Environmental Audit CommitteeWritten evidence submitted by the Environmental Investigation Agency

1. Introduction to the EIA

Founded in 1984, the Environmental Investigation Agency (EIA) is an NGO and has been actively involved in the greenhouse gas (GHG) emission policy debate for over 20 years.

2. F-gas Background

F-gases (fluorinated gases) are a suite of GHGs containing fluorine. Used in various industrial and commercial processes (predominantly refrigeration, air conditioning, foams and fire extinguishers), the most common F-gases are hydrofluorocarbons (HFCs), although perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) are also included. F-gases currently account for 3% of total GHG emissions in the UK (CCC, 2013, p.1), yet unlike other GHGs, most F-gases are 1,000–20,000 times more powerful than CO2 (Defra, 2012, p.1) in terms of Global Warming Potential (GWP). Furthermore, UK F-gas emissions have grown significantly in the past two decades, rising from 2 MtCO2e in 1995 to 12 MtCO2e in 2008 (CCC, 2010, p.131). HFCs in particular are growing the fasted, with associated CO2e emissions swelling by 8% per year from 2004–2008 (UNEP, 2011, p.9). Spiralling HFC production, consumption and emissions must be addressed as a matter of urgency. Estimates project that global HFC emissions will increase to 3.6–8.8 GtCO2e yr-1 by 2050 (Velders et al., 2009; Gschrey & Schwarz, 2009). The higher end of these projections means that HFC emissions will equal 19% of all predicted CO2 emissions in 2050 in the absence of a CO2 stabilisation target.

3. EU Policy

Recognising the rising influence that F-gases such as HFCs were having on the global climate, the EU introduced EC Regulation 842/2006 on certain fluorinated greenhouse gases (the F-Gas Regulation) which came into force in 2007 and focused on containment and recovery of F-gases. In 2011, the EU Commission contracted the Öko-Recherche research institute in Germany to produce a preparatory study, in part to assess the effectiveness of the existing F-Gas Regulation and also to advise on future amendments to the Regulation. This study found that even with full implementation of the existing F-Gas Regulation, annual F-gas emissions in the EU would actually increase by over 7% between 2008 and 2050, from 103,104 to 110,824 kt CO2e yr-1 respectively (Schwarz et al., 2011, p.158). This runs in stark contrast with the UK’s obligation under the Climate Change Act 2008 (which underpins the UK Carbon Budgets) to reduce GHG emissions by 80% by 2050, compared with a 1990 baseline.

4. Future EU Policy

Following the Öko-Recherche study, in November 2012 the EU Commission released a proposal for a revised F-Gas Regulation (EC, 2012a). Amendments to this Regulation will go to a vote in the plenary session of the European Parliament in late 2013 and the associated ENVI Committee voted in June 2013 to support bans on new HFC-based equipment in a wide range of sectors, in recognition of the fact that safe, cost-effective and energy efficient alternatives are already available. The Lithuanian presidency and Member States intend to have several ‘Working Party on International Environment’ (WPE) meetings throughout 2013 on the existing proposals, in order to determine the EU Council’s position. During this stage, it is essential that the UK’s position (coordinated via Defra) fully takes into account the scientific and technological evidence available.

5. Introducing Bans on New Equipment in the F-Gas Regulation

The EU Commission’s own preparatory study showed that new HFC equipment bans1 can be implemented in all the key sectors by 2020 (Schwarz et al., 2011, p.264), being replaced instead with technologies that rely on greener cooling chemicals including CO2, hydrocarbons or ammonia, all of which possess much lower (or zero) GWPs than HFCs. Such bans form part of the key amendments proposed by the European Parliament (and agreed by the ENVI Committee) as changes to the existing Regulation and it is important to note that Schwarz et al.’s analysis restricted possible alternatives to HFC equipment to technologies that exhibit equal (or better) life-cycle energy efficiency ratings and are proven to be safe. Bans on new equipment using HFCs provide chemical producers, manufacturers and end-users with genuine regulatory certainty. They send clear market signals with concrete timeframes for companies and investors in each subsector, spurring the necessary planning and capital investments. Furthermore their use is historically proven, with bans having been integral policy tools to enable the phase-out of ozone depleting substances under the Montreal Protocol.

6. SMEs and the Green Economy

The EU Commission’s impact assessment on the review of the existing Regulation found that a “strengthened policy approach… …would provide opportunities for small innovative companies,” particularly if “bans of production, use or placing on the market of F-gases in certain applications” were included (EC, 2012b, p.44). In the UK alone, there are over 40 SMEs providing HFC-free solutions to the country’s refrigeration and air conditioning needs, including manufacturers, component suppliers, contractors, installers, and research & training institutes (Shecco, 2012, pp.156–165). Encouraging this shift towards HFC-free technologies—through introducing bans on new equipment where safe, energy efficient and cost-effective alternatives exist—would benefit these SMEs by providing them with policy certainty and support the green economy, avoiding locking the UK into unnecessarily high future F-gas emissions. In the current economic climate, clear market direction is needed to enable our green economy to flourish. Some companies have warned that without bans there will not be enough certainty to invest in low-GWP technology production. Additionally, the associated reduction in HFC emissions would provide the UK with added flexibility in the way that it chooses to implement its Carbon Budget objectives. In short, introducing bans on certain HFC equipment represents an easy win for UK SMEs and well as the UK’s climate objectives more broadly.

