HCFC Phase-out Management Plans

Hydrochlorofluorocarbons (HCFCs) have always been considered as an interim solution to Chlorofluorocarbons (CFC) Phase-out, because of their lower Ozone Depleting Potential (ODP) which is between 5-10% when compared to CFCs. While the Global Warming Potential (GWP) of HCFCs is high (600-2,200 CO₂-equivalent), it is much lower than that of CFCs (6,000-10,600 CO₂-equivalent).

The majority of HCFCs have a high GWP. Their phase-out through the introduction of lower GWP alternatives will therefore contribute significantly to climate change mitigation. Depending on the alternative selected, this contribution can be very significant or can be so deleterious and of such magnitude as to nullify the efforts a country is undertaking via other voluntary actions, such as efficient lighting or appliance replacement programmes to achieve energy savings.

In 2007, the Parties to the Montreal Protocol agreed to accelerate the phase-out of HCFCs (initially targeted for 2040) largely because of the substantive climate benefits this would bring about. Parties operating under the Montreal Protocol’s Article 5(1) (mostly developing countries) may receive financial assistance from the Multilateral Fund for the implementation of the Montreal Protocol (MLF) to formulate their overarching strategy and prepare HCFC Phase-out Management Plans (HPMPs). The control steps under the adjusted Montreal Protocol for these parties are: i) “freeze” of HCFC production and consumption by 2013 (the baseline being the average of 2009 and 2010); ii) reduction of 10% by 1 January 2015; iii) 35% reduction by 2020; iv) 67.5% reduction in 2025; v) 97.5 reduction by 2030; and vi) 100% phase-out by 2040.

Currently, UNDP is assisting developing countries and countries with economies in transition to comply with the HCFC consumption freeze and the 10% reduction targets. As the lead agency in 30 developing countries UNDP is supporting the preparation of their HCFC Phase-Out Management Plans (HPMPs). Combined, these countries represent 77% of the global consumption of HCFCs.

UNDP also supports countries in the preparation of investment projects for the conversion of manufacturing processes to non-HCFC alternatives in the foam, refrigeration and air-conditioning, solvents and other sectors.

HCFC elimination in those sectors can bring energy efficiency gains and significant climate benefits through proper selection of alternatives.

In short, UNDP’s country assistance contains the following main elements:

• Institutionl Capacity Development –Analyzing existing administrative practices and institutional structures controlling ODS, and specifically HCFCs, by assessing gaps, deficiencies and needs; and recommending changes and identifying resources available/necessary to meet Montreal Protocol obligations.
• Assessment and Demonstration of HCFC Alternative Technologies - Providing technical support and information with respect to alternative technologies and substances, taking into consideration, inter alia, ozone, climate benefits and energy efficiency; facilitating engagement of industrial and commercial enterprises in discussions related to alternative technology developments/assessments; assessing new low carbon technologies for use in developing countries; and promoting South-South cooperation.
• Technical Assistance and Technology Transfer – Support to countries in undertaking (sub)sector-level HCFC production and consumption surveys, technology needs assessments and situation analyses on HCFC import, export/re-export and distribution channels; forecasting HCFC production and consumption patterns, undertaking prioritization with respect to HCFC phase-out and developing comprehensive strategies and action plans for HCFC phase-out management looking into low-carbon national and sectoral strategies.
• Maximizing Climate Benefits in the Refrigeration and Air Conditioning – Careful analysis and calculation of net impact to climate of alternative technologies and supporting countries to combine and sequence the funding to implement the transformation to technologies which will maximize climate benefits of planned HPMP.
• Policy and Regulatory Interventions – Analyzing current compliance status and preparing consumption-based future compliance projections; undertaking analysis of legal and regulatory frameworks governing ODS and specifically HCFCs, such as licensing and import/export controls; identifying gaps and deficiencies in existing regulatory frameworks and recommending changes to maintain consistency with Montreal Protocol obligations.
• Increased Access to Funding – Supporting countries in securing financial support from the MLF to meet compliance with the Montreal Protocol, and assisting in identifying and mobilizing additional financial resources to address climate co-benefits from the GEF, carbon markets, bilateral donors, and other sources.

What countries can do to maximize climate benefits of HCFC phase-out?

Agreements adopted at the United Nations Climate Change Conference in Cancun, Mexico (December 2010) encourage developing countries to formulate low-carbon development strategies or plans in the context of sustainable development. It is important that countries take into account the HCFC phase-out work when developing their low-carbon strategies and plans. This will allow countries not only control potent greenhouse gases but also utilize the HCFC phase-out as a step towards transformation to green economy.

As the HCFC phase-out will lead to the need to use alternative substances, the real impact on climate will be subject to the success or failure of the selection of alternatives and the pace of their introduction in the country. In addition, a successful strategy to promote the introduction of climate-friendly alternatives as well as control of high GWP technology introduction in the country is of essence. . For example, HCFC-141b, which is a substance used commonly in foam products, has a GWP of 713 (IPCC SROC 2005). The enterprise could select to replace HCFC-141b by different available alternatives which have GWPs that can vary from over 1,000 down to less than 20. Thus, if alternative substances with higher GWP are introduced and no disincentives are put in place to avoid their use in the country, there is a large risk of having a negligible benefit on climate and/or an increased level of CO₂-eq emissions.

Consequently, the net effect in climate change mitigation achieved by the HCFC phase-out will largely depend on the alternative substances that are phased in and on the country’s ability to pass and enforce regulatory measures. In addition, control on imports of equipment containing HCFCs and high GWP alternatives require monitoring. Economic disincentives also need to be put in place to reduce demand for such imports.

In particular, in the refrigeration and air conditioning servicing sectors, future consumption of HCFCs or alternatives will be subject to the refrigerant contained in the equipment being imported today and in the next five years. If a country does not carefully control the type of equipment being introduced into the market, it could inadvertently increase the future demand of high GWP substances to maintain this equipment in the future. This is particularly relevant considering that many of these appliances are imported.

In order to protect the ozone layer as well as mitigate climate change, important actions by countries are needed:

• Ensure proper support to the implementation of the HPMP, in particular in the regulatory aspects, in order to guarantee that timely action is taken to achieve compliance with the Montreal Protocol.
• Consider net climate impact both due to direct and indirect emission reductions using industry-standards tools such as Life-Cycle Climate Performance (LCCP). LCCP takes into account both direct and indirect emissions of CO₂ throughout the life cycle - from "cradle to grave" - originating in all components and the chemical constituents of the refrigerating plant.
• Consider economic/fiscal instruments (tax to high GWP alternatives, duties, etc.) to ensure the reduction of future demand of high GWP substances to serve equipment. Some examples of effective regulatory measures established by different countries during the CFC phase out era are available.
• Consider the possibility to account the impact in reduction of CO₂-eq emissions of phasing out HCFCs in the low-carbon development strategies and plans and associated mitigation actions.
• Broaden the partnership with donor community for mobilization of resources to maximize climate co-benefits of HCFC phase-out.