Memorandum submitted by Calor Gas Ltd
(U14)
SUMMARY
F-gas emissions (mainly hydrofluorocarbons—HFCs)
are growing faster than other greenhouse gases (GHGs), with far
more powerful global warming potential (GWP). They are manufactured,
mostly for use in refrigeration and air conditioning, even though
there are better alternative technologies on the market. Between
1992, when Greenpeace demonstrated the viability of alternative
hydrocarbon (HC) refrigeration, and 2002, global HFC production
increased more than 20-fold. Government allowed F-gases to replace
ozone-damaging CFCs; while HFCs do not damage the ozone layer,
they have a powerful GWP: the most common, HFC-134a, is 1,300
times worse than CO2. EU Member States are now deliberating
how far and how fast HFCs should be phased out. This is a rare
opportunity for action on an EU-wide basis and, if it is missed,
the damage done will take years to remedy. The UK's contribution
to this effort and these negotiations should be more ambitious
than is currently apparent.
SUMMARY OF
RECOMMENDATIONS
— The UK should use its influence with
the US Administration, building on recognition of global risks
from climate change, to secure support for the Kyoto approach,
especially regarding HFCs (para 4).
— Action on HFCs is imperative, otherwise
there will have to be more drastic reductions in transport and
energy emissions (both currently growing fast), measures which
may carry economic costs and distortions and test the political
will of governments (para 13).
— A clear alternative to even more
costly investment either to recover or contain HFCs is not to
use HFCs in the first place (para 14).
— The Government should be more rigorous
in implementing its commitments over HFCs in the procurement decisions
made by Departments and Agencies (paras 18-20).
— Most importantly, in the negotiations
and discussions on the EU F-gas Regulation, the Government should
put its weight on the side of certain Member States which otherwise
face the prospect of the EU over-riding their "greener"
domestic legislation; in so doing, the UK will help to achieve
more towards phasing out HFCs and encourage the acceptance and
use of alternatives (para 23).
INTRODUCTION
1. Calor Gas Ltd has since 1994 marketed
the CARE range of hydrocarbon (HC) refrigerants; it accounts for
less than 0.5% of the company turnover, which mainly consists
of the distribution and retailing of liquefied petroleum gas (LPG).
HCs are one of several environmentally friendly so-called "Not-in-Kind"
(NIK) alternatives to HFCs—energy efficient, safe and with
negligible global warming effects. NIKs include water, air, CO2,
and ammonia. For public policy rather more than commercial reasons
Calor has for several years worked alongside environmental organisations,
including Globe UK All Party Parliamentary Group and NGOs such
as Climate Action Network (CAN) Europe, Greenpeace, Friends of
the Earth, and WWF UK in advancing the case of NIKs over hydrofluorocarbons
(HFCs).
2. This submission will discuss the role
of HFCs in climate change, and pertinent Government policy; the
wider elements of the climate change programme will be referred
to only in so far as they are relevant to the HFC issue.
THE IMPORTANCE
OF THE
CLIMATE CHANGE
ISSUE: UK POLITICAL
COMMITMENTS
3. The UK Government's Chief Scientific
Adviser, Professor Sir David King, recently stated, "In my
view, climate change is the most severe problem that we are facing
today, more serious even than the threat of terrorism." (Science,
9 January 2004).
4. The study "Abrupt Climate Change"
(2003), produced by Global Business Network for the US Defense
Department, states that climate change "should be elevated
beyond a scientific debate to a US national security concern",
with catastrophic climate change—involving flooding, drought,
famine, civil disorder and international conflict—as being
"plausible" and challenging "US national security
in ways that should be considered immediately". This would
suggest that representations made by the UK Government to the
US Administration on the Kyoto Protocol generally and HFCs in
particular might not entirely fall on stony ground.
5. The UK Climate Change Programme 2000
stated: "HFCs are not sustainable in the long term".
