OZONE LAYER PROTECTION PROGRAMME IN INDONESIA

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1 Historical Perspective and Progress as of 18 November 2014 OZONE LAYER PROTECTION PROGRAMME IN INDONESIA By Anton SRI PROBIYANTONO

2 BRIEF 1970s Scientists discovered ODS 1985 Vienna Convention for the Protection of the Ozone Layer adopted 1987 Montreal Protocol on Substances that Deplete the Ozone Layer signed 1992 Indonesia ratified Vienna Convention, Montreal Protocol (MP) & London Amendment Indonesia implemented a Country Programme in compliance with MP Indonesia implemented National Phase-out Plan (NPP) to comply control milestones Assessment on the consumption of HCFC present HCFC Phase-out Management Plan (HPMP) 2

3 STATUS OF RATIFICATION Indonesia ratified Montreal Protocol and its amendments as given the table below: Agreement Date of Ratification Signature Vienna Convention - Signature Montreal Protocol Vienna Convention Montreal Protocol London Amendment Copenhagen Amendment Montreal Amendment Beijing Amendment

4 INTRODUCTION In the 1970s, scientists discovered certain man-made compounds contributed to the depletion of the Ozone Layer. These are the Ozone Depleting Substances (ODS) that have both Ozone Depletion Potential (ODP) and Global Warming Potential (GWP). These can be found in such every-day household items as refrigerators, Styrofoam cups, spray deodorants and cushions. In 1984, international attention was drawn to the urgent need of appropriate measures when it was confirmed that the Ozone Layer over Antarctica was disappearing. In 1985, the global community then adopted the Vienna Convention for the Protection of the Ozone Layer. Then, in 1987, they signed the Montreal Protocol on Substances that Deplete the Ozone Layer. To follow up on the global commitment, on 26 June 1992, Indonesia ratified the Vienna Convention, the Montreal Protocol and London Amendment. 4

5 ACTIVITIES OF THE MONTREAL PROTOCOL In , Indonesia implemented a Country Programme to address the needs of institutional measures, regulatory framework, incentive and disincentive measures, awareness and information dissemination, investment and technical assistance and monitoring in compliance with the Montreal Protocol. In , Indonesia implemented National Phase-out Plan (NPP) to eliminate the remaining consumption of ODS through a multi-year performance-based agreement to comply with the control milestones. 5

6 ACHIEVEMENTS 1. Relevant government agencies (Ministries of Environment, Health, Trade, Industry, Agriculture, etc) released various regulations in compliance with the Environmental Law 23/1997 and the Montreal Protocol to control and prohibit the import/use of certain ODS in cosmetics, agriculture, households, shipping, etc. 2. As of 2008, Indonesia has already banned the import of Chlorofluorocarbons (CFCs). 3. As of 2010, Indonesia is successfully in compliance with the Montreal Protocol control schedule for CFCs, Carbon Tetrachloride (CTC) and Halons. 4. As of 2012 until today, Indonesia has been implementing various activities to phase-out the consumption of Hydrochlorofluorocarbons (HCFCs) in coordination with Multilateral Fund (MLF) Secretariat, Implementing Agencies (UNDP, World Bank, UNIDO and UNEP), the Government of Australia, private sector and experts. 6

7 LESSONS LEARNED 1. In , the programme was implemented using a top-down approach considering the relatively low level of capacity and awareness existing in the ODS consuming industry sectors, on the Montreal Protocol obligations of the country. For instance, projects followed a direct/agency execution mechanism, with technical requirements for industry conversions determined by international experts and implementation of enterprise-level projects was overseen by implementing agency officials and experts. As a consequence, many enterprises did not take full ownership of the ODS phase-out. 2. Learning from previous experience, the Multilateral Fund adopted sector/national phase-out approaches, through multi-year performance-based plans with annual targets and penalties for non-compliance. During , the sector phase-out plans for various ODS consuming sectors were implemented in Indonesia. There was a much larger involvement of government and industry stakeholders in implementation. This contributed to building knowledge and capacity at the country-level for implementing complex, performance-based and technical programmes, including decentralized enforcement and monitoring responsibilities for local governments. 7

