India s Challenges of an HFC Phase Down

Size: px

Start display at page:

Download "India s Challenges of an HFC Phase Down"

Erika Payne
6 years ago
Views:

1 Sponsored by The Stanley Foundation and the Lyndon B. Johnson School of Public Affairs, University of Texas at Austin May 27-28, 2015 Key Regional Actors and Sector Opportunities for International Climate Change Cooperation University of Texas at Austin India s Challenges of an HFC Phase Down by Anjali Jaiswal, Bhaskar Deol, and Shannon Dilley NRDC This Working Paper was prepared for Key Regional Actors and Sector Opportunities for International Climate Change Cooperation. Participants neither reviewed nor approved this paper; the views expressed are the personal views of the author and not necessarily those of the Stanley Foundation or the Lyndon B. Johnson School of Public Affairs, University of Texas at Austin. This paper is in draft form and has not been edited for publication. The author's affiliation is listed for identification purposes only.

After six years of gridlock, the Indian government recently joined over 100 countries in proposing an amendment to the Montreal Protocol to phase down powerful heat-trapping gases known as

2 After six years of gridlock, the Indian government recently joined over 100 countries in proposing an amendment to the Montreal Protocol to phase down powerful heat-trapping gases known as hydrofluorocarbons (HFCs). While HFCs are only one or two percent of today s greenhouse gas inventory (on a carbon dioxide equivalent basis), scientists project that HFCs could account for 20 percent or more of the world s heat-trapping burden by This would erase the climate benefits already delivered by the Montreal Protocol. Phasing down HFCs is important because countries will be meeting in Paris, France in December 2015 to discuss climate change at the 21st session of the Conference of the Parties (COP-21). HFCs have a global warming potential (GWP) that is thousands of times greater than carbon dioxide (CO 2 ). For example, the current default refrigerant, HFC-410A has a GWP that is 2088, compared to CO 2 with a GWP of one. This has the potential to contribute to 32 percent of the total global warming impact in India by It will be hard to address climate change at the COP-21 without addressing HFCs. If present trends continue, a perfect storm of regulatory and economic forces will drive up HFC use dramatically in India and other rapidly developing countries. India and other developing countries are scheduled to begin phasing out current refrigerants that are largely used in air conditioners called hydrochlorofluorocarbons (HCFCs) under the Montreal Protocol because those chemicals deplete the stratospheric ozone layer. However, air conditioning demand is booming as living standards rise for tens of millions of Indian citizens. Room air conditioner sales in India are growing at 30 percent per year and the total number of units in use in India may reach 200 million nearly 10 times the current number by The exponential growth of HFCs is significant because India is prone to the adverse effects of climate change. Not only has India already experienced increasing temperatures and droughts, but it also has experienced variable regional monsoons and increased sea level rise. The amplified heat waves have already resulted in the deaths of thousands of Indians. The increasing temperatures will only increase the use of room air conditioners, resulting in a continual feedback loop. Choices made in the next few years will shape whether Indian consumers, companies and government authorities can turn the challenges of room and vehicle air conditioning expansion into a business advantage and national opportunity while limiting climate change, improving air quality, and making air conditioning more efficient and less costly to operate. The Indian room air conditioning companies have an opportunity to leapfrog and phase down unsustainable technologies based on HFCs and move to a future based on climate-friendly refrigerants and energy-efficient equipment designs.

