Explanatory Memorandum to COM(2012)643 - Fluorinated greenhouse gases - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2012)643 - Fluorinated greenhouse gases. |
|---|---|
| source | COM(2012)643  |
| date | 07-11-2012 |
The international scientific consensus calls for limiting the global temperature increase to 2˚C to prevent undesirable climate effects. In respect of this objective, the European Council has called for a reduction of greenhouse gas emissions in the EU by 80-95 % by 2050 compared to levels in 1990 in the context of similar action by developed countries. The EU Low Carbon Economy Roadmap shows that, in order to achieve this objective at the lowest cost, all sectors and greenhouse gases must contribute including fluorinated greenhouse gases (F-gases) whose warming potential can be up to 23,000 times more potent than carbon dioxide (CO2).
In September 2011 the Commission published a report on the application of Regulation (EC) No 842/2006. It concluded that the Regulation could deliver significant emission reductions if it was further improved and fully applied. It also stated that more needed to be done to further reduce F-gas emissions in the EU. By ensuring that F-gases are replaced by safe alternatives with no or a lower impact on the climate, yearly emissions expressed in CO2 equivalent could be cut by two-thirds by 2030 at relatively low cost.
Clearly early action to exploit relatively cheap abatement options for F-gases will avoid potentially higher costs associated with the reduction of other greenhouse gases in other industrial sectors. However, some stakeholders have stated that it is difficult to market 'greener' alternative technologies under prevailing market conditions. In Denmark on the other hand, where stricter national rules on F-gases apply, start-ups and SMEs have successfully innovated and marketed new green technologies, turning them into market leaders.
replace Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases in order to ensure a more cost-efficient contribution to achieving the EU’s climate objectives by discouraging the use of F-gases with a high impact on the climate in favour of energy-efficient and safe alternatives, and further improving the containment and end-of-life treatment of products and equipment that contain F-gases;
enhance sustainable growth, stimulate innovation and develop green technologies by improving market opportunities for alternative technologies and gases with a low impact on the climate;
bring the EU into line with the latest scientific findings at international level, as described in the Fourth Assessment Report of the UN’s IPCC, e.g. with regard to the substances covered by this regulation and the calculation of their global warming potential (GWP);
help to bring about a consensus on an international agreement to phase down hydrofluorocarbons (HFCs), the most relevant group of F-gases, under the Montreal Protocol;
simplify and clarify Regulation (EC) No 842/2006 to reduce administrative burden in line with the Commission’s commitment to better regulation.
According to the cost-effective pathway to decarbonise the EU economy, emissions of F-gases should be reduced in the order of 70-78% by 2050 and by 72-73% by 2030 at a marginal abatement cost of approximately €50 per tonne CO2 equivalent.2 In total, F-gases account for 2% of all greenhouse gases in the EU today but have a much more potent atmospheric warming potential than CO2. They are used in a variety of refrigeration and air‑conditioning equipment, in insulation foams and electrical equipment, in aerosol sprays, as solvents or in fire protection systems. Emissions occur mainly during emissive uses (of aerosol sprays or solvents for example) or due to leakage during the operation and disposal of products and equipment that contain F-gases.
Most F-gases have been developed by industry to replace ozone-depleting substances (ODS) that are being phased out under the Montreal Protocol. Due to greater wealth and population growth, more products and equipment that rely on F-gases or ODS are sold. As a result, there has been a sharp increase worldwide in the production and use of F-gases since 1990 and will, if unaddressed, lead to considerable emissions into the atmosphere. Since products and equipment that contain F-gases often have a long life, if no action is taken today, high emissions that could have been prevented will continue for decades to come.
The current F-Gas Regulation focuses mainly on the containment and end-of-life processing of products and equipment that contain F-gases. Current EU F-gas policies are expected to stabilise F-gas emissions in the EU, if shortcomings in the application of certain measures are rectified. However, it is unlikely that there will be a reduction of emissions in absolute terms unless additional measures are implemented.
