This document is an excerpt from the EUR-Lex website
Document 52012SC0364
COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL on fluorinated greenhouse gases
COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL on fluorinated greenhouse gases
COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL on fluorinated greenhouse gases
/* SWD/2012/0364 final */
COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL on fluorinated greenhouse gases /* SWD/2012/0364 final */
TABLE OF CONTENTS 1........... Background.................................................................................................................... 1 2........... Procedural issues and
consultation of interested parties.................................................... 3 2.1........ Consultations of other Commission
Services.................................................................... 3 2.2........ External expertise........................................................................................................... 3 2.3........ Stakeholder consultation and
conference......................................................................... 4 2.4........ Scrutiny by the Commission Impact
Assessment Board................................................... 6 3........... Problem definition........................................................................................................... 7 3.1........ The problem that requires action..................................................................................... 7 3.2........ Underlying drivers of the problem.................................................................................... 9 3.3........ Evolution of the problem in the
EU................................................................................ 10 3.4........ Who is affected, in what ways and
to what extent?........................................................ 12 3.5........ EU right to act.............................................................................................................. 13 4........... Objectives.................................................................................................................... 14 4.1........ General policy objectives.............................................................................................. 14 4.2........ Specific policy objectives.............................................................................................. 14 4.3........ Operational policy objectives........................................................................................ 14 4.4........ Consistency with other policies
and objectives............................................................... 15 5........... Policy options............................................................................................................... 15 5.1........ Policy option A: No policy change
at EU level (baseline option)..................................... 15 5.2........ Policy option B: Voluntary
agreements by industry (non-regulatory)............................... 16 5.3........ Policy option C: Extended scope
of containment measures............................................. 16 5.4........ Policy option D: Establishment of
a phasedown mechanism for placing HFCs on the EU market 17 5.5........ Policy option E: Bans of
production, use or placing on the market of F-Gases in certain applications 19 5.6........ Combination of policy options....................................................................................... 20 5.7........ Options discarded from further
analysis......................................................................... 20 6........... Analysis of impacts....................................................................................................... 22 6.1........ Environmental impacts.................................................................................................. 22 6.1.1..... Approach used............................................................................................................. 22 6.1.2..... GHG emission reductions.............................................................................................. 23 6.1.3..... Ecotoxicity................................................................................................................... 25 6.2........ Economic impacts......................................................................................................... 25 6.2.1..... Abatement costs and direct costs
to industry................................................................. 26 6.2.2..... Impacts on sectors........................................................................................................ 27 6.2.3..... Administrative costs...................................................................................................... 35 6.2.4..... Impacts on regions........................................................................................................ 37 6.2.5..... Impacts on the functioning of the
internal market and competition................................... 38 6.2.6..... Impacts on competitiveness, trade
and investment flows................................................. 38 6.2.7..... Third countries and international
relations....................................................................... 42 6.2.8..... Impacts on consumer prices.......................................................................................... 43 6.2.9..... Impacts on innovation and research............................................................................... 43 6.2.10... Impacts on small and medium
enterprises (SMEs: see also Annex III)............................ 44 6.3........ Social impacts.............................................................................................................. 45 6.3.1..... Employment impacts and labour
market........................................................................ 45 6.3.2..... Safety, occupational and health
risks............................................................................. 48 7........... Comparing the options.................................................................................................. 49 8........... Monitoring and evaluation............................................................................................. 52 ANNEX I: Glossary of Terms..................................................................................................... 54 ANNEX II: Stakeholder Consultations........................................................................................ 57 1........... Conference Report on Stakeholder
Meeting in Brussels, 13 February 2012................... 57 1.1........ Conference Objectives................................................................................................. 57 1.2........ Summary of Presentations and
Interventions.................................................................. 57 1.3........ Concluding remarks...................................................................................................... 61 1.4........ Agenda of meeting........................................................................................................ 63 1.5........ Registered Participants.................................................................................................. 64 2........... Executive Summary of the
Analysis of the On-Line Stakeholder Consultation................. 70 2.1........ Participation................................................................................................................. 70 2.2........ Methodology................................................................................................................ 70 2.3........ Policy action addressing F-gas emissions....................................................................... 71 2.4........ Impacts of policy options.............................................................................................. 71 2.5........ General Conclusions..................................................................................................... 72 ANNEX III: Consultations of SMEs........................................................................................... 73 ANNEX IV: Background Information on the
Business as Usual Scenario (No Further Action – Option A) 79 1........... F-Gas Emissions........................................................................................................... 79 2........... The Model AnaFgas..................................................................................................... 81 3........... HFC demand and emissions in
EU-27 until 2050 for different sectors............................ 82 4........... F-Gas sources currently not
addressed by EU legislation............................................... 85 ANNEX V: Technical Assessment of
Environmental Impacts....................................................... 86 1........... Emissions for Policy Options B,
C, D, E vs. Baseline (Option A)................................... 86 2........... Replaced units in each sector As
a result of Policy Options B, C, D and E in 2030......... 91 ANNEX VI: Assessment of cost impacts on
sectors (Competitiveness proofing).......................... 93 1........... Abatement and direct costs........................................................................................... 93 2........... Abatement cost curve................................................................................................... 96 3........... Investment and Service costs, employment effects......................................................... 96 4........... Impacts on service companies..................................................................................... 100 ANNEX VII: Detailed results of Screening of
Policy Options..................................................... 102 1........... Discarded policy options............................................................................................. 102 2........... Discarded sub-options of policy
options B, C, D and E............................................... 103 3........... Screening of sub-options for
Policy options B, C, D & E............................................. 106 ANNEX VIII: Sensitivity Analysis of Cost
Estimation................................................................ 124 1........... General...................................................................................................................... 124 2........... Option B "Voluntary
agreements in certain HFC applications"...................................... 125 2.1........ Effects of prices for unsaturated
HFCs........................................................................ 125 2.2........ Effects of discount rate................................................................................................ 126 2.3........ Conclusions................................................................................................................ 127 3........... Option D "Quantitative
limits for the Placing on the Market of certain HFCs"................ 128 3.1........ Effects of prices for unsaturated
HFCs........................................................................ 129 3.2........ Effects of discount rate................................................................................................ 129 3.3........ Conclusions................................................................................................................ 130 4........... Option E "Ban the placing
on the market of certain open and closed applications of F-Gases" 131 4.1........ Effects of prices for unsaturated
HFCs........................................................................ 132 4.2........ Effects of discount rate................................................................................................ 132 4.3........ Conclusions................................................................................................................ 133 ANNEX IX: Model Description of the EmIO-F
Europe Input-Output model and Sensitivity Analysis of Employment impacts..................................................................................................................................... 134 1........... Introduction................................................................................................................ 134 2........... The Input-output model............................................................................................. 134 3........... Sensitivity analysis of
employment impacts................................................................... 138 ANNEX X: Mechanism for the Placement of HFCs
on the EU Market...................................... 141 1........... Introduction and Summary.......................................................................................... 141 2........... Scope........................................................................................................................ 142 2.1........ Coverage of substances.............................................................................................. 142 2.2........ HFCs to be specified individually
in a list..................................................................... 142 2.3........ Considered alternative(s)............................................................................................ 143 2.4........ Coverage of mixtures/preparations.............................................................................. 144 2.5........ Recovered, recycled and reclaimed
HFC.................................................................... 144 3........... Activities subject to
quantitative restrictions................................................................. 144 3.1........ HFCs in imported equipment...................................................................................... 144 3.2........ Options for taking measures on pre-charged equipment............................................... 153 3.3........ Export of products containing
HFCs........................................................................... 155 3.4........ Sectors covered......................................................................................................... 156 4........... Reduction schedule for a
phasedown for placing HFCs on the market.......................... 156 5........... Implementation mechanism and
quota allocation.......................................................... 164 5.1........ Quota allocation – allocation
through grandfathering or auctioning................................ 164 5.2........ Grandfathering or allocation on
demand....................................................................... 165 5.3........ Determination of the baseline....................................................................................... 166 5.4........ Treatment of exports................................................................................................... 166 5.5........ Implementation and required data................................................................................ 166 5.6........ Transferability of quotas.............................................................................................. 167 5.7........ Administrative costs for
companies.............................................................................. 168 6........... Monitoring, reporting and verification.......................................................................... 168 6.1........ Reporting................................................................................................................... 168 6.2........ Verification................................................................................................................. 170 6.3........ Compliance and enforcement...................................................................................... 171 ANNEX XI: Schedule for the Introduction of
Bans.................................................................... 173 ANNEX XII: Analysis of Administrative Costs.......................................................................... 174 1........... Methodology.............................................................................................................. 174 2........... Policy Option A: No policy
change............................................................................. 176 3........... Policy Option B: Voluntary
Agreements...................................................................... 176 3.1........ Overview of information
requirements for the option of voluntary agreements............... 177 3.2........ Annual report on HFC use.......................................................................................... 180 3.3........ Independent verification of HFC
use reports / submission to trade association / monitoring institution 183 3.4........ Annual monitoring report to EU................................................................................... 184 3.5........ Communication with stakeholders............................................................................... 187 3.6........ Summary of administrative costs
of voluntary agreements............................................. 189 4........... Policy Option C: Extended Scope
of containment measures......................................... 190 5........... Policy Option D: Establishment
of quantitative limits for placing certain F-Gases (HFCs) on the EU market
(phasedown).............................................................................................................. 190 5.1........ Overview of information
requirements for the phasedown option.................................. 190 5.2........ PD03 - Registration in F-Gas
database....................................................................... 199 5.3........ PD04 - Submission of verified
baseline report............................................................. 202 5.4........ PD05 - Verification of baseline
report......................................................................... 203 5.5........ PD18 - Report (Art. 6) on placing
on the market, import & export, reclamation, recycling & destruction 204 5.6........ PD 19 – Verification of Reporting
& submission to MS or central authority.................. 206 5.7........ PD 30 – Reporting on reclamation
and destruction...................................................... 207 5.8........ Summary of administrative cost of
the phasedown option............................................. 211 6........... Policy Option E: Regulatory Bans................................................................................ 212 6.1........ Overview of information
requirements for the ban option.............................................. 213 6.2........ B02 - Carry out audits/inspections.............................................................................. 215 6.3........ B 03 – MS reports on
implementation......................................................................... 218 6.4........ Summary of administrative cost of
the ban option......................................................... 220 ANNEX XIII: Questionnaire assessing
Administrative Costs of Stakeholders............................. 221 1........... Introduction................................................................................................................ 221 2........... General guidance to the users...................................................................................... 222 3........... Questionnaire addressing
companies with experience under the ODS Regulation.......... 225 4........... Questionnaire addressing
reclamation and/or destruction facilities currently not covered by reporting
obligations.................................................................................................................................. 226 5........... Questionnaire addressing MS
authorities with experience in F-Gas bans....................... 227 6........... Questionnaire addressing MS
competent authorities under the ODS regulation............. 228 7........... Questionnaire addressing
companies currently falling under reporting requirement in the F-Gas regulation 229 8........... Questionnaire addressing trade
associations experienced with a voluntary agreement (VA) 231 ANNEX XIV: Macroeconomic Analysis of F-Gas
Policies with GEM-E3................................ 233 1........... Methodology.............................................................................................................. 233 2........... Scenarios................................................................................................................... 233 3........... Detailed results........................................................................................................... 235 ANNEX XV: Differences between the EmIO-F and
the GEM-E3 model................................... 240 Annex XVI: State and potential of technology
in the different sectors.......................................... 241 1........... Common technology by sectors.................................................................................. 241 2........... The market potential of
abatement technology............................................................. 243 2.1........ Selection of sector abatement options.......................................................................... 243 2.2........ Energy efficiency......................................................................................................... 243 2.3........ The concept of penetration rates................................................................................. 243 2.4........ Constraints to market penetration................................................................................ 244 2.5........ Determination of penetration
rates............................................................................... 246 2.6........ Combination of penetration rates
(“penetration mix”)................................................... 247 2.7........ Key abatement options by sectors............................................................................... 249 Annex XVII: Assesment of indirect impacts on
sales.................................................................. 255 1. Background Hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6), commonly called
fluorinated gases or "F-Gases", are very potent greenhouse gases (GHG)
whose climate impact is up to 23.000 times higher than CO2. Their
emissions are therefore covered by the Kyoto Protocol. Currently, they account
for 2% of the GHGs in the EU. In 2010, 98% (by weight) of F-Gases placed on the
EU market were HFCs, 2% was SF6 and about 0.3% were PFCs. F-Gases are
commodities used in a large variety of products and equipment including
refrigeration, air conditioning (AC), insulation foams, electrical equipment,
aerosols and fire protection. Most F-Gases have been developed by industry
specifically to replace ozone-depleting substances (ODS) that are being phased
out under the Montreal Protocol and for this reason F-Gases are being
increasingly used at world-wide scale. Whereas other GHG
emissions are mainly a by-product resulting from production processes, heating
or transport, F-Gas emissions primarily occur either during emissive uses (e.g.
as aerosol or solvent) or due to leaks during the use period and improper waste
treatment of products and equipment.[1] In order to limit
the rapid growth of F-Gas emissions and contribute to the Kyoto target, the EU
adopted in 2006 –
a Regulation focusing on preventing leakage
during use ("containment") and at end of life of (mostly) stationary
equipment as well as a limited number of F-Gas bans in narrowly defined niche
application areas ("F-Gas Regulation")[2], and –
a Directive introducing restrictions on the use
of F-Gases with a global warming potential (GWP) above 150 in AC systems of new
motor vehicles ("MAC directive")[3]. There are two ways of
reducing F-Gases emissions from equipment and products. First, the use of F-Gases
in applications can be completely avoided or replaced by F-Gases with a lower
GWP and secondly, emissions during the use period or at the end of life of
products and equipment can be reduced. Except for the MAC Directive, which
focuses on AC in new passenger cars only, existing EU F-Gas legislation barely
discourages the use of highly climate-relevant F-Gases. On the other hand,
alternative substances to F-Gases can be used in nearly all fields of
application and are readily available already today.[4],[5] Annex XVI gives a sector-by-sector
overview over available alternative technologies and by what time 100% of
applications in each sector can be fully replaced by safe and energy-efficient
alternatives based on today`s technologies.[6] In some Member
States national legislation exists. By way of example, the Danish legislation
bans the use of F-Gases for certain purposes and includes F-Gas taxation and
support for R&D of alternative technology. As a result, the import of bulk F-Gases
was reduced to a third between 2000 and 2010 and Danish emissions of F-Gases
have been declining in recent years, while emissions are rising at EU level.[7] Austria has similarly maintained additional bans on specific
appliances using HFCs. In September 2011
the Commission published a report on the application, effects and adequacy of
the existing F-Gas Regulation[8]. It concluded that there is scope for further action to reduce
emissions from F-Gases in the EU, in particular by avoiding the use of F-Gases
where alternative technologies with no or lower impact on climate change exist.
A decrease of up to two-thirds of today's emissions by 2030 is cost-effective
due to the availability and maturity of alternatives in many sectors.[9] However, policies in this area have to address a high level of
complexity. Apart from taking into account the large variety of products and
equipment using F-Gases, the feasibility and cost-effectiveness of reducing
emissions in specific application areas may depend on e.g. equipment size and where
it is intended to be used. In this context energy efficiency and safety require
particular attention. In September 2011
the European Parliament adopted a Resolution[10] stating that "fast-action regulatory strategies are
available to phase down production and consumption of HFCs [..]" and
urged the "Commission to come forward with a revision of F-Gas
regulations and make proposals for a rapid phasedown of the production and
consumption of HFCs". In March 2012 this position was reaffirmed in
the Parliament's resolution[11] on the 2050 Roadmap, calling for an ambitious proposal to reduce
emissions of F-Gases by the end of 2012. The EU is clearly at
the forefront internationally as regards the phasing out of ODS under the
Montreal Protocol and in addressing the resulting F-Gas problem through
legislation. However, the EU is not at all alone in calling for urgent action
on F-Gases: In 2009, 2010, 2011 and 2012 several Parties to the Montreal
Protocol including the US submitted proposals to phasedown supply and
consumption of HFCs globally, which is supported by at least 108 countries[12]. Such action is
projected to avoid, in a cost-effective way, more than 100 Gigatonnes of CO2
equivalents (CO2eq) by 2050[13]. For perspective, this cumulative figure is roughly 3-4 times the
total annual anthropogenic CO2 emission at this point in time. The
EU has supported these proposals as a complement to climate mitigation action
under the United Nations Framework Convention on Climate Change (UNFCCC).[14] So far little progress has been achieved in the negotiations since,
inter alia, China, India and Brazil have refused to discuss this issue
under the Montreal Protocol. However, recently a new initiative called
"Climate and Clean Air Coalition to Reduce Short-Lived Climate
Pollutants" has been launched which calls for action on HFCs as one of
five priority focal areas and is quickly gaining momentum.[15] This initiative
has been joined/endorsed so far by Bangladesh, Canada, Colombia, Ghana, Japan,
Mexico, Nigeria, Norway, Sweden, the USA, as well as EC, World Bank, UNEP and most
recently the G8 countries. More countries have already expressed their interest
in joining. 2. Procedural
issues and consultation of interested parties 2.1. Consultations
of other Commission Services This Impact
Assessment for the review of the F-Gas Regulation (Agenda Planning
2012/CLIMA/003) was developed by DG CLIMA in close co-operation with relevant
Commission Services. The following DGs were invited to an Interservice Steering
Group: COMP, EMPL, ENER, ENTR, ENV, JRC, LS, MOVE, RTD, SANCO, SG, TAXUD and
TRADE. This group met eight times from April 2010 to March 2012 where it
provided input to a preparatory study as well as the follow-up work and the
drafting of the impact assessment. DG JRC was asked to carry out a
comprehensive macro-economic analysis of possible policy options with the
GEM-E3 model (Annex XIV). The final meeting on the draft Impact Assessement on
29 March 2012 was attended by CLIMA, ENER, ENTR, JRC and SG. Written comments
to this meeting were provided by SANCO and TRADE. 2.2. External
expertise DG CLIMA
commissioned the following studies to underpin the review: (1)
A comprehensive study was carried out by a
consortium led by Öko-Recherche ("preparatory study").9
This study inter alia assessed the effectiveness of current policies,
the feasibility and cost-effectiveness of the replacement of F-Gases in all
main application areas (see Annex XVI), and discussed options for further
action to reduce F-Gas emissions. The analysis was based on a thorough bottom-up
analysis, involving the development of a model based on market data, including
production, import, exports and sales, for both substances and
products/equipment (referred to as AnaFgas model, Annex IV). The study assumes
a conservative approach using today`s costs for alternatives and considering only
available, safe and energy-efficient technologies. Future reductions in
investment costs that are expected from economies-of-scale and
learning-by-doing were not factored into the analysis. This study forms the
main evidence base for this impact assessment. (2)
As a follow-up to the preparatory study, a
consortium led by Öko-Institut assisted DG CLIMA in further refining the social
and economic effects of the most promising policy options considered for a
review, and examining in more detail the possible design of the option to set
quantitative limits for the placing on the market of F-Gases in the EU. (3)
A complementary study on policy options for the
management and destruction of ozone-depleting substances and F-Gases contained
in equipment and products (so-called "banks") was carried out by SKM
ENVIROS.[16] Three other large
and relevant studies by other parties were used for the drafting, thus
reinforcing the validity of the results presented in this document. A study commissioned
by EPEE (a European umbrella group representing members who produce, design and
install heating, cooling and refrigeration technologies), was carried out by
Armines/ERIE[17] and estimated the timeframe and feasibility of introducing gases
with lower GWP. Secondly, a study published by the German Umweltbundesamt4
examined the availability of alternatives and their appropriateness in the
individual sectors. Finally, the Technical and Economic Assessment Panel (TEAP)
of the Montreal Protocol published a report5 on the assessment of
alternatives at global level. In addition, DG
CLIMA set up an expert group consisting of 47 experts from different industrial
sectors (24 high-level representatives), Member States (20 nominated a
representative), and NGOs (3) to provide guidance and technical input to the
preparatory study. The group met twice between October 2010 and May 2011 and
provided written advice to DG CLIMA in the preparatory phase of the review. 2.3. Stakeholder
consultation and conference An internet-based
consultation was open to individuals and organisations on the website of DG
CLIMA from 26th September to 19th December 2011. 261
replies were obtained, of which 164 came from organisations. 75% of the latter were
related to industry (see Fig.1). Less than 2% of these stakeholders chose the
option "no further action" in response to a question on the most
appropriate action at EU level to contribute to reducing GHG emissions in the
absence of global action on HFCs. Fig. 1: Respondents to the on-line stakeholder consultation
representing organisations The findings of the
consultation were presented at an open stakeholder conference[18] on 13 February
2012, which was attended by over 130 participants from industry, Member States,
NGOs and the European Parliament. This meeting gave participants ample time and
opportunity to deliver feedback and state their views regarding options for
reviewing the Regulation. Almost all stakeholders agreed there was a need for
further action on F-Gases compared to the status quo. A large majority of
industry preferred or could live with a phasedown of supply of F-Gases as it
would allow industry flexibility in cases where alternative technologies were
not considered suitable. Bans were considered to be too rigid by those industry
players relying on F-Gas technology, while NGOs and industrial participants
engaged in alternative technologies considered cost-effective bans to be
essential and saw a phasedown as a complementary measure to bans. A few
participants preferred to focus on better application of the current Regulation
only. Member States had no official positions yet, but indicated support for a phasedown
measure (see Annex II). The consultations involved a large number of
organisations and umbrella groups. At least 47 stakeholders out of 161 consulted
represented the views of SMEs (see Annex III). Industrial users of F-Gas
equipment such as FoodDrinkEurope, representing many SMEs, wanted reassurance
that existing equipment is not made redundant. Subsequently, a
number of European Protection Agencies have positioned themselves on the
review, considering that the preparatory study8 is an appropriate
basis for further action, especially as energy efficiency and economic impacts
are already taken into account in the analysis. They recommend a mixture of
measures based on a phasedown drawing on the experience of the ODS phase-out,
and additional bans.[19] Given these
extensive consultations and expert involvement, DG CLIMA exceeded the European
Commission's minimum consultations standards in the process of drafting this
Impact Assessment. 2.4. Scrutiny
by the Commission Impact Assessment Board The Impact
Assessment Board of the European Commission assessed a draft version of the
present impact assessment and issued its opinion on 25/05/2012. The Impact
Assessment Board made several recommendations and,
in the light of the latter, the final impact assessment report: –
Describes the wider policy context in more
detail, in particular as regards the context of the roadmap (see section 3.1),
the alternatives available (see 1 & Annex XVI), the most affected interests
(see e.g. 3.4, 6.2.2 and summary table 7), as well as the international context
(see 1); –
Clarifies the objectives and their link to concrete
monitoring indicators (see 4.3, 8); –
Gives more detail on the policy options (section
5.1-5.5), especially the mechanism of a phasedown (see 5.4, Annex X); –
Clarifies the assessment of impacts on
competitiveness, SMEs, consumers, employment, health and safety, as well as the
effects on market players, distributional and regional effects i.e. by
providing more detail on costs by sector in section 6.2.2 and Table 3, by extending
the competitiveness impact section 6.2.6 and addressing price impacts for consumers
for the affected products; –
Adds views of stakeholders throughout the text. 3. Problem
definition 3.1. The
problem that requires action The 4th Assessment Report of the
Intergovernmental Panel on Climate Change (IPCC) stated that developed
countries would need, on the basis of existing science, to reduce GHG emissions
by 80 to 95% below 1990 emissions by 2050 to achieve the objective of limiting
global climate change to a temperature increase of 2˚C and thus avoid
undesirable climate effects.[20] To reach this target, the European Commission (EC) has laid out a cost-effective
pathway to achieve the necessary overall emission reductions in the EU by 2050.[21] This low carbon roadmap establishes the necessary sectoral
contributions in 6 areas consistent with an 80% EU reduction in GHG in 2050 on
the basis of 1990, namely the power sector, residential & tertiary,
industry, transport, non-CO2 agriculture and other non-CO2
sectors. To achieve the climate objective at lowest costs, non-CO2 emissions
(including F-gases but excluding non-CO2 from agriculture) should be
reduced between 72-73% by 2030 and 70%-78% in 2050, compared to 1990 levels. If
based on the reference year 2005, the roadmap requires a reduction in non-CO2
emissions (except agriculture) of 60-61% by 2030.[22] F-gases emissions were estimated at 90 Mt CO2eq in 2005
(see Annex IV). A 60% reduction implies that emissions would have to be reduced
to a level of 35 Mt CO2eq by 2030. Given estimated levels of 104 Mt
CO2eq emission in 2030 based on a full application of current
legislation, this would mean a further decrease of ca. 70 Mt CO2eq
is required. The roadmap shows that to be cost-effective the marginal costs of
abating emissions should not be higher than ca. €50/t CO2.[23] F-Gases, generally, are very potent GHGs
with high to very high GWPs of up to several thousand times that of CO2.[24] F-Gases are used
in a large variety of products and equipment including refrigeration, AC, foams,
electrical equipment, aerosols and fire protection (Fig. 2); there are 28
diverse main application areas (Fig. 6). Fig. 2: Sectors using F-gases
in new equipment/products in the EU. 2010 data reported under the F-Gas
Regulation Fig. 3: Global
estimated consumption of HFCs in CO2eq by various sectors. Rapid
growth after 1990 is clearly evident. HFCs constitute the largest quantitative
percentage of all F-Gases. Source: UNEP25 With the successful phase-out of ODS, the
production and use of F-Gases as ODS replacements has been growing strongly in
recent years (see Fig. 3 for HFCs, the bulk of F-Gases) and will eventually
lead to considerable emissions into the atmosphere, with the potential to
substantially influence climate in the future.[25] To better
appreciate the significance: Future HFC emissions could be equivalent to 18-45%
of CO2 emissions based on the IPCC's "450ppm CO2
emissions pathway"-scenario by 2050.25 Since equipment and
products containing F-Gases have a long lifetime of up to 50 years (e.g.
building insulation foams), a lack of public intervention today would result in
higher emissions up to several decades into the future. In 2010, emissions from F-gases in the EU were
estimated to be ca. 110 million tonnes (Mt) CO2eq8,
corresponding to ca. 2% of all GHG emissions. Alternatives to F-Gases exist in
many applications4,5, at costs well below 50€ per tonne
CO2 abated9 (Annex XVI). In fact, 95% of the overall
reduction potential of HFCs (without motor vehicles) can be reached at
abatement costs lower than 20€ per tonne CO2. Analysis shows further
that F-Gas emissions could be reduced cost-efficiently by more than two-thirds
by 20309 (see also Fig. 7 below), which would amount to cumulated
emission savings of ca. 625 Mt CO2eq. in the period from 2015 until
2030.[26] If reductions in F-Gas emissions will
not contribute to the EU 2050 climate targets in a consistent manner, the EU will
either risk missing these targets altogether or would have to require more
expensive emission reductions in other industrial sectors. A two-thirds reduction of emissions by 2030 would also be fully
compliant with proposals made in the international context of the Montreal
Protocol by Micronesia and North-American states (US, Canada, Mexico), thus
preparing Europe for a potential international agreement. EU action on F-Gases
would also strongly support recent climate action at international level
promoted by the "Climate and Clean Air Coalition to Reduce Short-Lived
Climate Pollutants". 3.2. Underlying
drivers of the problem –
Phasing out of ozone-depleting substances
(ODS) under the Montreal Protocol: In order to
phase-out ODS, the Montreal Protocol controls their production and consumption.
As the choice of alternatives to ODS[27] is not regulated, a shift towards the production and use of F-Gases
is taking place world-wide. –
Increasing use of F-Gas containing equipment
and products: The most relevant uses for F-Gases
are in refrigeration & AC (RAC[28]), foams, aerosols and electrical equipment.[29] Many of these application areas, in particular the RAC, are expected
to grow strongly in the future9,[30]. This
higher demand is a result of economic growth and increasing life standards, a strive
for energy efficiency (e.g. heat pumps, foams) and, in the developing countries,
also population growth.25,[31] –
Today`s use are the emissions of the future: F-Gases are used in appliances such as RAC equipment that have
ordinary lifespans of 10-20 years for smaller and 20-30 years for larger
systems, throughout which leakage may occur, as well as at the end-of-life
treatment. Typical leak rates for larger equipment are 5-15% per year (but
smaller for hermetically sealed equipment such as domestic fridges: <1% per
year). Foams have lifetimes of 15 (if used in domestic appliances) to 50 years
(for building insulation), and emissions usually occur at end-of-life and thereafter
(e.g. from waste dumps). Recovery of F-gases from foams is rather costly. The
use of F-Gases in aerosols, as solvents and in electrical equipment mostly does
not create significant banks of potential emissions. Use in fire equipment does
create banks but leakage is very tightly controlled due to safety regulations.16 –
Demand for and innovation of alternative
technologies is hampered by market failures: Climate
effects of F-Gases are not factored into the price. Industry requires a clear
signal in order to switch towards investments into alternative technologies
(and to invest into R&D where still needed). Demand increase would also
lead to economies of scale for alternative equipment. The current absence of a
clear regulatory signal leads to a lower market penetration of green products
than would be optimal from a societal perspective. 3.3. Evolution
of the problem in the EU F-Gas emissions can
be prevented by avoiding their use in the first place and/or by reducing losses
during the lifetime and at the end of life of F-Gas containing equipment. The
current F-Gas Regulation mainly focuses on the latter. It includes provisions
on –
containment (preventing leakage of F-Gases from
stationary equipment) and recovery of F-Gases from end-of-life equipment (Art.
3/4); –
training and certification requirements for personnel
handling F-Gases (Art. 5); –
reporting in order to monitor the sales of
F-Gases (Art. 6); –
labelling of equipment containing F-Gases (Art.
7); and –
bans and market restrictions in a few niche
areas where superior alternatives were already common place (Art. 8 and 9). The
report8 on the application of the F-Gas Regulation showed that,
while these measures have the potential to reduce emissions, there are unfortunately
shortcomings in the current application of the training
and certification as well as the containment provisions, while compliance with Art. 6, 7, 8 and 9 was found to be satisfactory
or better. Training and certification apply to
approximately 600,000 persons and 66,000 companies (of which 98% in the RAC
sector), posing a challenge to Member States to swiftly implement the necessary
vocational training and certification systems in a timely manner, especially
where such systems had not existed previously. Consequently, in some sectors
more than 50% of personnel and companies had not been certified by 4 July 2011.
Compliance by companies with the schedules for leakage checks and the
obligation to install leakage detection systems was found to be unsatisfactory,
as there was low awareness among operators due to deficiencies in enforcement.
However, it must be noted that many of these shortcomings may be considered
initial effects, especially since some requirements became applicable only in
2011, allowing little time for proper application. There is also a growing
potential for recovery from systems containing F-gases in the coming years, as
such systems will be reaching their end of life. In the stakeholder
consultation, 84% of respondents expressed the view
that the current status quo of implementing the existing regulation was not
sufficient. While some stakeholders believed that better implementation would
suffice, others wanted to see further legal action. The MAC Directive introduced
restrictions on the use of F-Gases with a GWP above 150 in mobile AC of new
passenger cars. In other sectors, current legislation does little to support an
increased use of viable alternatives to F-Gases in new products and equipment. Potentially,
considerable emission reductions are achievable through
the existing F-Gas Regulation and MAC Directive.8 Assuming full
application of the two pieces of legislation, the total
emissions of F-Gases would stabilise around today's level of 110 Mt CO2eq
in the EU-27 as a result of existing EU policy (Fig.
4, solid line). Without any legislation, F-Gases emissions
in the EU would grow to over 200 Mt CO2eq in 2050 (Fig. 4: dotted
line), almost doubling today's levels (see Annex IV for
details). However, the observed shortcomings in the
application of the F-Gas Regulation risk undermining these projected benefits and,
if not sufficiently addressed, could lead to forfeiting 38 Mt CO2eq
of cost-efficient emission reductions, ending up at ca. 150 Mt CO2eq
in 2050. While it is important to step up efforts to ensure full compliance, observed
low compliance on existing containment measures is a further argument for also reducing
use of F-Gases in equipment in the first place. Furthermore, the SKM
study16 on F-Gas banks concluded that switching to alternatives is
key to addressing F-Gas emissions in the waste stream. Although improved
implementation of waste legislation can contribute to emission reductions, it
can only address an overall small proportion of the problem and cannot substitute
for measures addressing the origin of the problem. Fig. 4: Projections of F-Gas emissions in the EU with and
without the measures in the F-Gas Regulation and the MAC Directive. Source: Schwarz
et al. (2011)9 Last but not least,
a full application of the current F-Gas Regulation would at best achieve a
stabilisation of emissions, which is fully insufficient to reach the EU's
climate goals requiring a fair share reduction in the F-Gas sector of 60% by
2030, compared to 2005. Nor would the current Regulation be anywhere near
sufficient if an international agreement to phase down F-Gases is reached, on
the basis of the proposals currently on the table. Therefore, action to
complement the existing measures in the F-Gas Regulation is absolutely
essential. 3.4. Who
is affected, in what ways and to what extent? –
Climate change affects everybody. During the
first ten years of this millennium temperatures were the highest ever recorded,
confirming the finding of the IPCC that total temperature increased already by
0.76°C from 1850–1899 to the period 2001–2005[32]. Evidence is rising strongly that a warming of the climate results
in more frequent and more intense "extreme weather events".[33] –
The overall economy and non-F-Gas European
industries may suffer a loss of price competitiveness if they must abate
emissions at higher costs than possible within the F-Gas sector. –
Too little innovation and market penetration of alternative
technologies represent a missed opportunity to stimulate innovation, green jobs
and growth. Many of these "green growth" companies are SMEs[34], who find it hard to market their products under current market
conditions (see Annex II). –
The F-Gas sector comprises a number of different
market players who may be affected in different ways by any policy changes;
these players include producers of F-Gas, manufacturers of equipment,
electricity companies, service companies, importers and exporters, users of
equipment, the retail sector and raw material sectors (e.g. metals and
products). Currently, industrial sectors relying on F-Gases are affected in
different ways. While producers of F-Gases and of equipment and products are
only to a very limited extent subject to restrictions related to F-Gases, users
of F-Gas equipment are subject to the containment requirements. If more alternative
technologies were deployed, end-users of equipment could in several cases have
lower costs overall e.g. for small industrial refrigeration, which is relevant
for SMEs in particular. –
Emissions from F-Gases are covered by the
"Effort Sharing Decision" establishing annual binding GHG emission
targets for Member States for the period 2013–2020. Some Member States consider
that the current EU legislation does not provide sufficient tools to ensure
cost-effective reductions of F-Gas emissions. Therefore, several Member States
have adopted national laws that are more stringent than the EU legislation,
e.g. in Austria and Denmark the use of F-Gases for certain purposes is prohibited.
While such prohibitions have driven innovation, unilateral action is not
favoured by business and may pose challenges, in particular for SMEs. 3.5. EU
right to act The right for the
Union to act in this field is set out in Articles 191 and 192 of the Treaty on
the Functioning of the European Union (TFEU) which in Article 191 explicitly
refers to the objective of combating climate change as part of the Union policy
on the environment. Action in this field
also respects the principle of subsidiarity. Climate change is a transnational
issue and since the EU has a common emission reduction target, Union-wide
action is necessary. Such action can better be taken at EU level compared to
diverse actions taken at Member State level, thereby achieving a high degree of
environmental protection while also taken into account the need to minimise
distortions in the internal market by introducing a level-playing field for all
enterprises affected. Where appropriate the right of Member States is preserved
to implement some provisions, such as the training and certification
requirements or penalties, through provisions at Member State level taking into
account their national circumstances. 4. Objectives 4.1. General
policy objectives It is the general
objective of this initiative to contribute significantly to meeting the global
challenge of keeping climate change below 2º C of pre-industrial levels by
reducing GHG emissions in the EU by 80 to 95% in 2050 compared to 1990. This
target correspond to the necessary reduction levels identified by the Intergovernmental
Panel on Climate Change (IPCC) for developed countries and was endorsed both by
the Council and the European Council as the EU 2050 emission reduction target. 4.2. Specific
policy objectives It is the specific objective of this
initiative to contribute to the achievement of the EU 2050 reduction target by
reducing CO2eq-emissions from F-Gases in the EU, in particular by: –
discouraging the use of F-Gases with high GWP in
the EU where suitable alternatives exist; –
encouraging the use of alternative substances or
technologies when they result in lower GHG emissions without compromising
safety, functionality and energy efficiency, and achieving higher market shares
for these technologies; –
preventing leakage from equipment and proper end
of life treatment of F-Gases in applications; –
facilitating convergence towards a potential
future agreement to phase down HFCs under the Montreal Protocol; –
enhancing sustainable growth, stimulate
innovation and develop green technologies by improving market opportunities for
alternative technologies and gases with low GWP; –
creating efficient and proportionate mechanisms
for reaching the environmental objectives while limiting any undesirable
effects on SMEs and employment, the administrative burden for companies and
authorities, the abatement costs per tonne CO2 and preserving the competition
in the Internal Market, to the extent possible. 4.3. Operational
policy objectives Consistent with the specific and
general objective, the operational objective is to reduce F-Gas emissions in
the EU by 60% in 2030 compared to 2005. A second operational objective is to do
so in a cost-effective manner by taking consistent, and cost-efficient measures
(up to a maximum of 50€/t CO2eq), at reasonable costs to industry
and with minimum administrative effort. In addition, an upgrading of the
existing legislation through clarifications as well improving the
enforceability of legislation should contribute to achieving better implementation
and application of the legislation and contribute to achieving the objectives
above. 4.4. Consistency
with other policies and objectives The
objectives of this initiative are consistent with and reinforce the following
policies and objectives: –
The required emission reductions are consistent
with the pathway outlined in the 2050 EU Low Carbon Roadmap. The selected
sub-options are also cost-effective since they are estimated to have (marginal)
abatement costs of less than 50€/t CO2 by 2030; –
support to novel alternatives will help maintain
the competitiveness of the European economy and in particular support green
growth as demanded by the EU 2020 priority sustainable growth: building a more
competitive low carbon economy, protecting the environment and capitalising on
Europe's leadership in developing new green technologies[35]; –
improving the legislative text will ensure
simplification and clarification of existing policy to enable better
implementation in the spirit of better regulation[36]; –
measures are introduced to safeguard the
interests of SMEs along the "think small first" principle[37]; –
special attention is paid to impacts on energy
efficiency to ensure consistency in line with EU efforts of eco-design[38] and energy
efficiency[39]; –
taking action now at European level will lend
support to the negotiations for an international agreement under the Montreal
Protocol to phase down HFCs. 5. Policy
options 5.1. Policy
option A: No policy change at EU level (baseline option) This option includes
the existing legislation and assumes, in particular, full application of the
provisions of the F-Gas Regulation in all Member States and sectors. This
implies that current shortcomings are effectively addressed. 84% of respondents
to the online stakeholder survey thought the current status quo (i.e. existing
legal rules and implementation) was not sufficient. The steps to remediate
current shortcomings include rigorous persecution of non-compliance by Member
States as well as measures of encouragement at European level through non-legislative
actions such as awareness raising, exchange of best practices and assistance
which may take many shapes, e.g. the Commission is currently incorporating
labelling rules into the Integrated Tariff of the European Communities to
support Member States in enforcing the labelling provisions of the F-Gas
Regulation. Numerous suggestions were made by stakeholders during the on-line
survey, many of which require better control, policing and enforcement at
Member State level. Stakeholders and Member State representatives also made several
suggestions for clarifications and simplification in the Regulation, in
particular on definitions, in reaction to a pertinent question in the
stakeholder survey, which are similarly addressed under this option. Hence, Option A is
the baseline that includes current legislation as well as some necessary
measures to approve its application. Options B to E describe further measures
that are additional to this baseline. 5.2. Policy
option B: Voluntary agreements by industry (non-regulatory) This option
considers additional or enhanced voluntary agreements in the EU to reduce F-Gas
emissions. Such action was preferred in particular by industrial stakeholders
in the online survey, with the exception of F-Gas producers. Stakeholders
reported mixed experiences with voluntary agreements in the past, some reported
on successful examples whereas others did not consider voluntary agreements to
be adequate and/or enforceable. Such agreements could be considered realistic
in the following areas, considering that abatement costs for these applications
are estimated to be relatively low[40] (see Annex VI for more details): –
phase-out HFCs in commercial refrigeration
(centralised systems, commercial hermetics, condensing units); –
replace HFC-134a in XPS foams; –
replace HFC-23 in fire protection; –
destroy HFC-23 emissions from halocarbon
production; –
replace SF6 and NF3 in
photovoltaic industry; –
and reach an enhanced agreement on the use of
PFCs, NF3, HFC-23 and SF6 in the semiconductor industry. 5.3. Policy
option C: Extended scope of containment measures This option foresees
an extension of the current F-Gas Regulation in its main provisions, i.e. the
requirements on containment (Art. 3) and recovery (Art. 4). Such action was
strongly supported by many industrial players in the online stakeholder survey. A number of potential
extensions were screened in terms of e.g. effectiveness and efficiency (see
details in Annex VII). Eventually, the only sub-option considered to be
relevant was an extension of the scope of these requirements to AC in some
transport modalities. In order to improve
containment, improved product standards on leak tightness of applications
containing F-Gases are desirable and should be further pursued.[41] This development
of mandatory technical standards is part of the work under the Ecodesign
Directive (2009/125/EC) and, possibly, in the future also under the proposed
Energy Efficiency Directive[42]. However, considering the large number of appliances, corresponding
standards and the timeframes involved, this relevant approach cannot substitute
for measures addressing the origin of the problem. Impacts of such standards were
hence not explicitly considered under this option. 5.4. Policy
option D: Establishment of a phasedown mechanism for placing HFCs on the EU
market This option involves
a phasing down of the supply of bulk HFC substances in the EU complemented with
measures to cover quantities imported inside of equipment ("pre-charged").
In the online survey, a phasedown was supported by producers of F-Gases and
producers of equipment (both alternatives and F-Gases) as well as users of
equipment, in addition to strong support from public authorities and many
individuals. In the ensuing stakeholder conference meeting on 13 February 2012,
there was widespread support for such a measure by industry as it was
considered to be more flexible than bans and would allow industry to adapt and
continue using F-gases in applications where this was considered to be the
optimal solution. However, in particular NGOs considered that bans were also
necessary. The phasedown mechanism
assessed implies a gradually declining "cap" for the total placement
of bulk HFCs (in tonnes of CO2eq) on the market in the EU with a freeze in
2015, a first reduction step in 2016 and reaching 21% of the levels sold in
2008-2011 by 2030. These levels have been determined so as to fully respect
current market needs and the possibilities of replacements in all sectors
(compare Annex XVI) with proven, safe and energy-efficient technologies already
available today. The expected accelerated future development of alternative
technologies will provide an additional safety margin. Entities placing HFCs on the EU market must
hold rights to "place on the market" (POM). ‘Placing on the market’
means the supplying of or making available to a third party within the EU for
the first time and includes imports of bulk substances. The Commission
allocates free quotas of rights to POM to stakeholders based on past reporting
data ("grandfathering"). Stakeholders must ensure that they hold
enough rights to cover their actual placing on the market and they may transfer
rights between them. Compliance checks are carried out by the Commission in the
following year, with independent verification of reports. As the participating
entities are known through the existing reporting from the F-Gas Regulation and
their number is a manageable size of ca. 100 companies, the phasedown is fully
implementable through setting of limits by the Commission at EU level, making
use of the experience gained through the ODS phase-out. A reserve will be available
to new market entrants. Measures to address
quantities imported in pre-charged RAC equipment are indispensable for the
environmental integrity[43] of the phasedown mechanism and a level playing field in the market.
Here one must differ between hermetically sealed and non-hermetically sealed
equipment. For the latter, a requirement of filling on the installation site
only (instead of being factory pre-charged) is the preferable way to subject
these HFCs to the quantitative restrictions of a phasedown (see also Annex X). This
requirement is non-discriminatory as it would apply in the same way to products
produced in the EU and to those imported. The appliances affected would
essentially be "non-monobloc" AC systems (i.e. single-split,
multi-split and rooftop systems) and would cover ca. 86% of refrigerants
imported in AC equipment. By submitting these quantities to the cap, the
replacement of high-GWP HFCs with alternatives is favoured in the vast majority
of these appliances, so that over time the on-site filling requirement will
affect less and less units. Filling of equipment during the installation on
site would also alleviate the expressed concerns of the service industry (mainly
SMEs) that currently the installation of new equipment is often done without
the legally required use of certified experts, leading to additional and
avoidable emissions, malfunctioning and loss of energy efficiency.[44] For the sealed
equipment (e.g. AC movables), a placing on the market ban would safeguard the
environmental performance of the mechanism as well as attaining a more level
playing field for importers vs. domestically produced equipment. Fig. 5 shows the phasedown
schedule. The grey area represents the quantities which need to be placed on
the market to satisfy the demand for F-Gases for product and equipment where
cost-efficient alternatives do not exist. The schedule is calculated on the
basis of the AnaFGas model and up-scaled to match the quantities reported under
the F-Gas Regulation. These quantities do not account for the expected
technological progress on alternative equipment which will provide an
additional safety margin to avoid shortage of supply for applications that are
not (yet) replaceable (see Annex X for details). Fig. 5: Key
features of phasedown schedule (see Annex X for more details) The system should be flexible enough to
allow modifying the allocation mechanism to improve its functioning where
deemed necessary. To accommodate the outcome of a potential international
agreement, amendments to the phasedown schedule at a later state should be
possible. Furthermore, the Commission should have the possibility to exempt HFC
quantities produced or imported for specific uses from the phasedown mechanism if
the supply for applications which are critical for health and safety reasons
would otherwise not be ensured. 5.5. Policy
option E: Bans of production, use or placing on the market of F-Gases in
certain applications This policy option
bans, from a specific date onwards, the sale of certain new appliances with F-Gases
in the EU or the use of F-Gases in the following sectors where full market
penetration of cost-efficient alternatives was considered feasible: –
Commercial refrigeration (stand-alone systems,
condensing units, centralised systems); –
Industrial refrigeration[45] –
Transport refrigeration (Refrigerated trucks and
trailers); –
Stationary AC (moveable systems, single split
systems, multi split/VRF systems, rooftop systems, displacement chillers); –
HFC-23 in fire protection; –
SF6 in Magnesium die-casting <850 kg/ y and
recycling of die casting alloys; –
Non-medical technical aerosols (except if 100%
inflammability is required); –
HFC-134a in XPS foam blowing; and –
Mandatory destruction of HFC-23. Bans were strongly favoured
by individuals, public authorities and NGOs, but few industrial players. Some
noted that substantive exemptions would be necessary e.g. due to local building
codes prohibiting the use of certain alternatives in certain areas. Importers
of foreign equipment argued that bans would be detrimental to their business. 5.6. Combination
of policy options The policy options
presented above are not all mutually exclusive, as measures contained in the
options address e.g. different gases or different application areas, so some
could be implemented jointly, which is e.g. the case for Option C that is
complementary to all other policy options. The impacts of such combined options
would therefore often be a simple addition of the individual impacts of policy
options combined. But bans under Option E could also be combined with an HFC phasedown,
in particular to steer the choice of alternative technologies in sectors where
they are most cost-efficient. In this case the environmental impact and
economic costs are to a large extent already included in the impacts of Option
D as measures overlap. All policy options
would contain clarification and simplification of the legislative text in order
to improve implementation in the spirit of better regulation. Given the complexity of the sector, many
stakeholders in the online survey seemed to suggest that a mix of policies is
the best approach forward. A number of European Environmental Protection Agencies
have openly declared to favour such a combined approach, based on a phasedown
accompanied by bans in certain areas, in order to meet the emission reduction
targets in a cost-efficient way.19 5.7. Options
discarded from further analysis Additional policy
options were screened but discarded from further analysis and are therefore not
presented in detail in this section (See Annex VII for details). These policy
options were: –
Suspension of the current F-Gas Regulation, as it would mean forfeiting significant emission savings. –
Inclusion under the EU-Emission Trading
System (ETS). The current ETS has been designed to
give a price to actual emissions from activities such as energy production, not
for gases sold to be used in equipment for long periods of time and with no
clear emission endpoint as is the case for most F-Gas applications. Also, the
number of players who would have to acquire licenses would be prohibitively
high and difficult to monitor. Only few stakeholders selected this measure
among the 3 most appropriate options in the online survey (6%). –
EU harmonized tax schemes. There are a number of reason why this option was discarded, inter
alia (i) tax levels and exemptions should reflect national differences and
the risk of emissions, (ii) correct tax levels are difficult to set at European
level, and (iii) control of the tax scheme at European level would involve a
high administrative effort. A minority of stakeholders selected this measure
among the 3 most appropriate options in the online survey (19%). –
Deposit and refund schemes. A number of existing national differences make it preferable to implement
these at national level. A minority of stakeholders selected this measure among
the 3 most appropriate options in the online survey (18%). In addition to discarding these general
options, some additional sub-options to policy options B, C, D and E were
screened against criteria relating to: –
Effectiveness in terms of level of emission
reductions (>1Mt of CO2eq)[46].