The Deputy Prime Minister confirmed "a clear signal to industry
that HFCs have no long-term future" (9 March 2000). Caroline
Spelman MP, then Shadow Environment Secretary, said, "The
decision to replace CFCs with HFCs was a dirty deal . . . HFCs
are a major contributor to the greenhouse effect" (EU Standing
Committee A, 14 January 2004, col 16). Sue Doughty MP, Liberal-Democrat
Environment spokesperson said: "The Government seem to have
watered down their proposals . . . We need much greater ambition
. . . in the end, we just say `we will make it less bad'. I would
like fluorines to be phased out much faster" (loc cit, cols
7 and 18).
6. The Prime Minister stated on 14 September
2004: "What is now plain is that the emission of greenhouse
gases, associated with industrialisation and strong economic growth
. . . is causing global warming at a rate that began as significant,
has become alarming and is simply unsustainable in the long-term
. . . By unsustainable . . . I mean a challenge so far-reaching
in its impact and irreversible in its destructive power, that
it alters radically human existence. . . . Its likely effect will
not be felt to its full extent until after the time for the political
decisions that need to be taken has passed" Among several
pieces of evidence, Mr Blair cited: "Swiss Re, the world's
second largest insurer, has estimated that the economic costs
of global warming could double to $150 billion each year in the
next 10 years, hitting insurers with $30-$40 billion in claims."
As a clear indication of further ambition on this issue, he added:
"We have to recognise that the commitments reflected in the
Kyoto protocol and current EU policies are insufficient, uncomfortable
as that may be."
7. While Mr Blair did not refer to HFCs
as such, the Leader of the Opposition, Rt Hon Michael Howard MP,
was very specific: "We must be more active in removing the
causes of harmful emissions where we are able to. I can announce
today that the Conservatives are committed to phasing out the
use of hydrofluorocarbons, or HFCs, between 2008 and 2014 . .
. HFCs currently account for 2% of the UK's greenhouse gas emissions
and that will have doubled by the end of the first decade of the
21st century. Unless . . . the Government gives a clear lead,
then the situation will only worsen." (13 September 2004)
BACKGROUND
8. Fluorinated GHGs, including HFCs, are
used in refrigeration and air-conditioning, including vehicle
air-conditioning, foam blowing, solvents, aerosols and other products.
These largely replaced chlorofluorocarbons (CFCs), banned under
the 1987 Montreal Protocol because of their potential to damage
the ozone layer. While HFCs do not damage the ozone layer, they
have a powerful GWP. The most common, HFC-134a, is 1,300 times
worse than CO2. HFCs are among the gases which the
Kyoto Protocol commits the EU to reducing by 8% overall by 2008-12
compared to 1990. While CO2, methane and N20 levels
are steady or rising slightly in Europe, HFC emissions are growing
very fast—between 2000 and 2010 these may at least double,
to represent a third of the UK's commitment under Kyoto.
9. In Germany, over 95% of domestic refrigerators
use HCs: these do not damage the ozone layer, have an almost negligible
GWP, are a safe and proven technology and are also cost-effective.
Sweden, Austria and Denmark have all proposed both bans and taxes
on HFCs; Switzerland has also proposed bans; the Netherlands have
developed a tough voluntary system known as STEK.
10. An EU regulation on F-gases is being
considered in 2004-05 by EU Member States and the European Parliament.
The issue is how far and how fast HFCs should be phased out; it
is a rare opportunity for action on an EU-wide basis and, if it
is missed, the damage done will take years to remedy.
11. The Regulation relies for its expectations
of HFC containment on using a version of the apparently rigorous
Dutch containment scheme known as STEK. Not only is the version
envisaged in the Regulation weaker than STEK, but there are doubts
as to whether this—perhaps effective in a small, well-organised
country like the Netherlands—can be rolled out across the
whole EU. The information on which it is claimed that STEK has
achieved a 4.8% leakage rate comes from voluntary (importantly,
not random) responses to a survey in which only 334 of 2,140 registered
companies replied!