There are currently only a few measures in place to avoid the use of F-gases. Nevertheless, today it is possible, in almost all sectors in which F-gases are used, to fully or partially replace them with alternatives that are safe and at least as energy-efficient. Policy measures must, however, take into account the fact that the numerous types of products and equipment are concerned and that the technical feasibility and costs and benefits of replacing F-gases may depend on the size of the product or equipment and on where it will be used.
Internationally, the growing problem of F-gas emissions is receiving attention. In 2009, 2010, 2011 and 2012, several parties to the Montreal Protocol submitted proposals to phase down the supply and consumption of HFCs worldwide. The envisaged measures under this Regulation would anticipate a global phase-down along the lines of the current proposals under the Montreal Protocol and would thus prepare the EU for such future obligations. The EU has supported these proposals as a complement to action to mitigate climate change under the United Nations Framework Convention on Climate Change (UNFCCC)[8]. Little progress has been made in the negotiations so far because China, India, Brazil and other countries have refused to discuss this issue under the Montreal Protocol. However, the United Nations Conference on Sustainable Development (Rio+20) recently expressed support for a gradual phase-down of the consumption and production of HFCs[9].
In addition, the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants was established in 2012. The G8, the United Nations Environmental Programme (UNEP), the World Bank and the European Commission have joined it. A priority area for action are emissions of HFCs[10]. The European Parliament has also repeatedly called for ambitious action on F‑gases, in particular HFCs[11].
Current EU legislation on F-gases consists of two main legislative acts:
Regulation (EC) No 842/2006 focusing on preventing leakage during use (containment) and at the end of the life of (mostly) stationary equipment and on a limited number of F-gas bans on narrowly defined niche applications (the F-Gas Regulation),
Directive 2006/40/EC of the European Parliament and of the Council introducing restrictions on the use of F-gases with global warming potential (GWP) of more than 150 in the air-conditioning systems of new motor vehicles (the MAC Directive).
Regulation (EC) No 842/2006 is complemented by ten Commission Regulations establishing the format for reports[12], the form of labels and additional labelling requirements[13], standard requirements for checking leakage[14], [15], requirements for training and certification programmes[16], [17], [18], [19], [20] and the format for notifying them[21].
The right of the European Union to act in this area is set out in Articles 191 and 192 of the Treaty on the Functioning of the European Union (TFEU). Article 191 explicitly refers to the objective of combating climate change as part of the EU’s environmental policy. Action in this area fully respects the principle of subsidiarity. Climate change is a cross-border issue on which EU-wide action is needed, in particular since the EU has a common emission reduction target.
The cost-efficient emission reductions planned are consistent with the pathway outlined in the 2050 EU Low Carbon Roadmap. Support for new alternatives will help maintain the competitiveness of the European economy and support green growth in particular, in line with the EU 2020 priority of sustainable growth[22]. Measures to safeguard the interests of SMEs are introduced along ‘think small first’ lines[23], while special attention is paid to impacts on energy efficiency to ensure consistency in line with work the EU has done to encourage ecodesign[24] and energy efficiency[25]. Finally, the proposal also aims to simplify the legislation and keep administrative burden for public (EU or national) authorities and companies to a minimum.
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATION
- Problem description and objectives
- In this context, this proposal aims to
- Background
- Consistency with other policies and objectives of the Union
- Consultation of interested parties and the collection and use of expertise
- Impact assessment
- Summary of the proposed action
- Table 1. Summary overview over new equipment restrictions
- Legal basis
- Subsidiarity principle
- Proportionality principle
- Choice of instruments
The Commission has gathered extensive technical advice from a number of expert studies[26], [27], [28], [29] including a comprehensive preparatory study5 for the review of Regulation (EC) No 842/2006. A 47-member group of experts from the various industry sectors, Member States and NGOs was asked to provide guidance and technical input for this study. The Joint Research Centre (JRC) also did a macro-economic analysis of policy options.
The Commission carried out a broad consultation with stakeholders, including a three‑month public online consultation from 26 September to 19 December 2011 and an open hearing in Brussels on 13 February 2012. Three quarters of the 261 stakeholders who replied in the online consultation were from industry. With regard to the most adequate policy approaches in the absence of a worldwide phase-down of HFCs, less than 2 % of stakeholders replied ‘no further action’. The three most frequently chosen policy options were strengthening measures for containment and recovery, voluntary agreements and quantitative limits on placing HFCs on the EU market (phase-down). Many respondents thought several policy measures were appropriate.