However, to ensure consistency with requirements for similar sectors[47],
it is appropriate to retain specific options, even if the threshold is not
reached, where the measure is cost-neutral or even beneficial, for example
through gains in energy efficiency; –
Efficiency in terms of abatement costs (<50€
per t of CO2eq abated); –
Technical constraints like safety or loss of
energy efficiency; and –
Other constraints such as consistency with other
EU policies. By way of example, a number of sub-options
under Option C as regards extending the scope of containment were discarded
because the costs were too high (e.g. for refrigerated vans and rail transport marginal
costs were estimated to be €291 and €340 /t CO2eq abated,
respectively; see Table A-VII_2 to Table A-VII_7 in Annex VII). 6. Analysis
of impacts F-Gases are used in
many diverse application areas. Fig. 6 gives the main 28 (sub)-sectors (in
addition to HFC-23 by-production) which are considered in the following
analysis. Refrigeration is the most relevant sector in terms of emissions
(estimated 34% of total F-Gas emissions in 2010, based on Schwarz et al.9),
followed by mobile AC (30%), stationary AC (13%), other HFC uses (8%), SF6
uses (5%), PFCs and other halocarbons (5%), and foams (4%). The strongest long-term
growth is expected for stationary AC. A detailed assessment of costs for all
sub-sectors is given in Annex VI. Fig. 6: Main F-Gas application
areas and sub-sectors9 6.1. Environmental
impacts 6.1.1. Approach used Four key
environmental impacts were analysed for the period 2010 until the reference
year 2030 (vs. baseline option A): (1)
Reductions in direct F-Gas emissions (in Mt CO2eq); (2)
New direct emissions resulting from alternative
substances (in Mt CO2eq); (3)
Emissions due to energy
efficiency changes resulting from shifts to alternative
technologies. The expected difference in annual energy consumption (kWh)
between abatement technology and HFC reference technology was estimated and
converted into CO2 emissions by using a specific CO2
emission factor per kWh of electricity consumption. (4)
The emissions of ecotoxicologically relevant
substances were quantified in metric units of toxic substances. The bottom-up stock
model AnaFgas[48]
was used to estimate emission scenarios for F-Gases in the EU-27. Baseline emissions are expected to remain stable from 2010 until
2050, but are higher than 1995 (see Annex IV for further details).[49]
In order to reduce
overall emissions, measures on direct emissions (use of F-Gases) should
not lead to higher indirect emissions (e.g. due to increased energy use of
equipment). In order to avoid such a potential trade-off, only safe and
energy-efficient (i.e. at least as efficient as conventional technology) alternatives
were considered as feasible replacement substances in the calculation of
scenarios9 (see Annex XVI). 6.1.2. GHG emission reductions The largest emission reductions (71 Mt CO2eq) in 2030 can be achieved with policy option D (phasedown
combined with complimentary measures targeting HFC in imported equipment and
products) (see Table 1). For perspective, this is almost twice as high as
the yearly reduction of 37 Mt CO2 in the ETS cap
between 2008 and 2012. It is also a reduction of
ca. 63% in 2030 compared to emissions reported in 2005, i.e. at the level of emission
reductions needed (60-61%) in 2030 from the non-CO2 sector (without
agriculture) to be consistent with the 2◦ C target as expressed in
the roadmap for a competitive low carbon economy.21 Option E (bans
of placing HFCs on the EU market) would also achieve a substantial emission
reduction of about 53 Mt CO2eq of emissions in 2030 but still falls short as
to the emissions reductions stipulated by the Low Carbon Economy Roadmap, while
Option B (voluntary agreements) would achieve considerably lower emission
reductions of 22 Mt CO2eq, which are insufficient as regards the climate
goals. Option C (enlarged scope) achieves only very small additional emission
reductions[50]. Of the two most
promising options on environmental grounds (D and E), the emissions reductions
from Option E are lower mainly because bans can only be implemented when replacement
substances are available for all applications in the sector (=100% penetration
rate, see Annex XVI), whereas the phasedown can gradually take effect also in
sectors where replacements are only partly available at the onset of the
measure. For voluntary agreements (Option B) the reduction potential is
relatively low compared to D and E because a smaller number of sectors would
reduce emissions (see Annex V for further detail). Additional
emissions due to replacement substances are very
low for all options. Additional indirect emissions reductions occur
if the energy efficiency of replacements is higher compared to conventional technologies,
which is the case e.g. in the refrigeration sector, whereas for others, e.g. foam
blowing and AC, the energy efficiency of the abatement technologies is the same
as that of the reference technology. A faster replacement schedule in Option
D in the refrigeration sector leads to higher indirect emission
reductions in this case compared to the other options. The reduction of
indirect emissions is, however, also very low compared to direct emission
changes from replacing F-Gases in use today. The study conducted
by ERIE/Armines17 confirms the findings by Schwarz
et al. (2011)9 as it obtained very similar metric tonnes of
refrigerant emissions for the main application sectors by 2030. While Schwarz
et al. is conservative, i.e. based on available technologies, the ERIE/Armines
study takes the possible future technological development (i.e. "best
non-available technologies") into account. The ERIE/Armines study is
however much more limited in scope, addressing only 7 main sectors as opposed
to 28 (plus HFC-23 by-production) by Schwarz et al. Regarding a phasedown
option, ERIE/Armines conclude that it "seems to be an effective
measure to reduce significantly the climate impact of refrigeration,
air-conditioning and heat pump equipment [..]". Table 1: Environmental impacts of policy options
in 2030 compared to baseline (Option A) || Option B VA || Option C Extend Scope || Option D Phasedown || Option E Bans Direct emission changes in [Mt CO2eq] || - 21.7 || - 1.4 || - 69.2 || - 52.7 Additional emissions from replacement substances [Mt CO2eq] || + 0.02 || not occurring || + 0.14 || + 0.1 Additional indirect emissions due to energy-efficiency [Mt CO2eq] || - 0.51 || not occurring || higher efficiency for refrigeration -1.6 || higher efficiency for refrigeration - 0.72 SUM [Mt CO2eq] || - 22.2 || - 1.4 || - 70.7 || - 53.3 Emission reduction in 2030 compared to 2005 || -10% || +13% || -63% || -44% Ecotoxicity || low risk || not applicable || low risk || low risk 6.1.3. Ecotoxicity As regards ecotoxicity,
F-Gases and other replacement substances (or their decomposition products) used
in abatement technologies could potentially damage the environment if released
to the atmosphere in large quantities. HFCs have long atmospheric lifetimes of
up to 250 years but eventually decompose in the troposphere to yield
hydrofluoric acid (HF) and trifluoroacetic acid (TFA) which are washed out by
rainwater. PFCs and SF6 are even more persistent (several 1000 – 50,000
years) and do not decompose, but are eventually photolysed in the mesosphere.4
The release of HF and TFA could cause acidification of ecosystems, in particular
aqueous ecosystems, as they impact pH values. Among the natural alternatives, hydrocarbon
(HCs) emissions could potentially lead to ground level ozone and formation of
photochemical smog. Ammonia which is toxic to humans contributes to
acidification of ground and aquatic systems. In the examined
policy scenarios, Option B would lead to the formation of small quantities of
HF and TFA in the atmosphere. Options D and E would in addition cause the release
of hydrocarbons (HC-290, HC-600a), ethanol, and ammonia. Highest emissions from
replacement substances would be expected for Option D and were estimated as
6800t HCs, 890t ammonia and 10.300t of unsaturated HFCs, mostly from potential
use in refrigeration and AC in 2030. It must be borne in mind that the use of
replacement substances reduces the amount of HFC in the atmosphere (and
resulting long-term breakdown products). From a purely ecotoxicological point
of view, the release of natural replacement substances (HCs, ammonia, ethanol,
CO2,..) to the atmosphere is preferable to the release of HFCs as
they occur naturally in much larger concentrations than would be released under
any of the options. But also atmospheric concentrations of HFCs are in
the parts-per-trillion range which is far below effective ecotoxic levels.4
Ecotoxicity effects are therefore assumed to be low for all options, based on
state-of-the-art knowledge.[51],[52] 6.2. Economic
impacts Fig.
7 shows that F-Gas emission reductions of ca. 72 Mt
CO2eq could be achieved at marginal costs often far below 50€ per t
CO2eq. Beyond this level there are few other additional possible
emission reductions considering only technologies available today. These
findings are based on a very comprehensive analysis of replacebility of F-Gases
in all main application sectors based on available technologies that are safe
and energy-efficient. Detailed data and analysis covering each individual
sector is available in Schwarz et al.9 The discussion in this
section profits from this analysis (most relevant background data from the
latter study is summarised in e.g. Annexes IV, V, VI, VIII, and XVI of this
document). Fig. 7: Marginal emission abatement costs vs.
achievable emission reductions by 2030. Source: Schwarz et al. (2011)9 (MACC: Marginal Abatement Cost Curve, WM scenario = Option A). Costs
are in € at 2010 levels. 6.2.1. Abatement costs and direct costs to industry The following key direct economic impacts
were analysed in a quantitative way for the reference year 2030 in comparison
to the baseline scenario (Option A) for subsectors affected by each of the
options (see details in Annex VI): (1)
Abatement costs
for F-Gas emissions (€ per t CO2eq, assessed for the
sector-typical F-Gas reference systems and the most promising (safe) alternative
technologies). The considered parameters are: –
Emissions: GWP of substance, charge (amount) of
substance used, emission factor for use-phase and disposal, manufacturing
emission factor (e.g. for production of foam); –
Energy consumption: e.g. refrigerating capacity,
installed electric power, annual running time; –
Cost: investment cost of equipment and of first substance
fill, price of substance per kg, price of energy per kWh, equipment lifetime,
discount rate. The average abatement costs per t
CO2eq in 2030 for the three policy options with significant
emission reduction effects (B, D and E) are very similar (see Table 2). The marginal
costs are somewhat higher for Option D at €49/t CO2eq but consistent with
the projected marginal abatement costs for the implementation of GHG mitigation
policies and measures in 2030, namely 50€ / t CO2. For Option C,
average and marginal abatement costs are identical (one sector) and amount to
€46/t CO2eq. All options are therefore considered cost-efficient.
This finding also holds for higher discount rates or lower prices of F-Gases
(see sensitivity analysis in Annex VIII). (2)
Total (annualised)
net costs to industry (€ per year); these include: –
Capital investment costs: These costs include
capital investments (as well as interest payments) to install new equipment or
to modify a production facility (in the time from 2015 to 2030); –
Operating and maintenance costs: These costs
include costs to operate and maintain the equipment as well as changes in all
other input costs, e.g. service costs for leakage checks, refill, and energy. The total net costs
to sectors are highest for Option D (1,500 M€/year), due to the largest number
of sectors affected, closely followed by Option E (1,330 M€/year) and are
smaller for Option B (530 M€/year) and C (66 M€/year) (see Table 2). The
individual costs per (sub-) sector vary considerably (see also 6.2.2). Costs were calculated on an
annual basis, using a general discount rate of 4% and product specific
lifetimes varying between 10 and 30 years. Table 2: Comparison of direct cost impacts in 2030 || Unit || Option B VA || Option C Extend Scope || Option D Phasedown || Option E Bans Average abatement costs in 2030 || € / t CO2eq || 17 || 46 || 16 || 17 Marginal abatement costs || € / t CO2eq || 24 || 46 || 49 || 24 Total direct net costs to industry sectors || M€ / year || 527 (from -0,1 to 417 per sub-sector) || 66 || 1,499 (from -66 to +489 per sub-sector) || 1286 (from -5 to +489 per sub-sector) Source: Schwarz
et al. (2011)9, Table 8-24 and Table 8-25.[53] All costs in € at 2010
levels. 6.2.2. Impacts
on sectors According to Table 3,
the direct net costs differ widely for the different subsectors affected by
Options B, D and E (Option C only includes one sector). A large part of the
costs occurs in commercial refrigeration (commercial hermetics, condensing
units and centralized systems (option B, D and E). Table 3: Additional annual cost by sector in 2030 || B || C || D || E Domestic Refrigeration || 0 || 0 || 0 || 0 Commercial refrigeration: || || || || Commercial hermetics || 0 || 0 || 0 || -5 Condensing units || 105 || 0 || 105 || 276 Centralized systems || 417 || 0 || 417 || 380 Industrial Refrigeration: || || || || Industrial Ref small || 0 || 0 || -1 || 0 Industrial Ref large || 0 || 0 || -66 || -5 Transport refrigeration: || || || || Refrigerated Vans || 0 || 0 || 21 || 0 Refrigerated Trucks || 0 || 0 || 17 || 1 Fishing vessels || 0 || 0 || 2 || 0 Transport AC: || || || || Cargo ship AC || 0 || 0 || 6 || 0 Passenger ship AC || 0 || 0 || 3 || 0 Bus AC || 0 || 0 || 107 || 0 Truck AC || 0 || 66 || 244 || 0 Moveable AC systems || 0 || 0 || 2 || 19 Stationary AC: || || || || Split AC systems || 0 || 0 || 489 || 489 Multi-split AC systems || 0 || 0 || 54 || 46 Rooftop AC systems || 0 || 0 || 12 || 12 Chillers || 0 || 0 || 36 || 33 Centrifugal chillers || 0 || 0 || 1 || 0 Fire protection: || || || || Fire protection 227ea || 0 || 0 || 11 || 0 Fire protection 23 || 3 || 0 || 3 || 3 Aerosols || 0 || 0 || 36 || 36 Foam blowing: || || || || XPS-152a || 0 || 0 || -1 || 0 XPS-134a || 1 || 0 || 1 || 1 PU other || 0 || 0 || 0 || 0 Other: HFC-23 by-product || 1 || 0 || 0 || 1 SUM || 527 || 66 || 1499 || 1286 For Option D,
transport AC (trucks and buses) is also important as well as stationary AC
(i.e. single-split AC). Under this option, the five subsectors with the highest
net costs account for almost 90% of the costs arising in all 25 subsectors
affected. Low direct net costs occur for abatement in the remaining sectors
(see Annex VI for detailed data on costs per sector). A detailed assessment of
the impacts of these costs on turnover and competiveness for the most important
sectors is given in section 6.2.6. –
Direct impacts Key economic effects
have been assessed comprehensively using two models: To analyse the direct (and
indirect) effects on output resulting from changes in costs or investment, an
Input-Output model framework (i.e. the EmIO-F Europe model, see model
description in Annex IX) was used. EmIO-F Europe can give a basic
assessment of the effect of the additional burden a policy or measure may
impose on the economy. Secondly, a general equilibrium model (GEM-E3)
was used to complement the analysis (see model description in Annex XIV). A
comparative description of the latter two models is given in Annex XV. Based on
these models, impacts for the F-Gas application sectors are expected to be
small at less than 0.6% of total output in all cases (Fig. 8, Annex XIV).
A sensitivity analysis was carried out and is elaborated in Annex VIII. The
result was that even under conditions of a discount rate of 8% (instead of 4%) or
halved prices for unsaturated HFCs, cost-efficiency and environmental
effectiveness of all policy options B, D and E are not distorted significantly. At a more detailed
level, the Input-Output model shows that direct effects within each application
sector may occur in four main areas of commercial activity: (1) equipment
manufacturing, (2) supply of chemicals (i.e. F-Gases or replacement
substances), (3) services and maintenance, and (4) energy supply (i.e.
electricity). (1)
Equipment manufacturing: As a starting point
manufactures of the affected appliances are, in general, facing growing markets
e.g. for AC or refrigeration equipment. Option B, D and E would impact on the
choice of substance used in the production of a growing number of appliances
and may therefore require higher investment costs. Given that the direct impact
in all sectors is small, it can be expected that costs per unit will also be
relatively small. The analysis with the I/O model assumed that costs can be
passed on to consumers without affecting sales (additional investments). Hence,
equipment suppliers would be able to increase their sales due to higher
prices (related to the higher investment costs of the equipment). An analysis based on abatement costs derived with the AnaFgas
model (Schwarz et al., 20119) shows that Option D yields the highest sales as it
affects the highest number of appliances. Consequently, effects for Options E,
B (and C) are lower, in this order, as fewer sectors are affected (see Table 4).
In Section 6.2.6 the assumption on passing on costs is examined further. That
section looks at the increase in annual costs and the elasticity of demand for
the major pieces of equipment covering more than 90% of the costs. It shows
that the overall annual costs increases are small (around 1 to 2 %) and demand
for the goods is rather inelastic. Consequently, the expected increases in
sales in Table 4 (and output) may be overestimated by around 1%. Table 4: Comparison of the net
additional sales of domestic suppliers of equipment (M€ / year) || Unit || Option B || Option C || Option D || Option E Additional sales of domestic equipment suppliers || M€/year || 1,610 || Not applicable || 3,040 || 2,060 Source: Annex VI Table A_VI-2
based on Table 8.24 in Schwarz et al. (2011)9 with additional
adjustments Fig.
8 gives the EmIO-F Europe model outcome for the direct output effects as
a result of the different F-Gas policy options. In line with the
discussion above, the model shows higher outputs for the machinery and
equipment sector for all options. Highest outputs were modelled for Option D
(+0.52%), followed by Option B (+0.32%) and Option E (+0.23%)[54].
Fig. 8: Effects on
output of directly impacted activities, derived with EMIO-F Europe (as % of 2007 output; Phasedown
= Option D, Ban = Option E, VA = Option B) These positive
impacts on the equipment sector are confirmed by GEM-E3 (see Annex XIV).
Potential advantages for EU manufacturers in terms of additional exports,
having a strong position on the market for alternative technologies, are not
captured by the models used and are difficult to quantify at the present stage.
In conclusion, manufacturers of equipment can expect to profit from policy
options B, D and E, with strongest effects expected from a phasedown measure (Option
D). (2)
Services/Maintenance: For service and maintenance
companies some losses may be expected due to reduced service needs for F-Gas
equipment (Table 5). Options B, D and E focus on replacing HFCs
with a high GWP as opposed to Option C and the current F-Gas Regulation, the
latter having a strong focus on improved leakage detection and recovery at the
end of the life. However, alternative technology using high pressure or
flammable substances also require maintenance. Overall, the net effect on the
service sector is estimated based on AnaFGas (Schwarz et al., 20119)
to be negative in the long run for those policy options that favour most
strongly the use of alternative substances (in particular Option D and E; see
Table 5). Table 5: Comparison of losses from
ceased service under Art. 3 and 4 F-Gas Regulation in the long run (M€ / year) || Unit || Option B || Option C || Option D || Option E Losses (-) from ceased service under Art 3+4 || M€/year || -290 || 70 || -1,280 || -1,270 Source: Schwarz
et al. (2011)9 as well as Annex VI Results of the EmIO-F Europe model
also show that service companies experience (small) negative effects, which are
most pronounced for Option D (-0.38%) and E (-0.37%), and less for Option B (-0.09%)
(see Fig. 8). However, these effects may still be
overestimated since the baseline assumes full application of the existing legal
obligations. In reality, these obligations have not yet been fully applied
since implementation and awareness among users are delayed8.
Moreover, apparently the European Air-Conditioning, Refrigeration and Heat Pump
Contractors (AREA) are keen on exploiting the new business opportunities linked
to alternatives. In an internal survey[55] they conclude
that there is a potential risk of shortage of contractors trained in the use of
low GWP refrigerants and advises compulsory training based on harmonised
minimum requirements. In conclusion, maintenance needs due to
the existing F-Gas Regulation might decrease, in particular, for the most
effective options, phasedown (D) and bans (E), but the effects on relevant
companies are expected to be small. (3)
Supply of chemicals: The replacement of
HFCs with low-GWP substances would result in a shift in the sales of F-Gas
producers and distributors. Producers and distributors of low-GWP substances
are not always the same as those of HFCs. Current F-Gas producing companies in
the EU (7-10 in total) are large chemical companies which have production sites
distributed globally. In the transition from producing high GWP substances to
low GWP substances, the impacts will depend on the ability of some producers to
benefit more from the HFC replacements through the development of alternative
substances than their competitors. As there are several replacement substances
(currently two unsaturated HFCs, as well as mixtures of HFCs, hydrocarbons, CO2
and ammonia) and since all major producers are already developing low GWP
replacement substances, a situation in which only a few producers benefit from
the lower HFC consumption is unlikely to occur. Current F-Gas producers would
likely be the distributors of unsaturated HFCs which are expected to contribute
most to the turnover of F-Gas producers and distributors, as a result of the
comparably high prices of these chemicals. The EmIO-F Europe
model gives small net effects on the output of the chemicals sector for all options
(Fig. 8). A small positive effect (0.17 %) is obtained in case of a phasedown
(Option D), almost no effect in case of bans (Option E: +0.03%) and a negative
impact in case of voluntary agreements (Option B: -0,19%). The GEM-E3
model suggests small negative impacts on output for Option D and E for the
chemical sector (see Table 6 and Annex XIV). Domestic production decreases
slightly as it is substituted by imports. In the case of passing on costs to
end-users, the price of chemical products further increases and hence
production decreases further. Actual effects are likely to be even smaller (and
could be even positive) as imports of F-Gases are already addressed in Option D
which is not reflected by the model. In summary, effects on the chemical
sector are expected to be small for all options. Table
6: Chemical
Production compared to the Baseline in 2030 (% change) || Option D || Option E 1. Option D || -0.13 || -0.06 2. Option D with costs pass-on || -0.35 || -0.22 Source: GEM-E3
(see Annex XIV for details) (4)
Energy supply: The output of this
sector is affected by the changes in electricity consumption for new
technologies. The model EMIO-F Europe forecasts an output reduction of -0.59%
for Option D, -0.26% for Option E, and -0.19% for Option B (Fig. 8). This
output reduction is explained by a reduced electricity demand (and further
emission saving, see also Table 1) of replacement technologies. The effect is
highest for Option D as this option stimulates replacement in most sectors,
followed by E and B. Several stakeholders in the on-line survey similarly
expected that end-users would profit from reduced electricity consumption. The
negative impact of Option D and E is confirmed by GEM-E3. In
conclusion, electricity demand will decrease, in particular for Option
D, and will lead to small output reductions in this area. –
Indirect impacts Since equipment
manufacturers are expected to pass on costs to consumers, the industrial users
of such equipment, e.g. supermarkets and the food and drink manufacturing industry,
could be indirectly affected by potentially higher investment costs and changes
in annual operating costs for new equipment. The difference in annualized net
costs for operators investing in new equipment based on alternative
technologies range widely. Considerable annualised savings were estimated for
new investments in large industrial refrigeration (€ -22,642) which is affected
by Option D and E and in many other subsectors new investments would incur only
small direct costs for the operators. The highest costs (€ 2,876) for operators
were estimated for new centralised commercial systems (supermarkets), affected
by Options B, D and E (see Annex VI, Table A_VI-1). Fig. 9: Effects on
output of selected, indirectly impacted sectors determined with EmIO-F Europe (% of 2007
sector output; Phasedown = Option D, Ban = Option E, VA (voluntary agreement =
Option B) Fig. 9 displays the impact on selected sectors
that are indirectly affected, as obtained with the model EmIO-F Europe.
The indirect effects range from small but positive effects on sectors that
deliver inputs to the machinery and equipment sector (e.g. basic metals,
metal products) to very small but negative effects on sectors providing services
or products to final consumers (e.g. retail, clothing, luxury consumption
such as tobacco, hotels & restaurants etc.). The latter effects are
explained by the fact that consumers would have less money in their pockets to
spend on services and end-products, if higher prices of F-Gas equipment are
passed on to them. These effects are observed for all Options B, D and E, but
are generally most pronounced for Option D, followed by B and E. The reduced
consumption pattern leads to a very small reduction in aggregate output of -0.011%
in case of Option B, -0.014% in output for the case of Option D, and -0.004% in
case of Option E. Results in Fig. 9 assume that additional costs for equipment
would reduce final demand for all goods and services (e.g. food, textiles,
furniture, restaurants,..) proportionally. GEM-E3 confirms the positive
impacts for the metals sectors (Option D and E) and shows neutral to positive
effects for the consumer goods sectors (see Annex XIV). Given that the sales
for new equipment might be overestimated (due to the negative impact of price
increases on demand) the indirect reduction in demand for other goods might be
somewhat smaller. –
Total impact from both direct and indirect
effects Overall,
the total effect on output based on direct and indirect effects across all
sectors is very small. EmIO-F Europe predicts a slightly positive effect at 0.006%, 0.009%, and 0.003%
for Options B, D and E, respectively (based on Fig. 8 and Fig. 9), while
slightly negative (-0.006 for Option D to -0.003 for Option E) are obtained
with GEM-E3 (see Table 10 below). For clarity and as a
number of different industrial players may be affected by the F-Gas policy
options as outlined above, the following Table 7 gives a qualitative overview
over the most important actors and the impacts they may experience, summarizing
the discussions above. For most players, impacts would be small and nobody is
expected to lose out significantly, as demand for equipment will rise and not
decline. However, actors will have to adjust to the new situation, e.g.
retailers would see a shift towards selling more equipment with low GWP
substances. Most market players have experienced a similar transition already
under the Montreal ODS phase-out, which was achieved successfully and 10 years
faster than required in the EU, so they are expected to adapt quickly also to a
use reduction of F-Gases, as soon as a clear regulatory signal is set. It is
clear that producers of alternative equipment would be the big winners, fostering
the growth of green companies, many of which are SMEs similar to what has been
observed in some Member States (e.g. DK, AU) where there is more stringent
F-Gas legislation already. Table 7:
Overview of expected impacts of different market players: scales reach from
very high positive impacts (+++) to very high negative impacts (---) || Impact due to policy options || Types of company || Estimated Impact Producers of F-Gases (chemical industry) || direct || 7-10 large, globally acting companies || 0 (see 6.2.2, Fig. 8, Table 6) Producers of equipment overall (manufacturers) || direct || large and small companies || 0/+ (see 6.2.2, Fig. 8, Table 4) Producers of alternative equipment || direct || many SMEs || +++ (see e.g. 6.2.9) Electricity production || direct || large companies || - (see 6.2.2, Fig. 8) Service companies || direct || many SMEs || 0/- (see 6.2.2, Fig. 8, Table 5, 6.2.10, Annex III, Annex VI) Importers of equipment || direct || large and small companies || 0/- (see e.g. 6.2.6) Exporters of equipment || direct || large and small companies || 0/- (see 6.2.6, Table 12) Users of equipment || indirect || large companies, SMEs, microenterprises, consumers || 0 (see 6.2.2, 6.2.6, 6.2.10, Fig. 9, Table 11) Retail sectors || indirect || large and small companies || 0/- (see 6.2.2, Fig. 9) Input sectors (Basic metals, metal products) || indirect || large and small companies || 0/+ (see 6.2.2, Fig. 9) 6.2.3. Administrative
costs The definition of administrative costs
refers to the costs incurred by enterprises, public authorities or citizens in
meeting legal obligations to provide information on their actions or
production. Information is used in a broad sense to cover labelling, reporting,
registration, monitoring and assessment needed to provide information as well
as the transfer of information to public authorities. Administrative costs are the
sum of business-as-usual costs (costs that would still be incurred if the
legislation were to be removed) and administrative burden (incurred due to the
legislation). In the following the given costs are on top of costs currently
resulting from the monitoring and reporting under the existing F-Gas Regulation,
which remain the same for all considered policy options. Table 8 provides an
overview of the total additional administrative costs for the policy options
(details in Annex XII and XIII). It shows that administrative costs are
small in general, as they represent only a small percentage of the direct
costs to industry, ranging between <0.1% (Options C, D & E) and 2% (Option
B). Table
8:
Administrative costs of the policy options || Option B || Option C || Option D || Option E Total administrative costs [million € / year] || 10.7 || 0 || 0.2 || 1.2 Total one-off administrative costs [million €] || || || 1.9 || –
Option B Significantly higher
administrative costs were determined for Option B compared to the other policy
options. While this may seem surprising at first glance, it results from the
fact that (i) only additional
reporting costs are included in the calculations, i.e. on top of existing
reporting under the F-Gas Regulation which addresses the bulk of reporting
needs of the other options; (ii) it was
considered that voluntary agreements should have quantified and staged
objectives and should include a monitoring and reporting system for achieving
the objectives, following the recommendations of a pertinent EC communication[56]; (iii) the number of
participating companies to experience an additional administrative burden would
be large, e.g. the number of individual companies in the commercial
refrigeration sector would cover more than 1000 undertakings (see Annex XII);
and (iv) approximately
75% of the estimated annual cost of 10.7 million €/year for Option B are due to
independent verification of reported HFC use. Without the independent
verification of the reported information, the administrative burden for this
option would amount to 2.9 million €/ year. –
Option C No additional information
requirements would occur and hence no additional administrative burden was
estimated. –
Option D The main additional
costs for reporting and verification would be incurred by producers and
importers of bulk HFCs, meaning ca. 80 companies. The administrative costs for
all companies participating in a phasedown mechanism are estimated at €227,000
per year. In addition, one-off costs of 1.9 million Euros are estimated, 90% of
which arise from the independent verification of baseline reports. –
Option E For bans, the
administration for companies is rather simple[57] and not a lot
of new and additional information is needed. It would, however, require
additional administrative costs for audits or inspections by competent
authorities in Member States. A total amount of 1.2 million €/year was
estimated as the additional administrative burden, 73% of which arise from the
audits/inspections conducted on companies by national administrations. This is
an important difference to Option B and D, where additional costs would be
borne mostly by companies. Stakeholders in the
on-line consultation saw no large differences between options as regards the
administrative burden, but regarded Option D as somewhat less burdensome.
Stakeholders also pointed out repeatedly that the additional burden would be
small in sectors where reporting already exists (due to the F-Gas Regulation). 6.2.4. Impacts
on regions In the major (sub-)sectors
that include domestic refrigeration, commercial refrigeration, transport refrigeration,
mobile AC as well as aerosols, a large number of units would be affected by the
policy options. As this type of equipment is distributed relatively evenly between
Member States, investments in replacement technologies in these sub-sectors would
therefore also be distributed evenly without a regional concentration. On
the other hand, stationary AC units as well as AC systems in buses are more
frequently used in warmer Mediterranean climates in the Southern Member States
than in the temperate climate in the North. For these subsectors, direct net
costs will be 34% higher in Southern Europe than the EU average due to the
higher number of installed equipment per inhabitant (Table 9). This cost
effect is observed for Options D and E and would be about 1€ / person, hence
relatively small. Some of the remaining sub-sectors concern only a few
installations where there will be only some limited effects as these sectors
are very specialised. Table 9: Direct net cost effects for AC
systems per 1000 persons and sector (€ / 1000 inhabitants) || New Split AC || New Bus AC || Other sectors || TOTAL || % of EU average EU 27 average || 940 || 206 || 1737 || 2883 || 100 Southern EU[58] Northern EU || 1893 || 239 || 1737 || 3868 || 134 494 || 191 || 1737 || 2422 || 84 GDP effects were calculated with the macro-economic
GEM-E3 model (see Annex XIV for details). The scenario modelled with GEM-E3
focuses on the phasedown (Option D) and bans (Option E) only as these options
include the highest number of sectors, implying that all other policy options
would show smaller effects. Table 10 indicates that in 2030 the net GDP
effects are very small for the EU27 (for Option D and E) but somewhat higher
for Southern European countries (all countries bordering the Mediterranean
Sea) assuming an allocation of rights to place on the market through
grandfathering (scenario 1 in Table 10). If costs are fully passed on into
higher prices for the consumer, the difference between EU and the EU South in
terms of GDP losses could be slightly higher (scenario 2, Table 10). The
impacts might even be more positive both in the EU27 and the EU South since the
GEM-E3 model does not include the importers of F-Gases in the analysis
and hence the small negative impacts on GDP are overestimated. Hence, the
impact on GDP is generally very small and differences between the EU and the
EU-South are small as well (see Annex XIV for details.) Thus, in summary, even
if some regional effects are inherent in the proposed policy options, the
economic impacts are very small and will not have significant large effects on
certain regions in the EU. Table 10: GDP effects for the EU27 as a
whole and Southern Europe in 2030 (% change) for Options D and E (% change) || Option D || Option E || EU27 || EU South || EU27 || EU South 1. free allocation (grandfathering) || -0.006 || -0.008 || -0.003 || -0.003 2. costs pass-on || -0.012 || -0.016 || -0.007 || -0.009 Source: GEM-E3 (see Annex XIV for details) 6.2.5. Impacts
on the functioning of the internal market and competition For all policy
options, the rules will be applicable in the same way to all undertakings in
the EU so that a distortion of the internal market is not given. Given that for
most appliances several alternatives can be used, a limitation on the use of
F-Gases is in general not expected to limit competition in any significant way.
In the case of the phasedown (Option D), market players are assigned rights to
place on the market (POM) based on past outputs. For new entrants to the market
a reserve of rights to POM is implemented, so that competition is similarly
safeguarded. 6.2.6. Impacts
on competitiveness, trade and investment flows As regards competitiveness, direct impacts
on costs across all F-Gas application sectors are expected to be small for all
policy options compared to total output since costs increases are small
compared to business-as-usual Moreover, Option B, D and E are designed in a way
where domestic producers and importers of appliances will face the same
conditions for placing products on the market and hence EU producers of F-Gases
and F-Gas equipment will, even though costs may increase, not be put at a
disadvantage which could harm their international competitiveness. Furthermore,
the activity of servicing/maintenance is not subject to
international competition. However, if Option D did not include measures to target imported substances in pre-charged
equipment, only domestically produced products would be affected by the cap which
would represent a competitive disadvantage for equipment producers. Such a
concern was expressed by companies and industry associations in the stakeholder
survey. Sectors of concern would predominantly be stationary AC systems[59]
and to a lesser degree AC systems of imported vehicles. The numbers of
producers, importers and exporters of pre-charged equipment can be estimated as
shown in Annex X. The measures on pre-charged equipment, namely the requirement
to fill on site, would treat domestically produced and imported equipment in
the same way. Claims that such a requirement would lead to higher production
costs for foreign manufacturers are unfounded. According to expert estimates additional
costs would be in the order of €0.50 per unit produced in the worst case.[60]
Exports of products and equipment
containing HFCs are only relevant in a few (sub)-sectors: mobile ACs (motor
vehicles), MDIs (Metered Dose Inhalers: 50% of demand exported) as well as XPS
foam insulation boards (20% of demand exported; compare Table A_X-3/4 in Annex
X). HFCs used in this equipment are put on the market in the EU and would therefore
fall under the phasedown, which may lead to higher costs. In the automotive
sector a shift to low GWP substances is already on-going due to the MAC
Directive and extra costs compared to the product (vehicle) price are small. Whether trade flows will change depends, in
general, on the different abilities to produce products relying on alternative
technologies. Option D, E and B will create an EU demand that spurs development
of alternative technologies to a varying extent, with the phasedown having the
highest potential to enhance the demand-driven capacity to innovate. Many
stakeholders in the on-line consultation and stakeholder conference pointed out
that an EU pioneering role for alternatives could result in a competitive
"first mover"-advantage for European companies at the international
level, if a global agreement to phase out F-Gases is reached. Many of those industrial
stakeholders who expressed concerns on competitiveness due to unilateral EU
action preferred a phasedown measure (Option D) over bans (Option E) due to its
flexibility (Annex II). However, since it is not a priori clear
that costs can be passed on to the user, it is appropriate to also look at the possible
effects of costs on the expected increase in demand (and sales) from the
affected products. The increase in (annualised) costs for the operators
investing in new equipment based on alternative technologies has been
compared with the annualised costs (of using the specific technology) under the
baseline for those eight subsectors that are faced with the highest absolute
costs or have a big share in the investments (See Annex VI for details). Table
11 shows the increase in total annual costs. Differences between the policy
options[61] are apparently small. The
expected annualised increase in investment and operation costs of new equipment
is highest for centralised systems of commercial refrigeration and lowest for
industrial refrigeration (with expected decreases). For all the other sectors
overall costs and total costs are small. These increases in costs may have some
effect on the expected increase in demand (sales) for the affected products
(see Annex VI, Table A_VI-2). Evidence shows that the elasticity of demand (for
AC and refrigeration) is rather small (-0.37)[62]; e.g. an
increase in expected cost of multi-split AC of 1.6% may therefore lead only to
a direct reduction in demand of -0.6%. Hence, this indirect impact of costs
increase on the expected increase in demand for equipment will also be rather
small. By way of example, under Option D sales of centralised commercial
refrigeration systems would increase by 774 million per year (see Annex XVII).
As a result of the annual cost (and price) increase, demand might drop and the increase
sales might not increase by 774 million, but only by 760 million for that
sector (See Annex XVII). In the worst case the expected increase in sales (and
investments) for all sectors addressed could be up to 1% smaller than the
increase in output expected because some consumers will refrain from buying the
new equipment. A second issue is
the impact of the additional costs for those sectors that are buying the new
equipment. The sectors that use commercial refrigeration see their costs
increase by up to 4.8% in the case of centralised systems. The refrigeration
costs are however only part of the total costs for these companies and can be
distributed over a large range of products (e.g. in the case of supermarkets), so
the costs increase will be very small. The sectors that use industrial
refrigeration experience a decrease in the costs (up to 1.4%) which will decrease
their total costs to some degree with positive impacts on output. Stakeholders
in this area, e.g. FoodDrinkEurope, only wanted to be reassured that there will
be no forced replacement of existing equipment. Replacement of end-of-life
equipment by alternative equipment was not considered a problem. None of the policy options entail bans on the use of existing HFC
appliances and hence will not force users to scrap equipment before its end of
life. Large supermarket chains are already making
voluntary efforts to introduce alternatives at large scales.34 For
the other selected subsectors, the additional costs linked to new investments
are between -1.4 and 2% of the costs associated with the baseline F-Gas
equipment. It is apparent that even for those sectors with additional costs at
the high end, the additional costs per unit compared to baseline unit costs
remain low and impacts on end-users are therefore expected to be rather
small. Table
11: Average
change in annualized costs for operators investing in new equipment compared to
the baseline scenario (Option A: % change) || B || C || D || E Condensing units commercial refrigeration || 0.9 || n/a || 0.9 || 0.9 Centralized Systems commercial refrigeration || 4.7 || n/a || 4.8 || 4.7 Bus AC || n/a || n/a || 2.1 || n/a Trucks and trailers AC || n/a || 1.2* || 0.1 || 0.0 Single-split Room AC || n/a || n/a || 1.6 || 1.6 Multi-split AC || 0.0 || 0.0 || 0.8 || 0.0 Industrial refrigeration large || 0.0 || 0.0 || -1.4 || -1.4 Chillers || 0.0 || 0.0 || 0.4 || 0.4 Source: Annex
VI and Schwarz et al. 2011 (p. 243-272)9. Costs include capital
costs, interest costs as well as all other costs (* costs linked to containment
and recovery provisions only) The impacts on competitiveness (i.e. on
output and trade (imports and exports)) have also been analysed with the GEM-E3
model for Options D and E, which entail the highest costs. Table 12 summarises
the results per economic sector.[63] Impacts are generally
very small, with highest effects in the range of -0.13 and -0.16 for production
and exports in the chemical sector under Option D. Effects on imports are even
smaller (see Annex XIV for details). Based on the model, the impacts on
output and trade are therefore expected to be small, with negative or positive
effects depending on the sector. Table 12: Impacts on production and exports per sector for Options
D and E in 2030 (% change compared to baseline) || Production || Exports || OPTION || D || E || D || E || Agriculture || || 0.01 || 0.01 || 0.03 || 0.03 Chemical || || -0.13 || -0.06 || -0.16 || -0.07 Coal || || -0.01 || -0.01 || 0.07 || 0.08 Construction || || 0.01 || 0.00 || 0.01 || 0.01 Consumer goods || || 0.01 || 0.00 || 0.02 || 0.01 Electric Goods || || 0.04 || 0.02 || 0.03 || 0.01 Electricity || || -0.01 || -0.01 || 0.01 || 0.01 Energy Intensive || || 0.00 || 0.00 || 0.01 || 0.01 Gas || || 0.01 || 0.00 || 0.05 || 0.02 Market services || || 0.00 || 0.00 || 0.02 || 0.01 Metals || || 0.02 || 0.01 || 0.02 || 0.01 Non-market services || || 0.00 || 0.00 || 0.03 || 0.01 Oil || || 0.00 || 0.00 || 0.02 || 0.01 Other equipment || || 0.02 || 0.02 || 0.03 || 0.01 Transport || || 0.00 || 0.00 || 0.01 || 0.00 Transport Equipment || || 0.02 || 0.01 || 0.02 || 0.01 Source: GEM-E3 6.2.7. Third
countries and international relations At international level measures on the reduction of F-Gas
emissions, in particular HFCs are being considered. The initiative to control
HFCs under the Montreal Protocol has so far not been successful, even though
already in 2010 more than 108 Parties to the Montreal Protocol expressed
support for this approach.[64] All options for the reduction of HFC emissions would demonstrate the
determination of the EU to tackle increasing F-Gas emissions. The underlying
analysis, which demonstrates that the use of HFC alternatives is technically feasible
and cost-efficient, will strengthen the EU position in further negotiations on
an international agreement on HFCs. The adoption of a phasedown (Option D) and
of bans (Option E) would create a substantial market for low-GWP technologies
and thus incentivise the development of such technologies also in exporting
third countries. It can be expected that these market opportunities will also
result in higher penetration rates of such technologies in non-EU countries,
even if these countries do not support binding commitments through an
international agreement at the present stage. Bans on certain new applications (Option E) apply
equally to domestically produced and imported products and equipment.
Nevertheless, some third country producers have voiced that they would consider
bans to be de facto discriminatory vis-à-vis imports because those
producers would not set-up a new production line to serve the EU Market only.