12. At a conference on climate-friendly
refrigeration technologies on 22 June 2004, supported by Greenpeace
and the UN Environment Programme, Coca Cola announced it will
switch out of HFC foam and that it expects to use natural refrigerants
in new equipment from around 2006; Unilever Ice Cream will from
2005 buy only HFC-free freezers; McDonalds is understood to have
undertaken to convert 30,000 of its restaurants to alternative
refrigeration. However, companies and public authorities will
only be incentivised to adopt alternatives if it is clear that,
for example, the EU, is committed to a firm programme of HFC phase-out
ie one that will impact upon their direct competitors and not
leave these companies isolated.
MEETING KYOTO
TARGETS: HFCS
AND CO2
13. HFCs currently account for 2% of EU's
greenhouse gas emissions, compared with CO2's 80%,
but their usage is rising rapidly—particularly with the
increased demand for air-conditioning of vehicles and buildings.
The HFC industry itself forecasts that HFC production in 2007
will be three times greater than it was in 2001. The 2004 Budget
Report stated (para 7.8 and chart 7.1) that UK CO2
emissions are down only by 8.7% since 1990, and running level
or slightly increasing since 1997, well above the Kyoto target
for 2010. The International Energy Agency warned on 2 March that,
"Energy savings rates across all sectors and in almost all
countries have slowed since the late 1980s, as has the decline
in CO2 emissions relative to GDP". Without action
on HFCs there will have to be further reductions in transport
and energy emissions (both currently growing fast). Such measures
may carry economic costs and distortions and, in view of their
unpopularity, will test the political will of EU Governments.
F-GASES LEAK—CONTAINMENT
IS NOT
WORKING
14. Most HFC emissions come from leakage
during use or disposal. The HFC lobby claims that pollution can
be minimised by reducing leakage, and this view is favoured both
by the EU Commission and the UK Government. However:
(a) Atlantic Consulting's study ("HFC
Containment has already failed", first produced in February
2004, and published in Atmospheric Environment, a peer-reviewed
journal, in August 2004) shows that "leak rates of HFC-134a
over the period 1990-2000 are the same as they were for its predecessor,
CFC-12, in the mid-1980s." Atlantic concludes: "Clearly,
HFC containment has failed . . . This paper calls into question
the use of containment as a policy tool for controlling HFC emissions.
(b) The CFC recycling programme for redundant
refrigerators is a costly failure: more than half of all CFCs
supposed to be recovered escape to the atmosphere (RAL Quality
Assurance Association for the De-Manufacture of Refrigeration
Equipment, reported in RAC Magazine, March 2004).
(c) The HFC industry has campaigned against
the controls proposed on HFC uses in vehicle air-conditioning
(MAC). In 1997, only 9% of new cars sold in Europe had MAC: by
2003 it was fitted in 80% of new cars sold in Germany. A 31-fold
increase between 1995 and 2010 in MAC-related GHG emissions is
predicted. Yet these HFCs were not in replacement of CFCs, but
an entirely new use (totally at variance with HMG's commitment).
In addition to leakage during usage, there will be the costly
problem of preventing leakage when vehicles are abandoned or disposed
of.
(d) After a stakeholder consultation by
the EU in 2003, industry estimates of leak-rates from MAC were
corrected upwards by 40% (Proposed F-gas Regulation, p 4 COM (2003)
final).
(e) Every year the UK reports GHG emissions
to the United Nations Framework Convention on Climate Change (UNFCCC),
with apparently a 2-year lag, ie 1998 emissions reported first
in 2000. Furthermore, the UK reports revisions for preceding years:
in 2004 the UK revised year 2000 emissions of HFCs, first reported
in 2002, upwards by, it seems, 25.6%.
It is thus not surprising that in 2002 atmospheric
levels of HFCs measured over Spitsbergen were 20% higher than
in 2001 (ENDS Daily 6 February 2004). A clear alternative to even
more investment either to recover or contain HFCs is not to use
HFCs in the first place.
THE GERMAN
EVIDENCE
15. The German Environmental Protection
Agency produced in February 2004 a 240 page report identifying,
in detail, existing alternative technologies or processes for
every use of F-gases in over 20 sectors ("Fluorinated Greenhouse
Gases in Products and Processes:—Technical Climate Protection
Measures"—Report of the Federal Environmental Agency,
Germany 20 February 2004 Federal Environmental Agency http://www.umweltbundesamt.de.