The stakeholder hearing, attended by over 130 stakeholders, revealed that a large majority of industry preferred or could live with a phase-down of the supply of F-gases. This would give it some flexibility in cases where alternative technologies were not yet considered suitable. In contrast, they thought that bans on new equipment were too rigid or that they required a complex set of exemptions. For commercial users of F-gas equipment, it was crucial that existing equipment would not become redundant. NGOs and stakeholders from industry who are working with alternative technologies thought that it was essential to have bans with minor exemptions. They regarded a phase-down as a complement to bans. A few stakeholders wanted to focus only on better application of the Regulation. At that stage, Member States had no official positions but indicated support for a phase-down. A network of Environmental Protection Agencies[30] recommended combining a phase-down mechanism with bans to reinforce the phase-down.
The Commission did an impact assessment of policy alternatives in terms of their effectiveness in achieving the policy objectives and their environmental, economic and social impacts on stakeholders. A wide range of policy measures to complement existing measures were considered. The final options contained only measures that were shown to deliver substantial emission savings at low abatement costs and to be consistent with other EU policies.
Full application of the F-Gas Regulation was set as the baseline option. Four other policy options were assessed in detail:
(a) Voluntary agreements;
(b) Extended scope for containment and recovery measures;
(c) Quantitative limits on the supply of HFCs (phase-down);
(d) A ban on placing certain products and equipment that contain F-gases on the EU market.
The methodological basis for the impact assessment was a detailed analysis of the feasibility of introducing safe, energy-efficient alternatives in the 28 main sectors that use F-gases. Since alternative technologies were only taken into account if they were considered at least as energy-efficient as conventional F-gas technologies, indirect emissions from electricity consumption were inherently addressed from the outset.
Impacts at different stages in the production chain and at different stages of use were considered, i.e. on producers of chemicals; producers of products and equipment; wholesalers; industrial users of products and equipment; companies that service equipment and final consumers.
The impact assessment showed that a phase-down of HFCs that introduces gradually lower limits until 2030 for the amounts of these F-gases to be put on the market in the EU would deliver the most emission savings, reducing today’s emissions by two thirds by 2030 (roughly 70 million tonnes of CO2 equivalent). Some restrictions on the use of F-gases are appropriate, in particular to safeguard the integrity of the phase-down and to target F-gases not covered by the phase-down. Measures on containment and recovery should be extended to some modes of transport. Together, these options would most stimulate innovation and the development of green technologies. Their cost to the economy and society as a whole would be low (a maximum effect on GDP of -0.006 %), while giving industry flexibility. An emission reduction of two thirds would be in line with the current proposals under the Montreal Protocol and prepare EU industry for a phase-down. It would lead to cost reductions due to higher market penetration and to economies of scale for alternative technologies, thus helping to reach an agreement on the proposals under the Montreal Protocol.
Administrative costs can be kept relatively low (total administrative costs of around two million euro a year for a phase-down). This is because the reporting scheme under Regulation (EC) No 842/2006 already provides most of the data needed to implement any policy options in the future.
The proposal maintains the current provisions of the F-Gas Regulation, with adjustments to ensure better implementation and enforcement of the legislation by national authorities. Some containment measures have also been extended to refrigerated trucks and trailers. Annex IX provides in a correlation table an overview on how the existing provisions have been integrated in the proposed regulation.
The most important new measure is the introduction of quantitative limits on the supply of bulk HFC substances in the EU, decreasing over time. This phase-down is complemented by measures ensuring that quantities used in products and equipment are also covered by this mechanism.
The phase-down mechanism involves a gradually declining cap on the total placement of bulk HFCs (in tonnes of CO2 equivalent) on the market in the EU with a freeze in 2015, followed by a first reduction in 2016 and reaching 21 % of the levels sold in 2008–11 by 2030. Producers of products and equipment who face a restricted supply of F-gases will switch to alternative technologies where feasible.