The complementary measures on certain equipment
pre-charged with HFC (part of Option D) addresses imports as well. The proposed
measures have, therefore, to be notified under the TBT (Agreement on Technical
Barriers to Trade). 6.2.8. Impacts
on consumer prices Effects on consumer
prices depend on the extent that producers or retailers pass through any
additional costs they may experience. Potential effects on consumer prices can
easily be categorised based on abatement costs. Those measures that exhibit
negative abatement costs (see Annex VI) can be assumed to impose no or positive
(through reduced prices) effects on consumers. Table 11 shows the increase in
annualized costs for the consumer for the most affected products in case costs
would be fully passed through. Higher costs of equipment are to a large degree
compensated by decreased operating costs. Costs of domestic refrigeration are
hardly affected (€0.004/year for option D) and annual costs of AC
(single-split, multi-split or chillers) might increase by 0.4 to 1.6%. It
can therefore be expected that the effect on specific as well as general consumer
prices will remain small for all policy options. This is confirmed by the GEM-E3
results which suggest a macroeconomic price effect between -0.01% to +0.00% for
Options D and E depending on cost pass-through. 6.2.9. Impacts
on innovation and research Legislation could
drive innovation, economic development and green jobs in Europe. By way of
example, Denmark has successfully supported alternatives backed up by strict
national F-Gas legislation and has seen important increases in the use of natural
refrigerants in RAC equipment. While market shares of e.g. commercial and
industrial refrigeration equipment using natural alternatives are still low
today in Europe, market prospects in Europe as seen by industry are very good
in the field.[65] Options B, D and E promote
the use of alternative substances and technologies. Therefore, these policy
options would stimulate research and development and facilitate the development
and dissemination of new production methods, technologies and products. These
effects would be largest for Option D, followed by Options E and B. Option
E provides binding legal requirements driving the innovation process just like
Option D but would affect a smaller number of sectors. In Option B the driver
for innovation is based only on voluntary commitments and less sectors would be
covered, so a smaller effect than for D and E is expected. Option C, the
improvement of the F-Gas Regulation does not require new technologies and
innovations to the extent that Options B, D and E do and would therefore have only
minor positive impacts on innovation and research. 6.2.10. Impacts
on small and medium enterprises (SMEs: see also Annex III) The companies currently placing F-Gases on
the EU market and reporting under the F-Gas regulation were classified based on
the number of employees and the annual turnover. As a result, 36% of the
affected companies are large, 15% medium, and 26% small enterprises (for 23%
data found was not sufficient to fully categorize their status). Producers of
F-Gases are almost exclusively large companies, while wholesalers, distributors,
import/export companies and service companies are often SMEs. SMEs and
microenterprises are also found as operators/end-users of relevant equipment,
e.g. in the food and drink industry. Many SMEs in the F-Gas sector are wholesalers
who would be less affected by additional substantive costs because policy Options
B, C, D and E do not require adaption of their service delivery processes in a
substantial way. In addition, SMEs placing on the market only small quantities
of HFCs benefit from the foreseen minimum thresholds for the application of the
phasedown mechanism under Option D. On the other hand, Option E would affect
importers of foreign equipment relying strongly on F-Gases, as pointed out at
the stakeholder meeting and the on-line consultation. Option D would provide
more flexibility to allow foreign producers to adapt, and thus would be
preferable to Option E for SME importers. As for producers of equipment it
should be emphasised that a strengthened policy approach (in particular Options
D and E) would provide opportunities for small innovative companies. Denmark
has successfully supported alternatives by national legislative measures and
support to R&D and thus stimulated market growth of Danish SMEs in the
sector.7, [66] As for companies servicing F-Gas
equipment, the effects explained above (6.2.2) will also affect small
enterprises as demand for the enhanced maintenance requirements under the F-Gas
regulation should decline in the long run when less F-Gases would be used in
equipment. However, at least in the medium term this should not be noticeable
to service companies as the containment obligations stemming from the existing F-Gas
Regulation are only slowly being fully understood and implemented on the ground
by affected companies, leaving a lot of growth potential for the service sector
in this field. Furthermore, the inclusion of additional sectors in existing
maintenance requirements should create additional demand for servicing
companies just as novel equipment using alternatives will create new service
and maintenance needs, in particular for substances that are flammable and/or
used at high pressures. Making best use of such opportunities will however
require initial investments in particular with regard to training.[67]
Finally, service companies which have limited their business activities to leak
checking and recovery usually are also involved in the installation of new
equipment and its on-site construction (and would profit from the latter
activities under a strengthened approach, in particular if on-site filling is
prescribed). In summary, even though F-Gas servicing needs due to the existing
Regulation would decline in particular for the most effective policy options,
SMEs in the service sector will experience new business opportunities under a
strengthened approach (i.e. in particular D and E), so that they are not
expected to suffer any significant negative consequences. As for SMEs in sectors that might be indirectly
affected (as suppliers or sellers of products/services to end-users, e.g.
foodstuff, clothing, gastronomy,..), the discussion in 6.2.2 (and Fig. 9)
showed that such effects are very small overall, with some sectors providing
input to the machinery and equipment sector affected positively, while very
small negative effects on the products-for-endusers sectors could occur. All
policy options aim at reducing the use of F-Gases with high GWP in new
equipment and do not force the replacement of old equipment. Hence, SMEs
would not be burdened with any new costs for replacing existing equipment. This
is particularly relevant for the competitiveness of SMEs and microenterprises
in the food-and-drink industry.[68] Options B and D would impose a (small)
additional administrative burden on companies for the verification of
the reported information (see 6.2.3). It is the intention to introduce quantitative
thresholds similar as is the case for reporting requirements to protect small
companies, especially microenterprises. 6.3. Social
impacts In the following
impacts on employment and safety, occupational and health risks are presented. All
other types of social impacts, including rights related to job quality, social
inclusion of particular groups, gender issues, governance issues, access to
justice of media, crime and security, culture or social protection are not
affected by any of the proposed policy options. 6.3.1. Employment
impacts and labour market Net employment
effects of the policy options were analysed in detail including: (1)
Direct employment effects at the level of
regulator or regulated entities; (2)
Indirect employment effects that occur further
up the production chain as a result of the increased investment activity in specific
sectors or economic areas; (3)
Employment effects induced through demand shifts
that i) occur to finance the investments (demand reduction) or ii) result from
revenue recycling, e.g. increased government expenditure (demand increase). In the following,
employment effects of Options B (voluntary agreements), D (phasedown) and E (bans)
are compared. Option C was not analysed in detail because its limited scope
means that costs are very small and employment effects therefore negligible. Based
on the EmIO-F Europe Input-Output model (see Annex IX) and EU27 employment
data for 2007, the effect of additional investments, reduced running costs and
consumer reaction on employment was estimated. Fig. 10
shows employment effects for those activity areas directly impacted by the
change in F-Gas policy. The effects are in line with the output effects
discussed previously (6.2.2). As most of the change in activity is related to
additional investment in machinery and equipment, the (positive) effect is most
pronounced in this area. On the other hand, the model predicts negative effects
for services and maintenance. The overall effect on service companies is,
however, likely to be more balanced (see discussion in 6.2.2). Electricity
demand is lower for new equipment, hence a negative effect on employment in
this area is observed. The same is true for the chemicals sector which shows
positive but rather small effects. For Option D, the effects are more
pronounced (both positive and negative) than for the other two options, as more
sectors are involved, with a small overall positive benefit on employment. As
discussed before the impacts on sales (and investments) might be somewhat
smaller (1%) if costs are passed through in prices and lower sales of
equipment, e.g. the total effect for machinery (option D) would not be 0.3%,
but only 0.297%. Fig. 10: Employment effects for
activity areas in directly impacted sectors (% of 2007 sector employment) based
on EmIO-F Europe Fig. 11 details employment effects based on
EmIO-F Europe for selected, indirectly affected sectors. Positive
effects occur for those sectors providing inputs for production to the
machinery/equipment sector (basic metals and metal products), while small
negative effects occur in the retail and consumer goods sectors due to the reduced
demand by consumers. Fig. 11: Employment effects on
selected, indirectly impacted sectors (as % of 2007 sector employment), based
on EmIO-F Europe Fig. 12 summarises direct and indirect
employment effects for policy Options B, D and E in terms of number of jobs
created, based on EmIO-F Europe. All sectors related to investment
expenditures will experience a stimulus, while ongoing expenditure would be
reduced and thus affect employment negatively, and consumer reaction might lead
to less sales due to higher prices. In total, Option D would have a net total
positive effect on employment of around 7180 jobs, Option E would have a net
effect of 3740 and Option B would create around 630 net jobs. The net effect on
employment are small positive effects in case of Option D and to a lesser
degree, for Option E, while almost no effect is observed for Option B. Fig. 12: Effect on employment (number of
employees), EmIO-F
Europe model For comparison, employment impacts for Option
D and E have also been estimated with the macro-economic GEM-E3 model
(Annex XIV) for Option D and E. The results differ somewhat from EmIO-F: 1600
jobs could be lost by Option D; in case costs are passed on to consumers the
net employment would decrease further to -15,800 jobs (In case rights to use
F-gases would be auctioned and revenues used to cut labour costs impacts would
be positive: +5400 jobs) Option E would have similar, but smaller impacts of
-1,000 to -11,600 in case of costs pass-on (and +4000 in case of auctioning)
Since GEM-E3 does not account for the fact that F-Gas imports are
addressed by measures, the impacts shown are likely to be overestimated. Overall,
both models agree on the magnitude of effects, which are in the order of
several thousand jobs created or lost. By comparison, these numbers are small
compared to the total number of jobs in 2030 (some 231 million jobs in the EU
as a whole), representing a maximum effect of -0.007% in the worst case. In conclusion, both
models predict small effects in the order of up to several thousand jobs in
case of a strengthened F-Gas Regulation, an effect that is highest for the phasedown
mechanism (Option D). 6.3.2. Safety,
occupational and health risks Many substances used
in abatement technologies are flammable and therefore constitute a potential
occupational hazard. Hydrocarbon (HC) refrigerants such as already commonly
used in private fridges are classified as highly flammable and unsaturated HFC
refrigerants which are also likely to be used as substitutes for HFCs have
recently been classified as “mildly flammable”
[69]. This
classification also applies to ammonia (NH3) and e.g. HFC-32. Some
substances are toxic (NH3), and some are operated at high pressures
(CO2). The feasibility
analysis of replacement substances for the different application sectors
carried out by Schwarz et al. (2011)9 which
forms the basis for the effectiveness and efficiency assessment of the policy
options is based on the precondition that only proven and safe (and
energy-efficient) alternative technologies should be deployed. For this reason health
and occupational risks for alternatives as a result of the policy options are
not expected to be high, as long as safety standards and procedures are
followed. Even though no comprehensive data to quantify the increased health
risks due to the use of flammable HCs or highly pressurised CO2 and
NH3 systems at larger scale seems to be available, the use in some
sectors such as commercial and industrial refrigeration is already widespread
in Europe without giving rise to a high number of accidents. Halogen-free
alternatives such as propane, butane (HCs), CO2 received a more
favourable toxicological rating than F-Gases and pose no health risks to
employees if regulations are observed. Given proper handling, NH3 is
also an acceptable alternative substance for refrigeration purposes.4 Product
design must take the flammability or pressure needs into account, e.g.
combustible substances are contained in enclosed or encapsulated
explosion-proof systems only. Health risks from flammable substances for non-professionals
are met by technical safety standards and safety installations (charge limits
in occupied spaces, operation in indirect mode for higher charges, etc.). Health
risks for professionals as a result of improper handling or installation cannot
be fully ruled out but can be minimised by appropriate training and education,
which is obligatory for persons who come into contact with dangerous substances,
and is prescribed by existing legislation (F-Gas Regulation). It is considered
to include in the legal proposal the need for training requirements for
certified personnel handling alternatives in order to further minimise any
safety risks. The costs for training and education are already included in the
investment costs of equipment, which is based on alternative technologies such
as HCs, ammonia or CO2. Stakeholders pointed out during the
consultation that different safety standards and regulations in Member States
should be harmonised in order to minimise risks but also to avoid that
different standards remain a barrier to innovative solutions and internal
trade. 7. Comparing
the options Table 13 compares the
most important impact parameters for all policy options vs. the baseline (Option
A). Option D, the HFC phasedown mechanism complemented by measures on
pre-charged equipment achieves the highest environmental effectiveness,
i.e. the fastest and largest replacement of HFCs with high GWP. Options E also
achieves considerable emission savings albeit significantly lower than Option
D, while Option B and C achieve much less emission reductions
altogether. Table 13: Summary table of environmental, economic
and social impacts of the policy options IMPACTS || Option B || Option C || Option D || Option E || || Vas || Enlarged Scope || Phasedown || Bans || ENVIRONMENTAL || || || || || Emission Reductions SUM [Mt CO2eq] || 22.2 || 1.4 || 70.7 || 53.3 || Ecotoxicological Relevance || low risk || negligible || low risk || low risk || ECONOMIC || || || || || Average abatement costs [€/t CO2eq] || 17 || 46 || 16 || 17 || Total direct costs [(M€/year] || 527 || 66 || 1,499 || 1,286 || Administrative costs [M€/year] || 10.7 || 0 || 0.2 (+ 1.9 one-off) || 1.2 || Direct effects on sector output [ % of 2007, I/O model] || 0.006 || negligible || 0.009 || 0.003 || - machinery/ equipment || 0.38 || negligible || 0.52 || 0.23 || - services/ maintenance || -0.09 || negligible || -0.38 || -0.37 || - chemicals || -0,19 || negligible || 0.17 || 0.03 || - electricity || -0.19 || negligible || -0.59 || -0.26 || GDP impacts (% change, GEM-E3 model) || smaller than D || negligible || -0.006 || -0.003 || Impacts Regions || negligible || negligible || small effects on EU South || smaller than D || Impacts SMEs || no significant effects || negligible || no significant effects || no significant effects || Internal market || none || none || none || None || Competiveness, trade & investment || small || negligible || small positive for alternatives || Small positive for alternatives || Third countries || negligible || negligible || incentivises alternatives globally || incentivises alternatives globally || Consumer prices || negligible || negligible || negligible || negligible || Innovation & research || facilitates to low degree new technologies || negligible || facilitates new technologies and products || facilitates new technologies and products || SOCIAL || || || || || Employment: impact in 2030 [No. of jobs] || +600 || negligible || -16,000 to +7,000 || -12,000 to +4,000 || Safety & health risks || negligible || negligible || negligible || negligible || All policy
options achieve their respective emission reductions cost-efficiently, i.e. at abatement costs below 50€ / t CO2eq. Economic impacts on GDP, employment,
industry sectors, regions, etc. are low in general.
Due to the higher use of replacement substances in Option D the total direct
costs are highest, but lead to stronger positive sectoral effects in some areas
(machinery and equipment) but small negative effects in others (services and
energy). SMEs are not expected to face considerable negative effects, but for Options
D and E there is a small effect on Southern European countries. Options D
and E are the only options that will strongly stimulate innovation and market
uptake of green technologies. Additionally, administrative costs are
relatively low for all options, but highest for Option B mostly due to the
need for additional verified reporting by a high number of companies affected. The qualitative ranking in Table 14 below further
summarises environmental, economic and social effects, using 0 for neutral
effects, +/++/+++ for positive impacts and –/--/--- for costs and negative
impacts. For the economic impacts mainly the abatement costs, the
administrative costs and effects on output were considered for the ranking.
This table clearly indicates the most positive total impact of policy option
D, the HFC phasedown mechanism complemented with measures on pre-charged
equipment. Only Option
D is fully effective as regards the objectives, as only this option would make
a sufficiently large contribution in emissions reductions to the low carbon
roadmap at the levels needed to take overall cost-efficient mitigative action (see
Table 14). This is achieved at levels that are considered cost-efficient (at
< €50 / tonne CO2) according to the Roadmap. Option D also stimulates
innovation and comes at a low cost to the economy and society as a whole while
giving flexibility to industry. It is therefore the only policy option that
is coherent with the objectives. Table 14: Ranking of policy options IMPACTS || Option B || Option C || Option D || Option E || VA's || Enlarged scope || Phasedown || Bans ENVIRONMENTAL || + || 0 || +++ || ++ ECONOMIC || 0 || 0 || 0 || 0 SOCIAL || 0 || 0 || 0 || 0 Cost-Effective Contribution to Roadmap || No (emission reductions only capture 30% of cost-effective actions) || No (emission reductions negligible) || Yes (all emission reductions up to cost-efficient level captured) || No (emission reductions only capture 75% of cost-effective actions As set out in section 5.6, all policy
options are not mutually exclusive. By way of example, Option C is
complementary to all the other policy options and could therefore be
implemented alongside e.g. Option D. Some bans in Option E are also complementary
to Option D, e.g. if they concern F-Gases not covered by the phasedown (SF6
in magnesium die casting) and the mandatory destruction of HFC-23, or could be
implemented alongside to address low-hanging fruits in sectors where the use of
alternatives is already commonplace, i.e. domestic and commercial
refrigeration. In this way, Option D implemented together
with Option C, as well as complementary bans on emissive uses of SF6, mandatory
destruction of HFC-23 by-production, together with action on domestic and
commercial refrigeration would achieve an emission reduction of ca. 72 Mt CO2eq.
All economic and social effects would for all practical purposes be identical
to Option D, as this option alone addresses the vast majority of sectors and
applications of such a package. Stakeholders including many industrial
umbrella groups have also to a large degree expressed their preference for a
package of measures at the stakeholder conference meeting and as a main element
would prefer a phasedown, as opposed to use bans (Annex II). 8. Monitoring
and evaluation The main objective
is to reduce emissions and deliver a fair, cost-efficient contribution from the
F-Gas sector to mitigative action, e.g. the Low Carbon Roadmap. Effectiveness
of the chosen policy option as regards emissions can be closely followed in the
future through the reporting of GHG emissions by Member States to the UNFCCC[70]
and the EU Monitoring Mechnism[71], which includes emission
data on F-Gases. Furthermore, the
baseline (Option A) allows the annual collection of data on bulk F-Gases in the
EU due to existing reporting requirements in the current F-Gas Regulation2.
These obligations apply to companies producing, importing or exporting F-Gas
quantities and preparations >1 tonne and reports are to be submitted
annually to the EC and the competent authorities of the Member State concerned.
Data is currently available for the years 2007-2010. This existing reporting
scheme under the F-Gas Regulation is generally suitable for retrospectively
verifying the bulk F-Gas quantities placed on the EU market and also provides
important data for an effective monitoring and evaluation of the policy options
discussed. Additional monitoring and reporting needs arise in the following
areas to ensure the evaluation of the effectiveness of the implemented F-Gas
policies as well as coherence with possible international obligations: –
Extend coverage of substances (to meet
international developments and include unsaturated HFCs) –
Extend the company reporting requirements to
quantities contained in imported or exported pre-charged products and equipment
(needed for implementing Option D or E) –
Complement the one tonne threshold for company
reporting with a GWP-based de minimis rule (for implementing Option D)
of 1,000 t CO2eq per year (on average similar in magnitude to the
one tonne threshold which already applies under the current regulation[72]) –
Introduce reporting obligations for reclamation
and destruction of F-Gases by specialised facilities to fully monitor recovered
HFC quantities from reuse/recycling or reclamation –
Additional reporting for exporters in an EU phasedown
mechanism (Option D) –
Improve reporting systems which Member States
need to calculate emission data under Art. 6(4) of the F-Gas Regulation –
Independent verification of company reports on
POM to assure accuracy (Option D) Based on the reporting data alongside the
UNFCCC emissions data, progress on emission reductions, the use of individual
substances and the introduction of alternatives, the performance of policies
and their environmental impact can be calculated in the future. A review clause
would be appropriate to take account of new technical developments, while at
the same time safeguarding planning certainty for industry.[73] ANNEX I: Glossary of Terms AC Air
conditioning AnaFgas Analysis of Fluorinated GHGs in EU-27
(bottom-up stock model to derive demand and emission scenarios for F-Gases in
relevant sectors and sub-sectors for the EU-27) (see Annex IV) CFCs Chlorofluorocarbons
(belong to ODS) COP Conference
of parties CO2eq CO2
equivalents COM European
Commission CN Combined
Nomenclature CRF Common
reporting format (UNFCCC) EC European
Commission EEA European
Environment Agency EmIO-F (Europe) Employment
Input-Output Model for Analysis of Policies and Measures for the European Union
(see Annex IX and XV) ETS Emission
Trading System FAR Fourth IPCC
Assessment Report F-Gases Fluorinated
Gases: HFCs, PFCs and SF6 GEM-E3 macro-economic
general equilibrium model (see Annex XIV and XV) GHG Greenhouse
gases GWP Global
warming potential HCs Hydrocarbons,
e.g. propane, butane HCFCs Hydrochlorofluorocarbons
(belong to ODS) HF Hydrofluoric
acid HFCs Hydrofluorocarbons
(belong to F-Gases) HFC-23 Trifluoromethane HS code Harmonized
System code IPCC International
Panel on Climate Change LULUCF Land Use/Land
Use Change/Forestry MAC Directive Directive 2006/40/EC relating to emissions
from air-conditioning systems in motor vehicles and amending Council Directive
70/156/EEC MDI Metered
Dose Inhaler Mg Magnesium MS Member
State(s) NF3 Nitrogentrifluoride NH3 Ammonia OCF One-component
foams ODS Ozone-depleting
substances: e.g. CFCs, HCFCs, Halons ORC Organic
Rankine Cycle PFCs Perfluorocarbons
(belong to F-Gases) POM Placing on
the market PU Polyurethane RAC refrigeration
and AC equipment (includes heatpumps) SAR Second IPCC
Assessment Report SF6 Sulphurhexafluoride
(belongs to F-Gases) SME Small and
medium enterprise SO2F2 Sulfurylfluoride TAR Third IPCC
Assessment Report TBT Agreement
on Technical Barriers to Trade TFA Trifluoric
Acetic Acid UNFCCC United Nations
Framework Convention on Climate Change (M)t CO2eq (million)
tonnes CO2 equivalents VA(s) Voluntary
agreement(s) WAM Emission
scenario for EU if F-Gas legislation is strengthened WM Emission
scenario for EU if current F-Gas legislation is maintained
unchanged (= baseline Option A) WOM (Hypothetical)
emission scenario for EU in the case that no EU F- Gas
legislation existed WTO World Trade
Organisation XPS Extruded
Polystyrene ANNEX II: Stakeholder Consultations 1. Conference Report
on Stakeholder Meeting in Brussels, 13 February 2012 1.1. Conference
Objectives The meeting aimed at informing stakeholders
about first results of the online stakeholder consultation, as well as options
for future action. A second objective was to provide a platform for an open
exchange of views with stakeholders to conclude the consultation process. 1.2. Summary
of Presentations and Interventions –
Presentations Consultants from Öko-Recherche presented
their preparatory study for the review of the Regulation on certain fluorinated
gases (F-Gas Regulation), focusing in particular on the feasibility and
cost-effectiveness of alternatives in different sectors, and calculating future
penetration rates for these alternatives. They also screened the most promising
policy options in terms of effectiveness of emission reductions, cost
efficiency, energy efficiency, technical constraints and other criteria such as
coherence with other policies. The highest emission reduction potential was
achievable by limiting the amounts of F-Gases placed on the market ("phasedown"),
followed by bans and by voluntary agreements. Subsequently, DG CLIMA presented the
Commission's review report (COM (2011) 581) of 26 September 2011, which
assessed the current state of implementation of the F-Gas Regulation, its
impacts and long-term adequacy of reducing the climate effects due to F-Gas
emissions. Some shortcomings in the implementation of the Regulation were
highlighted. A full implementation could enable a stabilisation of F-Gas
emissions at today's levels. In view of the climate goals and a growing
feasibility of replacing F-Gases in many sectors with alternatives, further
cost-effective reductions of greenhouse gas emissions were justified.
Potentially, up to 2/3 of today's emissions could be eliminated in the EU by
2030. DG CLIMA presented initial results from the
online stakeholder consultation that took place from September to December
2011. 261 stakeholders replied to this questionnaire of which 77% came from the
industrial sectors. Almost all stakeholders agreed there was a need for further
action on F-Gases compared to the status quo and over 40% of respondents also
considered further legislative action to be necessary. Many suggestions for
improving containment were also made. On the question of the most adequate
policy approaches there were quite divergent views and sectoral differences. In
addition, some industry respondents expressed concerns as regards their
competitiveness, while manufacturers of equipment using alternatives,
administrations, NGOs and many individuals saw concrete benefits in a shift
away from F-Gases, especially for fast movers. DG CLIMA then presented the current state
of play regarding the reflections on potential EU action in the field of F-Gases
in order to reach the EU climate goals in a cost-effective way. The Commission
was currently assessing further the environmental, economic and social impacts
of major policy options such as voluntary agreements, improving containment,
progressively limiting the supply of F-Gases ("phasedown"), and
possible bans on the use of F-Gases in certain applications. These options were
being considered on top of a full application of the existing F-Gas Regulation.
Given the need to address different F-Gases, different uses and varying
availability of alternatives as well as old and new equipment and products, a
mix of policy measures appeared necessary. The Commission planed to adopt a
legislative proposal in the second half of 2012. –
Discussion and Comments Stakeholders were invited to provide
feedback, in particular, on what package of F-Gas measures could best meet the
objective of contributing consistently and cost-effectively to the EU 2050 greenhouse
gas emission reduction target. Almost all stakeholders took the floor. ·
A large majority of industry acknowledged the
need for further EU action and preferred or could live with a phasedown option
as it was considered to be more flexible than bans and would allow industry to
adapt and continue using F-Gases in applications where this was considered to
be the optimal solution. NGOs and a few industrial participants favoured bans
where alternatives to F-Gases would lead to lower overall greenhouse gas
emissions and NGOs saw a phasedown rather as a complementary measure to bans.
Others, such as importers of equipment, pointed out that bans would be
detrimental to their business. A few participants wanted to focus on
containment only. Member States had no official positions yet, but indicated
support for a phasedown measure. ·
Many would also like to see action at the global
level and encouraged the Commission to endeavour to get an agreement through
the Montreal Protocol to avoid unfair competition and a need for product
differentiation between the EU market and markets elsewhere. ·
A need for a mix of policies was confirmed by
many stakeholders. Other comments mentioned by some
stakeholders included: ·
Full implementation and application of the
current legislation should be ensured. ·
Measures related to containment of F-Gases
should be strengthened and the scope should be extended. Also, requirements
regarding "end of life" treatment should be enhanced. ·
The experiences with voluntary agreements were
very mixed. Such agreements were favoured by some, whereas others did not
consider them to be adequate and enforceable. ·
A level playing field should be ensured.
Consequently, the chosen mix of policies should affect imported products
containing F-Gases to the same extent as products produced and used in the EU
and it should not hamper export. It could be considered to tax gases in
pre-charged equipment or require the installation of the gas to be done by certified
personnel in the EU. ·
It would be unfair to introduce bans on the use
of F-Gases in products that could be substituted by products not subject to
bans, e.g. banning F-Gases in certain foams while leaving other foams
unregulated. ·
Existing equipment should not be made redundant;
therefore, it would be crucial that potential bans target only the use of F-Gases
in new equipment. ·
Product liability issues should be taken into
account for alternative technologies that were e.g. flammable. ·
Different safety and building codes across the
EU represented barriers to the use of alternatives and EU harmonisation should
be considered. ·
Availability of F-Gases should be safeguarded
for certain necessary uses in e.g. in fire protection and medical aerosols. ·
Training and certification rules for personnel
dealing with alternative technologies should be harmonised to ensure
sufficiently trained contractors in order to enable uptake of alternatives and
to limit distortion of competition. ·
Alignment with other policies, e.g. requirements
related to environmental performance of energy related products (ecodesign) and
waste was essential. Impacts on energy efficiency should be further assessed,
in particular for heat pumps. ·
Sufficient time for transition and clear dates
would be needed to enable industry to plan ahead. ·
Effects on SMEs should be considered. ·
Policy should promote a direct shift to natural
refrigerants, while intermediate steps involving first a shift to F-Gases with
a lower GWP and subsequently to natural refrigerants would be costly and should
be avoided. ·
To avoid use of SF6 in switchgear, the EU should
ban the use in the future and at the same time jointly finance with industry
R&D on alternative uses to SF6 in large switchgear since currently
alternatives do not exist. ·
HFC23 destruction should be made mandatory The following questions were raised by
stakeholders: ·
The findings of the Öko-Recherche study show
a high feasibility to replace F-Gases with natural refrigerants. Why are F-Gases
with low GWP not included as alternatives to a higher extend in the model? Öko-Recherche response: The EU objective is
to reduce emissions cost effectively hence, where technically feasible and cost
effective (costs lower than 50 € per CO2 equivalent in 2030) gases with no
recorded GWP have been favoured, regardless of whether a shift to relatively
low GWP F-Gases would be less costly. A study conducted by ERIE/Armines
confirms the Öko-Recherche results and gives similar metric tonnes by 2030 for
the main application sectors, but is more limited in its scope. Alternatives
were only taken into account if they could at least meet the energy efficiency
related to technologies using conventional F-Gases. ·
Are other studies also considered in the
impact assessment? DG CLIMA response: The Öko-Recherche study
is a comprehensive study covering all sectors and F-Gases and it provides a
good basis to develop policies. In addition, studies made by ERIE/Armines in
2011 and the German Umweltbundesamt in 2010 as well as an upcoming study on
"banks" by SKM/ENVIROS are taken into consideration. DG CLIMA would
also welcome further input from projects announced by EPEE on a phasedown
mechanism and by AREA on training requirements. ·
Have inadvertent emissions during production
processes been considered in the study? Öko-Recherche response: No. ·
How would the trend for F-Gas projections be
iF-Gases covered by the F-Gas Regulation alone and disregarding the MAC
Directive? DG CLIMA response: The projected F-Gas
emissions that are regulated by the F-Gas Regulation alone would increase in
the future if no further action is taken. ·
Does the Commission have good experiences
with voluntary agreements? DG CLIMA response: The voluntary agreements
in this context are non-regulatory voluntary agreements between industry players.
The experiences with that type of voluntary agreements appear to be mixed. The
semiconductor industry's agreement to reduce perfluorocarbons has lead to a
reduction in greenhouse gas emissions. ·
Will there be set-asides for necessary uses
in e.g. fire protection and medical aerosols? DG CLIMA response: Needs for F-Gases where
no cost efficient alternative exists are taken carefully into consideration. ·
Are taxes considered at EU level? DG CLIMA response: EU-harmonised taxes
requiring unanimity in the Council and covering so many different sectors are
difficult to establish at an optimal level and it is difficult to foresee the
resulting emission reductions. By introducing e.g. cap under a "phasedown"
the outcome is assured. Hence, at this stage an EU harmonised tax is not
considered as a relevant option, however, Member States could introduce taxes
on F-Gases. ·
Will training measures be included into the
Regulation? DG CLIMA response: The Commission is
considering all options including possible measures related to training. ·
How will pre-charged equipment be handled? DG CLIMA response: We are looking into this
with a view to ensure a consistent approach to reduce emissions and a level
playing field for producers inside and outside the EU. ·
Will the impact assessment be made public? DG CLIMA response: Yes, when the Commission
adopts a legislative proposal it will be accompanied by an impact assessment in
the form of a staff working paper. 1.3. Concluding
remarks DG CLIMA thanked participants for the comments
made at the meeting and during the online stakeholder consultation and
underlined that the comments were very useful for the further work on the
impact assessment and the legislative proposal. DG CLIMA noted that proper implementation
of existing legislation was crucial and that Member States had been asked to
step up their efforts. The meeting had revealed a large consensus on the need
for further EU legislative action and a preference for a "phasedown"
mechanism as a key driver while noting that a phasedown can be designed in many
ways. Also, given the complexity of the subject a mix of measures would be
appropriate. Moreover, many had flagged the need to work towards a global phasedown
under the Montreal Protocol. Finally, many called for more harmonisation of, in
particular, safety requirements. DG CLIMA mentioned that this conference was
seen as the last step in a long consultation process with stakeholders which
started in 2010 with an expert stakeholder group following the preparatory
study by Öko-Recherche, included the 3-month online stakeholder consultation as
well as this open stakeholder conference. DG CLIMA would further analyse all
the contributions obtained and thoroughly examine the impacts of different
policy options and work on the legislative proposal foreseen later in 2012. **** 1.4. Agenda
of meeting STAKEHOLDER MEETING On a Review of Regulation (EC) No 842/2006 of the European
Parliament and of the Council “on certain fluorinated greenhouse gass” Monday 13 February 2012 – 10:00 / 17:00 HOURS Room 0A, Centre de Conference Albert Borschette, Rue Froissart 36,
B-1049 BRUSSELS 1.
Opening
2.
Presentation
by Öko-Recherche GmbH of the Preparatory study for a Review of the Regulation
on certain fluorinated greenhouse gass (Regulation (EC) No 842/2006) - Questions and clarifications 3.
Presentation by DG CLIMA of the Commission Report on the
application, effects and adequacy of the Regulation on certain fluorinated greenhouse
gass (Regulation (EC) No 842/2006)); COM(2011) 581 final - Questions and clarifications 4.
Presentation
by DG CLIMA of the results of the online stakeholder consultation on reducing
fluorinated greenhouse gas emissions - Questions and clarifications 5.
Introduction
by DG CLIMA of policy options to achieve cost-effective reductions of
fluorinated greenhouse gas emissions - Exchange of views and statements 6.
Closing 1.5. Registered
Participants || Surname || First name || Mr || BECKER || Malte || Electrolux Home Products Corporation N.V. Mr || TARABBIA || Christian || Whirlpool EMEA Mr || D'HAESE || Alain || European Aerosol Federation (FEA) Ms || FOURNEAU || Virginie || Dehon Group Mr || LELIÉVRE-DAMIT || Alain || Climalife - dehon group Ms || MARTIN || Delphine || Climalife - dehon group Mr || KUNZE || Peter || ACEA - European Automobile Manufacturers Association Mr || ELDER || Alan || EUROFEU Mr || CAMERON || Alasdair || Environmental Investigation Agency Mr || LARSSON || Tove || FoodDrinkEurope Mr || REESON || Stephen || FoodDrinkEurope Ms || PAPAZAHARIOU || Christiana || LG Electronics France Mr || HWANG || Herman || LG Electronics France Mr || SCUMPIERU || Mihai || Mitsubishi Electric AC Systems Europe Ltd Mr || LOWRIE || Richard || Mitsubishi Electric AC Systems Europe Ltd Mr || NICOLLE || Darcy || AmCham EU Mr || COWPERTHWAITE || Stephen || UK - DEFRA Mr || ANDERSEN || Jacob || UK - DEFRA Mr || WÖHRL || Stefan || German Association of the Automotive Industry Mr || MESSNER || Kevin || Association of home appliance Manufacturers (AHAM) Mr || HOOGKAMER || Joop || EUROVENT Ms || DHONT || Hilde || Daikin Europe N.V. Mr || DIERYCKX || Martin || Daikin Europe N.V. Ms || FLRTCHER || Rory || ASSURE Secretariat Mr || THIE || Stefan || JBCE Mr || BAUMBACH || Frank || MAC Partners Europe Mr || DIERYCKX || Martin || AGORIA Mr || GREALY || Joe || Transfrigoroute International Mr || STUMPF || André || Transfrigoroute International Mr || McCARTHY || Adam || Johnson Controls Mr || BLACK || Jon || European Industrial Gases Association AISBL (EIGA) Mr || DEVIN || Eric || CEMAFROID SNC - France Ms || PIGACHE || Claire || EADS Mr || CAMPBELL || Nick || ARKEMA SA Mr || GOELLER || Juergen || Carrier EMEA and Carrier Transicold EMEA Ms || O'NEILL || Michelle || Ingersoll Rand International Ltd. Ms || WEIKER || Christine || European Cold Storage and Logistics Association - ECSLA Mr || BAUMEISTER || Frank || European Cold Storage and Logistics Association - ECSLA Mr || KENICHI || Ichihara || Fujitsu General Mr || LORENZO VOLPI || Ilja || CER Mr || JANIN || Olivier || AREA Mr || LINDLEY || Andy || Mexichem Fluor Ltd Mr || Nigel || GRANT || BEAMA Ltd Mr || CORDIOLI || Giacomo || ANIE-Energia (Italy) Mr || AMBROSI || Robert || Sub-Zero, Inc Mr || OETJEN || Jan || Sub-Zero, Inc Mr || ENGELHARDT || Rolf || DE - Federal Ministry for the Environment Ms || MUNZERT || Elisabeth || DE - Federal Ministry for the Environment Mr || SATHIAMOORTHY || Muhunthan || BP Ms || ROBINSON || Andrea || BP Mr || MOSEMANN || Dieter || Eurammon Mr || BIASSE || Jean-Marc || T&D Europe Mr || PORTE || Wim || EATON Mr || DE HAAN || Ton || EATON Mr || OTEGUI || Enrique || AFBEL Ms || VOIGT || Andrea || EPEE Ms || van der LOO || Fanny || EPEE Mr || SLEDSENS || Ton || Natuur & Milieu Ms || BECKEN || Katja || DE - German Federal Environment Agency Ms || ANGELOSANTE || Antonella || IT - Ministry for the Environment, Land and Sea Ms || SPINETTI || Roberta || IT - Ministry for the Environment, Land and Sea Mr || KATAOKA || Osami || JRAIA/JROAME Mr || MARATOU || Alexandra || Shecco Mr || RICHTERS || Arne || Shecco Ms || FINEL || Nufar || FI - Finish Environmental Institute Ms || NURMI || Eeva || FI - Ministry of Environment Mr || Nankivell || Mike || ACRIB Mr || RAUSCHER || Nadine || EXIBA Ms || CLARKE || Jean || IE - Department of Environment, Community and Local Government Ms || COLLINS || Caitriona || EPA Mr || GARNACHO || Laura Gallego || CAMBIO CLIMÁTICO – DEPARTAMENTO DE ECONOMÍA Mr || BEIGHTON || Samuel || Wragge & Co LLP. Mr || J. LEVINE || Lewis || Wragge & Co LLP. Mr || WALTHAUS || Herman || NL - Ministry of Infrastructure and Environment Mr || COCCIONI || Renzo || ZVEI - German Electrical and Electronic Manufacturers' Association Mr || BASSI || Marino || EMBRACO Ms || KÖPPEN || Andrea || EHI Ms || POPP || Dana || EHI Mr || KYLMALIIKKEIDEN LIITTO || Suomen || Finnish Refrigeration Enterprises Association Mr || KYLMAYHDISTYS || Suomen || The Finnish Society of Refrigeration Mr || JONES || Arthur || Tyco International Ms || BORSKA || Jana || CZ - Ministry of Environment of the Czech Republic Mr || JUST || Samuel || FR - Ministère de l'Ecologie, du Développement Durable des Transports et du Logement Mr || CACCIATORI || Federico || ANIMA Mr || PAUWELS || Marleen || EFCTC (European Fluorocarbon Technical Committee) Mr || BONASO || Carlo || Frigo 2000 srl Mr || LINKE || Wilfried || BDH Mr || SCHMITT || Peter Boris || Henkel AG & Co. KGaA Ms || RABAZAUSKAITE-SURVILE || Jurga || LT – Ministry of Environment of the Republic of Lithuania Mr || LAURINAVICIUS || Vladislavas || Board of National Association of Refrigeration Mr || MARTINEZ-SCHÜTT || Diego || CDM Watch Mr || FRACCAROLI || Nicola || CDM Watch Mr || SZYMANSKI || Rafal || PL - Ministry of the Environment Ms || MATHIS || Pamela || ICF International Mr || AARNIO || Ulriikka || Climate Action Network Europe Mr || Van GERWEN || Rene || Refrigerants Naturally Dr. || THEWISSEN || Harry || EECA ESIA Mr || GOEMAN || Bart || 3M Belgium Mr || BUREAU || Maxime || 3M Belgium Mr || KRENZ || Thorsten || Deutsche Bahn Ms || LANDER || Annika || MAN SE Ms || CONRAD || Silke || Daimler AG Mr || LEE || Nicholas || PSA Peugeot Citroën Ms || MERCEDES VÁZQUEZ || MIRANDA || RED ELÉCTRICA DE ESPAÑA Dr. || RAINER || Jakobs || IZW e.V. Information Centre of Heat Pumps and Refrigeration Mr || LENDERS || Jan Willem || The German Association of Energy and Water Industries Ms || SAAR || Dorothee || Deutsche Umwelthilfe e.V. Ms || NOURIGAT || Cécile || Burson-Marsteller Mr || SÉNÉJEAN || Benoit || ADHAC Mr || GROZDEK || Marino || HR - Ministry of Environment and Nature Protection Mr || LEMOINE || Sébastien || Carrier Transicold Europe Mr || ZBYSZEWSKI || Sandamali || Acumen public affairs Dr. || WYATT || David || IPAC Mr || HOFTJIZER || Joris || Westye Group Europe, Inc Ms || ÚJFALUSI || Maria || SE - Environmental Protection Agency Mr || AHMADZAI || Husamuddin || SE - Environmental Protection Agency Ms || SCACANOVA || Klara || R744.com Mr || DIEGUEZ || Jorge || Dupont Mr || VANDERSTRAETEN || Stefaan || AGORIA Ms || PERRY || Clare || EIA Ms || JACOBI || Reeli || Ministry of the Environment Mr || BASSO || Paolo || European Photovoltaic Industry Association (EPIA) Mr || WILMART || Alain || BE - Ministry of Environment Mr || LEES || Jeannine || BE - Ministry of Mobility Mr || DAUWE || Tom || VITO Mr || MOORKENS || Ils || VITO Mr || BONNE || Jan || MAYEKAWA Dr || SCHWARZ || Winfried || Öko-Recherche GmbH Ms || GSCHREY || Barbara || Öko-Recherche GmbH Mr || KIMMEL || Thomas || Öko-Recherche GmbH Ms || TRANHOLM -SCHWARZ || Bente (chair) || European Commission Mr || KASCHL || Arno || European Commission Mr || KLAASSEN || Gerardus || European Commission Ms || PLIMON || Isabella || European Commission Mr || KESTNER || Matthew || European Commission Ms || BASIN || Bérangère || European Parliament 2. Executive
Summary of the Analysis of the On-Line Stakeholder Consultation 2.1. Participation 259 stakeholders participated in the online
consultation, 95 identified themselves as individuals (37%) and 164 as
organised stakeholders (63%). 77% of the organised stakeholders represented
companies, professional associations or trade unions; the remaining organised
stakeholders included non-governmental organisations (NGOs) or associations of
NGOs (7%), relatively few public authorities (3%) and some other
organisations. 62 stakeholders were active at EU or the international
level, e.g. including umbrella groups, NGOs, and international companies. All
major application sectors were covered. The stationary refrigeration sector
accounted for 24% of stakeholders, stationary AC sectors for 21% and the heat
pump sector for 24%. 2.2. Methodology As regards the evaluation of the results a
quantitative focus based only on the number of responses given to a particular
option in this multiple-choice questionnaire is not appropriate for several
reasons.
Industrial stakeholders clearly
outnumber other organisations such as NGOs and administrations.
Certain industries participated
very actively whereas other application sectors replied at comparably low
numbers; hence the opinion of particular sectors is overrepresented
relative to the size of the sector.
Submissions by umbrella organisations
and associations of NGOs would in a purely quantitative approach be
counted only once (just as the position of a single company) although they
already represent concerted (and thus very valuable) positions of multiple
members or even sectors.
Some companies replied more than
once since national branches, different departments or daughter companies
sent their responses separately, largely using the same text as the mother
companies or headquarters.
As a result a more differentiated approach to deriving
results was taken by relating answers to the type of respondents giving them.
Further, qualitative aspects of the contributions (e.g. textual contributions)
were integrated into the analysis and particular weight was placed on concerted
positions of umbrella organisations rather than single opinions. 2.3. Policy action addressing F-gas emissions 84% of respondents found that the current status quo
of implementing the existing regulation was not sufficient. While some
stakeholders believed that better implementation would suffice, others wanted
to see further legal action. Different opinions as regards the latter were
linked to stakeholder types as well as sector particularities. As for obstacles preventing the switch to alternative
technologies, the results indicated that the barriers differ between sectors.
This reflects that safe and cost-effective alternatives are not yet available
to the same degree in all application sectors. Overall, higher initial
investments were the main barrier identified. In the absence of a global
HFC phasedown, the preferred policy actions for organised stakeholders were strengthening
containment and recovery, voluntary agreements for specific sectors, and limits
to the placing of HFCs on the EU market, in this order. The options preferred
by individuals were additional prohibitions, strengthening containment and
recovery, and voluntary agreements. Stakeholders provided numerous suggestions to improve
containment and recovery pointing out the importance of control and enforcement
of the existing legislation and harmonisation of the situation within the EU as
well as the need to broaden the scope of the existing legislation. Further
propositions included measures improving awareness and information exchange,
the introduction of financial incentives and taxes as well as some technical
measures. 2.4. Impacts
of policy options When asked who would be most negatively affected,
organised stakeholders and individuals selected most often the commercial or
industrial end-users of relevant products/ equipment as well as producers of
products/ equipment normally relying on F-gases. Individuals also assumed that
F-gas producers would experience negative impacts, a concern not shared by the
producers themselves. A majority of industry stated concerns on a
strengthened approach with regard to the competitiveness of European businesses
in general. However, impacts were likely to differ between product groups.
Also, industry associations expressed concerns that non-EU competitors and
companies not covered by a strengthened approach might benefit. It was
suggested that respecting industrial planning timescales would help minimize
negative impacts. Also, it was important to avoid equipment redundancy before
their end of life. Benefits of a strengthened approach would occur for
manufacturers of products and equipment relying on alternatives as well as for
servicing companies and users of relevant products and equipment. Improved
containment and higher energy efficiency due to regular maintenance would
result in advantages for end users. NGOs and public authorities highlighted
competitive advantages in the alternative refrigeration and AC market. In additional comments, environmental NGOs underlined
the economic and environmental benefits for Member States and consumers that
could be achieved through an HFC phase out. Measures affecting the industry,
considered to be responsible for HFC use in the first place, were fairer than
measures impacting users and service companies. Public authorities highlighted
“marketing opportunities for fast movers”. Stakeholders saw no large differences for the
different options in relation to the administrative burden. In sectors where
certain reporting requirements already exist, it was suggested that the additional
administrative burden could be rather small. Established monitoring, consistent
enforcement, control and sanctioning were considered crucial for the
implementation of further measures. Environmental NGOs pointed out that
sectoral bans on use and marketing would bring about the smallest
administrative burden. 2.5. General Conclusions
Only a tiny minority of all
respondents (2%) thought that no further action would be an appropriate
response for the EU in the absence of progress at the global level. Similarly,
only 10% of respondents thought the current status quo (i.e. existing
legal rules and level of implementation) is sufficient.
A great number of suggestions
for improvement on implementation and containment of leakages were made.
In addition, over 40% of respondents including some industrial players
clearly indicated a need for further legal action.
Stakeholders were divided on the
most appropriate policy options. This was linked to stakeholder type (e.g.
industry, NGO, national administration,..) but also to sectoral
differences between industrial players. The preferred type of action
largely depends on the application sectors and whether requirements
already exist or not. This seems to indicate that there is no magic
solution in the form of a single policy option that can address the
complexities of the different sectors and applications. Over 500 suggested
measures collected as part of the consultation indicate that an
appropriate mix of policies may be the best way forward.
The expected impacts similarly
varied according to interest groups and application sectors. Many, but not
all, industrial players expressed some concerns on the grounds of
competitiveness. Other stakeholders including administrations, companies
in the field of alternatives, NGOs and many individuals saw concrete
opportunities and benefits in a shift away from F-Gases, especially for
"fast movers" and "green technologies".
Such benefits are expected in
particular if a global agreement to phase down/out F-Gases can be
achieved.
ANNEX III: Consultations of SMEs Table
A_III-1: The
SME test (1) Consultation with SMEs representatives || See section 2.3, Annex II as well as the list of organisations given below (2) Preliminary assessment of businesses likely to be affected || See sections 3.4, 6.2 (in particular 6.2.2, 6.2.10) as well as Annex II & information below Companies currently placing HFCs on the EU market and reporting under the F-Gas regulation were analysed: 36% of the affected companies are large, 15% medium, 26% small enterprises and for 23% no data was found to fully categorize the status. Small companies are mostly wholesalers, distributors and producers of equipment, while manufacturers and producers of HFCs in Europe are almost exclusively large companies. In addition SMEs also provide service and maintenance for the F-Gas sector (e.g. Art 3, Art 4 existing F-Gas Regulation). SMEs and microenterprises are also found as operators/end-users of relevant equipment, e.g. in the food and drink industry. (3) Measurement of the impact on SMEs || See sections 6.2 (in particular 6.2.2, 6.2.10) & 7 as well as Annex II & information below The effects on SMEs have been analysed via (i) an assessment of direct abatement costs in different sectors, (ii) an Input-Output model (see Annex IX, XV), (iii) a general equilibrium model (Annex XIV, XV), and (iv) a qualitative analysis based on the experience with the existing F-Gas regulation. Many SMEs are wholesalers/distributors which will be less affected because the policy options B, C, D and E do not require adapting the nature of their service delivery process in a substantial way. In addition, SMEs placing on the market only small quantities of HFCs benefit from the foreseen minimum thresholds for the application of the phasedown mechanism under Option D. On the other hand, option E would affect importers of foreign equipment relying strongly on F-Gases, as pointed out at the stakeholder meeting and the on-line consultation. Option D would provide more flexibility to allow foreign producers to adapt, and thus would be preferable to option E for SME importers. As for producers of equipment it should be emphasised that a strengthened policy approach (in particular Options D and E) would provide opportunities for small innovative companies. Denmark has successfully supported alternatives by national legislative measures and support to R&D and thus stimulated market growth of Danish SMEs in the sector.6, [74] As for companies servicing F-Gas equipment, the effects explained above (6.2.2) will also affect small enterprises as demand for the enhanced maintenance requirements under the F-Gas regulation should decline in the long run when less F-Gases would be used in equipment. However, at least in the medium term this should not be noticeable to service companies as the containment obligations stemming from the existing F-Gas Regulation are only slowly being fully understood and implemented on the ground by affected companies, leaving a lot of growth potential for the service sector in this field. Furthermore, the inclusion of additional sectors in existing maintenance requirements should create additional demand for servicing companies and companies working with alternative technologies. Novel equipment using alternatives will also create new service and maintenance needs, in particular for substances that are flammable and/or used at high pressures. Making best use of such opportunities will however require initial investments in particular with regard to training.[75] Finally, service companies which have limited their business activities to leak checking and recovery usually are also involved in the installation of new equipment and its on-site construction (and would profit from the latter activities under a strengthened approach, in particular if on-site filling is prescribed). In summary, even though F-Gas servicing needs due to the existing Regulation would decline in particular for the most effective policy options, SMEs in the service sector will experience new business opportunities under a strengthened approach (i.e. in particular D and E) so that they are not expected to suffer any significant negative consequences. As for SMEs in sectors that might be indirectly affected (as suppliers or sellers of products/services to end-users, e.g. foodstuff, clothing, gastronomy,..), the discussion in 6.2.2 (and Fig. 9) showed that such effects are very small overall, with some sectors providing input to the machinery and equipment sector affected positively, while very small negative effects on the products-for-endusers sectors could occur. All policy options aim at reducing the use of F-Gases with high GWP in new equipment and do not force the replacement of old equipment. Hence, SMEs would not be burdened with any new costs for replacing existing equipment. This is particularly relevant for the competitiveness of SMEs and microenterprises in the food-and-drink industry.[76] Options B and D would impose a (small) additional administrative burden on companies for the verification of the reported information (see 6.2.3). It is the intention to introduce a threshold similar as is the case for reporting requirements to protect small companies. SMEs expressed the view during the consultations that the Commission should ambitiously pursue an agreement at the global level, as producing for markets governed by different rules would be difficult for SMEs that target global markets. Further information on the consultation process with SMEs is given in Annex II. (4) Assess alternative options and mitigating measures || Considering that policy option A (no policy change) will not lead to a reduction in F-Gases in line with the low carbon roadmap, policy options B,C,D and E have to be considered. The content and structure of these policy options should ensure that any plausible negative impacts on SMEs are minimized or averted. In addition to the general policy design, this is done via e.g. the use of thresholds: - option B and D would impose a (small) additional administrative burden on companies for the verification of the reported information (see 6.2.3). It is the intention to use a threshold (e.g. 10,000t CO2eq.) for this requirement in order to protect small enterprises from any disproportionate administrative costs. A threshold of 1000 tonnes CO2eq or 1 metric tonne of HFC applies to the reporting requirements (in average corresponding to the currently applicable threshold). - under option D companies need quotas to place HFCs on the market. A threshold of 1000 tonnes CO2eq will be used to exclude very small HFC market players. (see Annex X) The following organisations
which include SMEs among their members were consulted during the on-line
stakeholder consultation and/or the open stakeholder conference: European-level umbrella organisations –
Alliance Froid Climatisation Environnement
(AFCE) –
Eurofins –
Euroheat & Power –
European Aerosol Federation –
European Association of Refrigeration, AC, and
Heat Pump Contractors (AREA) –
European Cold Storage and Logistics Association
(ECSLA) –
European Committee of Domestic Equipment Manufacturers
(CECED) –
European Committee of Air Handling and
Refrigeration (Eurovent) –
European Garage Equipment Association (EGEA) –
European Heat Pump Association (EHPA) –
European Partnership for Energy and the
Environment (EPEE) –
FoodDrinkEurope –
PU Europe –
T&D Europe –
Transfrigoroute International (TI) National-level
organisations –
Agoria (BE) –
AC and Refrigeration Industry Board (ACRIB, UK) –
Asociación de Empresas Gestoras de Residuos y
Recursos Especiales (ASEGRE, ES) –
Asociación de Fabricantes de Equipos de Climatización
(AFEC, ES) –
Associazione Italiana Costruttori Antincendio
(UMAN, IT) –
Associazione dei Tecnici del Freddo (ATF, IT) –
British Refrigeration Association (BRA, UK) –
Bundesverband der Deutschen Energie und
Wasserwirtschaft (BDEW, DE) –
Bundesverband der Deutschen Giesserei-Industrie
(BDG, DE) –
CLIMAFORT (FR) –
Conferederation of Employers and Industries of
Spain (CEOE, ES) –
Fachverband der Elektro- und Elektronikindustrie
(FEEI, DE) –
Fachverband der Gas- und
Wärmeversorgungsunternehmen (AU) –
Fédération des services énergie environnement
(FEDENE) –
Federation of Environmental Trade Associations
(FETA, UK) –
Finnish Refrigeration Enterprices Association
(FI) –
Fire Industry Association (FIA, UK) –
Heating, Ventilating and AC Manufacturers
Association (HEVAC, UK) –
Österreichischer Kälte- und Klimatechnischer Verein
(ÖKKV, AU) –
Polish Refrigeration and AC employers
association (KFCh, PO) –
Turkish AC & Refrigeration Manufacturers`
Association (ISKID, TU) –
Unie der belgischen frigoristen (BE) –
VKE – Norwegian Refrigeration and HVAC Association
(NO) –
Zentralverband Elektrotechnik- und
Elektronikindustrie e.V. (ZVEI) In addition single
SMEs provided feedback incl.: –
Ambient control –
Calorex Heatpumps –
Clima-D –
Elektrotechnische Werke Fritz Diescher &
Söhne –
Konvekta –
Lucas Rupp Weider Wärmepumpen –
Stratox –
Sub Zero ANNEX IV: Background Information on the Business as Usual Scenario (No
Further Action – Option A)
1. F-Gas
Emissions F-Gas emissions and the differences between
the scenarios WM (= option A, no further legislative action) and WOM (= without
existing F-Gas legislation) are presented in Table A_IV-1 for selected years.