7. UK Government Position on Bans

The UK’s current position on the review of the F-Gas Regulation, headed by Defra, includes a misconception that additional bans will place an unfair burden on UK industry and entail disproportionate costs. In reality, failing to introduce bans for sectors in which alternatives are readily available—such as for commercial refrigeration equipment—would actually guarantee the continued market dominance of American and Japanese multinationals at the expense of UK SMEs. In the commercial refrigeration sector, Waitrose has committed to phase out HFCs in new and existing equipment by 2020, with Sainsbury’s, Marks & Spencer and The Co-operative set to follow suit by 2030 (EIA, 2012). Supporting this, Richard Benyon MP, Parliamentary Under-Secretary of State for Defra, recently claimed that “Restrictions on HFCs in commercial refrigeration equipment would provide market opportunities for manufacturers of natural refrigeration equipment” (Hansard, 2012). As the real-world experience of UK retailers and the Öko-Recherche study carried out on behalf of the EU Commission show, switching away from HFCs can lead to significant cost savings over the lifetime of refrigeration and cooling equipment. As the market develops and widespread applications of alternative technologies generate economies of scale, costs will fall even further whilst energy efficiency gains are likely to increase.

8. Recommendations for Action

As one of the more influential Member States, the UK’s willingness to push for an effective policy at EU level will be crucial to ensuring that the EU’s domestic ambition complements its progressive position at international level. It is important to note that failure to address F-gases meaningfully at EU level will have a hugely detrimental impact on talks currently taking place within the Montreal Protocol and UNFCCC. The UK should follow the example of progressive Member States such as Germany, France and Denmark, who have made clear their preference for sector bans on HFCs and have flourishing domestic alternatives industries. Implementing feasible bans on new equipment containing HFCs would strengthen the UK’s overall Carbon Budgets as such bans represent an easy win for emissions reductions, whilst supporting SMEs and the green economy.

9. Assisted Questions/Topics to Raise with the CCC and DECC

(a)In the context of the UK government reviewing the Carbon Budgets in 2014, do you recognise that HFC reductions offer a least-cost opportunity if they are banned in sectors where climate-friendly, cost-effective, safe and proven technologies already exist?

(b)Given the need to stimulate the green economy and find cost-effective emissions reductions, would you support the introduction of placing on the market restrictions (bans) on HFCs in sectors where numerous independent studies have shown low GWP alternatives to be cost-effective, safe and energy efficient?

(c)Do you recognise that placing on the market restrictions (bans) on HFCs provides UK-based green technology equipment manufacturers with opportunities for growth?

References

CCC (Committee on Climate Change), 2013, Other non CO2 factsheet, UK, available: http://www.theccc.org.uk/publication/other-non-co2/.

CCC (Committee on Climate Change), 2010, The Fourth Carbon Budget: Reducing emissions through the 2020s, UK, available: http://www.theccc.org.uk/publication/the-fourth-carbon-budget-reducing-emissions-through-the-2020s-2/.

Defra (Department for Environment, Food and Rural Affairs), 2012, Guidance: F Gas and Ozone Regulations—Information Sheet GEN 2: Fluid Uses, UK, available: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/182571/fgas-gen2-fluid-uses.pdf.

EC (European Commission), 2012a, Proposal for a regulation of the European Parliament and of the Council on fluorinated greenhouse gases: COM(2012) 643, available: http://ec.europa.eu/clima/policies/f-gas/legislation/documentation_en.htm.

EC (European Commission), 2012b, Impact Assessment: Review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases, available: http://ec.europa.eu/clima/policies/f-gas/legislation/docs/swd_2012_364_en.pdf.

EIA (Environmental Investigation Agency), 2012, Chilling Facts IV: HFC-Free Cooling Goes Mainstream, available: http://www.eia-international.org/wp-content/uploads/EIA_ChillFactsIV_FINAL_lo-res.pdf.

Gschrey, B. and Schwarz, W., 2009, Global Projection of F-gas Emissions Shows High Increase Until 2050, available: http://www.umweltbundesamt.de/produkte/dokumente/Flyer_F_gase_global.pdf.

Hansard, 2012, UK Commons Debates—Written Answers: Refrigeration—Job Creation, available: http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm130603/text/130603w0004.htm#13060415001768.

IPCC (Intergovernmental Panel on Climate Change), 2000, IPCC Special Reporton Emissions Scenarios: Summary for Policymakers, available: http://www.ipcc.ch/pdf/special-reports/spm/sres-en.pdf.

Schwarz, W., Leisewitz, A., Gschrey, B., Herold, A., Gores, S., Papst, I., Usinger, J., Colbourne, D., Kauffeld, M., Pedersen, H. and Croiset, I., 2011, Preparatory study for a review of Regulation (EC)

No 842/2006 on certain fluorinated greenhouse gases: Prepared for the European Commission in the context of Service Contract No 070307/2009/548866/SER/C4, available: http://ec.europa.eu/clima/policies/f-gas/docs/2011_study_en.pdf.

Shecco, 2012, Natural Refrigerants Market Growth for Europe, available: http://guide.shecco.com/GUIDE-Natural-Refrigerants-Europe-2012.php.

UNEP (United Nations Environment Programme), 2011, HFCs: A Critical Link in Protecting Climate and the Ozone Layer—UNEP Synthesis Report, available: http://www.unep.org/dewa/Portals/67/pdf/HFC_report.pdf.

Velders, G., Fahey, D., Daniel, J., McFarland, M. and Anderson, S., 2009, The Large Contribution of Projected HFC Emissions to Future Climate Forcing, Proceedings of the National Academy of Sciences, 10:1073, available: http://www.pnas.org/content/early/2009/06/19/0902817106.abstract.

20 June 2013

1 EIA’s call for bans only affects new equipment and does not extend to existing equipment

Prepared 3rd October 2013