16. The report shows that F-gases are not
necessary for the following uses: refrigerants in domestic refrigerators
and freezers, commercial or industrial refrigeration, stationary
air conditioning of buildings or transport, stationary or mobile
air-conditioning units (domestic, commercial, industrial); in
domestic heat pumps; as blowing agents to make rigid foams for
thermal insulation, flexible polyurethane foams, integral skin
polyurethane foams or one component foam; as propellant in technical
sprays, medical aerosols, aerosols in households and cosmetic
aerosols, in aerosols intended for decorative purposes, party
supplies and claxons, fire extinguishing, etching semi conductors
circuit board production, extinguishing and electrical insulating
gas (switch-gear) cover gas for magnesium processing, degasser
for secondary aluminium casting and, filling gas for car tyres.
(The exceptions are HFCs in pepper sprays and non-domestic insecticides.)
It also identifies many new alternatives currently in testing,
and measures to reduce emissions.
17. The authors state that future emissions
will "increase enormously" owing to replacement of CFCs
and that systems which use CO2 as refrigerant (not
HFCs) "are now ready to go into production". Forecasts
predict a continued sharp rise in the use of F-gases. In 2020,
fluorinated GHGs are anticipated to have a global annual market
volume of up to 500,000 t, Europe accounting for up to 100,000
t of this. In Germany HFC emissions and related emissions will
have increased between 1995 and 2010 by approximately 270%. Many
German cars are being scrapped in countries without adequate CFC
or HFC recovery systems. "Taking all aspects into account,
it can be concluded that CO2 is the best refrigerant"
for car air conditioning.
REFRIGERATION PROCUREMENT:
THE GOVERNMENT
RECORD
18. Evidence of the UK Government's disappointing
implementation of its environmental commitments is manifested
by various recent procurement decisions which, despite specific
commitments, use HFCs. Beverley Hughes MP, as Parliamentary Under-Secretary
of State for DETR, stated, "Our policy is to switch, where
possible, from hydrofluorocarbons (HFCs) . . . to environmentally-preferable
substitutes"(WA 9 March 2001), thus reiterating the statement
in "Climate Change-The UK Programme" (November 2000)
that "HFCs should only be used where other safe, technically
feasible, cost effective and more environmentally acceptable alternatives
do not exist".
19. HFCs have been used in the following:
refurbishment of No 10 Downing Street, the new GCHQ at Cheltenham,
the MOD Whitehall complex and RAF High Wycombe, Great George Street
Treasury Building, the Home Office at 50 Queen Anne's Gate, a
building leased by DEFRA in Temple Quay Bristol, and the DFID
office, 20 Victoria Street. More recent failings include: the
HSE new building in Bootle; MOD Admiralty Arch, London; Romford
Hospital PFI project; British Cattle Market Service, Workington
(part of DEFRA); Windsor Library, Imperial College; University
of London Tanaka & HQ buildings; and Liverpool University
Surface Science Building. The Observer reported the Meteorological
Office's new £150 million headquarters in Exeter has installed
an HFC air-conditioning system (26 September 2004).
20. A Government backbench MP, Jane Griffiths,
spoke as follows in 2002: "The Foreign and Commonwealth Office
. . . asked about the coolant for the new Government communications
headquarters building . . . said that the building will use the
refrigerant HFC134A . . . HFC 134A was responsible for 2.61 million
tonnes of greenhouse gas emissions in 2000. That is not quite
the Government climate change policy of not using HFC unless there
is no choice . . . The Secretary of State for Health provided
me with a list of 77 building projects currently under way . .
. The Department did say that [the] NHS Model Engineering Specification
. . . advises that HFC 134A or 407C and its associate blends are
used. That is even further from the climate change policy . .
. The Lord Chancellor's Department . . . has a number [of building
projects] in the planning stage and . . . [takes] no consideration
of climate change impact. Disappointingly, the Government are
not doing very well in implementing their own climate change policies,"
(Hansard, 24 May 2002, cols 570-71).