The data in this table is calculated with GWP values from the 4th IPCC
Assessment Report. Table
A_IV-1: F-Gas
emissions in EU-27 in the WOM and WM scenarios in 2000-2050 (kt CO2eq)
and differences between the scenarios (kt CO2eq; %) || 2000 || 2005 || 2008 || 2010 || 2015 || 2020 || 2030 || 2050 WOM || 84,929 || 90,335 || 104,013 || 116,114 || 144,580 || 164,561 || 183,928 || 204,162 WM || 84,929 || 90,335 || 103,104 || 113,253 || 113,666 || 118,489 || 103,657 || 110,824 Diff in kt CO2 || 0 || 0 || 909 || 2,861 || 30,914 || 46,072 || 80,271 || 93,338 Diff. In % || 0 || 0 || 0.9% || 2.5% || 21.4% || 28.0% || 43.6% || 45.7% F-Gas emissions as presented in Table A_IV-1 are derived from the
model AnaFgas.[77] The modelled emissions
are only partly based on emission data reported by the Member States to the
UNFCCC in form of CRF (common reporting format) tables, although CRF data
represent the best available empiric information source on F-Gas activity data
and emissions in Member States. Sectors largely relying on CRF data include
fire protection, solvents, semiconductor manufacture, primary aluminium
production, production of halocarbons, and XPS foam. In other sectors CRF data
are too general, often incomplete, not sufficiently transparent and of varying
quality. For this reason, additional efforts were made to improve the emission
data for fluorinated gases in these sectors. Numbers for current and historic emissions differ due to the use of
different GWPs in the calculations. The emissions in CO2eq presented
herein, such as Table A_IV-1 above, are calculated with GWPs from the IPCC 4th
Assessment Report. These GWPs were agreed at COP 17 as the future metric
for the reporting of greenhouse gas inventories after the 1st commitment
period under the Kyoto Protocol. Previously, until the inventory reports for
the reporting year 2012, GWPs from the Second Assessment Report of the IPCC
were used. A comparison of the F-Gas emissions
reported by CRF and F-Gas emissions calculated by the model AnaFgas has been
undertaken for validation. Table A_IV-2 summarizes the total EU F-Gas emissions
for the years 2000-2009. In the first line emissions from the recent CRF
submission (EU CRF table 10s4.2) in 2011 are listed. The second line contains
total F-Gas emissions from the model AnaFgas. For this validation exercise, the
GWP values are in both time series from the 2nd IPCC AR so that only
methodological differences between the model AnaFgas and the greenhouse gas
inventories are reflected. Table
A_IV-2: Comparison
of emission estimates between AnaFgas and Member States’ greenhouse gas
inventories kt CO2eq || 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 || 2007 || 2008 || 2009 CRF || 66,205 || 63,833 || 66,949 || 69,303 || 70,113 || 73,485 || 74,657 || 78,551 || 80,950 || 81,352 Model || 74,023 || 69,197 || 70,722 || 71,701 || 74,285 || 77,694 || 79,887 || 83,077 || 89,210 || 92,707 Diff in % || 12% || 8% || 6% || 3% || 6% || 6% || 7% || 6% || 10% || 14% From the comparison it can be seen that: (1)
CRF reports and model output feature the same
upward trend from 2001 to 2009. (2)
The deviation between the annual emission data
ranges between 3% and 14%. (3)
The model emissions are always higher than the
national greenhouse gas inventories. The third point is not surprising because
the model sets completeness standards equivalent to the requirements of 2006
IPCC Guidelines for all Member States. The 2006 IPCC Guidelines are not yet
legally binding for the inventory reporting and will only be binding starting
with the inventory submission for the year 2013. 2006 IPCC Guidelines are
considerably refined with regard to methodologies for fluorinated gases and
provide methodologies in areas in which current IPCC guidelines lack such methodologies.
Only some MS already report these additional sources of F-Gases already now in
their greenhouse gas inventories. This is considered to be the main reason for
the deviation between the modelled emissions and the reported greenhouse gas
inventories. 2. The
Model AnaFgas The model AnaFgas (Analysis of Fluorinated greenhouse
gass in EU-27) is a bottom-up stock model to derive demand and emission
scenarios for F-Gases in relevant sectors and sub-sectors for the EU-27 Member
States (see Fig. A_IV-1). It models demand for and emissions of HFCs, PFCs and
SF6 as well as HCFC-22 for the period 1995 to 2050 based on market
data and estimates of the quantity of equipment or products sold each year
containing these substances, and the amount of substances required in the EU to
manufacture and/or maintain equipment and products over time. All emission and
demand estimates are derived from bottom-up approaches, i.e. by estimating
demand and emissions per sector through the use of underlying driving factors.
These include annual changes in equipment stock, composition and charge of the
equipment, leakage during equipment lifetime and during disposal. The lag between
use of a chemical and actual emission of this chemical is reproduced.
Aggregating emission and use over the different end-uses, the model produces
estimates of total year-specific annual demand for and emissions of each
substance expressed in metric tonnes or GWP-weighted
(kt CO2eq). Seven sectors with a total of 29 sub
sectors are separately represented in the model (see Figure A_IV-1). In total
21 different fluorinated gases (excluding ozone-depleting gases) are included
in the model (11 HFCs, 5 PFCs, 2 unsaturated HFCs, 1 fluoroketone, SF6,
NF3) and calculations can either be based on metric tonnes or GWP
(GWP). Figure A_IV-1: Sectors and sub-sectors represented
by the model AnaFgas 3. HFC
demand and emissions in EU-27 until 2050 for different sectors In the following the projected emissions
per sectors are presented. Total F-Gas
emissions in the EU-27 are projected to remain at stable levels from about 2010
onwards (Table A_IV-3). In spite of the containment measures of the existing
F-gas Regulation, emissions from stationary AC strongly increase by 25 Mt CO2eq
until 2050, due to increased use. In addition, emissions from the refrigeration
sector increase by 5 Mt CO2eq from 2015 to 2050. As a result, the
reduction in emissions from AC of motor vehicles by almost 30 Mt CO2
eq. is offset by 2050. Table
A_IV-3: F-Gas
emissions by sectors in EU-27 as projected in the baseline scenario (AnaFgas) F-gas emissions (kt CO2eq) || 2010 || 2015 || 2020 || 2030 || 2050 Refrigeration || 39,347 || 32,093 || 34,363 || 35,556 || 37,277 Stationary AC || 15,058 || 20,641 || 28,206 || 36,992 || 40,971 Mobile AC motor vehicles || 32,526 || 34,819 || 28,293 || 6,604 || 6,889 Mobile AC ships + rail || 1,999 || 1,789 || 1,812 || 1,822 || 1,846 Foam || 3,299 || 3,631 || 3,974 || 4,634 || 5,746 Other || 9,155 || 9,503 || 9,893 || 10,143 || 10,576 - thereof MDI || 2,921 || 3,065 || 3,202 || 3,453 || 3,886 Total HFC || 101,384 || 102,476 || 106,541 || 95,750 || 103,306 Total HFCs w/o mobile AC motor vehicles || 68,858 || 67,657 || 78,248 || 89,146 || 101,460 SF6 || 5,452 || 5,583 || 6,966 || 2,921 || 2,533 PFCs and haloproduction || 6,417 || 5,607 || 4,982 || 4,986 || 4,985 Total || 113,253 || 113,666 || 118,489 || 103,657 || 110,824 The effect of containment
and recovery measures set out by the F-gas Regulation is expected to occur in
the period until 2015 if the provisions will be fully implemented and applied. The
sector where the effects of containment and recovery measures are most
significant in absolute terms is commercial refrigeration (Figure A_IV-2).
After reductions in the period 2010-2015 due to the F-gas Regulation, constant
long-term levels for emissions and demand are projected. Figure A_IV-2: HFC emissions and demand (kt CO2eq)
in commercial refrigeration (2010-2050), for EU-27 under baseline scenario. In the stationary AC and heat pump sector containment
provisions apply to certain equipment with charges >3 kg. Effects of these
measures will be offset by the growth in subsectors with equipment of charges
<3 kg (Figure A_IV-3). Before the market becomes saturated in 2035,
considerable growth is expected, which makes stationary AC the largest
individual HFC sector in Europe. In this graph, demand includes imported HFCs
in pre-filled systems. Figure A_IV-3: HFC emissions and
demand (kt CO2eq) for stationary AC and heat pumps (2010-2050), for
EU-27 under baseline scenario. 4. F-Gas
sources currently not addressed by EU legislation At the moment,
certain sources of F-Gas emissions in EU-27 are addressed neither by the F-Gas
Regulation nor the MAC Directive. These sources include: –
HFC emissions from mobile AC systems contained
in vehicles other than motor vehicles (ship AC and rail AC); –
HFC emissions from mobile refrigeration systems
such as refrigerated trucks, refrigerated containers or fishing vessels; –
HFC emissions from foams other than OCF; –
HFC emissions from halocarbon production; –
HFC-23 by-product emissions; –
PFC emissions (e.g. from primary aluminium
production or from the semiconductor industry); –
SF6 emissions from certain
applications such as photovoltaic manufacture, particle accelerators, air-borne
military radar systems, etc.; –
F-Gas emissions from Organic Rankine Cycles
(ORC; i.e. generation of power from heat recovery). Emissions of other F-Gases
not currently included in the scope of the F-Gas Regulation: NF3
emissions, SO2F2 emissions and emissions of unsaturated
HFCs. ANNEX V: Technical Assessment of Environmental Impacts 1. Emissions
for Policy Options B, C, D, E vs. Baseline (Option A) This Annex presents
the F-Gas emission trends in the WM scenario (= no further policy action: option
A) and the WAM scenario ("with additional measures")) for the
different policy options. Fig. A_V-1: Maximum F-Gas emission reduction
potential (WAM) of the option B “voluntary agreements”, compared to
F-Gas emissions in the WM (baseline) scenario in the period 2015-2050. Source:
AnaFgas Fig. A_V-2: F-Gas emission reduction potential (WAM) of the option C
“Inclusion in the scope of Articles 3 and 4: Refrigerated road transport –
trucks and trailers” compared to total F-Gas emissions in the WM (baseline)
scenario in 2015-2050. Source: AnaFgas N.B.: The Y-axis does not start from 0 but from 90,000
ktCO2eq in order to better illustrate the difference between WM and WAM
scenario. Fig. A_V-3: F-Gas
emission reduction potential (WAM) of the option D “Limits of Placing on
the Market of HFCs” compared to total F-Gas emissions in all sectors in the WM
(baseline) scenario. Source: AnaFgas The emission reduction potential in 2030
amounts to 71.7 Mt CO2 eq, which is almost 70% of the total F-Gas emissions of
103.7 Mt CO2 eq in 2030. Fig. A_V-4: Emission
reduction potential (WAM) of the option “ban of use of HFCs for open
applications” compared to total F-Gas emissions of the WM (baseline) scenario
in the period 2015-2050. Source: AnaFgas N.B.:
"Open applications" include (i) non-medical technical aerosols and
(ii) HFC-134a in XPS foam blowing, and form part of option E Fig. A_V-5: Emission
reduction potential (WAM) of the option “ban of the POM of certain closed
applications containing HFCs” compared to total F-Gas emissions of the WM
(baseline) scenario in the period 2015-2050. Source: AnaFgas N.B.: "Closed
applications" include commercial refrigeration, industrial refrigeration,
transport refrigeration, stationary AC, HFC-23 in fire protection, SF6
in Mg die casting, and mandatory destruction of HFC-23 Bans on open and closed applications
(Fig. A_V-4 and A_V-5) together make up policy option E (refer to chapter 5.5
of main part). The emission reduction potential for
banning both open and closed applications in 2030 amounts to 52.7 Mt CO2eq,
which is 50.4% of the total F-Gas emissions of 103.7 Mt CO2 eq in 2030. 2. Replaced
units in each sector As a result of Policy Options B, C, D and E in 2030 Table A_V-1: Number of replaced HFC based stock
units by policy options B, D and E in 2030 for each sector Option || Option B Voluntary agreements [stock units] || Option E: Option Bans of use in certain open and closed applications [stock units] || Option D: Quantitative limits for placing on the market of HFCs [stock units] Domestic Refrigeration || not affected || not affected || 2,783,400 Commercial Refrigeration || || || Hermetic Commercial || 5,737,300 || 5,307,000 || 5,737,300 Condensing units || 3,020,000 || 2,421,300 || 3,020,000 Centralized systems || 144,900 || 134,000 || 144,900 Industrial Refrigeration || || || Industrial Ref small || not affected || 500 || 6,000 Industrial Ref large || not affected || 200 || 2,900 Transport refrigeration || || || Refrigerated Vans || not affected || not affected || 601,800 Refrigerated Trucks || not affected || 63,200 || 532,300 Refrigerated Ships || not affected || not affected || 400 Mobile AC || || || Ship AC || not affected || not affected || 4,200 Bus AC || not affected || not affected || 609,400 Truck AC || not affected || not affected || 19,520,300 Stationary AC || || || Moveable AC systems || not affected || 34,283,800 || 3,428,380 Split AC systems || not affected || 96,697,500 || 96,697,500 Multi split AC systems || not affected || 1,376,200 || 1,570,583 Rooftop AC systems || not affected || 522,500 || 522,500 Chillers || not affected || 714,600 || 771,866 Centrifugal chillers || not affected || not affected || 3,800 Fire protection || || || Fire protection 227ea || not affected || not affected || 48,600 Fire protection 23 || 24,500 || 24,500 || 24,500 Foam blowing || || || XPS-152a || not affected || not affected || 13 (prod. lines) XPS-134a || 13 (prod. lines) || 13 (prod. lines) || 13 (prod. lines) PU other || not affected || not affected || 77 (prod. lines) Other || || || Aerosols || not affected || 9,000,000 cans || 9,000,000 cans Manufacture of HCFC-22 and HFC-32 || not affected || not affected || not affected Source:
AnaFgas Table A_V-2: Number of replaced HFC based stock
units by policy options C in 2030 for each sector Option || Option C: Extended Scope [stock units] Domestic Refrigeration || not affected Commercial Refrigeration || already covered Industrial Refrigeration || already covered Transport refrigeration || Refrigerated Vans || not affected Refrigerated Trucks || 631,000 Refrigerated Ships || not affected Mobile AC || Stationary AC || already covered Fire protection || already covered Foam blowing || not applicable Other || Aerosols || not applicable Manufacture of HCFC-22 and HFC-32 || not affected As a result of a lower number of affected
sectors and sub-sectors, the number of replaced units is the lowest under the
option “extended scope” (option C: only one sector), followed by “voluntary
agreements” (option B), “bans of the use of F-Gases in certain applications” (option
E) and is highest for the option “limits to placing on the market” combined
with measures on pre-charged equipment (option D). However, within the relevant sectors the
number of replaced units also differs between policy options. In sectors which
could theoretically be covered by any of the three policy options, the number
of replaced units in 2030 is often lower for “bans of the use of F-Gases in certain
applications” (option E), compared to the other two options. This is due to the
fact that the introduction of replacement solutions follows the penetration
rates of these technologies in the options “voluntary agreements” (option B)
and “limits to placing on the market” (option D), i.e. that every year all
available replacement solutions for new equipment are installed according to
the penetration mix. In the option “regulatory bans of the use of F-Gases in
certain applications” (option E) on the other hand, a ban can be established
only when the penetration mix in the sector has already reached 100% (unless
specific exemptions can be clearly defined). This leads to a delay in the
replacement of HFC-based systems, and consequently to a lower number of
replaced units in 2030 for option E. ANNEX VI: Assessment of cost impacts on sectors (Competitiveness
proofing) 1. Abatement
and direct costs Table A_VI-1: Overview of cost impacts for
the policy options at sub-sectoral level Subsectors affected || Average emission abatement cost || Direct net costs to sector* || Direct cost per operator €/tCO2eq || M€/year || € /year Option B: Voluntary agreements Commercial hermetics || -0.8 || -0.12 || -0.02 Condensing units || 1.2 || 105.0 || 34.7 Centralized systems || 23.7 || 416.8 || 2,876 Fire protection HFC-23 || 3.1 || 3.18 || 130 XPS-134a[78] || 1.0 || 1.2 || 98,000 (production line) HFC-23 by-product emissions || < 2 || 0.55 || 0.55 Total voluntary agreements || 16.8b || 526.6a || - Option C: Extended scope Trucks and trailers || 46 || 66.4 || 105.2 Option D: HFC phasedown mechanism Domestic Refrigeration || 1.0 || 0.01 || 0.004 Commercial hermetics || -0.8 || -0.12 || -0.02 Condensing units || 1,2 || 105.0 || 34.7 Centralized systems || 23.7 || 416.8 || 2,876 Industrial Ref small || -0.9 || -0.92 || -153 Industrial Ref large || -21.6 || -65.9 || -22,642 Refrigerated Vans || 45.1 || 20.9 || 34.7 Refrigerated Trucks || 2.6 || 16.8 || 31.6 Fishing vessels || 3.4 || 1.96 || 5,368 Cargo ship AC || 16.7 || 5.60 || 1,507 Passenger ship AC || 35.0 || 2.90 || 6,190 Bus AC || 48.5 || 107.1 || 175.1 Truck AC || 43.1 || 243.9 || 12.5 Moveable AC systems || 8.9 || 1.9 || 0.55 Split AC systems || 19,0 || 488.7 || 5.1 Multi split AC systems || 13.1 || 53.5 || 34.1 Rooftop AC systems || 8.2 || 11.8 || 22.5 Chillers || 5.9 || 36.3 || 47.0 Centrifugal chillers || 11.1 || 1.49 || 381 Fire protection 227ea || 22,3 || 10.9 || 225 Fire protection 23 || 3.1 || 3.18 || 130 Aerosols || 10.0 || 36.3 || 4.0 XPS-152a || -1.6 || -0.7 || -56,400 (production line) XPS-134a || 1.0 || 1.2 || 98,000 (production line) PU other || 3.5 || 0.32 || 4,130 Total limits placing on market || 16.2 || 1,499.00 || - Option E: Bans for POM Ban the POM of certain open applications containing F-Gases Aerosols || 10 || 36.3 || n. e. XPS-134a || 1 || 1.2 || 98,000 (production line) Total ban open appl. || 7 || 37.5 || 3.2 Ban the POM of certain closed applications containing F-Gases Commercial hermetics || -0.8 || -4.64 || -0.9 Condensing units || 1.2 || 276.1 || 34.0 Centralized systems || 23.7 || 380.1 || 2,835 Industrial Ref small || -0.9 || -0.07 || -153 Industrial Ref large || -21.6 || -5.10 || -22,642 Refrigerated Trucks || 2.6 || 0.96 || 15.3 Moveable AC systems || 8.9 || 18.76 || 0.5 Split AC systems || 19.0 || 488.72 || 5.1 Multi split AC systems || 13.1 || 45.74 || 33.2 Rooftop AC systems || 8.2 || 11.78 || 22.6 Chillers || 5.9 || 33.05 || 46.3 Fire protection 23 || 3.1 || 3.18 || 130.1 Total ban closed applications || 16.9 || 1,248.6 || - Mandatory destruction of HFC-23 emissions from halocarbon production Destruction of HFC-23 emissions to the extent possible || <2 || 0.55 || n.a. n.e. =
not estimated; n.a. = not applicable * In option E, the additional direct net
costs to the sectors include the additional cost for equipment arising to the
operators in the sectors, not only the sales of domestic equipment suppliers to
the operators. Source:
Schwarz et al.9: Table 8.24 with additional corrections 2. Abatement
cost curve Fig. A_VI-1 shows that F-Gas emission reductions of ca 72 Mt CO2eq can
be abated at a price of <50€ per tonne CO2eq. This would
eliminate almost 70% of today`s emissions due to F-Gases despite a growing use
of the relevant equipment.. Fig. A_VI-1: Marginal emission abatement costs vs.
achievable emission reductions by 2030. Source: Schwarz et al. (2011)9
(MACC: Marginal Abatement Cost Curve) 3. Investment
and Service costs, employment effects Table A_VI-2: Overview of investment costs, loss
and gains from service and qualitative assessment of employment effects Subsectors affected || Equipment investment cost / Sales of equipment suppliers* || Loss (-) / Gains (+) from service Art 3+4 or new service for NH3+CO2 M€/y || Employment (domestic equipment manufacture + service) M€/year || M€/year || Option B: Voluntary agreements Commercial hermetics || 81.3 || -14.3 || ++ Condensing units || 752.7 || -204.7 || +++ Centralized systems || 773.9 || -81.4 || +++ Fire protection HFC-23 || 0.0 || -2.2 || 0 XPS-134a || 2.5 || || + HFC-23 by-product emissions || 0.3 || || + Total voluntary agreements || 1,610.7 || -302.7 || +++ Option C: Extended scope Trucks and trailers || n.a. || +71.3 || ++ Option D: Quantitative limits for the placing on the market of HFCs Domestic Refrigeration || 2.0 || -0.3 || + Commercial hermetics || 81.3 || -14.3 || ++ Condensing units || 752.7 || -204.7 || +++ Centralized systems || 773.9 || -81.4 || +++ Industrial Ref small || 67.3 || -0.6 || ++ Industrial Ref large || 498.7 || +2.2 || +++ Refrigerated Vans || 17.8 || +2.5 || + Refrigerated Trucks || 141.7 || +7.0 || ++ Fishing vessels || 6.3 || +0.7 || + Cargo ship AC || 2.8 || +3.2 || + Passenger ship AC || 0.4 || +0.0 || 0 Bus AC || 34.7 || +4.6 || + Truck AC || 2.3 || || + Moveable AC systems || 7.4 || -0.9 || - Split AC systems || 157.6 || -483.5 || + Multi split AC systems || 69.6 || -268.7 || 0 Rooftop AC systems || 66.5 || -83.6 || 0 Chillers || 339.2 || -139.3 || +± Centrifugal chillers || 3.0 || -3.0 || 0 Fire protection 227ea || 5.4 || -4.4 || 0 Fire protection 23 || 0.0 || -2.2 || 0 Aerosols || 0 || || 0 XPS-152a || 2.5 || || + XPS-134a || 2.5 || || + PU other || 3.3 || || + Total limits placing on market || 3,039 || 1,275 || +++ Option E: Bans for POM Ban the POM of certain open applications containing F-Gases Aerosols || 0 || n.a. || 0 XPS-134a || 2.5 || n.a. || + Total ban open appl. || 2.5 || n.a. || + Ban the POM of certain closed applications containing F-Gases Commercial hermetics || 70.7 || -13.3 || ++ Condensing units || 602.2 || -163.4 || +++ Centralized systems || 714.1 || -75.6.0 || +++ Industrial Ref small || 5.2 || +0.1 || + Industrial Ref large || 38.6 || +0.2 || +++ Refrigerated Trucks || 16.5 || +0.6 || + Moveable AC systems || 7.4 || -85.7 || 0 Split AC systems || 157.6 || -483.5 || +++ Multi split AC systems || 61.2 || -235.7 || ++ Rooftop AC systems || 66.5 || -83.7 || + Chillers || 314.0 || -128.9 || +++ Fire protection 23 || 0 || -2.2 || 0 Total ban closed appl. || 2,054.0 || -1,271.3 || +++ Mandatory destruction of HFC-23 emissions from halocarbon production Destruction of HFC-23 emissions to the extent possible || 0.3 || n.a. || 0 n.e. =
not estimated; n.a. = not applicable * In option E, only the
additional sales of domestic equipment suppliers/manufacturers are included. In
the sectors of stationary AC, the cost for equipment arising to operators are
higher than the sales of domestic equipment manufacturers. Source:
Schwarz et al.20119,
with additional
corrections 4. Impacts
on service companies After replacement of HFCs in systems of refrigeration, stationary AC,
and fire protection equipment >3 kg, enhanced servicing activities according
to Articles 3 and 4(1) of the F-Gas Regulation are no longer required. In the
sectors with charges <3 kg, i.e. domestic refrigeration, commercial
hermetics, moveable air conditioners, single-split air conditioners, and,
partly, condensing units, application of Article 4(1) will discontinue.
Discontinuation of Articles 3 and 4(1) leads to a net loss in service activities
and in turnover for service companies in the long run. These effects on service
companies have been quantified in the following way: 1st step: The service costs of
the HFC reference unit resulting from application of Art 3 and/or Art 4(1) of
the F-Gas Regulation, have been determined (see Schwarz et al., 20119,
Annex V, EU sector sheets). 2ndstep: The service costs of
the HFC reference unit (1st step) and the number of replaced HFC
units by 2030 (AnaFgas) were multiplied, which results in the loss in turnover
of service companies by 2030. 3rd step: In the case of HFC
replacement by CO2 (high pressure equipment) and NH3
(toxicity) new service costs occur (Schwarz et al., 20119, Annex V,
EU sector sheets), which were estimated in this step. In option B, servicing activities according to Articles 3 and 4(1)
of the F-Gas Regulation are not required anymore in some sectors. This leads to
a loss in service turnover of 345 M€/year. New servicing needs arise for CO2
systems and cause gains of 57 M€/year. Net loss for service companies
would be 289 M€/year. Losses are particularly high for condensing units (-186 M€/year)
and rather low for service of fire protection equipment (-2.2 M€/year). In option D, after the replacement of HFCs in systems of
refrigeration, stationary AC, and fire protection, servicing activities
according to Articles 3 and 4(1) of the F-Gas Regulation are no longer required
in these sectors. In the sectors with charges <3 kg, i.e. domestic
refrigeration, commercial hermetics, moveable air conditioners, single-split AC,
and, partly, condensing units, application of Article 4(1) is no longer required.
Discontinuation of Articles 3 and 4(1) leads to a net loss in service
activities and turnover of -1,356 M€/year in Option D. This sum already
includes earnings from new service and maintenance for ammonia and CO2 systems
of +114 M€/year. Losses are particularly high in four sectors, namely single
split and multi-split AC units, chillers, and condensing units (-1,070 M€/year;
79%). In transport refrigeration (vans, trucks, fishing vessels) earnings can
be expected, which are, however, comparably small. The same effect would occur for bans in closed applications in
option E, a discontinuation of Articles 3 and 4(1) would lead to a total loss
in service turnover of -1,270 M€/year. This sum already includes earnings from
new service and maintenance for ammonia and CO2 systems of +78
M€/year. Service losses are particularly high for single split and multi-split AC
units (-711 M€/year; 56%). The numbers differ from option D as the emission
reduction effects are also lower due to a later introduction of the replacement
substances. As
discussed in chapter 6.2.10, these "theoretical" losses for service
companies are not expected to materialise in the short and medium term, since (i)
containment obligations stemming from the existing F-Gas Regulation are only slowly
being fully understood and implemented on the ground by affected companies,
leaving a lot of growth potential for the service sector in this field compared
to the current situation; (ii) service
companies which have limited their business activities to leak checking and
recovery usually are also involved in the installation of new equipment and its
on-site construction (and stand to profit from the latter activities under a
strengthened approach, in particular if on-site filling is prescribed). ANNEX VII:
Detailed results of Screening of Policy Options 1. Discarded
policy options In the following more
detailed information related to other considered but eventually discarded policy
options is presented: –
Suspension of current provisions of F-Gas Regulation A general suspension
of existing provisions would disadvantage Member States and industry compliant
with current legislation. Such a measure would also not be in line with the
climate and energy package and the 2050 roadmap, that require contributions
from all sectors to the EU emission reduction targets in 2020 and beyond until
2050. –
Inclusion of additional activities under the
EU-ETS The scope for inclusion of F-Gases under
the EU-ETS Directive is rather limited. The Directive applies either to industrial
installations that directly emit greenhouse gass or to aircraft operators, but
not to household or industrial appliances and equipment that mostly contribute
to emissions via leakages, at the end of the lifetime or through the use of a
product, i.e. with a timelag of several years to decades after production. It
would e.g. be impractical to require all individuals buying domestic fridges to
acquire licenses for the F-Gases contained therein. There are only few remaining sources of
F-Gases that are directly emitted from industrial installations. PFCs from
aluminium production are already covered under the F-Gas Directive. One
potential application would be the use of SF6 in magnesium die
casting. However, most installations already phased out SF6 due to
the ban included in the F-Gas Regulation for quantities above 850kg per year
and the remaining installations are addressed by policy option E. –
EU harmonized tax schemes Experiences from Denmark and Norway with
the implementation of tax schemes for fluorinated gases showed that –
The effect of taxes will strongly depend on the
tax level chosen and on the development of prices for HFCs and other F-Gases.
It is rather difficult to assess price elasticity for F-Gases in the context of
the future development of global markets with significant growth projections of
production levels in Asian countries. In this situation, it is rather
uncertain, which would be the appropriate tax level. The uncertainties around
the future development of prices for F-Gases with an uncertain level of
production growth in emerging countries are a feature which is clearly distinct
from other environmental taxes on products with more stable prices. –
The level of taxes needs to be determined
nationally and should allow regular adjustments to the economic situation. –
Exemptions from tax should be chosen carefully
and depend on national circumstances in Member States. –
Furthermore, substantial administrative effort
to establish, operate and control such tax scheme for fluorinated gases at EU
level would be needed over several years, in particular for a tax that is
imposed on F-Gases in manufactured products due to the wide range of such
products on the market charged with different F-Gases. As other policy options are available to
reach the environmental objectives, fiscal measures at EU level have been
discarded at this stage, also considering the predominant Member State
competence for those provisions. –
Deposit and refund schemes Deposit and refund schemes provide
financial incentives that can efficiently reduce demand and supply and foster
responsible use of F-Gases, enhance recovery, recycling and reclamation, and
support the use of low or zero GWP substances if linked to the GWP of specific
substances. However, the level of the financial incentives should take into
account the following aspects: –
Reclamation costs of recovered refrigerants
(including costs for transport to reclamation facilities); –
Initial costs for set-up of the scheme
(including infrastructure) and current costs of administration and control; –
Costs for refunds or rebates; –
Flexibility to allow regular adjustments to the
economic situation; –
Deposit and refund schemes need to reflect the
structure of supply of F-Gases, which are likely to vary substantially from one
use to another and from one Member State to another. Therefore, no generic scheme seems to be
universally applicable in EU-27 and deposit and refund schemes seem to be a
policy option that is preferably to be implemented at MS level and not at EU
level. 2. Discarded
sub-options of policy options B, C, D and E In addition to the general options
discarded described under (1), some additional subsectors or specific
applications were excluded from policy options B, C, D and E because of a more
detailed screening exercise related to effectiveness, efficiency and other
technical constraints which are presented in Table A_VII-1. The screening criteria were the following: –
Effectiveness in terms of level of emission
reductions (> 1Mt CO2eq); –
Efficiency in terms of abatement costs (<50€
per t of CO2eq abated); –
Technical constraints like safety or loss of
energy efficiency; –
Other constraints such as consistency with other
EU policies. This screening analysis was performed in
the same way as for the considered (sub)-options under policy options B to E
(see next section (3)). Table
A_VII-1:
Sub-options discarded based on detailed screening for effectiveness, efficiency
and other criteria as specified Application || Discarded because of Option B: New VA for domestic refrigeration || Effectiveness criterion not fulfilled, very low emission reduction potential of 12 kt CO2eq. by 2030 due to small number of units containing F-Gases remaining on the EU market Option C: Inclusion in the scope of Articles 4 (1): Refrigerated road transport – vans || Efficiency criterion not fulfilled, abatement costs about 290 €/t CO2eq., effectiveness criterion not fulfilled, very low emission reduction potential of 11 kt CO2eq. by 2030, implementation and verification is considered difficult due to high number of ‘van operators’ Option C: Inclusion in the scope of Articles 3 and 4: Rail transport || Efficiency criterion not fulfilled, abatement costs about 340 €/t CO2eq.very low emission reduction potential of 16 kt CO2eq. by 2030 because 80% of operator already fulfil service requirements Option C: Lowering the applicable charge threshold of certain equipment containing F-Gases already covered by Article 4(1) || Efficiency criterion not fulfilled, abatement costs > 1,750 € / t CO2eq.for all sub-options Option E: Ban of HFC-152a in XPS foam blowing || Effectiveness criterion not fulfilled, low emission reduction potential of 460 kt CO2eq. Option E: Ban of HFC in PU spray foam blowing || Efficiency criterion not fulfilled, abatement costs about 60 €/t CO2eq., relevant mainly in Spain and Portugal Option E: Ban of HFC in other PU foam blowing || Effectiveness criterion not fulfilled, low emission reduction potential of 590 kt CO2eq. by 2030 Option E: Ban of HFC indomestic refrigeration || Effectiveness criterion not fulfilled, very low emission reduction potential of 12 kt CO2eq. by 2030 Option E: Ban of HFC in centrifugal chillers || Effectiveness criterion not fulfilled, very low emission reduction potential of 9 kt CO2eq. by 2030 Option E: Ban of HFC in refrigerated vans || Effectiveness criterion not fulfilled, low emission reduction potential of 420 kt CO2eq. by 2030 Option E: Ban of HFC in heat pumps || Efficiency criterion not fulfilled, abatement costs about 130 €/t CO2eq.. Option E: Ban of HFC in fishing vessels and ship AC || F-Gas Regulation not the most appropriate instrument to address this sector: The Commission is currently considering options to reduce greenhouse gas emissions from the maritime sector, taking into account its international nature and unique characteristics. It would be appropriate to also consider addressing F-Gases in such coherent approach. Option E: Ban of HFC in rail vehicle AC || Effectiveness criterion and efficiency criterion not fulfilled, very low emission reduction potential of 16 kt CO2eq. by 2030 and abatement costs about 560 €/t CO2eq., penetration rate < 100% until 2030 Option E: Ban of HFC-227ea in fire protection || Effectiveness criterion not fulfilled, low emission reduction potential of 170 kt CO2eq. by 2030, penetration rate < 100% until 2030 Option E: Ban of SF6 in medium voltage secondary switchgear || Effectiveness criterion and efficiency criterion not fulfilled, very low emission reduction potential of 60 kt CO2eq. by 2030 and abatement costs about 350 €/t CO2eq., penetration rate < 100% until 2030 N.B.: Effectiveness criterion
was considered not to be fulfilled if emission reduction potential at EU-27
level was below 1 Mt CO2eq. until 2030. Efficiency criterion was
considered not to be fulfilled if abatement costs were higher than 50 €/tCO2eq. 3. Screening
of sub-options for Policy options B, C, D & E Table
A_VII-2:
Options to address F-Gas emissions in EU-27 through voluntary agreements Self-regulation or co-regulation || Additional emission reductions 2030 || Abatement costs 2030 || Effectiveness || Efficiency || Technical feasibility / penetration rates || Other qualitative criteria || Final evaluation kt CO2eq || €/ t CO2eq || Threshold: 1,000 kt CO2eq || Threshold: 50€/tCO2eq || || || VA with industry to phase-out/down HFCs in centralized systems, commercial hermetics, condensing units || 18,818 || -0.8 to 23.7 || ++ || ++ || alternatives available, penetration rate 100% in 2020 || || Include New VA with photovoltaic industry to replace SF6 and NF3 || 100 || n.a. || - || + || alternatives available, penetration rate 100% in 2015 || Photovoltaics industry likely to be willing to engage || Include Update international VA with semiconductor industry for PFCs, NF3, HFC-23 and SF6 || reduction potential n.e. || n.a. || - || + || || VA expired in 2010 || Include New VA for XPS foams (HFC-134a) || 1,553 || 1.0 || + || + || penetration rate 100% in 2015 || || Include New VA for domestic refrigeration || 12 || 1.0 || - || + || penetration rate 100% || Very small number of units containing F-Gases remaining || exclude New VA for HFC-23 in fire protection || 961 || 3.1 || +/- || + || penetration rate 100% || Very high GWP. No use in >20 MS, alternatives available || Include New VA for HFC-23 by-product emissions || 370 || <2 || - || + || destruction technology is available || HFC-23 destruction technology installed by most producers, only 1 production facility without || Include Total || 21,702* || || || || || || *
without semiconductor and photovoltaic industry, and domestic refrigeration;
n.a.: not applicable; n.e.: not estimated. Table
A_VII-3:
Options to address F-Gas emissions through extending the scope of the F-Gas
Regulation Improve containment and recovery in certain sectors || Additional emission reductions 2030 || Abatement costs 2030 || Effectiveness || Efficiency || Other qualitative criteria || Final evaluation kt CO2eq || €/t CO2eq || Threshold: 1,000 kt CO2eq || Threshold: 50€/tCO2eq || || Improve containment and recovery Inclusion in the scope of Articles 4 (1): Refrigerated road transport - vans || 11 || 291 || - || -- || Difficult implementation and verification due to high number of operators || exclude Inclusion in the scope of Articles 3 and 4: Refrigerated road transport – trucks and trailers || 1,430 || 46 || + || + || || include Inclusion in the scope of Articles 3 and 4: Rail transport || 16 || 340 || - || -- || 80% of operators already fulfil service requirements || exclude Inclusion in the scope of Articles 3 and 4: Refrigerated maritime transport – cargo ships || 273 || 10.5 || - || + || F-Gas Regulation not the most appropriate instrument to address this sector: The Commission is currently considering options to reduce greenhouse gas emissions from the maritime sector, taking into account its international nature and unique characteristics. It would be appropriate to also consider addressing F-Gases in such coherent approach. || exclude Inclusion in the scope of Articles 3 and 4: Refrigerated maritime transport – passenger ships || 405 || 8.5 || - || + Inclusion in the scope of Articles 3 and 4: Refrigerated maritime transport – fishing vessels || 360 || 0.5 || - || + Lowering the applicable charge threshold of certain equipment containing F-Gases already covered by Article 4(1) Domestic refrigeration || 1 || 324,722 || - || --- || || exclude Commercial hermetics || 13 || 29,575 || - || --- || Moveable air conditioners || 644 || 3,707 || - || --- || Split air conditioners || 6,057 || 2,204 || + || --- || Heat pumps || 740 || 1,756 || - || --- || Extending the training and certification requirements to personnel undertaking activities currently not covered under Article 5 || Not quantifiable || Not quantifiable || || || Effectiveness likely to be very low. || exclude Introducing maximum leakage rates for certain systems and equipment containing F-Gases || Not available || Not available || || || Does not include accidents; problems related to measurability of leakage rates; effectiveness likely to be low || exclude Introducing obligation for producers and suppliers of F-Gases to take back recovered F-Gases for reclamation and destruction || Not available || Not available || || || Include as an area for coordination and exchange of best practice as specific measures may vary across Member States. || exclude Table
A_VII-4:
Options to address SF6and HFC emissions from open applications in
EU-27 through use bans Ban the use of SF6 in open applications || Additional emission reductions 2030 || Abatement costs 2030 || Effectiveness || Efficiency || technical feasibility / penetration rates || Other qualitative criteria || Final evaluation kt CO2eq || €/ t CO2eq || Threshold: 1,000 kt CO2eq || Threshold: 50€/tCO2eq || || || Inclusion of magnesium die casting <850 kg/ y and recycling of die casting alloys in the scope of Article 8 || 250 || 0.4 || - || + || 100% in 2015 || Operators have started replacing SF6, are ready to phase-out. Costs are low, smaller installations could be treated in the same way as larger ones (consistency). || include Inclusion of HFCs from open applications of technical aerosols and XPS and PU foam in the scope of Article 9 Ban of HFCs in technical aerosols || 3,637 || 10 || + || + || 95% in 2020 || Exemptions need to be defined || include Ban of HFC-152a in XPS foam blowing in 2015 || 460 || -1.60 || - || ++ || 100% in 2015 || GWP of 152a is much lower (124) than GWP of 134a (1,430). Could possibly be considered combined with HFC-134a. || exclude Ban of HFC-134a in XPS foam blowing in 2015 || 1,553 || 1.0 || + || ++ || 100% in 2015 || Very few companies in EU || include Ban of HFC in PU spray foam blowing || 1,369 || 61.6 || + || +/- || 100% in 2015 || Relevant mainly in Spain and Portugal || exclude Ban of HFC in other PU foam blowing || 587 || 3.5 || - || + || up to 95% in 2015 || Exemptions need to be defined. || exclude Total || 5,190* || || || || || || * only the
sub-options included for further analysis Table
A_VII-5:
Options to address F-Gas emissions from closed applications in EU-27 by placing
on the market bans Ban the placing on the market of certain closed F-Gas applications || Additional emission reduction 2030 || Abatement costs 2030 || Effectiveness || Efficiency || technical feasibility / penetration rates || Other qualitative criteria || Final evaluation kt CO2eq || €/t CO2eq || Threshold: 1,000 kt CO2eq || Threshold: 50€/tCO2eq || || || Domestic refrigeration || 12 || 1.0 || - || + || 2015 || || exclude Commercial hermetic systems || 147 || -0.8 || -- || ++ || 2020 || || include Condensing units || 2,849 || 1.2 || + || + || 2020 || || include Centralised systems || 12,055 || 23.7 || ++ || + || 2020 || || include Small industrial refrigeration || 67 || -0.9 || +/- || ++ || 95% in 2030 || Exemptions need to be defined for small systems, e.g. <50 kg (similar to Sweden). || include Large industrial refrigeration || 202 || -21.6 || + || ++ || 95% in 2030 || Exemptions need to be defined. Combination of small + large ref. possible (threshold 50 kg) || include Moveable AC || 2,781 || 8.9 || + || + || 2020 || || include Single split AC || 22,970 || 19.0 || ++ || + || 2020 || || include Multi split AC || 2,172 || 13.1 || + || ++ || 2020 || || include Rooftop AC systems || 573 || 8.2 || - || ++ || 2020 || || include Displacement chillers || 1,989 || 5.9 || + || ++ || 2020 || || include Centrifugal chillers || 9 || 7.5 || - || ++ || 2030 || || exclude Refrigerated vans || 421 || 45.1 || - || +/- || 2020 || || exclude Heat pumps || 1,356 || 130.2 || || - || 2020 || || exclude Fishing vessels || 27 || 3.4 || - || + || penetration rate not 100% || F-Gas Reg. is not the most appropriate instrument to address this sector: The Commission is currently considering options to reduce greenhouse gas emissions from the maritime sector, taking into account its international nature and unique characteristics. It would be appropriate to also consider addressing F-Gases in such coherent approach. || Depends on choice of policy instrument Cargo ship AC || 232 || 16.7 || - || + || 2020 Passenger ship AC || 97 || 35,0 || - || + || penetration rate not 100% Refrigerated trucks and trailers || 322 || 2.6 || - || + || 2030 || || include Rail vehicle AC || 16 || 555.6 || -- || - || penetration rate not 100% || || exclude HFC-23 in fire protection || 961 || 3.1 || +/- || + || 2015 || Very high GWP. No use in 21 MS, alternatives available || include HFC-227ea in fire protection || 167 || 22.3 || - || + || penetration rate not 100% || || exclude Medium Voltage secondary switchgear || 61 || 347.7 || - || - || penetration rate not 100% || || exclude Destruction of HFC-23 emissions from halocarbon production || 370 || <2 || + || +++ || 100% || Industrial process emiss.; very high GWP; international commitments || include Total || 47,459* || 18.9* || || || || || *: only sub-options
included for further analysis Table
A VII-6: Option
to address F-Gas supply in EU-27 through quantitative limits for the placing on
the market of F-Gases. Reference year 2030 Set quantitative limits for the placing on the market of HFCs || Add. emission reduction 2030 || Average emission abatement costs 2030 || Effectiveness || Efficiency || Technical feasibility / penetration rates || Other qualitative criteria || Final evaluation kt CO2eq || €/t CO2eq || Threshold: 1,000 kt CO2 eq. || Threshold: 50€/tCO2eq || || || Maximum supply reductions in all sectors relying on HFCs : 136,500 kt CO2eq || 69,239 || 16.5 || +++ || ++ || No need for 100% due to nature of measure || High flexibility || include Table
A VII-7:
Options to address inadvertent HFC-23 emissions in EU-27 through the obligation
for destruction of these emissions HFC.23 emissions from halocarbon production || Add. emission reduction 2030 || Abatement costs 2030 || Effectiveness || Efficiency || Technical feasibility / penetration rates || Other Qualitative criteria || Final evaluation kt CO2eq || €/t CO2eq || Threshold: 1,000 kt CO2eq || Threshold: 50€/tCO2eq || || || Destruction of HFC-23 emissions from halocarbon production to the extent technically feasible || 370 || <2 || + || +++ || 100% || Industrial process emissions; very high GWP; international commitments || include ANNEX VIII: Sensitivity Analysis of Cost Estimation 1. General The economic impacts
largely rely on cost data. This applies not only to economic impacts in a
strict sense such as effects on specific abatement costs, on costs to the
industry sectors and to individual end-users but also to social impacts such as
effects on prices for equipment or employment. It is evident that
all monetary variables which are included in Annex V of Schwarz et al. (2011)9
influence the economic and social situation of the actors in the relevant
sectors. In this section, a sensitivity analysis is conducted for those cost parameters
which significantly affect the abatement costs (€/t CO2eq) and thus
the cost efficiency of the potential emission reductions. The most important parameters
are considered to be the following: –
The assumed purchase prices of
unsaturated HFCs such as HFC-1234yf (€60/kg), HFC-1234ze (€40/kg as a
refrigerant, €12/kg as foam blowing agent or aerosol propellant) and the blend
DR-11 (€30/kg) influence the abatement costs of the alternative technical
options which rely on these substances. It is anticipated that the cost will
considerably decrease up to 2030 because large-scale production of the
chemicals would be established by then. In the sensitivity analysis the effect
of a price reduction of 50% (“half price”) is assumed, compared to the prices
mentioned above (“base case”). Table
A_VIII-1:
Assumptions for purchase prices of alternative substances || “base case” scenario || “half price” scenario HFC-1234yf || €60 /kg || €30/ kg HFC-1234ze || €40 /kg as a refrigerant; €12 /kg as foam blowing agent or aerosol propellant || €20 /kg as a refrigerant; €6 /kg as foam blowing agent or aerosol propellant DR-11 || €30 /kg || €15/ kg –
The discount rate for the annualisation of
investment costs strongly influences the total annual costs to operators in
each individual sector, for application of conventional HFCs as well as of
low-GWP alternatives. A discount rate of 4% was used in Schwarz et al. (2011)9
as a general assumption and might be appropriate from the perspective of the
national economy (long-term capital market interest). However, a discount rate
of 4% is too low compared to the return rate from the perspective of individual
operators. An alternative discount rate of 8% will be used for cost estimates
and results will be compared to those based on a 4% discount rate (“base
case”). The impact of a doubled discount rate and
halved cost of unsaturated HFCs on emission reduction in 2030 was analysed
separately for the three policy options: Option B “Voluntary agreements”, option
D “Quantitative limits for the placing on the market of certain F-Gases”, and option
E “Ban of placing on the market of certain open and closed applications”. 2. Option
B "Voluntary agreements in certain HFC applications" After screening, the
option B “Voluntary agreements” includes only five application sectors of F-Gases:
Commercial hermetics, commercial condensing units, commercial centralised
systems, fire protection with HFC-23, and XPS manufacture with HFC-134a as
blowing agent. Despite the small number, the emission reduction potential is
comparably high because the reduction potential of alternative low-GWP
solutions is assumed to follow the penetration rates of the relevant
technologies without delay, as it is the assumption in the option “Quantitative
limits for the placing on the market”. 2.1. Effects
of prices for unsaturated HFCs The specific
emission abatement costs in the five sectors are below the threshold of €50 /t
CO2eq. This efficiency criterion is met not only in the base case
where the value is 16.8 € /t CO2 eq. but also if the prices of
unsaturated HFCs are halved: 16.6 € t CO2 eq. (see Table A_VIII-2,
col. 2). This very small difference results from the assumption that there is
only one sector for which unsaturated HFCs (HFC-1234ze) are considered a
realistic technical alternative to HFCs. This sector is XPS manufacture, where
the price reduction for HFC-1234ze leads to a reduction in the sector specific
abatement cost from 1.0 € /t CO2eq to -1.5 € /t CO2eq. Table A_VIII-2: Option B Voluntary
agreements: Impact of doubled discount rate and halved cost of unsaturated HFCs
on emission reduction 2030 Discount rate || 4% || 4% || 8% Unsaturated HFCs || High cost || Half cost || High cost Maximum reduction potential || 21,332 || 21,332 || 21,332 Abated at< €50/tCO2eq || 21,332 || 21,332 || 21,183 Abatement cost (€/tCO2eq) || 16.8 || 16.6 || 30.4 Sectors > 50€/tCO2eq || 0 || 0 || 1 Not abated emissions (>€50/tCO2eq) || 0 || 0 || 149 Table
A_VIII-3:
Option B: Sector excluded by screening as efficiency too low Discount rate || 4% || 4% || 8% Unsaturated HFCs || High cost || Half cost || High cost || || || Commercial hermetics 2.2. Effects
of discount rate Under a doubled discount rate of 8 %
instead of 4 % the average abatement cost increase from € 16.8 to 30.4€/t
CO2eq. (see Table A_VIII-2, column 3). The comparably high growth
results from the fact that all five sectors are affected if the investment
costs are annualised with the higher discount rate. In one sector (commercial
hermetic (refrigeration systems)) the abatement costs rise over the threshold
of 50 € /t CO2eq, so that the cost effective overall emission
reduction potential of the policy option is reduced. It decreases only by 0.15
Mt CO2eq, from 21.33 to 21.18 Mt CO2eq because the
affected sector is very small. 2.3. Conclusions Fig. A_VIII-1: Option
B: Impact of doubled discount rate and halved prices of unsaturated HFCs on the
MACC of the 2030 HFC emission reduction potential N.B.:. The middle curve
displays the base case. The upper curve indicates the effect of a discount rate
of 8%. The emission reduction potential at abatement costs below €50 /tCO2eq
is only slightly lower than that in the two other cases, amounting to ca. 21 Mt
CO2eq. As can be seen on the x-axis from 1.5 Mt CO2eq
onwards the curve for the base case is congruent with the curve for “half price
of unsaturated HFCs” because there is no difference between the abatement costs
in four of the five sectors concerned. Fig. A_VIII-1 shows that the three curves
do not substantially split from each other. In summary, even under a very high
discount rate (indicating focus on short-term profitability) this option can be
considered effective and efficient. 3. Option
D "Quantitative limits for the Placing on the Market of certain HFCs" This option assumes that the emission
reduction potential follows the gradual growth of the penetration rates of
alternative technologies i.e. that in each year all technically feasible
replacement solutions for new equipment are utilised according to the assumed
penetration mix even though the full market penetration potential might not
have been achieved yet. The technically feasible reduction potential by 2030 is
estimated at 72.9 Mt CO2eq. The emission reductions which can be
achieved at high efficiency is lower. Screening showed the following result:
The reduction potential can reach 69.2 Mt CO2 if all relevant
sectors with emission abatement costs below 50 €/t CO2eq make
the assumed transitions to low-GWP options. The efficiency criterion causes the
exclusion of four sectors from the option: PU spray foam, heat pumps, rail
vehicle AC, with potential emission reduction of 3.7 Mt CO2eq. The
estimated average emission abatement cost for the remaining 25 sectors is 16.5 €/t
CO2eq (for all these data see Table A_VIII-4, first column). Table A_VIII-4: Option D “Quantitative limit
for the placing of HFCs on the market”: Impact of doubled discount rate and
halved cost of unsaturated HFCs on emission reduction 2030 for option D
“Quantitative limits for the placing on the market of certain F-Gases” Discount rate || 4% || 4% || 8% Unsaturated HFC || High cost || Half cost || High cost Maximum emission reduction potential 2030 || 72,915 || 72,915 || 72,915 Abated at < €50/tCO2eq || 69,239 || 70,608 || 64,441 Average abatement cost (€/tCO2eq) || 16.5 || 9.9 || 28.1 Sectors > 50€/tCO2eq || 3 || 2 || 7 Not abated emissions (>€50/tCO2eq) || 3,676 || 2,307 || 8,474 Table
A_VIII-5:
Option D: Sectors excluded in the screening due to low efficiency Discount rate || 4% || 4% || 8% Unsaturated HFCs || High cost || Half cost || High cost || Heatpumps || Heatpumps || Heatpumps || Rail mobile AC || Rail mobile AC || Rail mobile AC || PU spray foam || || PU spray foam || || || Bus mobile AC || || || Refrigerated vans || || || Large industrial refrigeration || || || Commercial hermetics 3.1. Effects
of prices for unsaturated HFCs Table A_VIII-4 (column 2) shows that the reduction in prices for all unsaturated
HFCs by 50% leads to a decrease of the average abatement cost from 16.5 to 9.9
€/tCO2eq. As a result, PU spray foam (application of HFC-1234ze)
will be included in the option because the abatement costs of the sector mix of
low-GWP alternatives decrease from 62 to 42 € /t CO2eq., falling
below the efficiency threshold of € 50/t CO2 eq. As a consequence,
the overall emission reduction potential increases by 1.4 Mt CO2eq,
from 69.2 to 70.6 Mt CO2eq. It must be added that Schwarz et al.
