Commission said the agreements between the two companies related to the new coolant, known as R1234yf, may have blocked rivals keen to participate in its development and production.

The coolant, which is designed to meet an EU directive aimed at reducing the use of fluorinated greenhouse gases in car air conditioning systems, has pitted EU regulators against Germany and its powerful car makers led by Daimler (Xetra: 710000 - news) .

Last month the Commission ordered Germany to stop its carmakers using a banned refrigerant with a higher "global warming potential" than the Honeywell-Dupont product within two months or face court action and possible fines.

The new R1234yf coolant is already used in about 2 million cars globally.

When Honeywell and Dupont announced a joint venture to construct and operate a global manufacturing plant for the new refrigerant they said they had developed the product jointly but would market and sell it separately.

"The cooperation they entered into in 2010 ... may have limited its (the R1234yf refrigerant's) availability and technical development, in breach of EU antitrust rules," the Commission said in a statement on Tuesday.

It sent a so-called statement of objections or charge sheet setting out its concerns to the companies.

Honeywell rejected the charges, saying it had complied with EU rules.

"The allegations outlined in the statement of objections are baseless and conflict with the EU's own laws that encourage collaboration on development," the company said in a statement.

DuPont said it was disappointed with the Commission's move and that it would defend its case vigorously.

The firms can ask for a closed-door hearing to argue their case. If found guilty, they could face fines of up to 10 percent of their global turnover. (Editing by Greg Mahlich)