8 NEXT STEPS 1. Considering the lessons learned during implementation of the Montreal Protocol during and , the Deputy Minister for Natural Resources Conservation Enhancement and Environmental Degradation Control, the Ministry of Environment (MOE), through a decree no.01/dep.iii/klh/04/2009, established 4 (four) Technical Working Groups (TWGs) comprising of designated members of private sector (manufacturing industries and servicing companies), relevant government agencies, academicians and other stakeholders, to advise the government on the strategy to be adopted for compliance with the accelerated phase-out schedule for HCFCs. 2. MOE designated UNDP to be the lead agency for the HPMP in Indonesia focusing on Refrigeration, Air Conditioning (RAC) and Firefighting (FF) sectors. World Bank (WB) and UNIDO were designated as the cooperating agencies. WB focuses on Polyurethanes Foams sector while UNIDO focuses on solvents sector and one group project in the Foams sector. MOE also cooperates bilaterally with the Government of Australia to assist on technical aspect of refrigerant management. 3. Facilitated by UNDP, GOI was working together with WB, UNIDO, with over 137 manufacturing companies and over 2,000 servicing workshops to collect data, analyze it and prepare the Indonesia HPMP Stage-I proposal. 8

9 NEXT STEPS 4. Industries were fully involved in the process together with government officials and experts. 5. As a result, GOI was able to submit a HPMP Stage-I proposal that accommodated the integrated needs of Indonesia for compliance with the 2013 and 2015 control targets for HCFCs. 6. Indonesia s HPMP Stage-I was approved by the Executive Committee of the Multilateral Fund in its 64 meeting in July 2011 (ExCom Decision 64/42), noting with appreciation the exemplary policy and other initiatives in the proposal 7. According to the agreed HCFC consumption targets, Indonesia will need to freeze its HCFC consumption at the level of ODP tonnes by 01 January 2013, reduce it to ODP tonnes from 01 January 2015 and to further reduce it to ODP tonnes by 01 January

10 CONCLUSION ODS consuming industrial sectors are the heart of the Ozone Protection (Montreal Protocol) Programme. These industries produce, store, consume, distribute and release the ODS through their manufactured and/or serviced products. Their active engagement in the decision-making processes is critical to freeze, reduce and eliminate ODS, with the assistance of designated Implementing Agencies for Indonesia (UNDP, WB and UNIDO) and relevant government agencies (Ministry of Environment, Ministry of Trade, Ministry of Health, Ministry of Finance/Directorate General of Customs and Excise, Ministry of Energy and Mineral Resources, local governments), experts and other relevant stakeholders. This would facilitate the enactment of forward-looking regulations that would ensure compliance with the HPMP targets and also maximize climate benefits. Industries active engagement in the process of the programme preparation and implementation has been able to trigger higher interest of private sectors in promoting the importance of the Ozone Layer Protection and Climate Change mitigation. The industries are encouraged to propose their own data and targets to accelerate the progress. The road map to control the target is clearer. It will not only give impact locally but also globally. The partnership is expected to strengthen the efforts of Indonesia in compliance with the Montreal Protocol. 10

11 Existing Programme HYDROCHLOROFLUOROCARBONS (HCFC) PHASE-OUT MANAGEMENT PLAN (HPMP) OZONE LAYER PROTECTION PROGRAMME IN INDONESIA 11/18/

12 GENERAL INFORMATION Project Title: Objective: UNDP Award ID/ Project ID: / Implementing Partner: Start Date: 01 June 2012 End Date: 31 December 2018 Project Appraisal Committee (PAC) Meeting: HCFC Phase-out Management Plan (HPMP) for Compliance with the 2013 and 2015 Control Targets for Annex-C, Group-I Substances (HCFCs) in Indonesia To reduce 80.4 ODP tonnes in the national HCFC consumption by In addition, the project will result in net CO 2 equivalent direct emission reduction of about 1.5 million tonnes annually from Ministry of Environment (Assistant Deputy for Atmospheric Function Preservation and Climate Change Mitigation) 27 March

13 GENERAL INFORMATION Donor: MLF Project Numbers: Multilateral Fund (MLF) IDS/PHA/64/TAS/192 IDS/PHA/64/INV/193 IDS/PHA/64/INV/195 UNDP Award ID/ Project ID: / Period of Implementation: (Stage-I) Start Date: 01 June 2012 End Date: 31 December 2018 Prodoc signatures: 28 August 2012 by Ministry of Environment, Ministry of Finance and UNDP Total Resources: Managed UNDP for Indonesia: US$ 8,901,102 Managed by WB for Indonesia: US$ 2,714,187 Managed by UNIDO for Indonesia: US$ 777,395 Total: US$ 12,392,684 13