(2011)9 assume that unsaturated HFCs are included in the 2030
penetration mix only in 16 of the 25 sectors of concern. 3.2. Effects
of discount rate The third column of Table
A_VIII-4 reveals that the quantitative impact from a discount rate of 8%
compared to 4% is significantly higher than the impact of the price reduction
of unsaturated HFCs. The average
abatement costs per t CO2eq increase to € 28.1, and cause a
drop in efficiently abated emissions to 64.4 Mt CO2eq (compared to
69.2 Mt CO2eq in the base case). In contrast to the base case, four
additional sectors will be excluded from the option because of low cost
effectiveness (threshold is € 50/t CO2eq): bus AC,
refrigeration of vans, large industrial refrigeration and commercial hermetic
systems. It must be mentioned
that under the assumption of a discount rate of 4%, the abatement cost for
large industrial refrigeration are the lowest of all sectors (- 22 €/tCO2eq)
but turn positive, to even + 65 €/tCO2eq, if a discount rate of
8 % is applied. This is a result of the high absolute investment cost of
large ammonia-based refrigeration plants which are assumed to replace conventional
R-404A systems. This means that operators’ commitment to short-term
profitability is in the industrial refrigeration sector particularly
detrimental to the introduction of low-GWP alternatives. 3.3 Conclusions The price reduction
of unsaturated HFCs by 50% increases the cost-effective emission reduction
potential of the option “Quantitative limits for the
placing on the market of HFCs” by 1.4 Mt CO2eq
(+ 2%) while the doubling of the discount rate decreases the cost effective
emission reduction potential by 4.8 Mt CO2eq
(- 7%). Fig. A_VIII-2: Option
D: Impact of doubled discount rate and halved prices of unsaturated HFCs on the
MACC of the 2030 HFC emission reduction potential N.B.: The middle curve
displays the base case. The upper curve indicates the effect of a discount rate
of 8%, showing that 64.4 Mt CO2eq can be reduced with abatement
costs below €50 /tCO2eq. The lower curve represents the impact of a
price reduction of unsaturated HFCs by 50%; the cost effective emission
reduction potential is higher, amounting to 70.6 Mt CO2eq. It is the same
reduction potential as in the base case (middle curve). Fig. A_VIII-2 shows
that the three curves do not substantially differ indicating that even doubling
of the discount rate would not put the policy option “Quantitative limits for
the placing on the market of certain F-Gases” at risk. It can be concluded
that even under a high discount rate (indicating focus on short-term
profitability) the option can be considered effective and efficient. 4. Option
E "Ban the placing on the market of certain open and closed applications
of F-Gases" In the option
“Quantitative limits for the placing on the market” it was assumed that the
reduction potential of replacement solutions follows
the penetration rates of alternative technologies without delay, i.e. every
year all available replacement solutions for new equipment are installed
according to the penetration mix. In the option “Ban the placing on the market
of certain open and closed applications of F-Gases” a ban can, however, only be
established if the penetration mix is at 100% (or less provided that specific exemptions
can be clearly specified). Therefore, in the screening process a considerable
number of sectors have been excluded from the ban option because the assumed
penetration mix of low-GWP alternatives will not reach the required market
penetration by 2030. Even when 100% penetration can be reached by 2030, there
is a delay in the introduction of low-GWP alternatives which reduces the 2030
emission reduction potential compared to the option “Quantitative
limits for the placing on the market” (or “Voluntary agreements”) in
sectors where two (or three) options are feasible. Furthermore, certain
small sectors with emission reduction potential < 1 Mt CO2eq are
considered to be too small to be included in the ban option. The total number
of sectors for which bans are technically feasible before 2031 and sufficiently
effective is 16 (out of 27). However, two of the remaining sectors do not fulfil
the efficiency criterion <50€ /t CO2eq, and are also excluded
from the option (heat pumps, PU spray foam). The 2030 emission
reduction potential of bans in the remaining 14 sectors of closed and open
applications was estimated at 52.3 MtCO2eq by Schwarz et al. (2011)9.
A precondition is that all sectors make the assumed transitions to low-GWP
options. The estimated average abatement cost for the 14 sectors is 15.9 €/tCO2eq.
(Table A_VIII-6, column 1). Table A_VIII-6: Option E Ban of placing on
the market of certain open and closed applications with HFCs: Impact of doubled
discount rate and halved cost of unsaturated HFCs on the 2030 emission
reduction Discount rate || 4% || 4% || 8% Unsaturated HFC || High cost || Half cost || High cost Maximum reduction potential || 57,092 || 57,092 || 57,092 Abated at< €50/tCO2eq || 52,278 || 52,278 || 51,929 Avabatement cost (€/tCO2eq) || 15.9 || 8.3 || 26.5 Sectors> 50€/tCO2eq || 2 || 2 || 4 Not abated emissions (>€50/tCO2eq) || 4,814 || 4,814 || 5,163 Table
A_VIII-7:
Option E: Sectors excluded by screening for lack of cost efficiency Discount rate || 4% || 4% || 8% Unsaturated HFCs || High cost || Half cost || High cost || Heatpumps || Heatpumps || Heatpumps || PU spray foam || PU spray foam || PU spray foam || || || Industrial refrigeration || || || Commercial hermetics 4.1. Effects
of prices for unsaturated HFCs As can be seen in Table A_VIII-6
(column 2), the reduction in prices by 50% for all unsaturated HFCs leads to a
decrease of the average abatement costs from 15.9 to 8.3 €/tCO2eq.
Compared to the calculations with higher prices of unsaturated HFCs, no
additional sector falls below the efficiency threshold of € 50/t CO2eq.
As a consequence, the overall emission reduction potential is the same for both
price estimates. 4.2. Effects
of discount rate The third column of Table A_VIII-6
reveals that there is a quantitative impact from the doubling of the discount
rate not only to the average emission abatement costs, which will almost
double, but also to the emission reduction potential, which will be reduced by
a small amount. The average abatement costs per t CO2eq
increase to € 27.5, and cause a drop in efficiently abated emissions by
0.35 Mt CO2eq from 52.3 Mt CO2eq. Two sectors more than
in the base case will be excluded from the option because of low cost effectiveness
(threshold €50/t CO2eq): large industrial refrigeration and
commercial hermetic systems. Under a discount rate of 4 % the
abatement costs for large industrial refrigeration are the lowest of all
sectors (-22€/t CO2eq) but turn positive, to + 65 €/t CO2eq,
if a discount rate of 8 % is applied. This is a result of the high
absolute investment costs of large ammonia-based refrigeration plants which are
assumed to replace conventional R-404A systems. This means that operators’
commitment to short-term profitability is in the industrial refrigeration sector
particularly detrimental to the introduction of low-GWP alternatives. The
increase in abatement costs in the sector of commercial hermetic systems is in
the same range, rising from -0.8 € to +111 €/t CO2eq. This is also
due to the fact that the investment costs of systems with low-GWP refrigerants
(R-290 and R-744) are substantially higher than for systems with conventional
HFCs, even if the absolute difference is comparably small. 4.3. Conclusions Fig. A_VIII-3: Option
E: Impact of doubled discount rate and halved prices of unsaturated HFCs on the
MACC of the 2030 HFC emission reduction potential N.B.: The middle curve
displays the base case. The upper curve indicates the effect of a discount rate
of 8%, showing that 51.9 Mt CO2eq can be reduced with abatement
costs below €50 /tCO2eq. The lower curve represents the impact of a
price reduction of unsaturated HFCs by 50%; the cost effective emission
reduction potential is higher, amounting to 52.2 Mt CO2eq. It is the same
reduction potential as in the base case (middle curve). Fig A_VIII-3 shows that the three curves do not substantially split from each
other, indicating that even doubling of the discount rate would not set the
policy option E “Ban placing on the market of certain open and closed
applications” at risk. In summary, even under a very high discount rate
(indicating focus on short-term profitability) the option E can be considered
effective and efficient. ANNEX IX: Model Description of the EmIO-F Europe Input-Output
model and Sensitivity Analysis of Employment impacts 1. Introduction This Annex contains a more detailed
description of the model EmIO-F Europe - Employment Input-Output Model
for Analysis of Policies and Measures for the European Union and the results of
a sensitivity analysis of the employment impacts. 2. The
Input-output model EmIO Europe is a static Input-Output Model
to determine direct and indirect output and employment effects of environmental
policies and measures for the European Union. In this case, the model is
calibrated to accommodate the effects of the revised F-Gas regulation (hence
EmIo-F). The model is based on the Eurostat Input-Output Table (EU-27) for
domestic production at basic prices for the year 2007 as well as Eurostat
employment data for the same year. The inverse (Leontief) coefficient matrix is
calculated and used to analyse the direct effect a demand shift (e.g.
investment) has on the output of a sector and all indirect effects triggered in
other sectors providing intermediate inputs to production of this sector. The
vector of employment coefficients (derived by dividing the level of employment
per sector by aggregate output of this sector) defines the level of employment
per unit of production and can thus be used to investigate the effect on
employment of an increase or decrease in production activity. The Model incorporates 59 NACE Rev.1.1
2-digit sectors. The relevant sectors for an F-Gas related analysis are: 29
“Machinery and equipment n.e.c.”, 24 “Chemicals, chemical products and man-made
fibres” and 40 “Electrical energy, gas, steam and hot wa-ter”. Sector 29 not
only includes manufacturing of machinery and equipment, but also repair and
maintenance (e.g. 29.23 “Non-domestic cooling and ventilation equipment”). From
2012 onwards (reporting year 2008) countries will report to Eurostat according
to NACE Rev.2. In this more disaggregated classification sector, the sectors
for servicing and maintenance will be differentiated from manufacturing sectors
and thus permit a more detailed treatment of the effects on investment in new
equipment vs. changes in service and maintenance needs. To apply the model, information on both
investment and operation and maintenance (O&M) activities induced by the
policy measure is required and needs to be assigned to sectors within the
Input-Output model. This includes information on increased investment and
O&M activity stimulated by the policy or measure in some areas (blue box in
A_IX-1) as well as information on decreased activity due to the policy or
measure in other sectors (red box in A_IX-1). In case, information is provided
on a more detailed level, the data needs to be aggregated in accordance with
the sectoral aggregation level of the input-output statistics. In the process
of aggregation, some activities may need to be assigned to one and the same
sector (e.g. machinery and equipment or services relating to maintenance and
repairs) and information on positive and negative stimulation and their
individual effects on employment may no longer be disentangled. The overall net
effect, however, would be assessed. Fig. A_IX-1: Main economic mechanisms of job
creation and destruction Source:
adapted from Quirion and Demailly (2008)[79] This approach may present a bias towards
the most expensive technical and organisational option, because a large amount
of these costs is due to additional labour costs. It is therefore important to
account for the fact that economic agents (households, businesses, governments)
will necessarily pay for these extra costs and will therefore reduce other
expenses, thus inducing a negative effect on output and employment. Taking into
account this "income effect" (purple (larger) box in the above Fig.
A_IX-1) requires some additional assumptions, notably relating to which
economic actors will bear the extra costs and how they will change their saving
and consumption in response to these extra costs. EmIO Europe can distinguish
whether the cost of the policy or measure is borne by consumers, by industry or
by the government. As F-Gases are mainly associated with end-use products, we
assume that any additional costs to the production sectors will be fully passed
on to consumers. Currently two variations are implemented in
EmIO Europe to account for consumer reaction. Both have been applied in the
current context: i) the additional costs incurred from compliance with the
policy will reduce final demand proportionally for all production sectors
(proportional scenario), ii) the additional costs will not affect demand for
basic products (such as food, textiles, furniture, electronic equipment, most
services) but will reduce demand for products from those sectors that are
affected by the regulation (subsistence scenario). The model further distinguishes two
methodological variants concerning the financing of changes in activities (e.g.
investment): (1)
One variant labelled “Ex-post financing by
consumers” which models the net effect (direct and indirect) on production
stimulated by the policy (i.e. investment in hardware, changed maintenance
requirements, purchase of materials and changed electricity consumption) and
shows the effect of a change in household consumption after this initial
impulse has been fed through the economy. (2)
A second variant labelled “Ex-ante financing by
consumers” which simultaneously takes into consideration the initial impulse
and the induced reduction in demand by consumers needed to finance this
impulse. Total impact on employment is thus based on direct and indirect
production effects as well as consumer demand effects (purple (larger) box in
Fig. A_IX-1). In the context of the F-Gas regulation
variant 2) concerning the financing of investments was applied in EmIo Europe,
i.e. the effect on consumer was assessed after the initial impulse and induced
demand reaction of the policy was fed through the economy. Summarising an analysis of output and
employment effects in response to a policy or measure needs to tackle all those
sectors that are affected because of the regulation-induced changes in demand
for goods and products. These include direct output and employment effects
because of the change in investment or production, such as increased investment
in a specific technology, as well as indirect output and employment effects
because of the change in demand of products and goods further up the production
chain. While direct output and employment effects can be assessed based on
simple input coefficients (e.g. additional output and employment per unit of
in-vestment, additional output and employment per unit of turnover etc.),
assessing indirect effects requires an economic approach that covers all
economic sectors and their interactions. Using a more comprehensive modelling
framework based on official input-output statistics, e.g. input-output analysis
as applied by EmIO Europe, allows addressing both direct and indirect output
and employment effects. EmIO Europe can give a basic assessment of
the effect of the additional burden a policy or measure may impose on the
economy as well of the effect of recycling of revenues that may be raised by a
policy or measure. The financial burden to cover needed investments can be
expressed as a reduction in demand distributed across sectors, while revenue
recycling may – even at the same time – stimulate demand across the same or
others sectors. The model can differentiate these demand induced third-stage
employment effects for households, industry and/or government. EmIO Europe provides a fairly easy-to-use
tool for understanding linkages between different parts of the economy. It has
the advantage of –
Providing direct and indirect effects –
Giving a relatively high resolution of sectoral
detail (for the EU: NACE Rev1.1 59 2-digit sectors, higher resolution in NACE
Rev.2) –
Input-output and employment data readily
available (data on investment, however, is required) –
Medium degree of complexity –
Simple relationships (Leontief production
structure for production sectors) –
No special software requirement: Spreadsheets –
High transparency However, one has to keep in mind that the
Input-Output Model is static and therefore assumes fixed ratios for inputs and
production. Furthermore, it lacks supply-side information or budget
constraints. The model can be used to give a good indication of the magnitude
and direction of the effects. It can be considered a basic assessment and may
also provide a first stage of a more comprehensive assessment. 3. Sensitivity
analysis of employment impacts This section presents a sensitivity
analysis of the output effects by relaxing some of the assumptions made. As the
calculation of the output effect is an intermediate step in the calculation of
the employment effects those effects are likely of the same sign and magnitude.
The first assumption concerns the way in
which households react to increased costs by reducing their demand for goods. Up to now we have assumed that the additional costs incurred from
compliance with the policy reduces final demand proportionally for all
production sectors (proportional scenario). If instead the additional
costs do not affect demand for basic products (such as food, textiles,
furniture, electronic equipment, most services) but will reduce demand for
products from those sectors that are affected by the regulation (subsistence
scenario). The analysis shows that the output effect of the subsistence
scenario is less pronounced. This is due to the fact that more of the demand
reduction concerns imports in the subsistence scenario (24% instead of 16%) and
thus does not stimulate production activity in the EU. Figure A_IX-2 compares
the output effects of the two variations for all three policy options. Fig. A_IX-2: Output effect of different assumptions
on demand reduction by consumers However, independent of the assumptions
relating to the demand reaction, the overall effect remains about the same (see
Fig. A_IX-3 below). Fig. A_IX-3: Output
effect for the different options under different assumptions on consumer
reaction (as % of 2007 overall output) The second sensitivity analysis estimates
output effects sensitivity of reduced prices for unsaturated HFCs. The most
notable effect occurs in the chemicals sector, for which the policy-induced
change in investment is now negative for all three options, with the least
negative effect on production activity occurring for Option D (Phase Down) (See
Figure A_IX-4). This effect is due to the fact that under this assumption that
conventional HFCs are more expensive than their replacements, meaning that less
money flows into the chemicals/gases sector. Again, however, the overall
picture remains very close to the base case (see Figure A_IX-5). Fig. A_IX-4: Output
effects of half-price scenario on the chemicals/gases sector (as % of 2007
sector output) Fig. A_IX-5: Overall
effects of a half-price scenario (as % of 2007 output) ANNEX X: Mechanism for the Placement of HFCs on the EU Market 1. Introduction
and Summary The main concept for a phasedown mechanism entails defining a reduction
pathway between the current and a future level for the placing of HFCs on the
EU market. In this annex, sub-options for mechanisms implementing the policy
option to phasedown of the placing on the market of HFCs (option D) are
developed and discussed. For each set of sub-options one option was chosen for
further consideration. In the chosen scope of the proposed phasedown mechanism, “placing on
the market” (POM) refers to making available HFCs to the EU market (sold
production + import) for the first time and is limited to HFC flows in bulk
quantities, thus not accounting for HFCs contained in imported products or
equipment. Exported bulk HFCs are not regarded as “placed on the market” if
they are either directly exported by producers or exported by third parties
when the quantities had been purchased for that purpose. The list of HFCs
covered by the phasedown is almost identical to the list of HFCs covered by the
current F-Gas Regulation: The list is amended by two additional HFCs (HFC-152
and HFC-161) for which the IPCC provided GWP values in its Fourth Assessment
Report. The GWPs of the Fourth IPCC Assessment Report shall be used for the
conversion of physical tonnes into CO2 equivalents. No exemptions
for HFC-using sectors are foreseen. The limitation for the placing of HFCs on the EU market (“cap”) for
subsequent periods decreases over time. The proposed reduction schedule
features a step-wise reduction, starting with a freeze at a baseline level in
2015, a first reduction step in 2016 and a final step down in 2030 reaching 29%
of the baseline. The reduction steps are based on the expected feasibility of
using alternative substances. Decisions on the additional reductions beyond
2030 should be made at a later stage, but well before 2030, taking into account
new technological developments. Under the reduction scheme, entities that place HFCs on the EU market
have to hold rights to place HFCs on the market (quotas), expressed in tonnes
of CO2eq. The sum of these quotas should not exceed the defined
maximum level for a respective year for the EU. The Commission allocates quotas
to involved producers and importers, using a central database where quota
accounts of all companies placing HFCs on the EU market are held. The
allocation method chosen for further consideration is allocation by
grandfathering, i.e. based on past activities. Quotas may be transferred
between companies, but the transfer of unused quota at the end of a year to
subsequent years is not allowed. As under the present F-Gas Regulation, stakeholders annually report to
the Commission and Member States on stocks, production, import and exports of
regulated HFCs which allow the calculation of their respective placing of HFCs
on the market. Reports above certain thresholds shall be subject to independent
verification. Reporting on reclamation and destruction is enhanced. Enforcement and compliance, beyond the administration of the quotas at
EU level, follows the general responsibilities for the enforcement of EU
legislation. MS would need to take measures in cases of non-compliance as part
of the implementation of a revised F-Gas regulation to ensure that the HFC phasedown
is implemented. In order to ensure the integrity of the phasedown mechanism it is
necessary to foresee complementary measures addressing the placing on the
market of equipment pre-charged with HFCs. Already today the amounts of HFCs
imported in equipment account for 11% of the overall EU demand and is expected
to reach a share of 18% in 2030 if left unaddressed. Whereas for hermetically
sealed systems bans of certain types of equipment are envisaged, for other
systems a ban on pre-charging before importation should ensure that the
quantities used for the first fill are captured by the phasedown. 2. Scope 2.1. Coverage
of substances Any mechanism limiting the placing on the market of HFCs needs to clearly
define the substances controlled under such a scheme. 2.2. HFCs
to be specified individually in a list The current Regulation (EC) No 842/2006 defines the scope by means of a
general definition[80] complemented by a list
of individual substances in an annex in which the individual substances are
grouped according to their chemical similarities. The Montreal Protocol and the
Kyoto Protocol use a similar approach by listing the gases covered. Such a list
of HFCs would be annexed to a regulation or decision in the same way as in the
current F-Gas Regulation and for HFCs such a list could include the following
chemical species as indicated in Table A X-1. This list includes all
HFCs for which the IPCC has already provided an official GWP. HFC-152 and HFC-161, which are included in Table 1, are not
covered by the current F-Gas Regulation but should be included. These HFCs
could become potential alternatives to other HFCs, in particular in
preparations. Under the UNFCCC there is an agreement that new HFCs for which
the Fourth IPCC Assessment Report has provided a GWP should be included in the
future reporting of greenhouse gas emission inventories and also in emission
reduction commitments of a second commitment period under the Kyoto Protocol[81].
For consistency in monitoring and reporting with the future modalities under
the UNFCCC and the Kyoto Protocol, it is therefore recommended that all HFCs
are included in such a list for which the IPCC has provided a GWP in its most
recent assessment report. In both amendment proposals to the Montreal Protocol that have
currently been proposed, the scope of substances covers all HFCs as listed in Table
A_X-1. In addition, two unsaturated HFCs, i.e. HFC-1234yf (GWP 4) and
HFC-1234ze (GWP 6) are also included, which are not included in the Fourth IPCC
Assessment Report and do not have an GWP determined under the UNFCCC. Table A_X-1 List of HFC species and GWPs
according to the IPCC 2nd Assessment Report (SAR), 3rd
(TAR) and 4th Assessment Report (FAR) Despite the
inconsistency with the proposed amendments, the scope of the phasedown
mechanism should be limited to HFCs for which the IPCC has provided an
'official' GWP, as this is currently the major science-based process for such a
determination. Otherwise it would be necessary to establish a parallel
scientific process to assess the GWPs for new gases which seems beyond the
mandate of the revision of the F-Gas Regulation. The inclusion of
unsaturated HFCs with a low GWP in the phasedown would only have a minor impact
on the calculated future supply if expressed in CO2eq. In the
scenarios calculated for this report, the consumption of unsaturated HFCs
totals approx. 216 kt CO2eq in 2030. This is 0.16% of the total
supply in 2030. The two unsaturated HFCs should be included in the reporting
requirements under a revised F-Gas Regulation in order to ensure adequate
monitoring and reporting of their production and consumption, also for the case
an international HFC phasedown mechanism, including these substances, is
agreed. 2.3. Considered
alternative(s) Beside an
enumeration of the covered HFCs in a list, the alternative option considered
was to include only HFCs above a certain (GWP) threshold. In view of ensuring
consistency with current policy approaches and the initiatives at international
level, but also to avoid uncertainties with regards to the determination of a
GWP for a substance in question, the latter option has been discarded. 2.4. Coverage
of mixtures/preparations It is also necessary to define how substances that consist of mixtures
of HFCs or mixtures of HFCs with other substances would be treated. A
consistent treatment would mean that only the specific component of a mixture
would fall under the scope of a phasedown mechanism if a controlled HFC
component specified in the list is contained in the mixture. In terms of
enforcing the regulation this means that the components of the mixtures are
treated as individual substances and measures are needed to enable the
identification of the components of such mixtures. Such a rule would diverge from the current F-Gas Regulation that
defines “preparations“ as a mixture composed of two or more substances, at
least one of which is a fluorinated greenhouse gas, except where the total GWP
of the preparation is less than 150. However, it seems inconsistent to use a
GWP threshold for preparations, but not in general for the scope of F-Gases. 2.5. Recovered,
recycled and reclaimed HFC Recovered, recycled
and reclaimed HFC quantities should not be included in the scope of the phasedown
mechanism in order not to offset efforts made according to Article 4 of the F-Gas
Regulation which reduces the demand for virgin HFCs. This is also in line with
the ODS Regulation, which excludes these quantities from controls of
production.[82] 3. Activities
subject to quantitative restrictions The proposed HFC phasedown
mechanism refers to the placing on the market of HFCs in the EU and is thus
related to the supply of HFCs. “Placing on the market” is defined in the F-Gas
Regulation (Article 2 point 7) as “the supplying of or making available to a
third party within the Community for the first time, against payment or free of
charge, […] and includes import into the customs territory of the Community”. 3.1. HFCs
in imported equipment The phasedown
mechanism follows the approach chosen under the Montreal Protocol for ozone
depleting substances and reduces the availability of HFCs over time, in this
way eliminating potential sources of future emissions. Whether measures on bulk
substances alone would be sufficient to reach the intended emission reductions
in the EU depends on the share of emission sources in the EU not covered by the
mechanism in such a case. The supply of bulk HFC in the EU does not represent
accurately the amount of substances which can potentially be emitted in the EU
if there is a considerable amount of substances contained in imported
pre-charged equipment. The first fill of such equipment is carried out in a
third country and manufacturing emissions occur there. After import and installation
of the equipment, use-phase and disposal emissions arise in the EU. HFC quantities
contained in pre-charged equipment already account for a significant share of
HFCs on the European market in several sectors, such as mobile and stationary AC,
and is projected to increase. Most relevant is the stationary AC sector (in
particular smaller AC units such as single-splits and movables) for which high
growth is projected (Schwarz et al. (2011)9. 75-90% of the
split and multi-split air conditioners and small moveable systems are imported
from outside the EU, in particular from Asia. The ratio of HFCs in
pre-charged equipment being imported to the EU relative to overall EU demand is
currently 11% (18 Mt CO2eq) and is projected to amount to a share of
18% or 31 Mt CO2eq HFC supplied to the EU in the year 2030 (see Table
A_X-2 and Figure A_X-1). ). Details
on the sectoral distribution are provided in Tables A_X-3 and A_X-4. Table A_X-2 Supply of HFCs in EU-27 (Mt CO2eq)
in the baseline scenario (F-Gas Regulation and MAC Directive in place; option
A) in the period 2010-2050 – with and without pre-filled systems Year || 2010 || 2015 || 2020 || 2030 || 2050 Supply for domestic fill/refill (supply) || 152 || 141 || 140 || 139 || 143 Supply of HFCs in imported pre-filled systems || 18 || 24 || 27 || 31 || 32 Total demand incl. pre-filled imported systems || 170 || 165 || 167 || 170 || 174 Source: AnaFgas Fig. A_X-1: Supply of HFCs to EU-27 (kt CO2eq)
in the baseline (WM) scenario (F-Gas Regulation and MAC Directive in place;
option A) in the period 2000-2050 with and without pre-charged systems With regard to pre-charged equipment, two categories
need to be distinguished: –
Hermetically sealed pre-charged equipment is
filled during manufacture and sealed before import; refilling is not required.
Only the import of moveable room air conditioners is quantitatively relevant.
Other types of hermetically sealed pre-charged equipment are not imported in
large quantities, e.g. commercial refrigeration systems, heat pumps,
tumble-dryers and domestic refrigerators containing HFCs. –
Other pre-charged equipment, for example
split-air conditioners, is usually filled with an initial charge during
manufacture. This type of equipment needs in some cases to be topped up with
refrigerant before use and possibly during service. On the other hand, some quantities of HFCs supplied
in the EU are not used and finally emitted in the EU but filled into equipment
which is exported. Domestic first fill for export equipment is relevant with
regard to mobile air conditioners of motor vehicles and medical aerosols
(MDIs). XPS (extruded polystyrene) insulation boards blown using HFC-134a
constitute an export stream of HFCs in products as well. Table A_X-3 presents in a more disaggregated way the sectorial figures on the
HFC-using sectors affected by the proposed phasedown scheme. It indicates the
HFC types mainly used, main replacement options and demand estimates for 2010
and 2030, including bulk substance plus imports of pre-charged systems and
exports of prefilled systems. It also indicates the sectors in which imports or
exports of equipment or products containing HFCs are relevant. Table A_X-4 provides quantitative data on the sectorial demand in CO2eq tonnes. Table A_X-3 Sectoral demand of HFCs and shares
of imported or exported equipment / products containing HFCs Sector || HFCs used || Replacement options || HFC demand (ext2) [kt CO2eq] || Pre-charged HFC equipment/ products || Import: share pre-charged of demand 2010 || Export: share pre-charged of demand 2010 || Remarks 2010 || 2030 baseline scenario || Growth 2030 vs. 2010 Total || || || || 169,853 || 170,421 || 568 || || || || || Refrigeration || || || 60,557 || 55,265 || -5,292 || || || || || || Domestic Refrigeration || HFC-134a || HC || 3 || 0 || -3 || negl. || negl. || no || || || Commercial Refrigeration || HFC 134a; HFC 143a; HFC 125 || HFC-1234yf; HC; CO2 || 36,320 || 34,867 || -1,453 || negl. || no || negl. || || || Industrial Refrigeration || HFC 134a; HFC 143a; HFC 125; HFC-32 || NH3 || 20,128 || 14,046 || -6,082 || negl. || no || negl. || || || Road transport Refrigeration || HFC 134a; HFC 143a; HFC 125 || HFC-1234yf; HC; CO2 || 3,718 || 5,348 || 1,630 || negl. || no || negl. || || || Shipping Refrigeration (fisheries) || HFC 134a; HFC 143a; HFC 125 || NH3 || 388 || 1,004 || 616 || no || no || no || || Stationary A/C and Heat Pumps || || || 39,240 || 72,724 || 33,484 || || || || || || Room A/C moveables || HFC-32; HFC-125 || HFC-1234yf; HC; CO2 || 2,391 || 6,980 || 4,589 || yes || 69% || negl. || || || Room A/C single split || HFC-32; HFC-125 || HFC-1234yf; HC; CO2; HFC32 || 23,492 || 45,428 || 21,936 || yes || 50% || negl. || || || Rooftop || HFC-32; HFC-125 || HFC-1234yf; HC; CO2 || 1,175 || 1,358 || 183 || yes || 22% || negl. || || || Variable Refrigerant Flow & Multisplit || HFC-32; HFC-125 || HFC-1234yf; HC; CO2 || 2,618 || 5,187 || 2,570 || yes || 42% || negl. || || || Chillers (displacement) || HFC-134a; HFC-32; HFC-125 || HFC-1234yf HC; CO2; NH3 || 6,610 || 6,722 || 112 || yes || 4% || negl. || || || Centrifugal chillers || HFC-134a || uHFCa, HC, H2O || 567 || 605 || 38 || no || || || || || Heat Pumps || HFC-32; HFC-125 || HFC-1234yf; HC; CO2; HFC32 || 2,386 || 6,443 || 4,057 || negl. || no || negl. || || Mobile A/C || || || 40,326 || 11,953 || -28,373 || || || || || || Car A/C || HFC-134a || HFC-1234yf || 33,837 || 3,453 || -30,384 || yes || 8% || 10% || After 2017: No HFC import , export 100% || || Bus A/C || HFC-134a || HFC-1234yf || 1,918 || 1,870 || -48 || yes || 3% || 6% || || || Truck A/C || HFC-134a || HFC-1234yf || 3,532 || 4,688 || 1,155 || yes || 9% || 11% || || || Ship A/C || HFC-134a || NH3, XP10 || 901 || 1,771 || 869 || yes || 4% || no || || || Rail A/C || HFC-134a || CO2 || 137 || 171 || 35 || no || || || || Foams || || || 10,935 || 10,810 || -125 || || || || || || One Component Foam || HFC-134a || HC || 255 || 311 || 56 || negl. || || negl. || || || PU foam || HFC-365mfc; HFC-227ea; HFC-134a || HFC-1234ze; HC || 6,128 || 5,947 || -181 || negl. || || negl. || || || XPS || HFC-134a; HFC-152a || HFC-1234ze; HC; CO2 || 4,553 || 4,553 || 0 || yes || no || 20% || only with HFC-134a (not 152a) || Other HFCs || || || 18,795 || 19,668 || 873 || || || || || || Aerosols || HFC-134a || HFC-1234ze || 3,960 || 3,960 || 0 || negl. || negl. || negl. || || || Metered dose inhalers || HFC-134a; HFC-227ea || || 7,670 || 8,471 || 801 || yes || negl. || 50% || || || Solvents || HFC-43-10mee || || 330 || 330 || 0 || no || || || || || Fires extinguishers || HFC-227ea; HFC-23; HFC 236fa; HFC-125 || FK-5-1-12 || 6,721 || 6,785 || 64 || no || || || || || Aluminium & Magnesium Casting || HFC-134a || || 39 || 47 || 9 || no || || || HFC-134a is replacement for SF6 || || Semiconductor and Photovoltaics || HFC 23 || || 76 || 76 || 0 || no || || || Note: a uHFC: unsaturated HFC Source:
Estimates based on AnaFgas HFCs:
List of substances as in Table A X-1; GWPs of Fourth IPCC Assessment Report Table A_X-4 Sectoral demand of HFCs and unsaturated
HFCs (uHFC) and shares of imported/exported equipment/products containing HFCs
[GWP] Sector || HFC demand (ext2) [Mt CO2eq] || uHFC demand (ext 2) [Mt CO2eq] || Thereof import HFC pre-charged equipment [Mt CO2eq] || Thereof HFC refill imported pre-charged equipment. [Mt CO2eq] || Thereof export HFC pre-charged equipment [Mt CO2eq] 2010 || 2030 baseline (WM) scenario || Growth 2030 vs. 2010 || 2030 Phasedown (WAM scenario) || Red. potential 2030 WAM vs. WM || 2030 WM scenario || 2030 WAM scenario || 2010 || 2030 WM scenario || 2030 WAM scenario || 2010 || 2030 WM scenario || 2010 || 2030 WM scenario || 2030 WAM scenario Total || || 170 || 170 || 1 || 36 || -134 || 0.1 || 0.3 || 18 || 31 || 0 || 8 || 16 || 9 || 9 || 8 || Refrigeration || 61 || 55 || -5 || 9 || -46 || - || 0.0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || Stationary A/C and Heat Pumps || 39 || 73 || 33 || 7 || -66 || - || 0.1 || 15 || 30 || 0 || 8 || 15 || 0 || 0 || 0 || || Room A/C moveables || 2.4 || 7.0 || 4.6 || - || -7.0 || - || 0.0 || 1.7 || 4.8 || - || 0.6 || 1.6 || || || || || Room A/C single split || 23.5 || 45.4 || 21.9 || - || -45.4 || - || 0.1 || 11.7 || 22.7 || - || 6.3 || 11.3 || || || || || Rooftop || 1.2 || 1.4 || 0.2 || 0.0 || -1.3 || - || 0.0 || 0.3 || 0.3 || 0.0 || 0.1 || 0.1 || || || || || Variable Refrigerant Flow & Multisplit || 2.6 || 5.2 || 2.6 || 0.2 || -5.0 || - || 0.0 || 1.1 || 2.2 || 0.1 || 0.9 || 2.4 || || || || || Chillers (displacement) || 6.6 || 6.7 || 0.1 || 0.3 || -6.5 || - || 0.0 || 0.3 || 0.3 || 0.0 || || || || || || Mobile A/C || 40 || 12 || -28 || 6 || -6 || 0.1 || 0.1 || 3 || 1 || 0 || 0 || 1 || 4 || 4 || 4 || || Car A/C || 33.8 || 3.5 || -30.4 || 3.5 || - || 0.1 || 0.1 || 2.7 || - || - || || || 3.5 || 3.5 || 3.5 || || Bus A/C || 1.9 || 1.9 || -0.0 || 0.2 || -1.7 || - || 0.0 || 0.1 || 0.1 || 0.0 || || || 0.1 || 0.1 || 0.0 || || Truck A/C || 3.5 || 4.7 || 1.2 || 0.7 || -4.0 || - || 0.0 || 0.3 || 0.4 || 0.1 || 0.4 || 0.8 || 0.4 || 0.5 || 0.1 || || Ship A/C || 0.9 || 1.8 || 0.9 || 1.1 || -0.6 || - || - || 0.0 || 0.1 || 0.0 || || || || || || Foams || 11 || 11 || -0 || 4 || -6 || - || 0.0 || 0 || 0 || 0 || 0 || 0 || 1 || 1 || 0 || || XPS || 4.6 || 4.6 || - || - || -4.6 || - || 0.0 || || || || || || 0.9 || 0.9 || - || Other HFCs || 19 || 20 || 1 || 10 || -9 || - || 0.0 || 0 || 0 || 0 || 0 || 0 || 4 || 4 || 4 || || MDI || 7.7 || 8.5 || 0.8 || 8.5 || - || - || - || || || || || || 3.8 || 4.2 || 4.2 Note: a uHFC: unsaturated HFCs: HFC-1234yf (GWP 4), HFC-1234ze (GWP 6) Source:
Estimates based on AnaFgas; HFCs: List of substances as in TableA X- 1; GWPs of
Fourth IPCC Assessment Report 3.2. Options for taking measures on pre-charged equipment Without specific
measures on HFCs in pre-filled equipment alongside a phasedown mechanism, these
HFCs would be a continuously growing source of HFCs emissions in the EU. As a first approach
it was therefore considered to integrate quantities contained in pre-charged
equipment in a phasedown regime. The high number of entities which would be
covered by this extended scheme was one determining factor to discard this
option. In 2010, 107 stakeholders were involved in production, import and
export of bulk HFCs in quantities of more than 1 tonne/year.[83]
For import and export of products and equipment containing HFCs, no reporting
obligations exist so far. The numbers of producers, importers and exporters of
pre-charged equipment can be estimated as shown in Table A_X-5. Whereas the number of producing firms of prefilled equipment is
limited, the amount of distributors can only be estimated and is most likely
high. The order of magnitude of affected importers and exporters could be
thousands, depending on the thresholds for the application of the phasedown
mechanism chosen. Table A_X-5 Estimates of producers and distributors of
products or equipment containing HFCs 2010 || Third country based producers of systems for export into EU || EU based producers of systems for export to third countries || EU-based distributors of systems imported from third countries || EU based distributors of systems for export to third countries XPS-134a || 0 || 3 || 0 || unknown Air conditioned passenger cars || 10 || 12 || high number || unknown Air conditioned lorries (N1-N3) || 5 || 12 || high number || unknown Air conditioned buses || 0 || 5 || few || few Stationary AC - Chillers || 10 || 4 || high number || < 10 Stationary AC - Excluding chillers || 10 || 2 || very high number || < 10 MDI || 0 || 8 || 0 || ~ 30 Source: Estimates
Öko-Institute Hence,
the inclusion of imports of pre-charged equipment would subject a presently
unknown, high number of importers as stakeholders to the phasedown mechanism.
Most of those importers would probably have rather small amounts of placements on
the markets. Experiences from the EU ETS show that “small” participants often
have little knowledge of the system and create a lot of problems in
administering the system. Furthermore, the market for HFCs in bulk is
mature and stable with regard to the market players and shares. Under these
conditions a reduction of the flexibility of this market, which would be the
result of any phasedown mechanism, seems acceptable. But this would not be the
case for an inhomogeneous market, like the one for the broad variety of HFC
containing equipment, which has to be open for new entrants and innovative
products. An inclusion of HFC contained in pre-charged equipment in the phasedown
mechanism could in particular negatively impact on the market access for SMEs
launching new types of equipment or extending current activities. Moreover, importers of equipment and products that
shift towards alternatives would be able to transfer their allocated POMs
and generate windfall profits. Consequently, since domestic producers of
similar equipment and products do not receive POMs that could be used for providing windfall
profits, they would be put at a price competitive disadvantage
compared to importers. Consequently, a
direct inclusion of imports under the cap is not a good solution as it is
discriminatory (as only importers would be subjected to a registration and
reporting scheme, while domestic producers only experience possible price
increases from the cap), difficult to administer and design in the absence of
reliable data and given the potentially high number of entities to be
regulated, and is likely to create perverse incentives and windfall profits. Furthermore,
the flexibility of the inhomogeneous and dynamic market has to be preserved. Therefore, other
options for addressing imports of pre-charged equipment and products containing
HFCs were considered alongside a phasedown mechanism for bulk substances.
Possibilities include (i) to prohibit HFC imports contained in non-hermetically
sealed equipment (i.e. require filling in the EU), and (ii) specific bans. Imports of HFC
contained in non-hermetically sealed pre-charged equipment (i.e. single-split,
multi-split, rooftops) may be addressed by means of a ban on precharging of
these kinds equipment. All non-hermetically sealed equipment used in the EU
should be filled on their installation site with HFC quantities which were
either produced in the EU or imported in bulk quantities, and are thus subject
to the phasedown mechanism. Such a measure would apply to both domestically and
foreign produced equipment equally and is therefore non-discriminatory. Equipment
relying on HFCs would have to be imported or produced with a holding charge
(e.g nitrogen) only. This measure would therefore also reduce possible emissions
during transportation. By ensuring that HFCs fall under the phasedown cap,
replacement of HFCs will be incentivised also for imported equipment. For
equipment that no longer relies on HFCs the filling requirement ceases to
apply. The first fill
during installation has the additional advantage that the risk of illegal
installations by unqualified personnel resulting in high emissions,
malfunctioning and loss of energy efficiency is greatly reduced. As regards
manufacturing costs, these are estimated to not exceed €0.50 per unit,
including investments for additional equipment and labour costs, even when
considering the most conservative assumption on the additional cost per unit
(for split AC). Slightly higher costs for the user may occur for installing equipment
where the phasedown cap has not yet triggered HFC replacement, for HFC
equipment where topping up with gas is currently not necessary. Hence, due to the
high consistency with the phasedown measure (i.e. HFCs for use in Europe all
covered by phasedown), stakeholder acceptance and flexibility (as opposed to
bans) and potential to improve compliance with installation requirements,
requiring on-site filling is the preferred option to address HFCs imported in
non-hermetically sealed (RAC) equipment. This would cover 86% of the imported
AC equipment refrigerant mass (data for 2008). The use of HFCs in
sealed equipment which have to be filled during the manufacturing process might
become subject to specific bans as analysed in Schwarz et al. (2011)9.
Such bans would affect imported equipment as well as domestically produced
equipment and should in particular address, where possible, hermetically sealed
systems (i.e AC movables), which represent 14% of imported refrigerant mass in
AC equipment (data for 2008). 3.3. Export
of products containing HFCs The treatment of
direct exports of products or equipment containing HFCs by producers or
designated dealers is no issue for the environmental integrity of a phasedown
system focused on the EU market, as emission from exported HFCs would occur
outside the EU. However, exports of products containing HFCs previously placed
on the EU market would be covered by a phasedown scheme and would reduce the
quantities available for use in the EU. Thus, exporters of EU-produced products
or equipment containing HFCs face a certain competitive disadvantage since the
HFC needed for their products is included in the scope of a phasedown scheme.