THE EU REGULATION:
AN OPPORTUNITY
MISSED
21. The draft Regulation aims to limit emissions
of three F-gases controlled by Kyoto: it sets maximum leakage
rates and equipment monitoring rules, and phases out HFC-134a.
It has been weakened from its original drive against HFCs by heavy
lobbying by the well-funded body, EPEE, established by largely
US HFC manufacturers and their allies. Now, it requires no use
of alternative technologies; it does not restrict HFCs to "essential
uses" nor does it impose concrete bans.
22. The Commission proposed to proceed by
way of the internal market clause (Article 95) of the Treaty,
preventing individual Member States introducing tougher national
measures. Several, like Denmark, Austria and Sweden, already possess
or are planning tougher legislation, which they might be obliged
to roll back. To avoid this, some Member States are arguing for
the Regulation to be related to Article 175, the basis of environmental
regulation, so that the Regulation would set a minimum environmental
target which individual countries might exceed. The UK Government
has opposed this.
23. With the expectation that the Regulation
would proceed on a single market basis apparent in the autumn
of 2004, Calor, supported by environmental NGOs, has proposed
the following modest amendments:
(a) To use the Article 175 (environment)
legal base for everything apart from mobile air conditioning,
which would understandably, as vehicles are traded across the
EU, come under the single market clause. Calor understands that
the UK Government opposes this option and that even if this option
were taken, because of the legal pre-eminence of the single market,
Member States would be forced under legal challenge to withdraw
tougher measures. (The irony is that this does not prevent individual
states—like France—from having restrictive legislation
that effectively rules out the use of non-HFC equipment).
(b) To aim to be more ambitious within an
Article 95 legal base (ie extending the use restrictions or bans
into other areas, with the UK supporting Denmark, Austria, Sweden
and Belgium in their possible amendments). Calor understands that
the UK Government would oppose any extension of the boundaries
of bans or phase-outs because no cost or environmental benefit
analysis has been carried out and that it would not be possible
to do this before further decisions had to be made at the Council
of Ministers meeting in October 2004. Specifically, Calor proposed
a restriction on the use of HFCs in domestic refrigerators (as
the market was now mainly non-HFC). One advantage would be that
this would put an end date to the need to recover HFCs from fridges
(under the WEEE Directive). While domestic fridges have low leakage
during use, by the time they come to disposal all the gas has
usually leaked. (The Government is understood to take the view
that as this market is mostly non-HFC, a ban would have little
effect—ignoring the symbolic aspect, the WEEEaspect and
the fact that the proposed F-Gas regulation will ban HFC applications
which have never even been put on the market!)
(c) Calor also proposed HFC restrictions
in the field of commercial refrigeration, arguing that without
some lead from Government (through regulation), the industry would
stay with HFCs; this would act as a disincentive to those companies
who had shown that they were prepared to take the initiative (see
para 12 above).
24. The UK Government is understood to be
opposed to all these proposals. This is a tribute to the strength
of the F-gas lobby, which in stakeholder consultation usually
musters a very large majority over Calor, perhaps one or two other
NIK users (but most HC users are also, and on a larger scale,
HFC users) and green NGOs. It also indicates that, at European
Commission level, DG Environment's aspirations have been firmly
blocked by DG Enterprise. The same occurred in the UK, where DEFRA
is the "lead" department, but has been firmly blocked
by the DTI. This, indeed, raises an important political point.
The F-gas lobby has a greater share of voice because it represents
the majority vested interest "status quo". If Governments
had paid attention in the past to share of voice rather than quality
of argument, CFCs would never have been banned.
25. Unless the UK Government changes its
policy on the Regulation, or other Member States, or the European
Parliament, defeat this position, those wishing to encourage alternatives
to HFCs will have to wait until the Commission reviews the Regulation
some four years after it comes into force—probably in 2010.
Allowing then for phasing of any new measures, as one HC producer
has commented to Calor "I would say HFCs have got a free
run in until at least 2015 and beyond."
30 September 2004
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