The phase-down mechanism is based to a large extent on the experience gained from phasing down the consumption of ODS. Companies that place bulk HFCs on the EU market must have rights to place bulk substances on the EU market for the first time. The Commission allocates free quotas to companies based on past reporting data, with a reserve for new entrants. Companies must make sure that they have enough rights to cover their actual placing of products and equipment on the market. They may transfer quotas among themselves. The Commission checks compliance the following year, with independent verification of reports. Around 100 companies are expected to participate and a threshold ensures that companies that only place small quantities on the market are exempted.
HFCs imported in pre-charged equipment should also be counted under the phase-down and so complementary measures are indispensable to tackle these gases to ensure the environmental integrity[31] of the phase-down mechanism and a level playing field in the market. Therefore, non-hermetically sealed HFC appliances would still be able to be produced in, or imported into, the EU but they would have to be filled at the place of installation.[32] Similarly, the placing on the market of movable air conditioning containing HFCs will be banned from 2020. A few additional bans are introduced to underpin the phase-down mechanism and restrict the use of other F-gases not covered by the mechanism and which have been found to be cost-effective in relation to the overall required level of emissions reduction. See table 1 for overview.
Products and equipment | Date of prohibition
Use of HFC-23 in fire protection systems and fire extinguishers| 1 January 2015
Domestic refrigerators and freezers with HFCs with GWP of 150 or more| 1 January 2015
Refrigerators and freezers for commercial use (hermetically sealed systems)| 1 January 2017 for HFCs with GWP of 2500 or more 1 January 2020 for HFCs with GWP of 150 or more
Movable room air-conditioning appliances (hermetically sealed) with HFCs with GWP of 150 or more| 1 January 2020
In addition, recharging of existing refrigeration equipment with a charge size over 5 tonnes of CO2 equivalent with HFC of very high GWP (>2500) will not be permitted from 2020 onwards as more adequate and energy efficient drop-in refrigerants of lower GWP are already widely available on the market.
Restrictions on the use of SF6 in magnesium die casting is extended also to facilities using less than 850 kg per year as technological progress has rendered such use obsolete.
Additional reporting obligations should enable monitoring of the use of F-gases that are not covered by current legislation.
The primary objective of the Regulation is to provide a high level of protection for the environment, in particular by combating climate change. This proposal is therefore based on Article 192 of the Treaty on the Functioning of the European Union.
The objectives of the proposal cannot be sufficiently achieved by the Member States. The EU will better achieve the objectives for the following reasons.
Protecting the climate system is a cross-border issue. Individual Member States cannot solve the problems alone. The scale of the problem demands EU‑wide action as well as action worldwide. The proposal also aims to create the legal framework for implementing an international agreement on the phase-down of HFCs, to which the EU would be party. The agreement is currently under discussion at international level.
The Regulation provides for banning the placing on the market and the use of certain products and equipment that contain F-gases. It is therefore relevant to the functioning of the internal market.
The proposal focuses on amending and complementing EU legislation and on strengthening some provisions to improve its implementation and enforcement by Member States.
It therefore complies with the subsidiarity principle.
The proposal complies with the proportionality principle. The measures are based on a thorough assessment of their cost-efficiency. The thresholds for acceptable abatement costs are in line with the Low Carbon Roadmap[33], setting out the overall strategy to combat climate change. Sufficiently long transition periods allow the sectors concerned to adapt in an economically efficient way.
Where restrictions on certain F-gas applications are envisaged, the proposal ensures that technically and economically feasible alternatives are available. If under particular circumstances this is not the case, it allows derogations to be granted.
No detailed provisions are proposed in areas where the objectives might be better achieved by action in other policy areas, for example by legislation on waste or ecodesign. This is to avoid overlaps that might lead to the unclear allocation of responsibilities, creating an additional burden for public authorities and companies.
The legal instrument chosen is a Regulation because the proposal aims to replace and improve the existing Regulation and because the phase-down mechanism should build on the system established at EU level for the phase-down of ozone depleting substances. This system has proven to work efficiently. Any change to the system would unduly burden both Member States and the companies active in this sector.
The proposal has no incremental impact on the budget of the European Union.