3 The issues raised by India and other developing countries have been voiced in the past and can be broadly classified as legal, technical and financial in nature. Much progress has been made in discussing these issues in domestic, bilateral and international forums. Legal Aspects For several years, the key legal issue posed by India has been that the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol should govern HFCs, not the Montreal Protocol because HFCs are a greenhouse gas. While these climate treaties address the emissions of HFCs and other greenhouse gases, they do not address production and consumption of HFCs. In addition, the Clean Development Mechanism (CDM) under the UNFCCC gave controversial credits for developing country destruction of HFC-23, a powerful heat-trapping by-product of making the refrigerant HCFC-22. The more effective approach would be to include HFCs under the Montreal Protocol. HFCs fall under the jurisdiction of the Montreal Protocol because it requires the safety of replacement chemicals and HFCs were introduced to replace HCFCs. The Montreal Protocol has a 25-year proven track record of directly curbing the production and consumption of a wide range of industrial gases, nipping those problematic pollutants in the bud. With India s recent proposed amendment to the Montreal Protocol, this issue seems to have been resolved. However, a few issues remain. At the last set of meetings, the parties to the Montreal Protocol were discussing other possible arrangements for mutual support between the treaties. Some parties including the United States (U.S.) and European Union (EU) take a position that the Montreal Protocol and the climate treaties are independent and autonomous regimes, meaning that the parties are free to take up HFC controls under the Montreal Protocol without any affect on the UNFCCC or the Kyoto Protocol. The dominant view appears to be that if the parties could agree to an amendment that brings HFCs under the purview of the Montreal Protocol, it would then have legal autonomy to carry out its agreed mandate independent of the climate treaties. Technical Aspects India and other countries have raised concerns about the existence of HFC alternatives. Concerns include managing flammability risks associated with some alternatives, finding alternatives that work adequately at high ambient temperatures, and finding alternatives that can be safely used in densely packed urban environments such as India s megacities, like New Delhi and Mumbai. While there is not a single technology solution, technical experts involved in the Montreal Protocol discussions assert that a basket of alternatives exist for different applications. Some are available today and others are on the horizon. All of the proposed amendments provide a flexible phase down with financial and technological assistance through the Multilateral Fund (MLF) to address the needs of different countries. The tables below from the paper Cooling India with Less Warming summarize the availability of key alternatives on the market. Many more alternatives and blends are under development.

4 Table 1: Technical Options for Room Air-Conditioner Alternatives for HCFC-22 Technical Options for Vehicle Air Conditioner Alternatives to HFC-134a Financial Aspects

5 Financing the transition away from HFCs to more sustainable refrigerants is a major challenge for India. The discussion on alternative financing models ranges from using existing mechanisms like the MLF to the creation of new instruments. India raised concerns about the MLF s past effectiveness in transferring technology and suggests a financial mechanism that looks like the MLF but is outside the Montreal Protocol. Others have questioned India s critique of the MLF and advocate using the framework already in place. Most agree that the most critical information is what HFC transitions will cost an analytical task for the Montreal Protocol s Technology and Economic Assessment Panel (TEAP). India is reluctance to agree on binding commitments for HFC reductions until there is a clear technology pathway to get there with the means for financing the transition with additional resources. Developed countries have noted that it is difficult to deliver funding in the absence of developing country commitments. Hopefully this issue can be resolved before the COP-21. Global Support for Phasing Down HFCs Over 100 countries, including India, 28 EU member states, 54 African countries, Canada, the U.S., Mexico, and Island States support phasing down HFCs through an amendment to the Montreal Protocol. The world s largest economies such as China, the EU, Japan, Australia, and the U.S. are already implementing regulations and market transitions of their own. Global markets are equally active in phasing down HFCs. For example, the Consumer Goods Forum, a conglomeration of over 400 private sector companies have pledged phase down of HFCs. Both China and India have also pledged cooperation during summits with the U.S. in phasing down HFCs by using the proven instruments of the Montreal Protocol. As the global consensus builds towards phasing down HFCs, the key issues that need to be resolved through negotiation are: list of chemicals and possible chemical groupings for HFCs; calculation of the baseline for Article 5 and Non-Article 5 Parties; timetable for freeze and reduction of production and consumption of HFCs; and basis of financing and the start date for funding. The Indian proposed amendment includes a list of 19 HFC substances divided into four groups. It controls HFCs starting in 2016 for developed countries (Non-Article 5 Parties) and 2031 for developing countries (Article 5 Parties), allowing Article 5 Parties a 15-year grace period. It proposes MLF support for full conversion costs for Article 5 Parties. The Indian proposal also maintains the authority under the UNFCCC/Kyoto Protocol to account for and report on HFC emissions. The proposal also asks for licensing of HFC production, import and export, reporting requirements, and limitations on HFC imports and exports to non-parties. India s proposal with regard to the MLF differs from other amendment proposals. Where other proposals call for covering agreed incremental costs (the approach currently used under the Montreal Protocol), India proposes including MLF payment for full conversion costs. These are defined to include civil, electrical, and mechanical aspects of facilities; lost profits and full conversion costs for HFC production plants, manufacturing equipment, and operating costs for five years; training, technicians, awareness, tools, and payment for premature retirement of equipment; and double conversion costs wherever transitional technologies are to be deployed. India s proposal would avoid an estimated 4.2 gigatonne (Gt) of CO 2 GHG emissions by The North American proposed amendment includes Canada, Mexico, and the U.S. It lists 19 HFC chemicals as controlled substances and provides access to the MLF for incremental costs. Article 5 Parties receive a five-year grace period and the phase down schedule is different for Non-Article 5 Parties and Article 5 Parties. It would avoid an estimated 90 Gt of CO 2 equivalent GHG by The Island State proposed amendment was submitted by Kiribati, the Marshall Islands, Mauritius, the Federated States of Micronesia, Palau, Philippines, Samoa, and the Solomon Islands. It lists 22 specific HFCs and hydrofluoroolefins (HFOs) as controlled substances, allows access to the MLF for the full-agreed incremental costs, provides for a seven-year grace period, and delineates a different phase down schedule for Non-Article 5 Parties and Article 5 Parties. It could result in the reduction of 100 billion tonnes of CO 2 equivalent emissions by 2050.

