European Scrutiny Committee Contents


2 Control of fluorinated gases

(34395)

15984/12

+ ADDs 1-2

COM(12) 643

Draft Regulation on fluorinated greenhouse gases

Legal baseArticle 192(1) TFEU; co-decision; QMV
Document originated7 November 2012
Deposited in Parliament13 November 2012
DepartmentEnvironment, Food and Rural Affairs
Basis of considerationEM of 26 November 2012
Previous Committee ReportNone
Discussion in CouncilSee para 2.10 below
Committee's assessmentPolitically important
Committee's decisionFor debate in European Committee A

Background

2.1 In order to limit the rise in global temperatures, the EU is looking in 2050 to reduce by 80-95% as compared with levels in 1990, its emissions of greenhouse gases, including fluorinated gases, which have been developed to replace the ozone-depleting substances being phased out under the Montreal Protocol, but which have a very high global warming potential (GWP).[6]

2.2 Those gases therefore form part of the basket controlled under the Kyoto Protocol, the most common type being hydrofluorocarbons (HFCs), which are used mainly in air-conditioning and commercial refrigeration systems, and to a lesser extent in aerosol sprays and as solvents, but which leak with use or over time, and so contribute to global warming. In particular, Regulation (EC) No 842/2006 seeks to minimise such emissions from products and equipment, mainly through containment, leak reduction and repair, and recovery of gases, and, in addition to placing obligations on various organisations, it requires Member States to establish minimum training and certification requirements for companies and personnel working with equipment containing fluorinated gases, as well as implementing certain other requirements.

2.3 In September 2011, a report by the Commission evaluated the effect of the current rules, and assessed the need for further action to reduce emissions of these gases in the EU. Given the short period of time in which Regulation (EC) No 842/2006 had been in operation, it concluded that the impact of its containment and recovery provisions could not yet be quantified, but that the use and marketing restrictions, and a parallel Directive (2006/40/EC) introducing restrictions on the use in mobile air conditioning of fluorinated gases having a global warming potential above a certain threshold, were already contributing to the achievement of the EU's targets under the Kyoto Protocol. The report also showed that, if effectively implemented in all Member States, these two measures have the potential to avoid almost half of projected emissions, stabilising emissions at current levels, but it added that mere stabilisation was not compatible with EU emission reduction targets, and suggested that available and emerging technologies offered significant scope for additional cost-effective reductions both within the EU and internationally.

2.4 It accordingly presented some potential policy options for consideration, including new voluntary agreements; bans on new equipment containing fluorinated gases; extending the scope of existing provisions to other systems/equipment; establishing minimum leakage rates for installations; developing EU standards and notes describing best available techniques and best environmental practices, and the introduction of a scheme for the phasing-down of HFCs. It said that the Commission was currently consulting on these options, and would assess their potential economic, social and environmental impacts, following which it would then, if appropriate, present a legislative proposal for revising the existing Regulation.

The current proposal

2.5 The Commission has now brought forward this draft Regulation, which would impose further controls to achieve a reduction in emissions of fluorinated gases, whilst also seeking to ensure better implementation and enforcement by national authorities of the current regulations. In particular, it proposes a phase-down of the supply of HFCs by imposing a freeze in 2015, followed by a series of reductions commencing in 2016, the objective being to have reached by 2030 a level of supply equivalent to 21% of the annual average of the total quantity of HFCs produced and imported into the EU during the period from 2008 to 2011.

2.6 The phase down would be supported by a number of bans on the use of HFCs imported in non-hermetically sealed pre-charged equipment; on the placing on the market of movable air conditioning containing HFCs from 2020; and on the use of fluorinated gases with a global warming potential (GWP) of 2500 or more to service and maintain certain refrigeration and air conditioning equipment. There would also be bans on the more specialist uses to restrict the use of other fluorinated gases not covered by the phase down mechanism, but the mechanism would not affect substances which have already been placed on the market, or prevent the continued use of HFC-based equipment which existed prior to the new Regulation coming into force: and there would be a de minimis threshold for importers and producers of low volumes of HFCs (ie. companies using less than 1,000 tonnes of CO2 equivalent). Also, in order to monitor the effectiveness of the Regulation, the proposal would extend the scope of reporting obligations under the EU Regulations to cover other fluorinated substances having a significant GWP or likely to replace fluorinated gases already covered by the Regulations.

2.7 Finally, the proposal contains provisions allowing a comprehensive review to be carried out before 2030 to allow adaptation of the provisions of the Regulation in the light of implementation and of new developments.