14 BACKGROUND Indonesia acceded to the Vienna Convention and ratified the Montreal Protocol on Substances that Deplete the Ozone Layer in June As of January 2006, Indonesia has ratified all the amendments to the Montreal Protocol. Indonesia is classified as a party operating under Paragraph-1, Article-5 of the Montreal Protocol (MP) qualified to receive technical and financial assistance. Indonesia has prohibited imports of Chlorofluorocarbons (CFCs), Halons and Carbon Tetrachloride (CTCs) as of 1 January Indonesia s HCFC Phase-out Management Plan (HPMP Stage-I) comprises of a combination of interventions such as: technology transfer investments, policies and regulations, technical assistance, training, awareness and communications and management, coordination and monitoring in various HCFC consuming sectors. 14

WHAT ARE HCFCS? The most popular one that we know is Freon (produced by DuPont).

and solvents. Predominant HCFCs are HCFC-22 (RAC sectors).

subject to the adjusted control schedule for Article-5 countries.

15 WHAT ARE HCFCS? The most popular one that we know is Freon (produced by DuPont). HCFCs are used in Refrigeration (Ref), Air Conditioner (AC), Foams, Fire Fighting and solvents. Predominant HCFCs are HCFC-22 (RAC sectors). HCFCs are classified as controlled substances under Annex-C, Group-I of MP and subject to the adjusted control schedule for Article-5 countries. Indonesia has to freeze the consumption of HCFC at baseline levels from 2013 and reduce 10% from baseline levels as of

16 MONTREAL PROTOCOL DECISIONS Recognizing the environmental benefits (ODP & GWP reductions), the XIX Meeting of Parties to the Montreal Protocol (Sep.2007: XIX/6) accelerated the HCFC phase -out schedule as follows: Step Activity Time 1 st Control Freeze of production & consumption at Baseline Level As of 01 Jan nd Control Reduction of 10% (from Baseline Level) As of 01 Jan 2015 Subsequent Control Reduction of 35% 2020 Reduction of 67.5% 2025 Reduction of 97.5% 2030 Complete phase-out As of 01 Jan

CONSUMPTION OF HCFC (2007-2009) 2007 2008 2009 Substance Metric Tonnes ODP Tonnes Metric Tonnes ODP Tonnes Metric Tonnes ODP Tonnes HCFC-141b 1,008 110.

17 CONSUMPTION OF HCFC ( ) Substance Metric Tonnes ODP Tonnes Metric Tonnes ODP Tonnes Metric Tonnes ODP Tonnes HCFC-141b 1, , HCFC-22 3, , , HCFC HCFC Total 4, , ,

18 Projected from the consumption of R/AC, FF, Foams & Solvents PROJECTED HCFC CONSUMPTION STAGE-I ( ) TARGETS PROJECTED HCFC BASELINE MAX CONSUMPTION LEVEL FROM 01 JAN DEC 2014 MAX CONSUMPTION LEVEL AS OF 01 JAN 2015 Note: there will be Stage-II ( ) & subsequent targets established later. 18

19 STRATEGIC APPROACH Approach Partnership Activities Joint programme among Implementing Agencies (UNDP, WB, UNIDO & UNEP), government agencies and private sector (industries and associations) Implementing/ Bilateral Agencies: 1. UNDP (Lead Agency) 2. Australia (Bilateral Cooperating Agencies) 3. World Bank (Cooperating Agency) 4. UNIDO (Cooperating Agency) National Coordinating Agency: Ministry of Environment Components: 1. Investment 2. Non Investment (policies, regulations, capacity development, etc.) Prioritization: 1. Focus of Stage-I: Manufacturing ( ) 2. Focus of Stage-II: Servicing ( ) 19