Sectors of concern are motor vehicles (including passenger cars, buses and
lorries), metered dose inhalers (MDIs) and foams (HFC-134a-blown XPS insulation
boards). HFCs used in these products/equipment fall under the phasedown measure
so that there is a certain incentive to develop and use alternatives. For
passenger cars the MAC Directive already limits the use of HFCs drastically so
this is not an issue here. Extra cost due to HFC price will also be very small
for all transport AC sectors. An unknown high
number of exporters is affected. However, a differentiation of HFCs to be used
in production according to the destination of the final products is not
practicable at the moment of the placing on the market of the HFCs, in
particular when the substance is not directly purchased from a producer or
importer. A crediting of exports, which could then be used for new production
of HFCs or their import would, due to the high number of participants and
transactions, render the system unmanageable. 3.4. Sectors
covered Based on the
approach of the Montreal Protocol, all sectors relying on HFCs are covered by a
phasedown mechanism. In this way, the phasedown could be established in the
most flexible manner and would not inhibit innovation in particular areas. The MAC Directive
already represents an implementing measure for mobile AC in passenger cars and
contributes to the overall phasedown. A sufficiently high tail supply should
integrate sectors and applications which also in the future are likely to rely
on HFCs in the period until 2030 and for which alternatives may face technical
or economic constraints. Such a tail supply would need to include HFC
quantities projected to be required for: (3)
MDIs; (4)
particular sectors where no technically feasible
and safe alternatives are available such as technical aerosols, industrial
refrigeration, XPS foams; (5)
Additional quantities for applications not known
today or which today play a minor role but could possibly increase (e.g. ORC,
specific heat pump applications, for example in tumble driers). In one
quantitatively minor case, an HFC phasedown leading to higher HFC prices on the
domestic EU market would entail a perverse incentive: For magnesium foundries,
HFC-134a (GWP FAR: 1430) is the replacement substance for SF6 (GWP
FAR 22800) as the protective agent for the melt. Smaller magnesium foundries
that do not fall under the ban as defined in the F-Gas Regulation would receive
a financial incentive not to switch the F-Gas. However, if the phasedown is
accompanied by a ban of the use of SF6 in small magnesium foundries,
this perverse incentive would vanish. It could be
considered to establish exemptions from the phasedown of particular sectors or
subsectors. It is, however, likely that this would cause considerable
difficulties in defining the exact scope of such exemptions and would
substantially increase the administrative burdens for all authorities and
companies involved. Furthermore, exemptions would open up possibilities for
fraud. Feedstock
use of HFCs is known in only one case: In one F-Gas manufacturing plant, HFC-23
(by-product) is not fully emitted or treated in an incineration device. Large
shares of this by-production, ca. 400-500 tonnes per year, are used in the same
plant for halon-1301 production. Halon-1301 serves as basic material for the
manufacture of a broad-spectrum insecticide. It is not recommended to introduce
any exemptions from the phasedown scope for HFCs used as feedstock, as these
would concern only very singular cases which do not warrant an administrative
complication of the system. 4. Reduction
schedule for a phasedown for placing HFCs on the market The proposed phasedown
schedule has been developed on the basis of the bottom-up model (AnaFgas),
assessing the future availability and pace of introduction of alternative
technologies in all main sectors currently relying on HFCs. The scope of that
assessment referred to the EU F-Gas demand including imported pre-charged
equipment. The reduction scenario is established in a way that early retirement
of equipment already in use does not count towards the reduction, while new
equipment that is put into use after the old equipment has reached the end of
its technical lifetime would fall under the cap. Therefore, the market has time
to adjust to the new regulation and unforeseen costs for investors are not
minimised. It has to be
acknowledged that a bottom-up technology-based model like AnaFgas can
never fully catch all applications of F-Gases and arrive at the same values
like the top-down sales statistic of the EU reporting. Amongst the number HFC
sub-sectors not included in the model for lack of sufficient data are e.g. heat
pump tumble dryers, water heating heat pumps, organic rankine cycle (ORC),
thermometers, magnesium cover gas, semiconductor etching gas, and other
applications which may not be known to the authors of the model. To account for
such data gaps, inventory makers often use a “bottom-up surcharge” for “other”
in the range of 10-20%. Reporting under the F-Gas
directive is restricted to bulk substances. Thus imports and exports of HFCs
contained in pre-charged equipment is not accounted for. Reported sales 2010,
i.e. approx. 192 Mt CO2eq (based on FAR), are above the model values
shown in Table A_X-4: in the latter case 152 Mt CO2eq (FAR) are
calculated for bulk supply to the EU in 2010 (HFC demand: 170 Mt CO2eq
minus import of HFC in pre-charged equipment: 18 Mt CO2eq). This
deviation of 26% is not surprising, not only because of the sectors not covered
by the model, but also due to high 2010 figures which compensate for 2009
losses in the economic crisis. The AnaFgas model was developed in 2008
and primarily optimised to calculate emissions comparable to the emission
inventories. Thus, 2010 demand effects were hardly foreseeable. The EU
reporting system on F-Gases is still relatively new, and the demand of quality
control in checking and aggregating the companies’ reports has proven to be
very high. Thus, an overestimation in the reported EU figures is not
impossible. To compensate for
the mentioned uncertainties the phase-out schedule calculated on the basis of
the model has been up scaled to match the quantities reported under the F-Gas
regulation; a precaution avoiding a shortage in supply for applications which
are not (yet) replaceable. In the following
section the calculations of the demand with and without the inclusion of HFC
contained in pre-charged equipment are illustrated, before in a second step the
implications of the complementary measure (banning the placing on the market of
non-hermetic equipment which already contains a HFC pre-charge) are included.
Finally, the phase-out schedule is scaled up to ensure consistency with the
top-down data derived from the reporting under the F-Gas regulation. Fig. A_X-2: EU HFC demand scenarios N.B.: For the original WM
(baseline) and WAM (here: phasedown) scenarios, the term demand includes the
first fill of pre-charged equipment imported into the EU. For the modified WAM
scenario, the term demand does not includes the first fill of pre-charged
equipment imported into the EU. Source:
Calculations based on Schwarz et al. (2011)9 Under the scenario
which includes the quantities imported in equipment ("original WAM")
the higher demand until around 2020 is generated by the first fill (carried our
in the exporting country) which is accounted for under the phasedown. It is
assumed that under this scenario the number of imported equipment decreases
over the time as result of the mechanism. Under the modified
WAM scenario this incentive to switch to alternative technologies is missing
and it is assumed that imports continue to increase (see Table A_X-2).[84] As a consequence the
demand for HFCs for the servicing of such systems, carried out in the EU, is
increasing and exceeds the overall demand calculated for the "original
WAM" scenario. In order to derive
the total amount of virgin HFCs that needs to be placed on the market (POM) to
fulfil the EU demand in the starting year, the estimated amounts of reclaimed
HFC need to be deducted from the modified WAM demand scenario. Figure A_X-3 shows the comparison of demand and the calculated POM which is
necessary to meet that demand for the modified WAM scenario. Fig. A X-3: Demand and POM in the modified WAM scenario Source:
Calculations based on AnaFgas Reclaimed amounts are estimated by assuming
that disposal emissions as calculated in the AnaFgas model are on
average 50% of the F-Gas content at the end-of-life. The other half is
estimated to be partly reclaimed (16%) and destroyed (34%). The POM in the modified WAM scenario and
the proposed phasedown steps are shown in Figure A X-4. The first limitation ("freeze") of the POM is suggested
to take place in 2015. The first two reduction steps are designed to be above
the calculated POM in order to grant more flexibility to ensure that companies
have sufficient time to adapt: For the first reduction step in 2016 an
additional margin of 10% of the model results for POM are added, for the second
reduction step a margin of 5% is used. All later phasedown steps are designed
to follow closely the technically feasible reduction of the modified WAM
scenario. At present, the reduction schedule is defined up to 2030. Decisions
on the pathway beyond 2030 should be made at later stage but well before 2030. Fig. A_X-4: Phasedown steps (POM of bulk
HFCs) Source:
Calculations based on AnaFgas If the bulk phasedown is accompanied by
measures on HFC imports contained in non-hermetically sealed equipment, a
similar effect as explained for the difference between the original and the
modified WAM scenarios is assumed: In the first years, a higher POM within the
EU would be necessary in order to serve the additional demand for filling
imported equipment. In later years (after 2020) a lower demand for HFCs can be
expected, because for imported non-hermetic equipment the same rate of
switching to alternatives to HFCs can be assumed as for domestically produced
equipment. Proposed EU bulk HFC POM phase-down steps (including measures on PCE) (incl. measures on PCE)
Fig. A_X-5: Phase-down steps (POM of bulk
HFCs accompanied by measures on pre-charged equipment (PCE)) Source:
Calculations based on AnaFgas As mentioned above, the reduction schedule
derived from the model needs to be scaled up by 26% in order to meet the level
of EU reporting on HFCs. Figure A_X-6 and Table A_X-6 describe the scaled phasedown
schedule, which should be proposed as basis for the phasedown mechanism under
the revised regulation. Proposed EU bulk HFC POM phase-down steps (including measures on PCE) Fig.
A_X- 6: Phasedown
steps (POM of bulk HFCs accompanied by measures on pre-charged equipment (PCE))
(model results scaled to EU reporting levels) Table A_X-6 Key features of the proposed phasedown
schedule, accompanied by measures on pre-charged equipment
(model results scaled to EU reporting levels) || Proposed Reduction schedule Coverage || Bulk HFC placing on the market Baseline period || 2008-2011 Year of first control level || 2015 Proposed first control level || 100%a Final phasedown level || 21%a Year of final step down || 2030 Approximated Placing on the market for the first time of bulk HFCs in 2010 a || 186 Mt CO2eq Control schedule || Starting Year || POM Limit [Mt CO2 eq] || Percentage of 2010a 2015 || 186 || 100% 2016 || 173 || 93% 2018 || 123 || 63% 2021 || 83 || 45% 2024 || 58 || 31% 2027 || 44 || 24% 2030 || 38 || 21% Note: a The final values for the POM of bulk HFCs in the 2008-2011 are not yet available. Thus, the percentages shown in this were calculated taking as a reference the AnaFgas model calculations for 2010 and have illustrative character only. 5. Implementation
mechanism and quota allocation In order to
implement the established reduction schedule, the placing on the market of HFCs
needs to be quantitatively restricted. The cap and corresponding quotas should
be expressed in tonnes of CO2 equivalents, rather than physical
tonnes or kg of HFCs in order to adequately address the main objective of
reducing greenhouse gas emissions. Using CO2 equivalents also has
the advantage that companies focussing their portfolio on low GWP gases have
the highest benefits and the pressure to innovate is strongest for substances
with particular high GWP. All producers and
importers of bulk HFCs falling under the scope of the mechanism have to hold
quotas representing the right to place a certain amount of HFCs on the market.
Consumers such as operators of equipment or maintenance and service companies
will have no obligation under the scheme. To avoid disproportionate
administrative burden, in particular for SMEs, a threshold should apply, comparable
to the current threshold of one metric tonne of fluorinated gases currently
applicable to the reporting requirements under Regulation (EC) No 842/2006. In
view of the objective of the regulation to reduce the climate impact of F-Gas
emissions, a CO2 weighted threshold should be chosen, thus creating
an additional incentive to prefer HFCs with lower GWPs. A value of 1 000 t
CO2eq would be for most HFCs (with GWPs above 1,000) slightly more
stringent than the existing one (one metric tonne). The reduction
schedule refers to the EU consumption of bulk substances defined as production
+ imports – exports. Therefore, exported quantities do not count against the
placing on the market quota. 5.1. Quota
allocation – allocation through grandfathering or auctioning The Commission
establishes a central database for managing the allocation and use of quotas
for individual companies (producers and importers). At the end of each year,
the amount of HFCs placed on the market by each producer and importer has to be
below or equal to the quota allocated to the company (expressed in CO2eq).
Compliance is assessed based on reports provided by the companies on the HFC
quantities placed on the market for the respective year. The quotas could
either be sold via an auctioning system or distributed for free. The auctioning
of quotas could have some advantages, as the generation of revenues and a high
flexibility to react on market developments, also facilitating accessibility
for new market players. An auctioning system would, however, require the
development of an auctioning platform, providing the means of access to the
auctioning process. The auctioning process would consist of various tasks
including the registration of potential bidders, providing a platform and IT
infrastructure, collecting bids, managing collateral, running the auction and
ensuring payment and delivery. Even if the development and operation of the
system would be outsourced, experience with the EU ETS shows that the
supervision of the system would require a level of resources (either at Member
States' or Commission level). Such a system would appear disproportionate to
the size of the market addressed. In addition, the
structure of the market of bulk HFCs raises doubts about the appropriateness of
an auctioning of HFC POM quotas. Already today the market is highly
concentrated in the hands of very few suppliers. It can be expected that their
market power would diminish the effectiveness of the pricing in the auctioning
process and hamper the functioning of the market. For these reasons
the option of an auctioning system was discarded. 5.2. Grandfathering
or allocation on demand The allocation of
quotas could either be organised on the basis of periodical requests declaring
the expected, individual demand for a given time span, or by grandfathering
based upon the past activity level, i.e. the amount of HFCs placed on the EU
market by a participant during a base period multiplied with a reduction factor
in order to meet the cap. Under the previous
regulations on ODS[85], the phase-out of these
substances was implemented through quotas for the placing on the market of ODS
allocated through grandfathering based on historic market shares. In a case
where quotas for substances intended for an exempted use are subject to an
EU-wide cap, the current ODS Regulation combines the grandfathering approach
with a demand-based allocation mechanism.[86] For ODS
intended for essential laboratory and analytical purposes it was deemed
necessary to allow new entrants to benefit from this exemption, which is not
limited in time. Since the HFC phasedown does not aim at a complete ban on HFCs
(unlike the phase-out of ODS for other emissive uses), it is appropriate to
follow the same combined approach as for the permanently exempted ODS uses. An allocation
mechanism which would only be based on a declaration of expected demands had
been considered, but was discarded due to experiences acquired with the ODS
quota system. Some companies seem to exaggerate their demand more than others
and could receive a larger proportion of their real demand for free than others
providing a more realistic estimate. Whilst declarations at the higher end of
the expected demand are legitimate to prevent shortages in the upcoming
allocation period. But massive over-declarations have the potential to disrupt
the functioning of the allocation mechanism. As long as only a small proportion
of the market would be concerned by this risk, certain specific allocation
rules - as the ones adopted under the ODS regime[87]
- can sufficiently mitigate the risk and ensure an adequate level of fairness
of the system. The grandfathering
allocation scheme should, therefore, be complemented by a demand based
allocation to new entrants. The necessary quotas can be reserved in a ‘new
entrants’ reserve’. In view of the maturity of the market in bulk HFC a share
of 5% of the historic baseline should be sufficient to satisfy the demand of
new entrants. An option could be allowing new entrant to acquire a “historic”
baseline in future years (e.g. after two full years of operation), which would
also reduce the administrative effort linked with the recurring allocation
processes. The reduction factor used should be identical to the one for
allocation to incumbents. If the sum of
allocations based on expected demand and reduction factor was to surpass the
amount in the reserve, all applicants would be entitled to an equal share of
the reserve. If the reserve is not entirely used, the remaining quota could be
distributed to eligible companies on a pro-rata basis. 5.3. Determination
of the baseline For individual
companies the choice of the baseline for the grandfathering is an important
distributional matter. The baseline should be representative for the activities
of the majority of the participants. Given that the levels of activity of
individual companies may fluctuate from one year to another due to both
internal and external factors, the setting of a baseline based on an average of
several years is regarded as fairer. Reporting data is available from 2007
onwards, excluding the first year(s) (as data quality tends to be lower when a
reporting requirement is applied for the first time); a 3-year period
(2009-2011) or a 4-year period (2008-2011) would is a viable option. 5.4. Treatment
of exports The treatment of
exports in the calculation of the baseline has to be considered carefully. The
cap is designed to represent the demand on the EU market only, so exports are
excluded. Allocations could therefore exclude exports as well. Companies which
mainly produce or import for the EU market will receive allocation for the
physical placing on the domestic market only. If a company is only exporting
bulk substances the allocation should be zero. An alternative would
be to base the allocation on the sum of production and imports without taking
into account the exports. In this case exporting companies would be favoured
above those selling mostly to the inland market, as they receive allocation for
amounts that they will export and for which they have no need to hold a quota.
As exports play a major role in the current F-Gas market, the allocation factor
would seem rather low, because the sum of imports and production is by
definition above the domestic supply. The latter alternative was therefore discarded. 5.5. Implementation
and required data Entities should be
obliged to annually measure and report the quantities of HFCs placed on the
market and to hold the corresponding quotas for doing so. Annual reporting
reduces the risk that participating firms could place more substances on the
market than they are entitled to. The phasedown of
placing HFCs on the EU market should be facilitated by a central database
ensuring the accurate accounting, issuing, holding and deleting quotas. All
participants in the phasedown (producers and importers) register in the
database to open an account. The central database may be operated by the
European Commission, as the number of players is limited and an implementation
at Member States level is not necessary. The following
information would be recorded in the database: ·
Accounts held by a company or physical person
with contact information; ·
Allocation of quotas to each participating
undertaking; ·
Transfers of quotas ("transactions")
performed between the account holders. Payments and contracts for the
transactions of allowances between companies are settled outside the registry
system; ·
Annual verified quantities of HFCs placed on the
EU market by each account holder; ·
Compliance status in regard to the last annual
verification. If no verified quantities of HFCs placed on the market are
reported by the deadline set, the accounts of these undertakings are blocked. Part of the
information would be available only to the account holder, the Commission and
the competent authorities of the Member State concerned, but other information
might be made available to the public. As the proposed phasedown mechanism has
many similarities to the European ODS phase-out mechanism, the ODS database
might be extended for that purpose. The data
requirements under a grandfathering system would include the domestic
production, imports and exports of bulk substances. Data on production,
purchases, sales, stock changes, imports and exports of bulk substances are
currently reported under Commission Regulation (EC) No 1493/2007[88]
for the years 2007 to 2010. 5.6. Transferability
of quotas If a company ceases
its activities, its quota would be lost unless the closing company is entitled
to transfer its quota to other market participants. Since the phasedown steps
are calculated on the basis of the necessary supply to sectors for which
alternatives to HFCs are not (fully) available, a reduction of the overall
amount available HFCs should be avoided. The possibility of quota transfers
between active producers or importers also offers the advantage of enabling
market access for new entrants and to increase the flexibility for the holders
of quota to satisfy additional demand occurring during an allocation period. The transferability
is an important element to compensate for the freeze of market shares of
companies resulting from the chosen grandfathering approach for the quota
allocation. The transferability would create a market value for the quota which
should reflect the average marginal abatement costs across the sectors. The
price signal would incentivise the reduction and substitution of the use of F-Gases,
especially those with high GWP. The transferability of quotas between
undertakings would enable the environmental objective of the HFC phasedown mechanism
to be achieved in a more cost-effective manner. Given the small size
of the market and to avoid disproportionate administrative burden, the
transfers should be agreed bilaterally between entities registered in the
central database. Any transfer should be notified to and be registered in this
database. 5.7. Administrative
costs for companies For the allocation
though grandfathering, total one-off costs to industry of 1.7 million Euros are
estimated. One-off costs per company would range between approximately 0.4 and
60 thousand Euros, in average approximately 20 thousand Euros. Other costs are
mainly related to the verification procedure, therefore an appropriate
threshold for third party verification should be considered in order to avoid
disproportionate burden in particular for SMEs. No annual costs would occur for
the allocation of quotas, except for new entrants before they acquired a
'historic' reference baseline after a certain period of activities (e.g. two
years). 6. Monitoring,
reporting and verification 6.1. Reporting Reporting provisions
set out by Article 6 of the F-Gas Regulation and Commission Regulation (EC) No
1493/2007 allow an overview of the quantities of bulk F-Gases produced,
imported and exported to/from the EU market. Reporting obligations apply to
companies producing, importing or exporting F-Gas quantities and preparations
>1 tonne and reports are to be submitted annually to the EU Commission and
the competent authorities of the Member State concerned. The current reporting scheme
under the F-Gas Regulation is basically suitable to retrospectively verify the
bulk F-Gas uantities placed on the EU market. At present, F-Gases contained in
products or equipment are not covered by the reporting obligation. However, the
reporting obligations under the current F-Gas Regulation would require some
modifications in view of the HFC phasedown. The additional requirements concern
the scope of substances and thresholds in terms of metric tonnes or tonnes of
CO2 equivalents produced, imported, exported, reclaimed or destroyed
by stakeholders: - All
substances included in the phasedown regime need to be integrated in the
reporting requirements. As discussed before, a de minimis rule should be
foreseen. For the application of the phasedown mechanism a threshold of
1 000 t CO2 equivalents of HFCs placed on the market per
year is suggested. All production, import or export above that threshold should
be reported. In addition, in order to enable an evaluation of the policy
measures, any such activity involving more than 1 metric tonne should be
reported, regardless of the before mentioned threshold of 1 000 t CO2
equivalent. - The
unsaturated HFCs HFC-1234yf and HFC-1234ze are under discussion to be included
in an amendment to the Montreal Protocol. Both substances are neither proposed
to be included in the scope of the HFC phasedown nor covered in the reporting
obligation under the F-Gas Regulation. An inclusion of these substances in
reporting obligations is thus not necessary in order to underpin an EU HFC phasedown,
but it would be very useful to track the consumption of unsaturated substances
for purposes of policy verification and evaluation. Such data would also
strongly assist in explaining future HFC emission trends in the EU. In the case
of an amended Montreal Protocol such a reporting obligation would also become
necessary. Furthermore, concerns on the eco toxicity of breakdown products
warrant a continuous monitoring of the quantities of unsaturated HFCs. - An
extension of the reporting requirement on imports and/or exports of HFCs
contained in products or equipment – although not covered by the scope of the phasedown
- would help monitor the effectiveness of the policy. A sufficiently high
threshold should be foreseen to limit the administrative burden to the very
high number of importers and exporters of such products or equipment. - Recovered
HFC quantities for re-use/recycling or reclamation are not counted within the
scope of the HFC phasedown as POM means by definition the placement on the
market “for the first time”. However, estimated amounts of reclaimed HFCs were
subtracted from the estimated demand of HFCs in order to calculate the cap for
the overall quota to be placed on the market in a given year. Thus reclaimed
HFC amounts are available to consumers beyond the POM cap. Therefore, a proper
monitoring of reclaimed HFC amounts is important to monitor the performance of
the phasedown mechanism. Reclaimed F-Gases are covered under the
present reporting scheme of Art 6 F-Gas Regulation only for F-Gas producers,
importers and exporters. Specialised HFC reclamation facilities are not yet
covered and should be included in the reporting obligation. - Destruction
of F-Gases is covered under the present reporting scheme of Art. 6 F-Gas Regulation
only for F-Gas producers, importers and exporters. Specialized destruction
facilities are not covered. For the purpose of the POM phasedown scheme, there
is no need to enhance reporting on destruction. In the case of an amended Montreal
Protocol, full information on the destroyed amounts of HFCs might be needed and
such a reporting obligation including specialised destruction facilities might
become necessary. However, according to operators of destruction facilities, a
reporting on destroyed HFC species by species is not at all feasible:
Destruction facilities do not perform analyses to specify the components of
these mixtures. According to operators, it is uncertain whether appropriate
techniques are available, which would allow a determination of the specific HFC
contents (and thus GWPs) of the destroyed quantities are available. At present,
destruction facilities report to MS waste-management authorities the metric
tonnes of an unspecified mix of HFCs, HCFCs and other refrigerants, only. A
reasonably exact determination of the amount of HFCs destroyed expressed in CO2
equivalents thus appears not to be possible. - Direct
exports by producers do not count against their quotas, since those substances
are, by definition, not placed on the market. The same should apply to
quantities which are purchased from a EU producer by an exporter, although this
transaction would have to be considered as placing on the market. Both producer
and exporter would have to specify the HFC amounts exported in the same allocation
period. Article 6 of
the current F-Gas Regulation established reporting requirements for each
producer, importer and exporter of fluorinated greenhouse gass, as well as
destruction facilities, to the Commission and the same information shall be made
available to the competent authority of the Member State concerned. The same
procedure is suggested related to the extended reporting under an HFC phasedown
mechanism. The Commission could also designate an entity to collect the
reported information. The European Environment Agency (EEA) could be such an
entity because the EEA will collect, assess and compile the submitted reports
under the F-Gas Regulation and the ODS Regulation starting from 2012. 6.2. Verification For an HFC phasedown
mechanism it is essential to verify that participating undertakings do not
place more HFCs on the EU market than the quantity for which they hold quotas. Currently some
checks on the reported data under the F-Gas Regulation are performed by the
consultants who compile and assess the reported data for the Commission.
However these checks are limited to rather obvious mistakes and do not deliver
a clear answer whether the reported data is accurate. Measures for effective
implementation and enforcement need to allow tracking of the quantities of
individual HFC species and of HFC species in mixtures of substances on the EU
market. Especially if quotas
are transferable and represent a monetary value to holders, a robust
verification system should be established to ensure that the reported amounts
of HFCs placed on the market are accurately reflecting the real amounts placed
on the market. A system of
independent verification of the reports should be envisaged, complementing the
supervision carried out by the competent authorities of the Member States as
for other pieces of EU environmental legislation. It is assumed that reports
might be verified rather easily by external business accountants, since the
verification of production, imports and exports at company level concerns regular
commercial transactions. In order to reduce
administrative burden, a certain threshold for low volume producers, importers
and exporters should be introduced below which third party verification would
not be demanded. Administrative costs could be further lowered with a
verification system that does not require annual verification checks for all
companies, but that checks the data reported for some of the companies each
year. These checks could include some previous years. Thus each company may
only be verified every 3 or 5 years. Such a system would still provide an
incentive to report correctly because the likelihood that any fraud is
discovered at some point in time would be high. The costs for such an
independent verification system should be borne by companies. An involvement of
the customs authorities in the verification of reported imports and exports had
been considered, as practiced under the ODS regulation. However, the trade in
ODS requires a systematic licensing of each consignment which forms the basis
for the checks carried out by the customs authorities. Unless required by an
international agreement under the Montreal Protocol, a licensing system should
not be envisaged for the HFC in order to reduce the administrative burden for
the companies and authorities involved. Furthermore, the applicable customs
codes do not (yet) distinguish between HFCs and other substances serving the
same purposes. Based on the current HS code for HFCs (CN 2903 39), additional
end-numbers for different HFC types in bulk would need to be established to
allow customs verifying in spot checks the HFC types and quantities shipped
across the EU border. 6.3. Compliance
and enforcement The following areas
of infringements of provisions of an HFC phasedown mechanism would be
particularly relevant for an enforcement and compliance system: (1)
The correct reporting of the amounts of HFCs
placed on the EU market (production, imports, exports, imports in pre-filled
equipment); (2)
The placement of HFCs on the market by a company
shall not exceed the quotas available by the same company. Member States are
obliged to ensure that Union policies are implemented and can usually decide
themselves on the means of enforcement. In this respect, controls and
inspections play a crucial role. A legal instrument for a HFC phasedown should
foresee that Member States shall lay down measures to ensure that the
provisions have been implemented and potential consequences applicable to
infringements of the provisions of a regulation for an HFC phasedown. An infringement of
reporting requirements could consist in a lack of reporting or in incorrect
reporting. In the annual reporting cycle it would be registered if an
undertaking does not submit a required annual report. If companies do not
submit the required annual reports, Member States are required to take action
to ensure compliance and sanction breaches of the legislation. Incorrect reporting
would be detected during the independent verification of the annual reports on
the amounts of HFCs placed on the EU market and any excess of the allocated
quotas mainly at EU level. To enable enforcement at Member State level, the
Commission should inform Member States of any detected problems with the
reporting or with the accuracy of the reported information as well as of the
non-compliances with the individual quantitative limits. Infringements with
the reporting requirements detected by the independent verification could
simply lead to a correction of the reported quantities if small corrections of
errors occur. This could be implemented as part of the verification process and
the correction should be transparently documented in the report of the
independent verifiers. For major cases of misreporting specific penalties
should be established at Member State level. In addition to
sanctions imposed by Member States for companies exceeding their allocated POM
quotas, a reduction of the quota for these companies for the following year
should be foreseen. ANNEX XI: Schedule for the Introduction of Bans Table A_XI-1 Starting points for bans in policy
option E Application || Starting year of ban Commercial refrigeration (Stand-alone systems, Condensing units, Centralized systems) || 2020 Industrial refrigeration || 2030[89] Transport refrigeration (Refrigerated trucks and trailers) || 2030 Stationary AC (Moveable systems, single split systems, multi split/VRF systems, rooftop systems, displacement chillers) || 2020 HFC-23 in fire protection || 2015 Non-medical technical aerosols || 2020 HFC-134a in XPS foam blowing || 2015 SF6 Magnesium die-casting <850 kg/ y and recycling of die casting alloys || 2015 Mandatory destruction of HFC-23 || 2015 These starting points are based on the
calculation of when 100% penetration rates can be reached in the different
sectors (see Annex XVI). ANNEX XII: Analysis of Administrative Costs 1. Methodology In this Annex, a
transparent documentation of the estimation of administrative costs for the
analysed policy options is provided. All administrative costs are to be
understood as difference costs to policy option A (no policy change). The employed
methodology strictly follows the EU Impact Assessment guidelines[90]: For each
policy option, a quantitative estimate of changes in administrative costs
and administrative burden that may be incurred by stakeholders in implementing
that policy option in so far as activities to provide information are
concerned. The definition of administrative costs
refers to the costs incurred by enterprises, the voluntary sector, public
authorities or citizens in meeting legal obligations to provide information on
their action or production, either to public authorities or to private parties.
The term “information” is used
in a broad sense, covering labelling, reporting, registration, monitoring and
assessment needed to provide information as well as the transfer of information
to public authorities and private parties (e.g. trade associations). Any other
costs possibly incurred by stakeholders, i.e. not related to providing
information, are not regarded as administrative costs. Administrative costs are
to be understood on top of business-as-usual costs. Business-as-usual costs are
the costs that currently result from the monitoring and reporting under the
F-gas Regulation which would continue in the absence of new legislation. Costs incurred by
the Commission are similarly not included in the estimates for administrative
costs. For each policy
option, all relevant and additional information requirements were first
identified. To this end, the kind of information requirements/actions are
defined as within or without the scope of administrative costs needed to be
defined in detail. As the general concept, a normal functioning of the analysed
policy options was assumed. For example, eventual judicial proceedings were not
considered. As well, all further action by authorities or stakeholders to first
establish a policy option, i.e. drafting or commenting on the final legal or
contractual texts, was not considered. For each identified
information requirement, a concept was established for how to estimate specific
cost per single action and overall costs for the EU-27. Data sources for
specific costs include questionnaires to/interviews with stakeholders with
experience in comparable information requirements as well as expert estimates.
Specific cost data was multiplied with data on the number of affected
stakeholders in order to arrive at absolute costs. According to the
guidelines, costs are distinguished as one-off costs and annually recurring
costs. Furthermore, costs are differentiated as personnel costs, equipment
costs and outsourcing costs. Equipment costs appeared to be not relevant for any
of the considered options. For the estimation of personnel costs, first working
time was estimated. In order to arrive at costs, the working time was
multiplied with country specific and job-level specific tariffs for gross
earnings. For activities assumed to be relevant for the considered policy
options, the country-specific tariffs of job-level 2 “professionals” were used.
These were considered to serve as a proxy for a probably applicable mix of
job-levels 1 (“legislators, senior officials and managers”), 2
(“professionals”) and 3 (“technicians and associate professionals”). Table
A_XII-1 contains the used tariff data. Table
A_XII-1 Overview
of used country-specific tariffs Country specific tariffs – job level 2 (“Professionals”) € / h (2006) AT || 38.75 || IT || 59.26 BE || 35.25 || LV || 6.06 BG || 2.24 || LT || 41.58 CY || 20.29 || LU || 5.81 CZ || 7.74 || MT || 13.21 DE || 43.15 || NL || 35.19 DK || 45.40 || PL || 10.37 EE || 7.83 || PT || 19.32 EL || 21.00 || RO || 5.97 ES || 23.94 || SE || 40.47 FI || 34.74 || SI || 18.75 FR || 47.02 || SK || 5.19 HU || 7.78 || UK || 49.75 IE || 45.94 || || Source:
European Commission,, 2011 In the detailed questionnaires (see Annex
XIII) to stakeholders for creating data on time/cost efforts, each
information requirement was further disaggregated according to the guidelines
into the following set of activities: ·
Familiarising with the information obligation ·
Training members and employees about the
information obligations ·
Retrieving relevant information from existing
data ·
Adjusting existing data ·
Producing new data ·
Designing information material (e.g. leaflet
conception) ·
Filling forms and tables (including
recordkeeping) ·
Holding meetings (internal/external with an
auditor, lawyer etc.) ·
Inspecting and checking (including assistance to
inspection by public authorities) ·
Copying (reproducing reports, producing labels
or leaflets) ·
Submitting the information to the relevant
authority (e.g. sending it to the relevant authority) ·
Filing the information ·
Buying (IT) equipment & supplies (e.g.
labelling machines) to specifically used to fulfil information obligations ·
Other. These activities
were reflected in the questionnaire as appropriate for the individual
questions. Not all types of activities were relevant for every question asked.
Partly, the “other” category was further elaborated in order to adapt it to the
specific question. In the following
sections, for each option and each information requirement, the cost estimates
and data sources are documented. 2. Policy
Option A: No policy change Administrative costs
are defined as difference costs to the application of present policies. Thus,
no costs are assumed for this option. 3. Policy
Option B: Voluntary Agreements There are already voluntary agreements for
fluorinated gases at international, European or Member State level. Therefore
additional or enhanced voluntary agreements are considered as a policy option
for reducing emissions of fluorinated gases in the EU. Voluntary agreements considered
are identified in chapter 5.2. According to the Communication on
environmental agreements at Community level[91],
environmental agreements or voluntary agreements should have quantified and
staged objectives and should include a monitoring and reporting system for
achieving the objectives. In this respect, Option B “Voluntary agreements” will
cause an administrative burden for the participating business sectors in
relation to the monitoring, reporting and verification of the reduction of
F-Gas consumption. Given that the
concrete sectors and the objectives for voluntary agreements restricting the
use of F-Gas in certain appliances would have been agreed between the relevant
actors, it is assumed that no administrative costs will occur for the following
steps: ·
Identify the relevant actors in the sector for a
voluntary agreement, ·
Define reliable indicators to monitor compliance
with objectives and (interim) targets including costs for research information
and scientific and technological background data, and ·
Define the objectives of the voluntary agreement
and the baseline. 3.1. Overview
of information requirements for the option of voluntary agreements Table
A_XII-2 gives an overview of information
requirements which are necessary for voluntary agreements. Each line taken into
account for the quantitative estimation of administrative cost is further
explained in the following sections. Table
A_XII-2 Overview
of information requirements for voluntary agreements Information requirements for voluntary agreements in policy option B No. || Obligation || Frequency || Affected stakeholder group || Comment / Approach || Source of information Type || No. VA01 || Nominate monitoring institution & set up monitoring system || Once || Trade associations || 6 VAs || The setting-up of VAs is neglected as defined not to be part of administrative costs. || VA02 || Annual report on HFC use || Once per year || Operators/producers of equipment/ products || No. of companies per VA || Use reporting efforts under F-Gas Regulation (PD 18). || Companies presently reporting acc. Art 6 F-Gas Regulation VA03 || Independent verification of HFC use reports / submission to trade association / monitoring institution || Assumption: 6 VAs || Operators/producers of equipment/ products || No. of companies per VA || Verification cost per company & year equal to verification cost of annual reports in phasedown option (PD19). || Companies presently reporting acc. Art 6 F-Gas Regulation VA04 || Annual monitoring report || Once per year || Trade associations/ Monitoring institutions || 6 VAs || Cost per VA: Build on experience of existing VAs || Trade association having experience with VA, e.g. ESIA. VA05 || Check of monitoring reports || Once per year / of 6 VAs || COM || 1 || Is neglected as COM efforts are not included in administrative costs. || VA06 || Communication with stakeholders || Once per year || Trade associations/ Monitoring institutions || 6 VAs || Cost per VA/year: Trade associations with VA experience estimate communication costs || Trade association having experience with VA, e.g. ESIA. VA07 || Communication with stakeholders || Once per year / on 6 VAs || COM || 1 || Is neglected as COM efforts are not included in administrative costs. || 3.2. Annual
report on HFC use The information obligation VA02 “Annual report on HFC use”
determines the relevant costs for operators/producers of equipment/products
containing HFC which fall within the scope of the respective voluntary
agreement. In order to determine their administrative costs it will be referred
to reporting efforts of a company under the F-Gas Regulation (Table A_XII-3). Table
A_XII-3 Administrative
burden per operator/producer: VA02 - Annual report on HFC use VA 02 - Annual report on HFC use Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] Annual 55 || || 506 Source: Öko-Institute estimate Table
A_XII-4 contains the estimated number of operators and producers falling under
the scope of the relevant voluntary agreement. Table
A_XII-4 Number
of affected operators / producers per voluntary agreement: VA02 - Annual report
on HFC use Number of affected operator / producers per voluntary agreement Voluntary Agreement || No. of affected operators/ producers || Source Sub-option B-1: Voluntary agreements to phase-out HFCs in commercial refrigeration || ca. 20 (industrially manufactured stand- alone equipment) ca. 16 (large companies) ca.1000 (small companies for condensing units, centralized systems) || Ökoinstitute estimate Sub-option B-2: Voluntary agreement to replace HFC-134a in XPS foams || 13 || See Schwarz et.al. 2011.9 Sub-option B-3: Voluntary agreement to replace HFC-23 in fire protection || 30 || Estimation of total number of EU based original equipment manufacturers, see Schwarz et.al. 20119, p. 235. Sub-option B-4: Voluntary agreement for destruction of HFC-23 emissions from halocarbon production || 1 || Schwarz et al 20119, p.175 Sub-option B-5: Update of voluntary agreement with semiconductor industry related to PFCs, NF3, HFC-23 and SF6 || 19 || 19 Manufacturers are member of EECA (ESIA) Sub-option B-6: Voluntary agreement to replace SF6 and NF3 in photovoltaic industry || 8 || See Schwarz et. al. 20119, p. 233. Total amount || 1,107 || Table A_XII-5 Distribution of population in
MS for EU-27 in %. Distribution of population in MS [% of EU-27] Belgium || 2.19 || Luxembourg || 0.10 Bulgaria || 1.49 || Hungary || 1.99 Czech Republic || 2.09 || Malta || 0.08 Denmark || 1.12 || Netherlands || 3.33 Germany || 16.30 || Austria || 1.67 Estonia || 0.26 || Poland || 7.61 Ireland || 0.92 || Portugal || 2.13 Greece || 2.25 || Romania || 4.27 Spain || 9.21 || Slovenia || 0.42 France || 12.62 || Slovakia || 1.08 Italy || 12.12 || Finland || 1.08 Cyprus || 0.22 || Sweden || 1.87 Latvia || 0.44 || United Kingdom || 12.50 Lithuania || 0.64 || EU-27 || 100.00% Source: www.weltbevölkerung.de, data from June 2011 As the distribution of affected companies
in the EU-27 is not known, a weighted tariff based on the distribution of
population in the EU-27 issued to calculate the personnel costs per company.
Using the country specific tariffs for professionals (see Table A_XII-1)
the thus weighted average tariff for the EU-27 is € 35.82 per hour. In Table A_XII-6 the administrative
costs for producing annual reports on the use of HFC are shown. The figures are
calculated for a number of 1,107 operators / producers affected by voluntary
agreements, 55 hours personnel time and € 506 outsourcing costs per report /
per company (cf. Table A XII-3) and on a weighted tariff for the EU-27
of € 36. Table A_XII-6 Overall administrative burden
for all operators /producers in EU-27: VA 02 - Annual report on HFC use VA 02 - Annual report on HFC use Overall administrative burden for all operator/producer in EU-27 [Thousand €] Annual Personnel costs || Equipment costs || Outsourcing costs || Total costs 2,192 || 0 || 560 || 2,752 In option B for the obligation VA 02 the
overall annual costs to annually report on HFC use is estimated to be € 2.75
million. 3.3. Independent
verification of HFC use reports / submission to trade association / monitoring
institution According to the
information obligation VA03 operators and producers of equipment & products
will have their annual reports on the use of HFC to be verified by independent
organisation. Furthermore, they have to submit them to the relevant trade
association and monitoring institution. As the verification cost per company /
year is assumed to be equal to verification cost of annual reports in the phasedown
option (Annex X), the respective specific burden estimated there will be used
as a calculation basis. Table
A_XII-7 Administrative
burden per operator/producer: VA03 - Independent verification of HFC use
reports VA03 - Independent verification of HFC use reports Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] annual 25 || || 6,183 Source:
Analysis of questionnaires sent to F-Gas producers & importers (Annex XIII)
& Öko-Institute estimate In Table
A_XII-8 the administrative costs for operators and producers of equipment and
products to verify the annual reports on the use of HFC by independent
organisation are stated. The figures are calculated on a number of 1,107
operators / producers affected by voluntary agreements, 25 hours personnel time
and € 6000 outsourcing costs per report / per company (cf. Table A_XII-7)
and on a weighted tariff for the EU-27 of € 35.82 (as calculated for
VA02). Table
A_XII-8 Overall
administrative burden for all operators /producers in EU-27: VA03 - Independent
verification of HFC use reports / submission to trade association / monitoring
institution VA 03 - Independent verification of HFC use reports / submission to trade association / monitoring institution Overall administrative burden for all operator/producer in EU-27 [Thousand €] Annual Personnel costs || Equipment costs || Outsourcing costs || Total costs 973 || - || 6,844 || 7,818 In option B for the obligation VA03 the
overall annual costs for independent verification of HFC use reports, the
submission to trade association and monitoring institution is estimated to be €
7.8 million. 3.4. Annual
monitoring report to EU The assumption for obligation VA04 “Annual
monitoring report” is that for each VA one industry association is responsible
for collecting all the reports prepared by the associated members and produces
an overall report once a year. To estimate the costs for VA 04 a
questionnaire listing the required action within VA 04 was sent to 31
associations. Six associations responded not to have any VA within their field
of experience. Four industry associations reported administrative costs for a
VA; no information was received by the other associations. Figures shown in Table A_XII-9 are the resulting average hours necessary
for an industry association to prepare an annual monitoring report for the
Commission. Table A_XII-9 Administrative burden per
association: VA 04 – Annual monitoring report VA04 - Annual monitoring report to EU Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] annual 68 || - || 3,500 Source: Analysis of questionnaires sent to trade
associations Due to the low response no outliers were
identified. In Table A_XII-10 for each possible
voluntary agreement within the policy option B the affected European Industry
Association(s) and the number of associated national member associations or
associated companies is given. Table
A_XII-10 Industry
Associations affected by Voluntary Agreements Industry Associations affected by Voluntary Agreements Voluntary Agreement || Affected Association || No. of associated Members/Companies Sub-option B-1: Voluntary agreements to phase-out HFCs in commercial refrigeration || ASERCOM (Association of European Refrigeration Component Manufacturers) || 16 Sub-option B-2: Voluntary agreement to replace HFC-134a in XPS foams || EXIBA (European Extruded Polystyrene Insulation Board Association) || 9 ISOPA (European Diisocyanate & Polyol Producer Association) || 8 PU Europe (Polyurethane (PUR/PIR) Insulation Industry) || 11 Sub-option B-3: Voluntary agreement to replace HFC-23 in fire protection || EUROFEU (The European Committee of the Manufacturers of Fire Protection Equipment and Fire Fighting Vehicles) || 18 Sub-option B-4: Voluntary agreement for destruction of HFC-23 emissions from halocarbon production || EFCTC (Association of fluorocarbon producers) || 1[92] Sub-option B-5: Update of voluntary agreement with semiconductor industry related to PFCs, NF3, HFC-23 and SF6 || European Semiconductor Industry Association (EECA)(ESIA) || 19 Sub-option B-6: Voluntary agreement to replace SF6 and NF3 in photovoltaic industry. || EPIA (European Photovoltaic Industry Association) || 240 Based on a number of 8 European industry
associations who would be engaged
in 6 voluntary agreements the overall annual costs for producing an annual
monitoring report are estimated in Table A_XII-11. As the European industry associations are generally located in
Brussels (Belgium) the weighted tariff for professionals of € 35.25 per hour
for Belgium is used. Table
A_XII-11 Overall
administrative costs for European industry associations affected by Voluntary
Agreements VA04 - Annual monitoring report to EU Overall administrative cost in EU 27 Personnel costs || Equipment costs || Outsourcing costs || Total cost [Thousand €] annual 19.1 || - || 28.0 || 47.1 In option B for the obligation VA04 the
overall annual costs for producing an annual monitoring report are estimated at
approximately € 47,000. 3.5. Communication
with stakeholders The obligation VA06
within a voluntary agreement addresses the administrative efforts per year of a
European industry association to communicate with other stakeholders (Member
States, industry, NGOs, etc.) concerning the voluntary agreement. The administrative
effort is based on the figures received from questionnaires sent to industry
associations which are having experiences with voluntary agreements. Table A_XII-12 states that the average time needed per European industry
association to communicate with stakeholders is 139 hours. Table
A_XII-12 Administrative
burden per association: VA06 – Communication with stakeholders || VA06 – Communication with stakeholders || Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] || || annual 139 || 4,563 || - || Source:
Analysis of questionnaires to industry associations experienced with VAs in the
field of F-Gases Based on a number of 8 European industry
associations who would be engaged
in 6 voluntary agreements, the overall annual costs to produce an annual
monitoring report are estimated in Table A_XII-13. As the European industry associations are generally located in
Brussels (Belgium) the weighted tariff for professionals of € 35.25 per hour
for Belgium is used. Table A_XII-13 Overall administrative
costs for European industry associations affected to communicate with
stakeholders – VA06 VA06 - Communication with stakeholders Overall administrative cost in EU 27 Personnel costs || Equipment costs || Outsourcing costs || Total cost [Thousand €] annual 39.2 || 36.5 || - || 75.7 In option B for the
obligation VA06 the overall annual costs to communicate with stakeholders are
estimated to be approximately 76,000 Euros. 3.6. Summary
of administrative costs of voluntary agreements The estimation of the overall annual
administrative costs in the EU-27 for the policy option B “Voluntary
Agreements” is stated in Table
A_XII-14. Table
A_XII-14 Overall
annual administrative costs in the EU-27 for the policy option B, Voluntary
Agreements Approximately 73% of the estimated annual
costs of 10.7 million €/year is due to independent verification of reported HFC
use. 4. Policy
Option C: Extended Scope of containment measures For this policy option, no administrative
costs were assumed. 5. Policy
Option D: Establishment of quantitative limits for placing certain F-Gases
(HFCs) on the EU market (phasedown) 5.1. Overview
of information requirements for the phasedown option Table A_XII-15 gives an overview of information requirements occurring in the phasedown
option. Each line taken into account for the quantitative estimation of
administrative costs is further explained in the following sections. Table A_XII-16 contains a shortlist of
those information requirements quantitatively assessed. For the present assessment of
administrative cost, any administrative efforts related to the complementary measures
on pre-charged equipment have not be assessed. Such efforts would occur for
Member States and would not be identical to the efforts assessed for policy
option E (bans) as a different set of stakeholders would need to be controlled. Table A_XII-15 Overview of
information requirements in the phasedown option Overview of information requirements in the policy option on quantitative limits for placing on the market of HFCs (phasedown) No || Information requirement || Frequency || Affected stakeholders || Comment / Approach || Source of information Group || No PD01 || Set-up of F-Gas data base || Once || COM || 1 || COM efforts are not to be included in Impact Assessment. || PD02 || Operation of F-Gas data base || Permanent || COM || 1 || COM efforts are not to be included in Impact Assessment. || PD03 || Registration in F-Gas data base || Once || Producers & importers above CO2eq threshold || 80 || Experience of ODS actors, cost per company || ODS companies PD04 || Submission of verified baseline report || Once || Producers & importers above CO2eq threshold || 80 || Only transfer of information as data is available from the reports under the F-Gas regulation || Own estimate PD05 || Verification of baseline report || Once || Producers & importers above CO2eq threshold || 80 || Cost per year taken from annual report verification cost PD19 below || PD19 PD06 || Check of verified baseline report + allocation decision || Once || COM || 1 || COM efforts are not to be included in Impact Assessment. || PD07 || Transfer of baselines || Once || Producers & importers above CO2eq threshold (mainly in the case of mergers & acquisitions) || 10 || Not regarded as information requirement. Flexibility option offering a business opportunity. || PD08 || Adjustment of baselines for allocation reflecting baseline transfers (mergers & acquisitions) || Yearly, cases depend on mergers & acquisitions || COM || 1 || COM efforts are not to be included in Impact Assessment. || PD09 || Allocation to new entrants + check of verified reports of future HFC use || 4 times a year, cases depend on the number of new entrants || COM || 1 || COM efforts are not to be included in Impact Assessment. || PD10 || Set up of auctioning platform || Once || COM || 1 || Not considered for chosen phasedown option - relevant for auctioning system only. COM efforts are not to be included in Impact Assessment. || PD11 || Auction of rights to POMs || Regular (6 times per year) || COM || 1 || Not considered for chosen phasedown option - relevant for auctioning system only. COM efforts are not to be included in Impact Assessment. || PD12 || Auction of rights to POMs || Regular (6 times per year), entities participating 3 times only || Producers & importers above CO2eq threshold || 80 || Not considered for chosen phasedown option - relevant for auctioning system only. Cost per company & auction: Only conservative estimate of time technically needed to place the bids. Business strategy not to be included! || Own estimate PD13 || Transfer of rights to POMs || 5x times per year per participating entity = 400 || Producers & importers above CO2eq threshold || 80 || Not regarded as information requirement. Rather a/ business opportunity Cost per transfer: Only conservative estimate of time technically needed to place the bids. Business strategy not to be included! || Own estimate PD14 || Definition of eligibility criteria for verifiers || Once || MS || 27 MS || Not counted as administrative costs: Part of legislative procedure || PD15 || Deleted PD16 || Definition of eligibility criteria for verifiers || Once || COM || 1 || Not counted as admin costs: Part of legislative procedure. Same cost as for one MS. COM efforts are not to be included in Impact Assessment. || PD17 || Deleted PD18 || Report (Art 6) on placing on the market, import & export+ reclamation, recycling & destruction || Once per year || Producers, importers & exports above one tonne. || 100 || Baseline: Not to be counted as administrative cost, obligation of existing F-Gas regulation || Companies presently reporting under Art 6 F-Gas Regulation PD18b || Additional reporting on exports on behalf of producers || Once per year || Selected producers& exporters || ~15 || Not regarded as information requirement. Flexibility option offering a business opportunity. || PD19 || Verification of reporting & submission to MS or central authority || Once per year || Producers & importers above CO2eq threshold + exporters wishing to benefit || 30 || Concerns only HFC reports, no HFO reports Data source: estimates by Companies presently reporting und Art 6 F-Gas Regulation; reduction to 30% due to assumed higher threshold for verification needs || Companies presently reporting under Art 6 F-Gas Regulation PD19b || Verification for additional reporting on exports on behalf of producers || Once per year || Selected exporters || ~10 || Not regarded as information requirement. Flexibility option offering a business opportunity. || PD20 || Deleted PD21 || Deleted PD22 || Deleted PD23 || Introduce compliance system at MS level || Once || MS || 27 || No relevant additional effort compared to present F-Gas Regulation considered. || PD24 || Check of compliance || Once per year || COM || 1 || MS are informed by COM on compliance issues. COM efforts are not to be included in Impact Assessment. || PD25 || Impose penalties in case of non-compliance || Once per year || MS || 27 || Not counted for admin costs: Assumption: companies comply || PD26 || Deleted PD27 || Deleted PD28 || Deleted PD29 || Deduct non-compliance amounts from next allocation to non-compliant actor || Once per year || COM || 1 || Negligible! COM efforts are not to be included in Impact Assessment. || PD30 || Reporting on reclamation and destruction || Once per year || Specialised reclamation and destruction facilities || 65 || Let facilities estimate cost for HFC / blend-specific reporting Not necessarily needed for the phasedown. However, advisable. Necessary in case of amended Montreal Protocol. || Specialised reclamation facilities Table
A_XII-16 Shortlist
of information requirements quantitatively assessed for administrative costs in
the phasedown option Shortlist on quantitatively assessed administrative costs in the policy option on quantitative limits for placing on the market of HFCs (phasedown) No || Obligation || frequency || Affected stakeholders || Comment / Approach || Source of information Group || No. PD03 || Registration in F-Gas data base || once || Producers & importers above CO2eq threshold || 80 || Experience of ODS actors, cost per company || ODS companies PD04 || Submission of verified baseline report || once || Producers & importers above CO2eq threshold || 80 || Only transfer of information as data is available from the reports under the F-Gas regulation || Own estimate PD05 || Verification of baseline report || once || Producers & importers above CO2eq threshold || 80 || Cost per year taken from annual report verification cost PD19 below || PD19 PD19 || Verification of reporting & submission to MS or central authority || Once per year || Producers & importers above CO2eq threshold + exporters wishing to benefit || 30 || Concerns only HFC reports, no HFO reports Data source: estimates by Companies presently reporting und Art 6 F-Gas Regulation; reduction to 30% due to assumed higher threshold for verification needs || Companies presently reporting under Art 6 F-Gas Regulation PD30 || Reporting on reclamation and destruction || Once per year || Specialised reclamation and destruction facilities || 65 || Let facilities estimate cost for HFC / blend-specific reporting Not necessarily needed for the phasedown. However, advisable. Necessary in case of amended Montreal Protocol. || Specialised reclamation facilities 5.2. PD03
- Registration in F-Gas database All stakeholders
intending to place HFCs on the markets above a threshold of 1 kt CO2eq
need to register in a database operated by the European Commission. This is a
one-off cost. The effort is estimated
to be comparable to the registration to the Commission’s database on
production, import and export of ozone depleting substances (ODS)[93]. Thus, companies
currently involved in the ODS phase-out scheme were addressed to gather
information on specific costs. The number of
affected entities is estimated at 80, based on experiences with the present
reporting under the F-Gas Regulation (Art 6). This is a conservative estimate
as the number includes entities which presently exclusively deal with PFCs and
SF6 and thus would not be affected by the HFC phasedown scheme. Information on the
distribution of entities to Member States is available, as well as based on
experience with the present reporting under the F-Gas Regulation (Art 6). As
this data includes exporters, the percentage per country is used as a proxy (Table A_XII-17). Table A_XII-17 Distribution of entities
placing HFCs on the EU market between Member States Distribution of entities placing HFCs on the EU market between MS [% of EU-27] AT || - || IT || 10.3% BE || 7.5% || LV || - BG || 3.7% || LT || 3.7% CY || 1.9% || LU || - CZ || 1.9% || MT || 1.9% DE || 11.2% || NL || 3.7% DK || 0.9% || PL || 4.7% EE || 2.8% || PT || 1.9% EL || 2.8% || RO || 1.9% ES || 8.4% || SE || 2.8% FI || 1.9% || SI || 1.9% FR || 7.5% || SK || - HU || 3.7% || UK || 11.2% IE || 1.9% || EU-27 || 100.0% Source:
European Commission 2011: Confidential Report on F-Gases 2010 The distribution between Member States in
combination with the country-specific tariffs as shown in Table A_XII-1 leads to a weighted
average tariff of 32.55 €/h. Table A_XII-18 shows the evaluation of the questionnaires. Three answers were
received. Thus, no outliers could be identified. Estimates for equipment cost
and outsourcing costs were summarised as outsourcing costs. Figures shown are
the resulting averages. Table
A_XII-18 Administrative
burden per entity: PD 03 - Registration in F-Gas data base PD03 - Registration in database Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] once (one-off) 68 || || 155 Source:
Analysis of questionnaires sent to ODS stakeholders Table A_XII-19 shows the resulting overall cost (one-off) in the EU-27 taking into
account administrative burden per entity, the weighted tariff per hour, and the
number of affected entities. Table A_XII-19 Overall administrative
costs for EU-27: PD03 - Registration in F-Gas database PD03 - Registration in database Overall administrative cost in EU-27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] once (one-off) 177.1 || 0.0 || 12.4 || 189.5 5.3. PD04
- Submission of verified baseline report As the basis for the allocation of rights
to POMs in the analysed grandfathering system, undertakings intending to place
HFCs on the market need to submit a baseline report covering their respective
activities in the base period. The necessary data are assumed to be easily
available to the undertakings, as these data had to be reported in previous
years according to Art 6 of the F-Gas Regulation. Concerning
the specific administrative burden per company, a conservative estimate of two person-days (16 hours) is made. Time needed would
concern gathering, combination, internal checks of the data, the filling of
tables and submission of the report. Efforts for the verification of the report
are estimated separately below in 5.4 (PD05 – Verfication of baseline report). Table A_XII-20 Administrative burden per
entity: PD04 - Submission
of verified baseline report PD 04 - Submission of verified baseline report Administrative burden per entity Once (one-off) Time [hours] || Equipment costs [€] || Outsourcing costs [€] 16 || - || - This requirement would apply to the same
set of involved stakeholders as in PD03 above (chapter 5.2), i.e. undertakings
that place HFCs on the market above a threshold of 1 kt CO2eq.