6 The European Union proposed amendment was submitted by the 28 member states of the EU. It lists 19 HFCs split up into five groups, provides for a grace period up to three-years, allows access to the MLF for incremental costs, puts forth a phase down schedule for Non-Article 5 Parties and outlines a freeze in consumption for Article 5 Parties short term. The EU proposal would avoid an estimated 79 billion tonnes of CO 2 equivalent emissions by The African Group non-paper was submitted by 54 African countries. It lists 21 HFC substances divided into two groups and provides access to the MLF on an unconditional basis for Article 5 Parties. While it does not outline specific schedules or timeframes, it indicates that controls, freezes, baselines, and grace periods should be determined by the available technology and guided by the principle of Common But Differentiated Responsibilities. Momentum for a global phase down is increasing with several recent amendments and updates. While discussions regarding baseline, chemicals lists, grace periods, and financing mechanisms persist, key players are now at the table and engaging on this very important subject. Two main objectors remain Saudi Arabia and Pakistan. However, international efforts to move this new opposition are being vigorously pursued. India has led before in phasing out chlorofluorocarbons (CFCs) and other chemicals. Now Indian industry and government have the opportunity to examine their technical and policy options. If they are proactive, they have the potential to shape a deal that works for them while benefiting the global climate. HFCs are the low hanging fruit to tackle climate change amending the Montreal Protocol gives developing countries like India, the tools and support mechanisms with a proven track record of an already established and functioning framework. In the end, HFCs are an issue that must be addressed to move forward on climate change The Natural Resources Defense Council (NRDC) and our partners, the Council on Energy, Environment and Water and the Institute on Governance and Sustainable Development (IGSD) are conducting ongoing research on the business case for phasing down HFCs, the energy efficiency benefits of phasing down HFCs and the amendment proposals to the Montreal Protocol. Resources & Publications Proposed Amendment to the Montreal Protocol Submitted by India, April 16, 2015, Draft Fact Sheet: India Proposes HFC Phase-Down Amendment Proposal to the Montreal Protocol, April 20, 2015, Primer on Hydrofluorocarbons, March 2015, Reducing Stress on India s Energy Grid: The Power Sector Benefits of Transitioning to Lower Global Warming Potential and Energy Efficient Refrigerants in Room Air Conditioners, March Energy Efficiency Gains with Lower Global Warming Impact: A Profile of Air Conditioners Using R-290, November Energy Efficiency Gains with Lower Global Warming Impact: A Profile of Air Conditioners Using R-32, November Frequently Asked Questions on HFCs, October

7 Modelling Long Term HFC Emissions from India s Residential Air-Conditioning Sector, July Update on the HFC Phase-Down in Mobile Air Conditioning: Global Automakers Moving to HFO-1234yf, Except Some German Automakers Waiting for CO 2 Systems, March Cooling India with Less Warming: The Business Case for Phasing Down HFCs in Room and Vehicle Air Conditioners, December conditioner-efficiency.asp

GLOBAL SUPPLY AND DEMAND OF HCFCS AND HFCS

GLOBAL SUPPLY AND DEMAND OF HCFCS AND HFCS Workshop on Implementation Progress of HCFC Phase-out in A/C and Foam Sector in Thailand Viraj Vithoontien World Bank April 1, 2016 SOURCES OF HCFC SUPPLY Non-Article