20 ROAD MAP Milestones HCFC CONSUMPTION LIMIT (ODP Tonnes) N/A TECHNOLOGY CONVERSIONS Finalization of implementation plan X Enterprise level agreements X Enterprise level conversions X X Commissioning X X X PROJECT MANAGEMENT Finalization of implementation plan X Regulations development X X Enforcement X X X X X X X Monitoring & coordination X X X X X X X Awareness & capacity-building X X X X X X X Stakeholder consultations X X X X X X X Performance verification X X X X X 20

21 COMPANY CATEGORY HPMP Stage-I Group-1 Enterprises (Refrigeration and Air Conditioner Manufacturing Companies) Group-2 Enterprises (Refrigeration and Air Conditioner Assembling Companies) Group-3 Enterprises (Refrigeration and Air Conditioner Installing Companies) HPMP Stage-II HCFC-22 phase-out: servicing sector HCFC-123 phase-out in Fire Fighting applications 21

22 HPMP PROJECT ORGANIZATION STRUCTURE PROJECT BOARD Senior Beneficiary Ministry of Environment, Ministry of Industry, Ministry of Trade, Customs, Statistics, Industry (private sector) Executive Assistant Deputy for Atmospheric Function Preservation and Climate Change Mitigation, Deputy Minister for Environmental Degradation Control and Climate Change Senior Supplier UNDP Project Assurance UNDP National Project Manager Project Support 1. Project Assistance 2. Project Clerk Air Conditioning Team Refrigeration Team Technical Coordinator

23 PROGRESS AS OF 18 NOVEMBER 2014 Investment 7 RAC manufacturing companies (group-1) signed Memorandum of Agreement (MoA) to change their technology of production in Le Meridien Hotel, Jakarta on 20 March Later on, 1 AC manufacturing company signed MoA on 18 June refrigeration assembling companies (group-2) are willing to proceed with HPMP 8 refrigeration installing companies (group-3) will receive Incremental Capital Cost (IOC) Other companies on RAC will change their technology to use non HCFC Regulatory Framework: As of 1 January 2015, HCFC will be banned for refrigeration and air conditioner production process, blowing agent in domestic refrigeration, freezer thermoware, refrigerated trucks and integral skins, and imported goods that contain such substance. Accordingly, there are a number of decrees that have issued by relevant government agencies, i.e.: Decree of Minister of Trade Number 55/M-DAG/PER/9/2014 concerning the Terms and Conditions of Imported Cooling System Based Goods Decree of Minister of Industry Number 41/M-IND/PER/5/2014 concerning the Prohibition of Hydrochlorofluorocarbon (HCFC) in Industrial Sector 23

24 PROGRESS AS OF 18 NOVEMBER 2014 Regulatory Framework: National quotas are updated regularly (such as the issuance of letters by relevant Deputy Minister Number B-12012/Dep.III/LH/12/2011 concerning National Quota for 2012 and B /Dep.III/LH/PPLH/12/2012 concerning National Quota for 31 HCFC Importers). Introduction of New Technology The National Ozone Unit (NOU) invited manufacturing companies, especially the grant recipients, to new technology conference in Bangkok, Thailand (July 2013). NOU also facilitated the promotion of new technology in several workshops in Jakarta, Indonesia. Due Diligence on the Recipient Sites A Team consisting of officials of Ministry of Environment, UNDP and experts visited companies interested in the project. The Establishment of an Association Relevant industries agreed to establish Asosiasi Manajemen Refrigeran Indonesia (AMRI) or Indonesia Refrigerant Management Association on 4 September 2013 in Jakarta. 24

25 MILESTONES OF GROUP-1 1. Implementation work plan comprising of the following: Overall activity schedule; Specifications of product models to be re-designed; Plant re-layout drawings as applicable. 2. Plant and process modifications comprising of: Issuance of purchase orders/ contracts for major equipment and/or modifications thereof. 3. Installation comprising of: Installation of new/ retrofitted equipment; Completion of local civil, electrical and mechanical works; Installation of safety systems as applicable. 4. Trials and commissioning comprising of: Product prototypes; Product testing; Trial production; Personnel training for operation, maintenance and safety. 5. Completion and phase-out of HCFCs: Exhaustion of HCFC stocks; Disposal of redundant baseline equipment as applicable; Product external certification as applicable. Note: the milestones are stated in Memorandum of Agreement (MoA0 betweeen Ministry of Environment and companies 25

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PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Project Name ID-HCFC Phase-out Project