Thus, the same estimated number of affected entities in the EU-27 (80
undertakings) and the same EU-wide weighted tariff of 32.55 €/h is used here in
order to calculate overall cost for EU-27, as well. Table A_XII-21 shows the resulting overall costs (one-off) in the EU-27 taking
into account administrative burden per entity, the weighted tariff per hour,
and the number of affected entities. Table A_XII-21 Overall administrative
costs for EU-27: PD04 - Submission of verified baseline report PD04 - Submission of verified baseline report Overall administrative cost in EU-27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] once (one-off) 41.7 || 0.0 || 0.0 || 41.7 5.4. PD05
- Verification of baseline report Baseline reports for the allocation of
quotas in a grandfathering system (as described in chapter 5.3 above) need to
be verified. The estimate for the specific burden for reporting companies are
based on estimates which were collected among F-Gas reporting companies
regarding the additional external verification of an annual report on
production, import and export (as presently required under the F-Gas Regulation).
Those specific costs are multiplied by three in order
to take into account that the baseline report would cover not one single year
but a series of three years. Table A_XII-22 Administrative burden per
entity: PD05 - Verification
of baseline report PD05 - Verification of baseline report Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] once (one-off) 74 || 0 || 18 000 This requirement would apply to the same
set of stakeholders involved in PD03 – Registration in F-Gas database (chapter 5.2),
i.e. undertakings that place HFCs on the market above a threshold of 1 kt
CO2-eq. Thus, the same estimated number of affected entities in the
EU-27 (80 undertakings) and the same EU-wide weighted tariff of 32.55 €/h is
used here in order to calculate the overall costs for EU-27 as well. Table A_XII-23 shows the resulting overall costs (one-off) in the EU-27 taking
into account administrative burden per entity, the weighted tariff per hour,
and the number of affected entities. Table A_XII-23 Overall administrative
costs for EU-27: PD 05 - Verification of baseline report PD05 - Verification of baseline report Overall administrative cost in EU-27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] once (one-off) 192 || - || 1 440 || 1,632 5.5. PD18
- Report (Art. 6) on placing on the market, import & export, reclamation,
recycling & destruction The administrative effort of undertakings
presently reporting according to Art 6 of the F-Gas regulation is not to be
considered as administrative costs within the phasedown policy option. However,
reporting undertakings were asked to estimate their respective efforts in order
to be able to estimate potentially more precisely the implications of a change
of scope of the reporting obligation. Table A_XII-24
shows the evaluation of the questionnaires. 24 answers were received. Seven
outliers could be identified and discarded from the analysis. Estimates for
equipment cost and outsourcing costs were summarised as outsourcing costs:
Partly, undertakings use external consultants to help prepare their reporting.
Few undertakings report one-off equipment costs for IT. In order to estimate
annual costs for this assessment, 20% of the average equipment costs were
interpreted as annual outsourcing costs. Figures shown in Table A_XII-24 are the resulting averages. Table A_XII-24 Administrative burden per
entity: PD18 - Reporting acc. Art 6 F-Gas Regulation PD18 - Reporting acc. Art 6 F-Gas Regulation Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] annual 55 || || 506 Source:
Analysis of questionnaires sent to F-Gas producers & importers This requirement applies to the same set of
involved stakeholders as in PD03 – Registration in F-Gas database (chapter 5.2),
i.e. undertakings that place HFCs on the market. Thus, the same estimated
number of affected entities in the EU-27 (80 undertakings) and the same EU-wide
weighted tariff of 32.55 €/h is used here in order to calculate the overall
costs for EU-27 as well. Table A_XII-25 shows the resulting overall costs
(annual) in the EU-27 taking into account administrative burden per entity, the
weighted tariff per hour, and the number of affected entities. Table A_XII-25 Overall administrative
costs for EU-27: PD 18 - Reporting according to Art 6 F-Gas Regulation PD18 - Reporting acc. Art 6 F-Gas Regulation Overall administrative cost in EU-27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] annual 144.2 || 0.0 || 40.5 || 184.7 5.6. PD
19 – Verification of Reporting & submission to MS or central authority The annual reporting by undertakings needs
to be verified. Thus, reporting undertakings were asked to estimate the costs
of a verification of an annual report by an external business accountant. Table A_XII-26 shows the evaluation of the questionnaires. 15 answers were
received. Two outliers could be identified and discarded from the analysis.
Estimates for equipment costs and outsourcing costs were summarised as
outsourcing costs: Figures shown in Table A_XII-26 are the resulting averages. Table A_XII-26 Administrative burden per
entity: PD 19 - Verification of Reporting acc. Art 6 F-Gas Regulation PD19 - Verification of Reporting acc. Art 6 F-Gas Regulation Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] annual 25 || || 6 183 Source:
Analysis of questionnaires sent to F-Gas producers & importers (Annex XIII) This requirement would in principle apply
to the same set of involved stakeholders as in chapter 5.2 (PD 03 –
Registration in F-Gas database), i.e. undertakings that place HFCs on the
market. However, due to the assumption of a higher threshold for verification
needs, the number of affected entities in the EU-27 is estimated as 30 undertakings.
The same EU-wide weighted tariff of 32.55 €/h as for PD 03 is used here in
order to calculate the overall costs for the EU-27 as well. Table A_XII-27 shows the resulting overall costs (annual) in the EU-27 taking into
account administrative burden per entity, the weighted tariff per hour, and the
number of affected entities. Table A_XII-27 Overall administrative
costs for EU-27: PD 19 - Verification of Reporting acc. Art 6 F-Gas Regulation PD19 - Verification of Reporting acc. Art 6 F-Gas Regulation Overall administrative cost in EU 27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] annual 24.0 || - || 185.5 || 209.5 5.7. PD
30 – Reporting on reclamation and destruction In order to improve monitoring and data
availability, an obligation for reclamation and destruction facilities to
report reclaimed and destroyed F-Gas quantities should be introduced. Table A_XII-28
gives an overview of specialised reclamation and destruction facilities in
EU-27. Table A_XII-28 Number of reclamation and
destruction facilities in the EU-27 || Number of reclamation facilities || Number of destruction facilities AT || 0 || 0 BE || 3 || 1 BG || 2 || 0 CY || 0 || 0 CZ || 5 || 1 DE || 3 || 5b DK || 0 || 2 EE || 0 || 0 EL || 1a || 0 ES || 4 || 0 FI || 0 || 1 FR || 5 || 3 HU || 3 || 2 IE || 0 || 0 IT || 3 || 3 LT || 1a || 0 LU || 0 || 0 LV || 0 || 0 MT || 0 || 0 NL || 3 || 0 PL || 1 || 1 PT || 0 || 0 RO || 1 || 1 SE || 1 || 2 SI || 0 || 0 SK || 0 || 0 UK || 5 || 2 Total || 41 || 24 a License since March 2010
(Greece) and June 2010 (Lithuania) b One company with 4 facilities
referred to as 1 facility (only 1 out of the 4 facilities is operating). Source: Schwarz et al. (2011)9 For destruction, quantities are already
monitored and reported to authorities under the waste legislation and thus are
readily available in most cases. The data submitted, however, cannot be
specified for particular HFC types or types of blends since mixtures of
different HFCs, HCFCs and other refrigerants are usually delivered for
destruction. Destruction facilities do not perform analyses to specify the
components of these mixtures. According to operators, it is uncertain whether
appropriate techniques are available, which would allow a determination of the
specific HFC contents (and thus GWPs) of the destroyed quantities are
available. Therefore, it remains unknown to date whether the data available are
sufficiently specific for monitoring purposes under the phasedown option, even
more in the case of monitoring requirements for an amended Montreal Protocol. Reclamation is carried out by few entities,
notably gas distributors already reporting to authorities under the F-Gas
Regulation. Reclaimed quantities are very low so far, since the technical
process is complex and costly. Questionnaires on the administrative effort
required for reporting of F-Gases by reclamation and destruction facilities
have been sent out but few responses have been received to date. Therefore,
expert interviews were undertaken via telephone, but estimates of the
administrative burden are preliminary at this stage. Based on the assumption that data on
reclaimed HFCs quantities (specific by HFCs) and on destroyed refrigerant mixes
(including HFCs) are readily available within the undertakings, the additional
effort for reporting to the Commission is conservatively estimated at one
person-day (eight hours). Table A_XII-29 Administrative burden per
entity: PD 30 – Reporting of F-Gases by reclamation/ destruction facilities not
yet covered by reporting obligations PD 30 – Reporting of F-Gases by reclamation/ destruction facilities Administrative burden per entity Annual Time [hours] || Equipment costs [€] || Outsourcing costs [€] 8 || 0 || 0 In order to estimate a weighted average for
tariffs, for each Member State, the number of destruction and reclamation
facilities as shown in Table A_XII-28 is divided by the EU-27 total. The
result is given in Table A_XII-30. Table A_XII-30 Distribution of EU-27
destruction and reclamation facilities between Member States Distribution of EU-27 destruction and reclamation facilities between MS [% of EU-27] AT || - || IT || 9.2% BE || 6.2% || LV || 1.5% BG || 3.1% || LT || - CY || - || LU || - CZ || 9.2% || MT || - DE || 12.3% || NL || 4.6% DK || 3.1% || PL || 3.1% EE || - || PT || - EL || 1.5% || RO || 3.1% ES || 6.2% || SE || 4.6% FI || 1.5% || SI || - FR || 12.3% || SK || - HU || 7.7% || UK || 10.8% IE || - || EU-27 || 100.0% Source: Calculated
from Schwarz et al. (2011)9 The number of affected facilities is 65 (Table A_XII-28). The multiplication of
Member State-specific tariffs (Table A_XII-1) by the distribution to Member States leads to a weighted EU-27
average tariff of 33.29 €/h. Table A_XII-31 shows the resulting overall costs (annual) in the EU-27 taking into
account administrative burden per entity, the weighted tariff per hour, and the
number of affected entities. Table A_XII-31 Overall administrative
costs for EU-27 PD30 - Reporting on reclamation and destruction Overall administrative cost in EU-27 Personnel costs || Equipment Costs || Outsourcing costs || Total Cost [Thousand €] annual 17.3 || 0.0 || 0.0 || 17.3 5.8. Summary
of administrative cost of the phasedown option Table A_XII-32 and Table A_XII-33 summarise the one-off costs and annual
cost estimates for the phasedown option: Table A_XII-32 Summary of the one-off cost
in the EU-27 for the phasedown option Summary administrative cost phasedown (one-off) Overall administrative cost in EU-27 || Information requirement || Personnel cost || Equipment Cost || Outsourcing cost || Total Cost || || [Thousand €] once (one-off) PD03 || Registration in data base || 177 || - || 12 || 190 PD04 || Submission of verified baseline report || 42 || - || - || 42 PD05 || Verification of baseline report || 192 || - || 1,484 || 1,676 || Total one-off || 411 || - || 1,496 || 1,907 Table A_XII-33 Summary of annual costs in the
EU-27 for the phasedown option Summary administrative cost phasedown (annual) Overall administrative cost in EU-27 || Information requirement || Personnel cost || Equipment Cost || Outsourcing cost || Total Cost || || [Thousand €] annual PD19 || Verification of Reporting acc. Art 6 F-Gas Regulation || 24 || - || 185 || 209 PD30 || Reporting on reclamation and destruction || 17 || - || - || 17 || Total annual || 41 || - || 185 || 227 In order to compare
both cost categories, the one-off cost can be converted into annuities for 18
years (2013–2030) using an interest rate of 8%. Under these conditions, the
total one-off cost would correlate to € 203,000 per year. The total annualised
administrative costs for industry incurred by the phasedown option would amount
to approximately € 430,000 per year. About 90% of these costs are induced by
the verification of annual reports and the baseline report. However it should be
noted that the cost estimated for the reporting of destruction of HFCs would
cover the reporting of metric tonnes of an unspecified mix of HFCs, HCFCs and
other refrigerants, only. A reasonably exact determination of the amount of
HFCs destroyed expressed in CO2 equivalents is not possible on this
basis. 6. Policy
Option E: Regulatory Bans –
Policy option E refers to the introduction of
regulatory bans for certain open and closed applications containing fluorinated
greenhouse gass as well as the mandatory destruction of HFC-23 from halocarbon
production. In
section 5.5 in the main part the included bans are listed. An overview of the
information requirements in policy option E is given in Table A_XII-34 covering the following obligations: ·
Cooperation with audits & inspection by
public authorities - B01, ·
Carry out audits / inspections - B02, ·
Report on implementation to Commission - B03 and ·
Check the verification reports - B04. Given that the
concrete sectors, gases, timelines of bans on the use of F-Gas in certain
appliances would have been settled by the Commission beforehand, it is assumed
that no administrative costs will occur for these steps. Furthermore the policy
option is based on the assumption that there are no exemptions from a ban. This
assumption is due to the fact that the management of exemptions would entail
administrative costs for both undertakings and the Commission, inter alia
covering the application process, legal assessment, granting or rejection of an
exemption. However, such costs will not be treated as administrative costs, as
it is not imposed on undertakings to apply for an exemption. Administrative costs
regarding obligation B01 are not collected from the stakeholder and will not be
assessed, as the enforcement would probably consist in checking samples of
imported/produced marketed products. Checking the verification reports (obligation
B04) will not be included in the administrative costs of the option as that
will be done by the Commission and thus can be neglected following the impact
assessment guidelines. 6.1. Overview
of information requirements for the ban option Table A_XII-34 gives an overview of information
requirements which are necessary for regulatory bans. Each line taken into
account for the quantitative estimation of administrative cost is further
explained in the following sections. Table A_XII-34 Overview of information
requirements regarding regulatory bans Administrative costs of regulatory bans No. || Obligation || Frequency || Affected stakeholder group || Comment / Approach || Source of information || || || Type || No. || || B01 || Cooperation with audits & inspection by public authorities || Depends on enforcement by MS: Assumption is once per year || Producers, importers of equipment/products || ~1250 || Is neglected as enforcement would probably consist in checking samples of imported/produced marketed products. || B02 || Carry out audits / inspections || Once per year. No of inspections per year: No of producers/importers (B01). || MS authorities || 27 MS || Build on European experience in bans and own estimations: Unit of specific cost (cost per controlled entity) || B03 || Report on implementation to COM || Once pear year || MS authorities || 27 MS || Cost per MS based on experience with Art. 26 ODS reports. || ODS competent authorities B04 || Check verification reports || 27 reports once per year || COM || 1 || Is neglected as COM efforts are not included in administrative costs. || 6.2. B02
- Carry out audits/inspections Member States are
required to enforce the bans established. Therefore, the costs for enforcement
activities such as audits or inspections at relevant companies are of interest.
In general, inspections are carried out by relevant authorities whereas audits
are normally conducted by independent experts on behalf of the companies for
quality control. National legislation
on F-Gases in France requires companies holding certificates (“attestation de
capacité”; mandatory since 4 July 2009) to become audited by external bodies
every 5 years. Such audits aim at the control of personnel certification, data
monitoring and data verification within the company and are hence rather
comprehensive and cannot be compared to measures ensuring compliance with a
particular ban. Due to the legal requirement, all certified companies in France
need to take audits. Within an inspection
campaign, not all companies active in a particular sector are controlled, but
particular measures are enforced at random samples. Despite these
differences between the general nature of audits and inspections, it is
estimated that the efforts to be made by companies for preparation and support
are comparable. As officials investigate the cases chosen, the costs for an
inspection carried out by authorities are considered to be lower than cost for
an audit undertaken by contracted external auditors. Questionnaires have
been sent out to three authorities in Member States where bans of HFCs in
certain products or general bans have been in place for some time. Only one
answer has been received (from Denmark). It should be noted
that costs for inspections to enforce bans largely depend on the degree of
detail such investigations are aiming at. For example, in Austria control of ODS
bans in aerosols carried out in the 1990s included not only checks of the
labels and company data, but also costly and time consuming chemical analyses
by means of particular equipment. Bans of HFCs, in particular applications,
have not been controlled in recent years.[94] With regard to ODS
refrigerants, checks of equipment logbooks to enforce bans of the use of virgin
ODS are not known to date. Such bans are enforced by means of registration and
control of F-Gas importers and distributors. Thus, estimates of
administrative costs for one inspection are based on their own estimates for an
inspection of the ban of the use of HFCs in stationary equipment. It is assumed
that official environmental and/or chemical inspectors undertake an on-site
visit at one particular company. The inspection includes the check of the
logbooks and servicing information, the filling in forms and tables and filing
the information. No chemical analyses of products/equipment are carried out. Based on a
combination of the above-mentioned assumptions and the response of Denmark
authorities who estimated to need 65 hours for carrying out one audit/inspection
the following estimates on the administrative burden per entity is provided in Table A_XII-35. Table A_XII-54 Administrative burden per
entity: B02 – Carry out audits/ inspections B 02 – Carry out audits/ inspections Administrative burden per entity Annual Time [hours] || Equipment costs [€] || Outsourcing costs [€] 20 || 0 || 0 Table A_XII-36 Number of affected companies
with closed application within the areas of a regulatory ban: B02 – Carry out
audits/inspections Area of a regulatory ban (closed application) || No. of companies in EU-27 placing the equipment on the market: EU producers & Importers || Source Commercial refrigeration (Stand-alone systems, Condensing units, Centralized systems). || ca. 20 (industrially manufactured stand-alone equipment) ca. 16 (large companies) ca. 1000 (small companies for condensing units, centralized systems) || Ökoinstitute estimate Industrial refrigeration || ca. 100 || Ökoinstituteestimate Transport refrigeration (Refrigerated trucks and trailers), || 12 || See Schwarz et. al. 20119, p. 233. Stationary AC (Moveable systems, single split systems, multi split/VRF systems, rooftop systems, displacement chillers) || 10 (Producers) ca. 20 (Importers of OEM) || Ökoinstitute estimate HFC-23 in fire protection || 30 || Estimation on total number of EU based original equipment manufacturers, see Schwarz et.al. 20119, p. 235. Total amount || ca. 1,200 || Table A_XII-37 Number of affected companies
with open applications within the areas of a regulatory ban: B02 – Carry out
audits/inspections Area of a regulatory ban (open application) || No. of producing companies in EU-27 || Source of information XPS 134a foam blowing || 13 || See Schwarz et.al. 2011.9 SF6 in Magnesium die-casting <850 kg/y and recycling of die casting alloys || 19 || See Schwarz/Gschrey 2009[95], p. 18. Mandatory destruction of HFC-23. || 1 || Schwarz et al. (2011)9, p.175 Technical aerosols || ca. 20 || Ökoinstitute estimate Total amount || 53 || Table A_XII-38 shows the resulting overall annual costs in
the EU-27, taking into account a time of 20 hours for the carrying out audits/
inspections per company (cf. Table A_XII-35)), the weighted tariff of 36 €/hour for EU-27 (as calculated in
chapter 3.2 of this annex) and 1250 affected companies (sum of Table A_XII-36 and Table
A_XII-37). Table A_XII-38 Overall administrative costs
for EU-27: B02 – Carry out audits/ inspections B02 - Carry out audits / inspections Overall administrative cost in EU 27 Personnel costs || Equipment costs || Outsourcing costs || Total cost [Thousand €] annual 895,6 || - || - || 895,6 6.3. B
03 – MS reports on implementation Obligation B03 “MS
reports on implementation” envisages that competent authority in each Members
State shall report to the Commission on the implementation of regulatory bans
in their Member State. It is assumed that the effort is
comparable to the administrative efforts necessary to report to the Commission
on the implementation of ODS under Art. 26 ODS Regulation. A questionnaire
listing the required action within B03 was sent to 27 competent authorities in
the Members States in charge of the ODS regulation. Answers from 10 Member
States were received. Figures shown in Table A_XII-39 are the resulting average hours necessary
to report on the implementation to EU under Art. 26 of the ODS Regulation. Table A_XII-39 Administrative burden per MS:
B03 - MS reports on implementation to EU B03 - MS reports on implementation Administrative burden per entity Time [hours] || Equipment costs [€] || Outsourcing costs [€] annual 306 || - || 4,542 Source:
Analysis of questionnaires sent to MS competent authorities for ODS (Annex
XIII) Figures shown in Table
A_XII-40 are the resulting minimum and maximum hours
necessary to report on the implementation to EU under Art. 26 of the ODS
Regulation. Table A_XII-40 Minimum and maximum
administrative burden for the interviewed MS:
B03 - MS reports on implementation to EU B03 - MS reports on implementation to EU Minimum and maximum administrative burden for the interviewed MS Time [hours], annual Minimum || Maximum 16 || 1,000 Source:
Analysis of questionnaires sent to MS competent authorities for ODS (Annex
XIII) Two outliers were
identified and removed from the analysis. One MS did not state any costs for
reporting under Art. 26 ODS, one MS did not quantify the administrative costs
and one MS stated 610 hours for reporting under Art. 26 ODS which is five times
the average administrative burden. Only one Member
State of the seven reported to have equipment costs of € 2,250 necessary for
the reporting under Art. 26 ODS regulation and therefore will be evaluated as
an outlier not be included in the following analysis. Table A_XII-41 shows that the resulting overall annual
costs in the EU-27 is € 334.7 taking into account administrative burden per MS
of 212 hours per report/once a year and the average tariff per hour for
professionals in the EU-27 of € 26. The overall outsourcing costs are estimated
to be € 122.6. Table A_XII-41 Overall administrative costs
for EU-27: B03 - MS reports on implementation to EU B03 - MS reports on implementation Overall administrative cost in EU 27 Personnel costs || Equipment costs || Outsourcing costs || Total cost [Thousand €] annual 212.0 || - || 122.6 || 334.7 The following
comments given by the interviewed Member States are important inter alia for
the transferability of the administrative costs from reporting under Art. 26
ODS to a possible reporting under F-Gas Regulation in option E: In Federal States
(e.g. Germany) the administrative burden may vary between federal states.
According to competent authorities in Germany no additional equipment or outsourcing
is required and the administrative burden is rather low because authorities can
often produce the required information from their collected enforcement data.
Other kinds of information might take considerably longer to collect. In small countries
administrative efforts in this field are not very complicated and
comprehensive, e.g. everything in relation with reporting (Article 26) is
carried out by one person over approximately 4 months (as part of regular work)
in cooperation with stakeholders who provide data. However, it is believed that
costs and workload will increase significantly if Member States will have to report
on the use of F-Gases. Following the
assessment of the French competent authority the reporting of the MS according
to Article 26 ODS is not an administrative burden. Nevertheless, the French
competent authority believes that Article 26 ODS is not the most appropriate
one to be included in the revision of the Regulation 842/2006. Instead a
similar reporting mechanism (that includes production and destruction)
according to Article 27 ODS Regulation should be included in the revision of
the F-Gas Regulation and should be extended to pre-charged equipment as such
information is necessary to any phasedown scenario of the production and
consumption of F-Gases. 6.4. Summary
of administrative cost of the ban option The overall estimation of the annual administrative
costs in the option E “Regulatory ban on certain open and closed uses of HFC”
is given in Table A_XII-42. Table
A_XII-42 Annual
administrative costs of the ban option ANNEX XIII: Questionnaire assessing Administrative Costs of Stakeholders 1. Introduction Regulation (EC) No
842/2006 on certain fluorinated greenhouse gass ("F-Gas Regulation"),
supplemented by 10 implementing Commission Regulations, aims at reducing
emissions of hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride
(SF6) (collectively referred to as "F-Gases", all of which are
controlled as greenhouse gass under the Kyoto Protocol) in the European Union,
through a series of measures along two tracks of action: –
Avoiding F-Gases in some applications in which more
environmentally superior alternatives were already cost-effective. Measures
include use and marketing restrictions. –
Reduce leakages from equipment containing F-Gases.
Measures comprise: labelling of equipment containing F-Gases, training and
certification of personnel and companies handling this type oF-Gases,
containment and proper recovery. Article 10 of the F-Gas
Regulation requires the European Commission to publish a report in 2011 based
on the experience of its application and, if necessary, present proposals for
revision of the relevant provisions of the Regulation. On 26 September 2011
the Commission completed a review of the application, effects and adequacy of
the F-Gas Regulation and issued a report[96], drawing from
the results of an analytical study (Schwarz et al. (2011)9. In parallel, the
European Commission has contracted a consortium including Öko-Institut,
Öko-Recherche and HEAT International for support for the impact assessment of a
possible legal proposal to revise the F-Gas Regulation. In the context of that
contract several options for policy measures to revise the F-Gas Regulation in
order to further reduce European emissions are elaborated and subjected to an
impact assessment. As a part of that impact assessment, this questionnaire
shall serve to help assessing the administrative costs which would be incurred
by enterprises and public authorities in meeting additional legal obligations
to provide information on their action or production, as required by a possible
revision to the F-Gas Regulation, either to public authorities or to private
parties. Please note that
this questionnaire is circulated in parallel to, but is, however, independent
from the stakeholder consultation[97]
which the Commission has launched regarding its above mentioned report of 26
September 2011. In case you wish to communicate to the Commission your opinions
and arguments concerning any type of policy options to revise the F-Gas
regulation, we kindly ask you to use that stakeholder consultation forum for
that purpose. The evaluation of this questionnaire will not include any general
comments but will be restricted to the dimension of administrative cost
connected to the range of policy options presented below. 2. General
guidance to the users The attached questionnaire
is meant to underpin the Impact Assessment undertaken by the European
Commission as part of the revision of the Regulation (EC) No. 842/2006 on certain fluorinated greenhouse
gass. The aim of the questionnaire is to elicit a quantitative estimate of
changes in administrative costs and administrative burden that may be
incurred by stakeholders in implementing the requirements of a revised
Regulation in so far as activities to provide information are concerned.
The term “information” is used in a broad sense,
covering labelling, reporting, registration, monitoring and assessment needed
to provide information as well as the transfer of information to public
authorities and private parties (e.g. trade associations). Any other cost
possibly incurred to stakeholders, i.e. not related to providing information,
is not subject to this questionnaire. The variety of
possible information requirements identified in this questionnaire is
representative of a range of possible policy orientations, but they do not reflect
the Commission's views at this stage. In order to
facilitate both filling in and evaluation of the questionnaire, we have
implemented the questionnaire as an Excel worksheet. Please complete the
questions in the attached Excel worksheet in as much detail as possible and
return your response by //date// to //contact//, using the
e-mail-address //E-mail//. If you have any queries about the
questionnaire, please also contact us using the E-Mail-address above. In the Excel
worksheet specific questions are asked focusing –
on stakeholders’ experience on
administrative cost for meeting information requirements which are comparable
to those that might become relevant depending on policy options chosen for a
potential revision of the F-Gas Regulation, or –
on stakeholders’ expectations on
administrative cost for meeting information requirements that might become
relevant depending on policy options chosen for a potential revision of the F-Gas
Regulation. For better
readability the questions are printed in section 3below of this document, as
well. The addressees of
the questionnaire are kindly asked to indicate the time needed to fulfil an
information obligations differentiated by a set of activities. According to the
EU Impact Assessment guidelines[98] different types of required actions are categorized as follows: –
Familiarising with the information obligation –
Training members and employees about the
information obligations –
Retrieving relevant information from existing
data –
Adjusting existing data –
Producing new data –
Designing information material (e.g. leaflet
conception) –
Filling forms and tables (including
recordkeeping) –
Holding meetings (internal/external with an
auditor, lawyer etc.) –
Inspecting and checking (including assistance to
inspection by public authorities) –
Copying (reproducing reports, producing labels
or leaflets) –
Submitting the information to the relevant
authority (e.g. sending it to the relevant authority) –
Filing the information –
Buying (IT) equipment & supplies (e.g.
labelling machines) to specifically used to fulfil information obligations –
Other These activities are
reflected in the questionnaire as appropriate for the individual questions.
Note that not all types of activities are relevant for every question asked.
Whilst the basic data requirements from the questionnaire are fixed, a “comments/assumptions”
section has been included to allow participants to provide further explanation
of the estimates. It must be
emphasised that the Commission places great importance on determining numerical
values for the costs and benefits of proposals, wherever possible. Therefore,
the addressees are urged to provide their best estimates of staff-days and/or
cost data. The questions
related to the administrative burden include the following elements: –
Staff-hours: the
number of hours spent by staff of your company / institution fulfilling the
requirement as defined in the question; –
Consultancy costs:
fees for work done by external consultants; –
Capital costs:
for software or other items purchased to fulfil information requirements. The questionnaire
allows for insertion of staff-days and/or cost data. Please clearly indicate
which is being used by adding ‘days’ or ‘€’ (or other currency) in relevant
cells. In case it is not possible to provide a fix numerical value, please
provide an estimated range of staff days/costs and explain your estimate in the
“comments/assumptions” column. 3. Questionnaire
addressing companies with experience under the ODS Regulation ·
Registration in database 4. Questionnaire
addressing reclamation and/or destruction facilities currently not covered by
reporting obligations ·
Reporting of F-Gases by reclamation and/or
destruction facilities 5. Questionnaire
addressing MS authorities with experience in F-Gas bans ·
Carry out audits/inspections 6. Questionnaire
addressing MS competent authorities under the ODS regulation ·
Report on implementation of EU legislation to
the Commission 7. Questionnaire
addressing companies currently falling under reporting requirement in the F-Gas
regulation ·
Annual report on the placing of F-Gases on the
EU market ·
Verification of a report on the placing of F-Gases
on the EU market 8. Questionnaire
addressing trade associations experienced with a voluntary agreement (VA) ·
Annual monitoring report ·
Communication with stakeholders ANNEX XIV: Macroeconomic Analysis of F-Gas
Policies with GEM-E3
1. Methodology The GEM-E3 model is an applied
general equilibrium model[99]. The main feature of a
general equilibrium model is capturing the price induced effects of policies,
including substitution in commodity demand as well as shifts in trade behaviour.
As GEM-E3 evaluates emissions of all Kyoto-gases including fluorinated greenhouse
gass, and as it is allows imposing taxes on these pollutants, the model
captures the interactions between the economy, energy system, and interactions
for the major world regions linked though endogenous bilateral trade flows. The
current version of the model is based on the GTAP 7 database with the base year
2004. IPTS (JRC) performed the model calculations. The emissions follow
historical paths up 2010 (based on the UNFCCC inventory of EEA of 2011). For
fluorinated greenhouse gass the baseline emission path is in line with the "with
measures" (WM) scenario of Schwarz et al. (2011)9 after 2010
(option A). In GEM-E3 emissions of HFC are accounted in the production
stage, i.e. are allocated to the producers of HFC which is mainly the chemical
sector. As HFC emissions are allocated to this sector, the cost of employing
abatement technologies also are allocated to these sectors. The estimates of
the abatement cost functions are based on the IIASA database.[100]
2. Scenarios The scenarios implement the reductions of
HFC as a trading system over all emission sources. HFC emissions are allocated
to the producers of HFC, i.e. mainly the chemical sector. Therefore the
scenarios implement emission trading at upstream, i.e. production, level. The
emission reduction targets for 2030 are given in the Table A_XIV-1
below. The scenarios differ in the way F-Gas emission rights are allocated: for
free, or being sold through auctioning. Impacts would also depend on whether
the non-European countries also impose reduction targets on HFC, i.e. whether
the European policy is unilateral or not. An overview over the scenario
settings is given in the table below. The model assesses the impacts of the two
(strongest) options, D (Phase down) and option E (Ban), with the strongest
impact (in terms of emission reduction and costs). The emission reductions for
2030 are consistent with the expected reduction in emissions in 2030 of option
D and E in the main text. Table A_XIV-1: HFC emission reduction targets compared
to 2006 || 2030 EU-Option D || 62% EU-Option E || 45% Scenario 1 examines the case of allocation
of permits with no passing on of the costs in the case of unilateral EU action.
The scenario Group 1-W allows for costs pass-on, i.e. even if the permits are
allocated for free, firms include the (market) value of permits into the output
price. Group 2 implements full auctioning of F-Gas allocations (the right to
place F-Gas on the market). In the full auctioning case, the income of auctioning
F-Gas is assumed to be recycled into the economy by decreasing social security
contributions paid by employers reducing labour costs. All cases are
implemented for option D and E. Table
A_XIV-2 Scenario
overview Group || || Unilateral 1 || EU || Allocation of permits (grandfathering) No passing on Non-EU || No actions 1-W || EU || Allocation of permits (grandfathering) Passing on permit costs Non-EU || No actions 2 || EU || Auctioning of permits Non-EU || No actions 3. Detailed
results The table A_XIV-3
below show the possible impacts on GDP in 2030 for options D and E. While the
GDP impacts differ across scenarios and between options D and E, they are small
in all cases. Table
A_XIV-3 GDP
impacts in 2030 (% change compared to baseline) || D || E Allocation – no passing on || -0.006 || -0.003 Cost passing on || -0.012 || -0.007 Auctioning || -0.008 || -0.004 In case emission permits are allocated for
free and their value is not included in the output price (Group 1), the GDP
loss increases with the emission reductions. The GDP impact is therefore bigger
in option D than E. In the case of unilateral European policy and the
(opportunity costs of) grandfathered permits included into the output price
(cost pass-through), the GDP losses becomes more pronounced but are still
small: As the value of the permits further increases the output price, the loss
in competitiveness leads to an further increase of imports and decrease of
exports. The effect is smaller for option E since the permit price is lower. In
case of full auctioning of HFC permits GDP losses are smaller than in the costs
pass-through case. If these revenues are used to decrease social security
contributions paid by employers they decrease the cost of labour. This exercises
a positive effect on the whole economy as labour prices decrease. The impacts on employment are shown in the
following tables. Clearly, the impacts are small and either positive or
negative. They would be the most negative in case the additional direct costs
were passed through into higher prices. If permits to place F-Gases on the
market would be auctioned and the revenues used to reduce labour costs the
impact on employment would be positive. Note that the table does not take into
account that importers of F-Gases are affected by the proposed options D and E
as well. As a result the negative impacts on the number of jobs in the EU could
be smaller (and less negative or even positive) as well since importers would
also be faced with an increase in prices. Table
A_XIV-4: Employment
impacts in 2030 (number of jobs) || D || E No cost passing on || -1.600 || -1.000 Cost passing on || -15.800 || -11.600 Auctioning || 5.400 || 4.000 The impact on the level of production in
the different sectors is shown in the Table A_XIV-5. As the abatement policy is
implemented in an upstream manner, i.e. the producers of HFC are obliged to
hold emission permits for HFCs sold, the chemical sector which is the main
producers of HFC, is directly affected by the policy. The table shows the
change in the production level of this sector compared to the business-as-usual
(reflecting current legislation, option A). In general the effects on
production are small. With the explanations given above, the results show the
same pattern as the GDP results. Production decreases as domestic production is
substituted by imports. In the case of auctioning the price of chemical
products further increases and, thus, production decreases further. In the case
of auctioning this effect is less pronounced (see i.e option D) since
auctioning revenues are used to reduce labour costs. The double dividend of
labour cost decrease also has a small positive effect on the chemical sector.
The output losses might in reality be lower since importers of F-Gas (be it in bulk
or included in products) are also affected to a certain degree by the options D
& E since they are partially included. Modelling this would require
detailed data on the production and trade flows of specific goods which is not
available. Besides the effect that the price change of
chemical products affects the whole economy via intermediate demands, sector
other than chemical production are affected mainly by abatement investment.
Table A_XIV-5 shows for option D and E the detailed results indicating that in
particular the electric goods, transport equipment, other equipment and metals
sectors would see an increase in output. For option E similar but smaller
impacts occur. Table A_XIV-5 Change in sectoral output in 2030 for option
D and E (% change to baseline) || Option D || || || Option E || || || No cost passing on || Cost-passing on || Auction || No cost passing on || Cost-passing on || Auction Chemical || -0.13 || -0.35 || -0.34 || -0.06 || -0.22 || -0.22 Electricity || -0.01 || -0.02 || -0.02 || -0.01 || -0.01 || -0.01 Coal || -0.01 || -0.01 || -0.01 || -0.01 || -0.01 || -0.01 Market services || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 Non-market services || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 Transport || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 Oil || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 Energy Intensive || 0.00 || 0.00 || 0.01 || 0.00 || 0.00 || 0.01 Consumer goods || 0.01 || 0.02 || 0.02 || 0.00 || 0.01 || 0.01 Agriculture || 0.01 || 0.02 || 0.02 || 0.01 || 0.01 || 0.02 Construction || 0.01 || 0.01 || 0.01 || 0.00 || 0.00 || 0.00 Gas || 0.01 || 0.04 || 0.04 || 0.00 || 0.02 || 0.02 Metals || 0.02 || 0.04 || 0.04 || 0.01 || 0.04 || 0.04 Other equipment || 0.02 || 0.05 || 0.05 || 0.02 || 0.02 || 0.03 Transport Equipment || 0.02 || 0.04 || 0.04 || 0.01 || 0.02 || 0.03 Electric Goods || 0.04 || 0.06 || 0.07 || 0.02 || 0.04 || 0.04 The implications for competiveness in terms
of trade flows are shown in Table A_XIV-6 for the exports and Table A XIV-7 for
the imports. Apart from the chemical sector, which experiences a small
reduction in exports of 0.16% to 0.43% in option D and -.07 to 0.27% in option
E, the impacts on exports in all other sectors are small, but positive. The
auctioning tends to favour more labour-intensive sectors (e.g. non-market
services) since auction revenues are assumed to be used to reduce labour costs
but the effect does not differ significantly from the cost passing on in terms
of exports. Table A_XIV-6: Change in exports in 2030 in
all sectors for options D and E (% change
to baseline)).
|| Option D || Option E || No cost passing on || Cost-passing on || Auction || No cost passing on || Cost-passing on || Auction Chemical || -0.16 || -0.43 || -0.43 || -0.07 || -0.27 || -0.27 Electricity || 0.01 || 0.02 || 0.01 || 0.01 || 0.02 || 0.01 Energy Intensive || 0.01 || 0.02 || 0.03 || 0.01 || 0.01 || 0.02 Transport || 0.01 || 0.02 || 0.03 || 0.00 || 0.01 || 0.02 Construction || 0.01 || 0.03 || 0.03 || 0.01 || 0.02 || 0.02 Metals || 0.02 || 0.06 || 0.06 || 0.01 || 0.04 || 0.04 Consumer goods || 0.02 || 0.05 || 0.05 || 0.01 || 0.03 || 0.04 Market services || 0.02 || 0.04 || 0.04 || 0.01 || 0.03 || 0.03 Oil || 0.02 || 0.04 || 0.04 || 0.01 || 0.03 || 0.02 Transport Equipment || 0.02 || 0.04 || 0.05 || 0.01 || 0.03 || 0.03 Agriculture || 0.03 || 0.07 || 0.07 || 0.03 || 0.04 || 0.05 Electric Goods || 0.03 || 0.06 || 0.06 || 0.01 || 0.02 || 0.01 Non-market services || 0.03 || 0.07 || 0.07 || 0.01 || 0.04 || 0.05 Other equipment || 0.03 || 0.07 || 0.07 || 0.01 || 0.04 || 0.04 Gas || 0.05 || 0.17 || 0.15 || 0.02 || 0.10 || 0.09 Coal || 0.07 || 0.06 || 0.06 || 0.08 || 0.07 || 0.07 For the imports there is a more or less
opposite trend compared to the exports, but impacts are much smaller. The
chemical sector, construction, transport equipment and electric goods see an
increase in imports. In the chemical sector this is mainly due to the increase
in production costs compared to the other countries. In the other sectors the
increases might also be due to increase in domestic output. With cost passing
on of the (implicit) F-gas price in output prices the effects are slightly
higher. Note that this is also since GEM-E3 uses an upstream approach,
i.e. energy, the chemical sector, are directly affected by the policy and in
addition imports and export react to (production) price changes (see Annex XV
for details). Table
A_XIV-7 Change
in imports in 2030 in all sectors for options D and E (% change to baseline (option A)) || Option D || Option E || No cost passing on || Cost-pass on || Auction || No cost passing on || Cost-pass on || Auction Chemical || 0.01 || 0.01 || 0.02 || 0.00 || 0.01 || 0.01 Electricity || -0.01 || -0.01 || -0.01 || 0.00 || -0.01 || -0.01 Energy Intensive || -0.01 || -0.02 || 0.02 || -0.01 || 0.00 || -0.01 Transport || 0.00 || -0.01 || 0.00 || 0.00 || -0.01 || 0.00 Construction || 0.01 || 0.01 || 0.01 || 0.00 || 0.00 || 0.00 Metals || 0.00 || -0.01 || 0.01 || 0.00 || -0.01 || 0.00 Consumer goods || -0.01 || -0.03 || -0.02 || 0.00 || -0.02 || -0.01 Market services || -0.01 || -0.03 || -0.02 || 0.00 || -0.02 || -0.01 Oil || -0.02 || -0.05 || -0.05 || -0.01 || -0.03 || -0.03 Transport Equipment || 0.01 || 0.01 || 0.01 || 0.01 || 0.00 || 0.01 Agriculture || -0.01 || -0.02 || -0.02 || 0.00 || -0.01 || -0.01 Electric Goods || 0.02 || 0.01 || 0.02 || 0.01 || 0.00 || 0.01 Non-market services || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 || 0.00 Other equipment || 0.00 || -0.01 || 0.01 || 0.00 || -0.01 || 0.00 Gas || -0.01 || -0.03 || -0.03 || -0.01 || -0.02 || -0.02 Coal || -0.01 || -0.02 || -0.02 || 0.00 || -0.01 || -0.01 The impact on the consumer price index is
given in the following table for the various options. This is the median price
effect across the EU countries included the model for 2030. The table shows
that there is no significant impact across thee EU countries included in the
model for 2030. This is true for option D and E quite irrespective of passing
through of costs or auctioning of F-Gas rights. Table
A_XIV-8 Change
in market prices in 2030 for options D and E (% change to baseline). || Option D || Option E || No cost passing on || Cost-pass || Auction || No cost passing on || Cost-pass on || Auction Market prices || 0.00 || -0.01 || -0.01 || 0.00 || 0.00 || -0.01 ANNEX XV: Differences between the EmIO-F and the GEM-E3 model The two macro-economic models, EmIO-F and GEM-E3,
show the same broad picture: the GDP, output as well employment effects of the
proposed measures of F-Gas abatement are small. However, the model results
differ in some minor points due to the different methodologies used. The main
methodological differences relate to i) the model type (Input/Output model vs.