The Government's view

2.8 In his Explanatory Memorandum of 26 November 2012, the Parliamentary Under Secretary at the Department for Environment, Food and Rural Affairs (Lord de Mauley) says that, given the range of fluorinated gases, equipment and applications, there is no "one size fits all" solution to regulation in this area; that policy measures must take into account the numerous types of product and equipment concerned; and that the technical feasibility and costs and benefits of replacing fluorinated gases depends on a wide range of factors. He adds that it will be important to ensure that measures are introduced only where they will result in lower overall greenhouse gas emissions, in particular from both the leakage of fluorinated gases and the carbon dioxide emissions resulting from their energy consumption, but that there is, nevertheless, potential in almost all sectors in which fluorinated gases are used to replace them fully or partially with alternatives which are safe and at least as energy-efficient.

2.9 The Minister suggests that, in the light of this, the reduction steps in the phase down of HFCs have been determined so as to respect expected market needs fully, taking into account the feasibility of replacements with proven, safe and energy efficient technologies already available today in all sectors. He believes that producers and end users of equipment facing a restricted supply of HFCs will switch to alternative technologies where this is feasible and cost effective, and that the de minimis threshold aligned with the reporting obligations in the EU fluorinated gas Regulation will avoid a disproportionate burden for importers and producers of low volumes of HFCs. However, he says that, in their current form, the control of use provisions in the proposals could create significant costs for some end users, and that small systems containing certain fluorinated gas refrigerants with a high GWP would need to have those replaced by lower GWP alternatives by 2020. It would be necessary, therefore, to be sure that alternative refrigerants could be retro-filled successfully in all cases if such an all-encompassing use control is to be applied: and, if existing plants have to be replaced, this would create significant costs for some end users, especially SMEs.

2.10 The Minister also notes that a ban on the pre-charging of refrigeration, air-conditioning and heat pump equipment would take effect three years after the entry into force of a revised Regulation and that the potential implications of this are unclear. However, he points out that, whilst this may be needed to manage the HFC phase down effectively, it may introduce additional costs for end-users during installation, as well as related practical and safety issues, and that this will require careful consideration with stakeholders. In addition, he points out that, at an international level, existing proposals put forward under the Montreal Protocol to phase-down the production and consumption of HFCs have been under discussion since 2009, and that in 2010 the UK agreed "in principle" to support this because of the climate benefits it would bring. He says that this position has continued to inform discussions at subsequent Montreal Protocol meetings, where progress has been slow, but that, if agreed, an EU-level HFC phase-down could facilitate a potential agreement to such a phase-down at an international level.

2.11 The Minister also points out that the Commission's Impact Assessment considered the effectiveness of a wide range of policy measures, and their impact at different stages of production and use, concentrating on those which it felt had been shown to deliver substantial emission savings at low abatement costs and to be consistent with other EU policies. The Assessment showed that a phase-down of HFCs introducing gradually lower limits until 2030 for the amounts of these fluorinated gases to be put on the market in the EU would deliver the greatest emission savings (equivalent to two-thirds of current emissions by 2030, in line with current proposals under the Montreal Protocol), and that administrative costs can be kept relatively low: such an approach would also lead to cost reductions due to higher market penetration and to economies of scale for alternative technologies, thus helping to reach an agreement on the proposals under the Montreal Protocol.

2.12 He adds that the Government's own initial analysis suggests that, whilst the early step-down stages are quite steep, the later ones are less demanding, and that the proposed reduction steps are achievable. However, he says that this will rely on the development and introduction of low GWP alternatives which could be used as HFC replacements, particularly in parts of the stationary refrigeration and air-conditioning sector, and that it is important to recognise that there is currently rapid development of new alternatives with very low GWP. Some of these alternatives have been commercially available since 2010 and others are still in development but are expected to be available within one to three years. These new and emerging alternatives could have a major influence on the practicality and cost effectiveness of the phase-down schedule.

2.13 The Minister also refers to the likely timetable for this proposal. He says that it is expected to be a priority for the Irish Presidency, and to go to the Council for a first reading/common position in 2013, with the proposal entering into force on 1 January 2014.

Conclusion

2.14 The need to reduce emissions of fluorinated gases forms an important part of the EU's overall commitment to reduce levels of greenhouse gases, and, for that reason, this is clearly a significant proposal, which we are therefore drawing to the attention of the House. Moreover, whilst the Government suggests that the pace at which the supply of HFCs would be run down appears to respect expected market needs, it has drawn attention to a number of areas of concern. These include the potentially significant costs for some end-users, including small and medium-sized enterprises, arising from the control of use provisions; the need to clarify the implications of the proposed ban on pre-charging of refrigeration, air conditioning and heat pump equipment; and the extent to which this might also introduce additional costs for end-users during installation and give rise to practical and safety issues.

2.15 In view of this, we believe that it would be helpful if the House were to have an opportunity at this stage to consider these issues further, and we are therefore recommending this proposal for debate in European Committee A.





6   Such gases can be up to 23,000 times more potent than carbon dioxide. Back


 
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Prepared 13 December 2012