Computable General Equilibrium model) and thus different treatment of
international trade as well as production and consumer behaviour, ii) the
implementation of the policy scenarios as upstream or mid-stream shocks. More explicitly, some of the minor
differences can be explained as follows. The chemical sector shows slightly
positive reactions in EmIO-F for option D, while it shows somewhat much
stronger reactions in GEM-E3, either positive or negative. The
different behaviour of the models is because EmIO-F uses a mid-stream approach
to F-Gas abatement, i.e. the F-Gas content of products is directly affected by
the policy. This implies that changes in F-Gas related policies affect all
production activities that require F-Gases or replacement substances
independent of whether F-Gases are actually emitted or contained and recycled
or emitted at a later state. Thus a much larger spectrum of sectoral activities
than just the chemicals sector is affected by the policy change. EmIo-F
accounts for the changes in investment and running costs operators of equipment
containing F-Gases or manufacturers using F-Gases in the production process
phase. In contrast, GEM-E3 uses an upstream approach, i.e. the producers
of F-Gases (the chemical sector) are directly affected by the policy. Moreover, the input-output model (EmIO-F)
assumes fixed coefficient production functions and holds the share between
imports and exports for production and consumption constant across all
simulations. In contrast, in GEM-E3 production functions are formulated
in a more flexible way allowing for price-induced substitution away from
products which have become more expensive. Furthermore, imports and exports are
also price sensitive in GEM-E3, i.e. depend on the imposed policy
measures. Thus the chemical sector is negatively affected in the unilateral
case. In a multilateral case such as the one where importers were to be
included in the system Europe might gain competitiveness compared to countries
outside Europe and, consequently, may increases production and exports. There some differences in the impact of the
F-gas policies across the various sectors as obtained with the two models.
General trends and magnitude of effects are however similar, e.g. the sectors
that deliver machinery/equipment and their suppliers (metals, metal products)
show positive impacts in both models. A further difference between the models
is the way in which government revenues of the imposed policy, i.e. the income
of auctioning F-gas rights, is recycled (or used). In EmIO-F the government
recycles revenue in a static way i.e. according to (historical) spending
patterns contained in the Input-Output table. In contrast, GEM-E3
recycles auction revenues by reducing social security costs paid by employers
thus generating a dynamic employment effect since labour costs are reduced. Annex XVI: State and potential of technology in the different sectors This annex describes the technical
feasibility of using replacement substances in sectors currently relying on
F-Gases. This analysis is based on Schwarz et al.9 and focuses on
HFCs as the most important group of F-Gases and where most of the replacement
potential is found. 1. Common
technology by sectors Common technology used in the different
F-Gas sectors and subsectors at global scale is listed in an overview table
(Table A_XVI-1) and includes conventional F-Gas technology and established
alternative (halogen-free) technology. HCFC technology listed is today used for
new products and equipment only in developing countries and servicing of
existing systems in developed countries. By quantity, the most important HCFC
used today is HCFC-22 (GWP 1,810; ODP 0.05). HCFC technology still represents
the state of technology of new and existing products and equipment in
developing countries. In the USA, new HCFC equipment was sold widely until the
end of 2010. In Europe, HCFC equipment is becoming more and more outdated
technology but still exists to some extent. Only reclaimed HCFCs may be used
for servicing needs of existing equipment and new virgin HCFCs must not be
placed on the market any more (Regulation (EC) No 1005/2009). HFC technology is widely applied in all
refrigeration, AC, foam, aerosol and fire protection subsectors and can be
considered state of technology in Europe and other developed countries. The
most important HFCs used today include HFC-134a (GWP 1,430) and the blends
R404A (GWP 3,922) and R410A (GWP 2,088).[101] Technologies not relying on HFCs, PFCs, or
SF6 but on alternative substances with low GWP are also common and
widely used in some sectors and subsectors such as domestic refrigeration,
industrial refrigeration, certain subsectors of commercial refrigeration and
stationary AC, foams, aerosols, solvents as well as the fire protection sector.
SF6 (GWP 22,800) is used,
amongst others, in electrical switchgear and non-ferrous metal industry. SF6-free
alternatives are used to some extent for medium-voltage switchgear. In the
non-ferrous metal industry, which refers to the magnesium industry in EU-27,
the use of SF6 has been banned in large die casting facilities
(annual SF6 quantities used >850 kg) by the F-gas Regulation
(Article 8). Small die casting facilities (annual SF6 quantities
used <850 kg) today partly rely on SF6 but also introduced other
technologies, such as the use of HFC-134a (GWP 1,430, which is considerably
lower compared to the GWP of SF6) or SO2. Table A_XVI-1: State of technology in F-Gas sectors (excluding
unsaturated HFCs) Sector || Conventional F-gas technology || Established alternative technology Domestic refrigeration || - HFC-134a || - HC-600a Commercial refrigeration Centralized systems || - HCFC-22 - R404A, R407C - HFC-134a || - R744 in LT-cascade systems - R744 for MT and LT - R290, R1270 or R717 with secondary loop systems, sometimes R744 LT-cascade systems Condensing units || - HCFC-22 - R404A, R410A - HFC-134a || Stand alone units || - CFC-12 - HFC-134a - R404A || - R744 for a ice cream freezers and beverage vending machines - HC (hydrocarbon, mainly R290, sometimes R600a) for bottle coolers and LT cabinets, etc. Industrial refrigeration || - HCFC-22 - R404A, R407C || - ammonia (R717) - ammonia and CO2 cascade Transport refrigeration Reefer containers || - HFC-134a - R404A || Road refrigerated transport || - HFC-134a - R404A, R410A, R407C || Fishing vessels || - HCFC-22 - R404A || - ammonia (R717) - ammonia and CO2 cascade Stationary AC || - HCFC-22 - R410A, R407C - HFC-134a (chillers) - R404A (chillers) || - R290 (room AC, chillers, heat pumps) - R717 (large chillers) - R744 (heat pumps) Mobile AC Road vehicles || - HFC-134a - CFC-12 || - hydrocarbons (service only) (R744 in prototypes) Ships and rail || - HFC-134a || Foam || - HFC-152a, HFC-134a - HFC-245fa - HFC-365mfc/227ea - HCFC-141b, HCFC-142b - HCFC-22 || - hydrocarbons (pentanes) - organic solvents/CO2 - water-CO2 Fire protection || - HFC-227ea - HFC-236fa - HFC-23 - HFC-125 || - water, water mist, dry chemical, foam aerosols; - CO2 - inert gases Aerosols; OCF (excl. MDI) || - HFC-152a - HFC-134a || - hydrocarbons - dimethylether Medium voltage secondary switchgear || - SF6 || - solid insulation Non-ferrous metal industry (Mg industry) || - SF6 - (HFC-134a) || - SO2 - HFC-134a N.B. LT
= Low Temperature; MT = Medium Temperature 2. The
market potential of abatement technology 2.1. Selection
of sector abatement options For each sector relying on HFCs today,
cost-effective and technically feasible abatement solutions were identified and
qualitatively and quantitatively compared to the sector-typical conventional
HFC technology as reference. This comparative analysis was guided by the
following main criteria: -
Energy consumption. -
Safety -
Maximum reduction potential of CO2-weighted
HFC use and emissions. -
Cost effectiveness (expressed in abatement cost
of €/t CO2 eq). 2.2. Energy
efficiency Energy consumption was an essential selection criterion.
After the preliminary identification of alternative options only those options that
show at least equivalent energy performance as the reference HFC technology were
considered further. This criterion is important
because additional energy consumption would negatively impact the total climate
performance of a system (TEWI) up to the point where reductions of direct F-gas
emissions by replacement of HFCs could be offset by additional CO2 emissions from energy
production (indirect emissions). In several cases a standard abatement
solution might not be able to achieve the same or better energy performance as
the reference option in any climatic region due to low thermodynamic
performance. This applies e.g. to indirect refrigeration or AC systems even if
they use efficient refrigerants such as propane (R-290) or unsaturated HFCs
(HFC-1234yf). In some of those cases, the energy consumption of direct HFC
systems can be matched with the indirect use of gases if additional technical
measures (e.g. larger heat exchanger surface) are implemented. Such technical
optimisation increases, however, the investment cost of the abatement option.
In the foam sector poorer insulation performance of alternative blowing agents
must be compensated by increased foam thickness, which likewise raises the cost
compared to HFC based technology. In those cases an abatement option is
considered in the analysis but with the additional investment costs accounted. Therefore, the comparative analyses
include only abatement options when these can, with or without technical
optimisation, require equal or less energy for operation. 2.3. The
concept of penetration rates Existing and future market penetration is a
key parameter for the calculation of the consumption and emission reduction
potential of any technical alternative to current HFC technology. The penetration rate is defined as the
maximum market potential of a technical choice (i.e. abatement option) to
replace new products or equipment relying upon HFCs in a particular sector. Penetration rates are given for each abatement option based on
technical feasibility to replace existing HFC technology by a specific
alternative technology. A penetration rate of 30% in 2015 means that 30% of the
new HFC units installed in 2015 could potentially be replaced by units of this
particular abatement option. However, any abatement option is rarely
universally applicable to a sector. Thus, maximum market penetration for
replacement of current HFC technology in a specific sector in 2015, 2020, 2025
or 2030 can only be met by aggregation of two or more abatement options. 2.4. Constraints
to market penetration Limitations of each abatement option are
due to safety, cost and/or efficiency implications, and further parameters. It
is therefore necessary to consider the use of each relevant abatement option
for a specific sector within the context of the various limiting factors. –
Safety constraints The application of refrigerants[102]
is generally controlled by national regulations, such as those dealing with the
use of hazardous substances, buildings and so on. Generally such regulations
are non-specific in terms of how refrigerants can be applied and aim towards
“safe use”. However, in many countries, safety standards and codes of practice
are available which are more specific in the manner by which refrigerants are
applied; noting also that such standards and codes are often not legally
mandatory but are considered as “best practice”. Many of the currently used F-Gas
refrigerants have a safety classification of lower-toxicity/no flame
propagation (i.e., class “A1”). This means that they can be applied within most
situations without consideration of quantity limitations. However, many
abatement solutions are flammable or have higher toxicity or both (typically
“A2”, “A3” and “B2” classifications), which results in limitations in terms of
the quantity of refrigerant permitted within different locations. As such,
where standards specifically limit certain technical abatement options in
particular locations, this can impact on the penetration rate. As an example, R717 (class B2) is not
permitted to be used in direct systems, so the maximum penetration for room air
conditioners would be 0%, whilst R290 (class A3) can be used in direct systems
provided the charge size is below a certain quantity. Thus, the penetration
would be more than 0% but less than 100% because it would not ordinarily be
possible to use R290 in systems that require a large charge. Whilst safety standards may partially or
wholly restrict certain abatement options from being used in certain locations,
it is possible to redesign systems in order to ensure the refrigerant is kept
within an alternative location or reduce the quantity of refrigerant in a
system. This may be applicable where two refrigerant circuits are used instead
of one, or an indirect system is employed instead of a direct system. –
Efficiency constraints As mentioned above, it was a basic
principle for the analysis that any abatement option considered should not risk
offsetting refrigerant-related emissions reduction by consuming more energy.
Furthermore, in many countries, there are – or will be – minimum efficiency
standards for e.g. room AC systems. Therefore abatement options can only be
considered where systems would achieve at least the same level of efficiency.
In general, most of the abatement options under consideration can already
provide at least the same level of efficiency as the existing refrigerants. In cases, where abatement options have a
poorer efficiency than the existing HFC technology when used in comparable
systems, additional materials and components may be required to bring the
efficiency up to the required level, and these may incur costs. In particular,
where indirect systems are used instead of direct systems and the construction
is such that efficiency may be lost, increases in exchanger surface areas, for
example, may be necessary to achieve the target level. However, in some cases abatement options
may not be able to achieve the required efficiency level (even with
optimization), in which case the penetration rate would be limited. As an example,
the abatement option transcritical use of CO2 (which is more energy
efficient than most HFC systems in geographical zones with moderate climate could be used in AC systems within temperate climates. The penetration could reach 100% there,
but in hot climates the ideal cycle efficiency of CO2 (R744) would
still be below the minimum efficiency of such air conditioners and therefore
the penetration would be 0%. In the current analysis the penetration rate would
be reduced according to share of moderate and hot climates. As an example, for
Europe the penetration rate would be halved compared to the technical maximum
because CO2 systems are energetically superior north of the Alps but
inferior south of the Alps. –
Cost constraints In principle
any technically feasible abatement option can be used for any application,
provided unlimited funds are available to implement it. However, the market may
not accept products at considerably higher cost (price) than existing products.
The cost implication of using different abatement options which may be affected
by several different parameters, including safety requirements, desired
efficiency, system complexity and special materials. Therefore it is important
to establish situations where abatement options may result in excessively high
cost such that the penetration potential of that abatement options would be
limited. –
Availability of materials and components Some parts are
specific to certain refrigerants, e.g. compressors. Whilst it is feasible to
use, e.g. R744/CO2
in rooftop air conditioners, no suitable compressors are currently available.
Reciprocating compressors normally used for commercial refrigeration could be
applied but the efficiency would be much lower than the equivalent (scroll)
compressors that an R22 system may use. Another example is electrical
components for flammable refrigerant systems. HC chillers need to use
“protected” electrical devices to avoid ignition of a leak but certain
components e.g. low flow switches are not available, except for maybe oil rig
applications which would lead to overly high costs for use in refrigeration and
AC applications. Today not every system could be build with each of the
abatement options using “off the shelf” parts and the systems would need to be
improvised, which could lead to high costs and/or low efficiency. –
Availability of refrigerants and blowing agents Whilst hydrocarbons, CO2,
ammonia or water are available in sufficient quantities, newly developed
unsaturated HFCs are not yet commercially available of the necessary scale
today. However, these gases show promising prospects for replacement of
conventional HFCs and hence unsaturated HFCs are included in the comparative
analyses in this study wherever possible. This applies particularly to HFC-1234yf
(refrigerant) and, to minor extent, HFC-1234ze[103]
(foam blowing agent, aerosol propellant, refrigerant). The penetration rates of
HFC-1234yf will still be low by 2015, which is the first year for which
production at large scale is announced. As the market availability can be
assumed to develop over time, the accurate quantitative assessment of the
penetration rates is key condition for the estimation of the HFC reduction
potential in the period until 2030. –
System complexity and design know-how Systems running on ODS, HFCs and HFC blends
are of similar complexity and design. In contrast, design and construction of a
refrigeration or AC system running on flammable refrigerants or transcritical
CO2 systems require additional knowledge and training. Therefore,
design engineers and technicians need to acquire additional know-how in order
to install abatement technology properly. 2.5. Determination
of penetration rates In estimating the maximum potential
penetration rate, several factors are considered. For each of the constraints
considered above, the proportion ()
for each constraint ()
– in terms of refrigerant quantity, not necessarily number of systems – of the
sector that could not accommodate the specific abatement option due to each is
estimated. These factors are estimated for the year
2030, which should therefore account for both (i) anticipated technical
developments and (ii) market maturity. For example, where charge size limits
are a limiting factor, it can be assumed that research and development efforts
over the next 20 years will reduce specific charge sizes (kg/kW) to below
today's lowest values, or that system components for certain abatement options
are widely available such that the product development and small production
scale costs have been eliminated from the purchase price. Thus, the overall maximum penetration rate
is estimated from 1 – max{}.
i.e., the maximum possible penetration
under business-as-usual should be based on the maximum proportion of a sector
unable to accommodate the abatement option for any of the given constraints.
For each abatement option the proportions ()
are based on expert knowledge of the characteristics of the systems and
equipment, system design characteristics, requirements of safety standards,
technology requirements, etc. and coupling these with characteristics of the
refrigerants under consideration. Whilst the constraints detailed above are
mechanistic, another constraint may be included to account for the
“willingness” of the market to adopt a given abatement option, which may be a
function of the additional considerations necessary to suitably apply a
particular abatement option. These considerations may include having to get
special training for technicians, interpretation of complicated standards and
so on. Using this approach the maximum penetration rate could be scaled down. Whilst the maximum penetration rate detailed
above represents the best estimate for 2030, the penetration rates for the
intermediate dates – 2015, 2020 and 2025 – are obtained from interpolation
between the current status (i.e., penetration of each abatement option in 2010)
and the 2030 penetration, but also accounting for the typical lifetime of the
equipment within the sub sector. It must be noted here that there is no
generally accepted methodology for the determination of penetration rates, and
that the rates are subjective and with uncertainties. Evidently, nobody can
exactly forecast and quantify the technical development in the coming 20 years.
The penetration rates for the numerous individual technical solutions rely on
the best knowledge of the project experts. The assessment is inter alia a
result of detailed literature study, and of intensive discussion with the
industries concerned[104]. 2.6. Combination
of penetration rates (“penetration mix”) It should be pointed out that in reality a
sector may comprise a number of different abatement options. The mix of
different technical solutions cannot necessarily be represented by the maximum
penetration values for each abatement option since the same constraints that
apply to one abatement option may apply to another (for example, flammability,
etc). Therefore the maximum penetration rate of each abatement option for any
one sector is the maximum penetration rate of any one of the abatement option
within each of the groups listed in Table A_XVI-2 (refrigerants only). The groups represent the abatement option that are dominated by the same constraints and which are hence
mutually exclusive. For example, the penetration rates of two
flammable refrigerant abatement options in direct systems cannot be added since flammability is the same
limiting factor. However, the penetration rates for Group 1/2 and Group 4 can
be added since Group 4 abatement option could be applied where it would be impossible to use Group 1 or 2. Table A_XVI-2: Classification
of abatement options by limiting factors Group 1 Highly flammable || R600a R290/R1270 Group 2 Flammable || Unsaturated HFC R717 Group 3 Moderate ambient only || R744 Group 4 Indirect operation Highly efficient || R290/R1270 + R744 cascade R717 + R744 cascade HC + evaporation secondary (e.g. R744) Unsaturated HFC+ evaporation secondary (e.g. R744) Group 5 Indirect operation Normal efficiency || HC + liquid secondary R717 + liquid secondary Unsaturated HFC+ liquid secondary Group 6 Poor performance, high cost || Air cycle Liquid absorption Solid adsorption The first objective for each sector is the identification
of those technically feasible alternative technologies that provide highest
possible emission or demand reduction potential. The cost of these technologies
is not the primary but the secondary selection criterion, which determines the
order of different alternative options in the mix. From this it follows that
abatement options relying upon low or no GWP technologies are the preferred
choice. However, solutions with GWP which are lower than the ones used today,
such as blends of HFCs with unsaturated HFCs (GWP ~700) or substances like
HFC-32 (GWP 675) are also considered for the assumed penetration mix, if such
solutions, in a given year, are either the only alternative to high-GWP HFCs,
or can further increase the reduction potential of low-GWP options. According
to our analysis, only in few sectors (passenger ship air AC, room AC <12 kW,
and heat pumps[105]) inclusion of such
solutions could increase the reduction potential of the low-GWP options to
achieve the highest possible reduction effect until 2030. In all other sectors,
the combination of low-GWP solutions alone represented the highest possible
reduction potential. 2.7. Key
abatement options by sectors –
Refrigeration and AC subsectors In most refrigeration subsectors (Table A_XVI-3)
the penetration mix of abatement options can reach 100% in or before 2030.
Exemptions include the industrial refrigeration sector and refrigeration in
fishing vessels. Table A_XVI-3: Key abatement options in the
refrigeration sectors and their aggregated market penetration potential in 2030 Refrigeration and AC || Key abatement options || Market penetration of abatement options (penetration mix) in 2030 (%) Domestic refrigeration || R600a CO2 (R744) R1234yf || 95(100*) 5 0 Commercial refrigeration Centralized systems || R290 indirect + CO2 cascade R290 + CO2 + CO2 cascade CO2 || 90 10 0 Condensing units || R290 direct R290 indirect CO2 || 40 30 30 Stand-alone units || R290 direct CO2 || 85 15 Industrial refrigeration Small equipment || NH3 || 95 Large equipment || NH3 || 95 Transport refrigeration Refrigerated trucks || R290 direct CO2 || 80 20 Refrigerated vans || CO2 HFC-1234yf || 50 50 Reefer containers || CO2 || 100 Fishing vessels || NH3 + CO2 cascade || 95 * 100%
market potential of hydrocarbon refrigerant (R-600a) is assumed already for
2015. In many AC subsectors (Table A_XVI-4), the
penetration mix of abatement options can reach 100% in or before 2030. Table A_XVI-4: Key abatement options in the stationary
and mobile AC sectors and their combined market penetration potential in 2030 AC || Key abatement options || Market penetration of abatement options (penetration mix) in 2030 (%) Stationary AC Moveable AC || R290 direct CO2 HFC-1234yf || 40 20 40 Single split AC || R290 direct CO2 HFC-1234yf || 40 15 45 Multi split AC || R290 indirect CO2 HFC-1234yf || 70 30 0 Rooftop AC || R290 indirect CO2 R290 + evaporating secondary (CO2) || 65 35 0 Small chillers || R290 direct CO2 NH3 || 60 20 20 Large chillers || R290 direct CO2 NH3 R718 || 15 0 60 25 Centrifugal chillers || R290 HFC-1234ze R718 || 20 50 30 Heat pumps || R290 direct CO2 HFC-1234yf || 60 20 20 Mobile AC – road vehicles Passenger cars (incl. trucks) || HFC-1234yf R744 HC indirect || (100) (100) 0 Buses || HFC-1234yf R744 HC indirect || 100 0 0 Mobile AC – ships and rail vehicles[106] Passenger ships || Blends w unsat HFCs || 90 Cargo ships || NH3-brine Blends w unsat HFCs || 90 10 Rail vehicles || R744 || 60 –
Foam subsectors In all foam subsectors (Table A_XVI-5),
current HFC blowing agents could be substituted by abatement options in or
before 2030. Table A_XVI-5: Key abatement options in the foam
subsectors and their combined market penetration potential in 2030 Foam blowing agents || Key abatement options || Market penetration of abatement options (penetration mix) in 2030 (%) Insulation foams of PU and XPS for the construction sector Sandwich panels with metal facings, continuous (CME) || HC Unsaturated HFC || 90 10 Sandwich panels with metal facings, discontinuous (DIP) || HC Unsaturated HFC || 90 10 Sandwich panels with flexible facings, boardstock (CFF) || HC Unsaturated HFC || 90 10 Spray foam (SPR) || Unsaturated HFC H2O-CO2 || 50 50 XPS Foam Boards (XPS) || HC incl. organic solvent+CO2 Unsaturated HFC || 85 15 PU Foam for refrigeration applications and integral skin Domestic refrigeration (DOR) || HC || 100 Commercial refrigeration (COR) || HC Unsaturated HFC || 50 50 Refrigerated trucks, reefer containers (RTRU) || HC Unsaturated HFC || 90 10 Integral foams (INT) || H2O Unsaturated HFC || 50 50 –
Fire protection and technical aerosols Table A_XVI-6 includes technical aerosols[107]
(excluding MDI[108]) and the fire protection
sector. In fire protection, the key abatement option could fully substitute the
use of HFC-23 (GWP 14,800) as fire extinguishing agent in or before 2030. The
use of HFC-227ea, in contrast, can be replaced in most but not all
applications. With regard to technical aerosols, it is
estimated that the market penetration potential of unsaturated HFCs will cover 95%
of the applications. Table A_XVI-6: Key abatement options in the aerosol and
fire protection sectors and their market penetration potential in 2030 Fire protection Technical aerosols || Key abatement options || Market penetration of abatement options (penetration mix) in 2030 (%) Fire protection Equipment with HFC-227ea || FK 5-1-12 || 90 Equipment with HFC-23 || FK 5-1-12 || 100 Technical aerosols || Unsaturated HFCs || 95 –
Electrical switchgear and magnesium die casting Since in magnesium die casting large
facilities (SF6 use >850 kg/y) already were required to
substitute the use of SF6, alternative options for small facilities
are readily available and could reach full market penetration earlier than
2030. In the switchgear sector SF6 is currently the only technical
solution for voltage >52 kV. Below 52 kV, for the so-called medium voltage,
SF6 or air is used at the interface between high and medium voltage
(primary level); at the interface between medium and low voltage (secondary
level) SF6 clearly dominates the market (ca. 98%) but solid
insulation is technically possible today. Table A_XVI-7: Key abatement options in the electrical
medium-voltage secondary switchgear and magnesium casting sectors and their
market penetration potential in 2030 Other sectors || Key abatement options || Market penetration of abatement options (penetration mix) in 2030 (%) Medium voltage secondary switchgear || Solid insulation || 40 Magnesium die casting and recycling || HFC-134a, SO2 || 100 Annex XVII: Assessment of indirect impacts on sales Table
A_XVII.1 Increase in sales compared to baseline (Investments) by
subsector (million €/year) || || || || B || C || D || E Domestic Refrigeration || 0 || 0 || 2 || 0 Commercial hermetics || 81 || 0 || 81 || 71 Condensing units || 753 || 0 || 753 || 602 Centralized systems || 774 || 0 || 774 || 714 Industrial Ref small || 0 || 0 || 67 || 5 Industrial Ref large || 0 || 0 || 499 || 39 Refrigerated Vans || 0 || 0 || 18 || 0 Refrigerated Trucks || 0 || 0 || 142 || 17 Fishing vessels || 0 || 0 || 6 || 0 Cargo ship AC || 0 || 0 || 3 || 0 Passenger ship AC || 0 || 0 || 0 || 0 Bus AC || 0 || 0 || 35 || 0 Truck AC || 0 || 0 || 2 || 0 Moveable AC systems || 0 || 0 || 7 || 7 Split AC systems || 0 || 0 || 158 || 158 Multi split AC systems || 0 || 0 || 70 || 61 Rooftop AC systems || 0 || 0 || 67 || 67 Chillers || 0 || 0 || 339 || 339 Centrifugal chillers || 0 || 0 || 3 || 0 Fire protection 227ea || 0 || 0 || 5 || 0 Fire protection 23 || 0 || 0 || 0 || 0 Aerosols || 0 || 0 || 0 || 0 XPS-152a || 3 || 0 || 3 || 0 XPS-134a || 0 || 0 || 3 || 0 PU other || 0 || 0 || 3 || 0 HFC-23 by-product || 0 || 0 || 0 || 0 SUM || 1611 || 0 || 3039 || 2080 Table A_XVII.2. Change in sales in 2030 if increased investment
costs (and other costs) are fully passed on to consumers (%) || B || C || D || E Condensing units commercial refrigeration || 0.3% || 0.0% || -0.3% || -0.3% Centralized Systems Commercial Refrigeration || 1.8% || 0.0% || -1.8% || -1.8% BUS AC || 0.0% || 0.0% || -0.8% || 0.0% Trucks and trailers AC || 0.0% || -0.4% || -0.1% || 0.0% Single Split Room AC || 0.0% || 0.0% || -0.6% || -0.6% Multi split AC || 0.0% || 0.0% || -0.3% || 0.0% Industrial refrigeration large || 0.0% || 0.0% || 0.5% || 0.5% Chillers || 0.0% || 0.0% || -0.1% || -0.1% Table A_XVII.3. Reduction in sales (investments) compared to Table A_XVII.1.
Second-order effects in million Euros. || || || || || B || C || D || E Domestic Refrigeration || || || || Commercial hermetics || || || || Condensing units || -2.44 || 0.00 || -2.44 || -1.91 Centralized systems || -13.6 || 0.0 || -13.7 || -12.7 Industrial Ref small || || || || Industrial Ref large || 0.0 || 0.0 || 2.6 || 0.2 Refrigerated Vans || || || || Refrigerated Trucks || || || || Fishing vessels || || || || Cargo ship AC || || || || Passenger ship AC || || || || Bus AC || 0.0 || 0.0 || -0.3 || 0.0 Truck AC || 0.0 || 0.0 || 0.0 || 0.0 Moveable AC systems || || || || Split AC systems || 0.0 || 0.0 || -1.0 || -1.0 Multi split AC systems || 0.0 || 0.0 || -0.2 || 0.0 Rooftop AC systems || || || || Chillers || 0.0 || 0.0 || -0.5 || -0.5 Centrifugal chillers || || || || Fire protection 227ea || || || || Fire protection 23 || || || || Aerosols || || || || XPS-152a || || || || XPS-134a || || || || PU other || || || || HFC-23 by-product || || || || SUM || -16.0 || 0.0 || -15.5 || -15.9 Impact main sectors || -1.0% || 0.0% || -0.6% || -0.8% Table A_XVII.3 shows the reduction in
sales. E.g for option D sales of condensing units would go up by 753 million
per year in 2030 (Table A_XV.1). As a result of the increase in costs demand
would be 2.44 million lower and the net increase in sales would be smaller (753
minus 2.44 million €). The impact for the main sectors would be a second order
reduction in the increase in sales of 1% or less. The sectors represent 87 to
95% of the total change in sales. [1] With the exception of e.g. HFC-23 (Trifluoromethane),
which is formed as by-product of HCFC-22 (Chlorodifluoromethane) synthesis [2] Regulation (EC) No 842/2006 on certain fluorinated
greenhouse gases, OJ L161, 14.6.2006, p. 1 ("F-Gas Regulation") [3] Directive 2006/40/EC of the European Parliament and of
the Council of 17 May 2006 relating to emissions from AC systems in motor
vehicles, OJ L161, 14.6.2006, p. 12 ("MAC-Directive") [4] Becken et al. (2010). "Avoiding Fluorinated greenhouse
gass - Prospects for Phasing Out." Umweltbundesamt. Dessau, Germany. www.umweltbundesamt.de/uba-info-medien-e/3977.html [5] TEAP (2009). "Assessment of alternatives to
HCFCs and HFCs and update of the TEAP 2005 supplement report data". Montreal
Protocol. Report of the Technical and Economic Assessment Panel (TEAP). UNEP,
Nairobi. ozone.unep.org/teap/Reports/TEAP_Reports/teap-may-2009-decisionXX-8-task-force-report.pdf
[6] Furthermore, costs of introducing alternatives are
given in Annex VI [7] Danish Ministry of the Environment: Environmental
Protection Agency. "Denmark is going natural – The Danish road towards
natural refrigerants." Brochure, 2011. [8] COM (2011) 581 final. "Report from the
Commission on the application, effects and adequacy of the Regulation on
certain fluorinated greenhouse gases (Regulation (EC) No 842 /2006)" [9] Schwarz et al. (2011) "Preparatory study for
a review of Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases."
Öko-Recherche et al. [10] European Parliament Resolution of 14 September 2011. "A
comprehensive approach to non-CO2 climate-relevant anthropogenic emissions."
P7_TA-PROV(2011)0384. [11] European Parliament resolution of 15 March 2012. "Competitive
low carbon economy in 2050 – EP resolution on a Roadmap for moving to a
competitive low carbon economy in 2050" (2011/2095(INI)), P7_TA-PROV(2012)0086 [12] ozone.unep.org/Meeting_Documents/mop/22mop/MOP-22-9E.pdf
[13] Velders et al. (2009). "The large contribution
of projected HFC emissions to future climate forcing." Proceedings of
the National Academy of Sciences 106(27): 10949-10954. [14] Council Conclusion from 10 October 2011 on Preparations
for the COP17 to the UN Framework Convention on Climate Change and MOP7 of the
Kyoto Protocol in Durban. [15] www.unep.org/ccac/ [16] SKM Enviros (2012). "Further assessment of
policy options for the management and destruction of banks of ODS and F-Gases
in the EU" http://ec.europa.eu/clima/policies/ozone/research/docs/ods_f-gas_destruction_report_2012_en.pdf [17] Clodic et al.
(2011). "1990 to 2010 Refrigerant inventories
for Europe - Previsions on banks and emissions from 2006 to 2030 for the
European Union." Armines/ERIE http://www.epeeglobal.org/refrigerants/F-Gas-review/ [18] http://ec.europa.eu/clima/events/0049/index_en.htm [19] Letter of European Network of the Heads of Environment
Protection Agencies to Commissioners Potoçnik, Heedegaard, Tajani, and
Öttinger. 15. Mai 2012 [20] IPCC, 4th Assessment Report, Climate Change 2007:
Working Group III: Mitigation of Climate Change, chapter 13.3.3 Proposals for
climate change agreements, box 13.7. Scenario category for greenhouse gas concentration
levels of 450 ppm CO2 eq. http://www.ipcc.ch/publications_and_data/ar4/wg3/en/ch13.html [21] COM (2011) 112final: "A roadmap for moving to a
competitive low carbon economy in 2050." http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52011DC0112:EN:NOT [22] See Table 17, page 79 of Impact Assessment "A
roadmap for moving to a competitive low carbon economy in 2050. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2011:0288:FIN:EN:PDF
. [23] See Table 31, page 117 of Impact Assessment "A
roadmap for moving to a competitive low carbon economy in 2050. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2011:0288:FIN:EN:PDF
. [24] IPCC, 4th Assessment Report, Climate Change 2007,
chapter 2.10.2: Direct GWPs. http://www.ipcc.ch/publications_and_data/ar4/wg1/en/ch2s2-10-2.html [25] UNEP (2011). "HFCs: A critical link in
protecting climate and the ozone layer." http://www.unep.org/dewa/Portals/67/pdf/HFC_report.pdf [26] Based on AnaFGas (Schwarz et al., 2011; cited in
footnote No. 9) [27] ODS are also very strong climate gases with high GWPs [28] RAC includes heat pumps. [29] European Commission (2011). "Factsheet: EU
statistics on fluorinated greenhouse gases 2010." DG CLIMA. http://ec.europa.eu/clima/policies/F-Gas/docs/statistical_factsheet_2011_en.pdf [30] US-EPA (2011). "Global Anthropogenic Non-CO2
greenhouse gas Emissions: 1990-2030." EPA 430-D-11-003. U.S.
Environmental Protection Agency, Washington D.C. [31] EEA (2012). "Annual European Union greenhouse gas
inventory 1990–2010 and inventory report 2012". Technical report No 3/2012.
http://www.eea.europa.eu/publications/european-union-greenhouse-gas-inventory-2012
[32] IPCC, 4th Assessment Report, Climate Change 2007:
Working Group I, Summary for Policymakers. [33] IPCC, 4th Assessment Report, Climate Change 2007:
Working Group II, Summary for Policymakers. [34] Shecco (2012). "GUIDE 2012: Natural refrigerants –
market growth for Europe". http://guide.shecco.com/ [35] http://ec.europa.eu/europe2020/priorities/sustainable-growth/index_en.htm [36] http://ec.europa.eu/governance/better_regulation/key_docs_en.htm#_br [37] http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm [38] http://ec.europa.eu/enterprise/policies/sustainable-business/ecodesign/index_en.htm [39] http://ec.europa.eu/energy/efficiency/index_en.htm [40] 3.1€ or less per t of CO2eq abated except for
centralised refrigeration systems (23.7€ per t CO2eq) (see Annex
VII) [41] The relevant standard EN 378 on safety and
environmental requirements for refrigerating, AC and heat pump (RACHP) systems
describes the charge limits, and considers toxicity and flammability, sets
design requirements, where tightness and leak tests are considered together
with safety requirements. It also covers requirements for installation sites
and describes how the refrigeration systems have to be maintained, serviced,
dismantled. This standard is currently under revision. [42] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0370:FIN:EN:PDF [43] In 2030, 18% of the total EU demand of HFCs is
estimated to be inside imported equipment, based on CO2eq (currently 11%). If
imported equipment did not have to face the same supply restrictions on HFCs as
equipment produced in the EU, the share of import and hence uncontrolled supply
of HFCs would likely become even higher. [44] AREA (2010). "Postion paper: Review of Regulation
842/2006 on certain fluorinated greenhouse gass – pre-charged non-monobloc AC
equipment." www.area-eur.be [45] Penetration rates do not fully reach 100% for this
whole sector, but bans may be possible for larger industrial systems above a
certain capacity. See also Becken et al. (2010)4 [46] This is equivalent to 1% of current EU-27 emissions of
F-Gases (as reported in greenhouse gas inventories 2008) or 0.02% of total
EU-27 greenhouse gas emissions without contributions from LULUCF [47] For example domestic refrigeration and small commercial
stand-alone refrigeration equipment. [48] A detailed description of the assumptions in model
AnaFgas is provided in Annex III of Schwarz et al. 2011. A summary is
given in Annex IV. [49] All data in this report are calculated with GWP (GWP)
values from the Fourth IPCC Assessment Report. These GWPs are different from
those values currently used in greenhouse gas inventories, but they will become
mandatory from 2015 onwards. [50] The impacts of enhanced product standards on emission
reductions within a particular timeframe are difficult to quantify as they
depend on market uptake of standardised products and equipment or on the number
of personnel and companies applying the standards. As this supportive measure
is independent from the revision of the F-Gas Regulation, no quantitative
assessment of the impacts was carried out. [51] The highest concern is for TFA due to its persistence
and mild phytotoxicity. A recent study has shown that TFA
concentrations in rainwater in Europe may rise in the future but would in the
worst case still be at least a magnitude lower than observed no-effect levels
on organisms.52 Compared to the latter
study's assumptions (a total conversion of the European automobile fleet to use
an unsaturated HFC that readily decomposes to TFA), future TFA production from
all the policy options discussed in this document would be low. Nonetheless,
the future use of unsaturated HFCs should be closely monitored. [52] Henne et al. (2012). "Future Emissions and
Atmospheric Fate of HFC-1234yf from Mobile Air Conditioners in Europe".
Environmental Science & Technology 46: 1650-1658. [53] Option D was recalculated to take account of measures
on pre-charged equipment. [54] Option C was not analysed with the model as effects are
limited to one application sector only and hence very small for all activity
areas [55] AREA internal survey. "RACHP contractors’
training in the use of low GWP refrigerants". March 2012. [56] Communication from the Commission to the European Parliament,
the Council, the Economic and Social Committee and the Committee of the Regions:
Environmental Agreements at Community Level - Within the Framework of the
Action Plan on the Simplification and Improvement of the Regulatory
Environment. COM(2002) 412 final of 17.7.2002. [57] In case exemptions to the bans should be foreseen in
the implementation, this would probably involve extensive procedures to define
and apply for such exemptions. However such procedures do not need to be
accounted for in the assessment of administrative costs. [58] Southern EU: Bulgaria, Cyprus, Greece, Italy, Malta,
Portugal, Romania, Spain Northern EU: Rest of
EU 27 [59] Ca. 3.5 million units sold in the EU in 2008, projected
to be 10.4 million units in 2030 [60] Personal communication from Oeko-Recherche [61] Option C affects only one
sector. [62] DOE (2004).
Appendix 10 A. Relative price elasticity of demand for appliances. (http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/home_appliances_tsd/appendix_10a.pdf.).
Department of Energy, Washington. Based on: Golder,O and G. Tellis (1998)
Beyond diffusion: an affordability model of the growth of new consumer
durables, Journal of Forecasting, 17, pp 259-280 and D. Revelt and K. Train
(1997) Mixed logit with repeated choices: household choices of appliances
efficiency level, Review of economics and statistics (July). [63] The modelled scenario assumes that
costs of the right to use F-gases are allocated for free and their
(opportunity) costs are not passed on to the final price. Other scenarios were
also modelled (see Annex XIV). [64] Annex III to the Report of the Twenty-Second Meeting of
the Parties to the Montreal Protocol on Substances that Deplete the Ozone
Layer, Bangkok, November 2010. ozone.unep.org/Meeting_Documents/mop/22mop/MOP-22-9E.pdf [65] Shecco (2012). "GUIDE 2012: Natural
Refrigerants – Market Growth for Europe". guide.shecco.com [66] Founded at the same time as the entry into force of the
Danish ban on certain HFC uses, a Danish start-up, founded by 2 persons in
2006, succeeded in becoming a leading brand for CO2 refrigeration
technology. [67] AREA, the European organisation of refrigeration, AC
and heatpump contractors, who represent ca. 9000 servicing companies that are
mostly SMEs and micro-enterprises, is already working on guidance documents and
qualification requirements related to the use of low GWP refrigerants. www.area-eur.be/_Rainbow/Documents/AREA%20-%20PP%20Low%20GWP%20refrigerants%20(110629).pdf
[68] There are 274,000 food and
drink companies in Europe, 99.1% of which are SMEs. SMEs also accounted for
48.7% of turnover and 63% of employment in the food and drink industry in 2010.
[69] The unsaturated HFC-1234ze, which is considered not
only a possible alternative refrigerant (for centrifugal chillers) and aerosol
propellant but also an alternative blowing agent for XPS foam, is not flammable
at room temperature (<30°C). However, the process temperature on foam
blowing is significantly higher than 30°C so that adequate safety measures must
be taken in the factory, comparable to those when hydrocarbons/organic solvents
are used. [70] unfccc.int/ghg_data/ghg_data_unfccc/items/4146.php [71] Decision 280/2004/EC
of the European Parliament and of the Council of 11 February 2004 concerning
a mechanism for monitoring Community greenhouse gas emissions and
for implementing the Kyoto Protocol. [72] The abolition of the threshold had been considered but
was discarded in Schwarz et al. 2011 as the impact on the accuracy of
reporting was found to be negligible and would not justify the additional
administrative burden. [73] F-Gas producers indicated that lead times of 10 years
are needed for an adequate planning process. [74] Coincidentally with the entry into force of the Danish
ban on certain HFC uses, a Danish start-up, founded by 2 persons in 2006,
succeeded in becoming a leading brand for CO2 refrigeration
technology. [75] AREA, the European organisation of refrigeration, AC
and heat pump contractors, who represent ca. 9000 servicing companies that are
mostly SMEs and micro-enterprises, is already working on guidance documents and
qualification requirements related to the use of low GWP refrigerants. http://www.area-eur.be/_Rainbow/Documents/AREA%20-%20PP%20Low%20GWP%20refrigerants%20(110629).pdf
[76] There are 274,000 food and
drink companies in Europe, 99.1% of which are SMEs. SMEs also accounted for
48.7% of turnover and 63% of employment in the food and drink industry in 2010.
[77] A detailed description of the assumptions in model
AnaFgas is provided in Annex III of Schwarz et al. 2011. [78] Considering an annual output of a typical production
line of ca. 75,000 cubic metres of foam, and a wholesale price of € 300
per cubic metre foam board, the annual production is worth over 20 M€. Compared
to this total value, the additional costs of € 98,000 account for only
0.5% of the annual output value of products and thus still represents
only a small financial load to the operators. [79] P. Quirion and D. Demailly (2008), "-30% de
CO2 = + 684000 emplois, l'équation gagnante pour la France", study for
WWF France, http://www.centre-cired.fr/perso/quirion/quirion_emploi_wwf.pdf
[80] ‘Fluorinated
greenhouse gass’ means hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and
sulphur hexafluoride (SF6) as listed in Annex I and preparations containing
those substances, but excludes substances controlled under Regulation (EC) No
2037/2000 of the European Parliament and of the Council of 29 June 2000 on
substances that deplete the ozone layer. ‘Hydrofluorocarbon’
means an organic compound consisting of carbon, hydrogen and fluorine, and
where no more than six carbon atoms are contained in the molecule. [81] Annex III to decision -/CP.17 on “the Revision of the
UNFCCC reporting guidelines on annual inventories for Parties included in Annex
I to the Convention” and decision -/CMP.7 on “greenhouse gass, sectors and
source categories, common metrics to calculate the carbon dioxide equivalence
of anthropogenic emissions by sources and removals by sinks, and other
methodological issues” [82] ODS Regulation: “No amount recovered, recycled or
reclaimed shall be considered as production“. [83] 8 producers, 70 importers and 68 exporters submitted
reports, some companies carry out two or all activities. [84] It must be noted that Table A_X-2
does not reflect the impact of a phasedown scheme without addressing HFCs in
imported pre-charged equipment. It is likely that that import shares would increase
even more in this case. [85] See Regulation (EC) No 2037/2000 on substances that
deplete the ozone layer, OJ L 244, 29.9.2000, p. 1. [86] See Article 10 of Regulation (EC) No 1005/2009 on
substances that deplete the ozone layer, OJ L 286, 31.10.2009, p. 1. [87] Commission Regulation (EU) No 537/2011 of 1 June 2011
on the mechanism for the allocation of quantities of controlled substances
allowed for laboratory and analytical uses in the Union under Regulation (EC)
No 1005/2009 on substances that deplete the ozone layer, OJ L 147, 2.6.2011, p.
4. [88] Commission Regulation No 1493/2007 of 17 December 2007 establishing,
pursuant to Regulation (EC) No 842/2006 of the European Parliament and of the Council,
the format for the report to be submitted by producers, importers and exporters
of certain fluorinated greenhouse gass, OJ, 18.12.2007, L332, p. 7. [89] Bans are possible earlier for larger industrial systems
above a certain capacity. See also Becken et al. (2010)4 [90] http://ec.europa.eu/governance/impact/commission_guidelines/docs/iag_2009_annex_en.pdf [91] European Commission 2002: Communication from the
Commission to the European Parliament, the Council, the Economic and Social
Committee and the Committee of the Regions - Environmental Agreements at
Community Level Within the Framework of the Action Plan on the Simplification
and Improvement of the Regulatory Environment, COM(2002) 412 final of
17.7.2002. [92] So far only one facility for destruction of HFC-23
emissions from halocarbon production in Europe exists. Therefore the
administrative costs for a voluntary agreement are negligible. [93] http://ec.europa.eu/clima/policies/ozone/ods/index_en.htm [94] Telephone conversation with Austrian EPA, 22.12.2011. [95] Schwarz/Gschrey
(Öko-Recherche): Service contract to assess the feasibility of options to reduce
emissions of SF6 from the EU non-ferrous metal industry and analyse their
potential impacts. [96]http://ec.europa.eu/clima/policies/F-Gas/docs/report_en.pdf [97]http://ec.europa.eu/clima/consultations/0011/index_en.htm [98]http://ec.europa.eu/governance/impact/commission_guidelines/docs/iag_2009_annex_en.pdf [99] For a detailed model description see: www.GEM-E3.net [100] Hoglund-Isaksson et al. (2010). "Potentials and
costs for mitigation of non-CO2 GHG emissions in the European Union until
2030." IIASA, Laxenburg. Report to the European Commission. http://ec.europa.eu/clima/policies/package/docs/non_co2emissions_may2010_en.pdf [101] If not otherwise stated, the GWP values in this report are from the
4th IPCC Assessment Report (2007). [102] Penetration rates are assessed not only for refrigerant using
systems but also for fire protection equipment, foams, and aerosols.
Refrigerants, however, are by far the largest application of HFCs. [103] Honeywell, the manufacturer of HFC-1234ze, stated that in 2011
HFC-1234ze was “commercially available”. It should be noted that by May 2011
this unsaturated HFC was produced at a “small-scale production facility”. In
May 2011 the company announced to triple the capacities (Honeywell News
Release, May 12, 2011). [104] For example see “Remark on the replacement potential of hydrocarbon refrigerants in split room air conditioners” following
the Data Input Sheet “Stationary AC – single split type”
in annex IV which explains in detail the penetration
rate assessment for room air conditioners with R-290. Room air conditioners
with R-290 are the abatement technology with the highest individual HFC
reduction potential in the study. It should be noted that the assumptions for
the relevant variables of R-290 room air conditioners are in line with the
draft Commission Regulation implementing Directive 2009/125/EC of the European
Parliament and of the Council with regard to ecodesign requirements for air
conditioners and comfort fans. [105] In the sub sectors of room air conditioners <12 kW (movable and
single split systems) the additional reduction effect from inclusion of HFC-32
lasts only until 2029 because in 2020 the penetration mix of low-GWP
technologies has reached 100% (lifetime 10 years). [106] Abatement options for ships and rail vehicles have been assessed
for Europe only but not for the remaining A2 countries and for A5 countries, due
to very limited data availability. [107] There is currently no definition of technical aerosols in the legal
text. FEA (Fédération Européenne des Aerosols) suggests the following
definition: Technical aerosols are aerosol dispensers used in maintenance,
repair, cleaning, testing, disinsecting, manufacturing, installation and other
applications where a non-flammable formulation is required for safety reasons.
(Communication to Öko-Recherche, 15 May, 2011). This definition also separates
novelty aerosols from “technical” aerosols. [108] HFCs are used in Metered-Dose Inhalers for the treatment of asthma
and other respiratory diseases. Health aspects related to the application of
MDIs as compared to potential abatement technology need specific investigation.