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North American Proposal for Phasing Down HFCs under the

Montreal Protocol

Presentation byCanada, Mexico and the United States

Main Meeting of Ozone Action Networks from Latin America and the Caribbean

Trinidad and TobagoOctober 4-7, 2011

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Scope of Presentation

• Linkages between Ozone-Depleting Substances (ODS) and Hydrofluorocarbons (HFCs)

• Transition by Sectors• Trilateral Amendment Proposal Overview• Benefits• Legal Aspects and Policy Rationale• Financial Assistance under Montreal Protocol • HFC-23 By-Product Emissions from HCFC-22

Production• Questions and Comments

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Relationship between ODS and Other Greenhouse Gases

Ozone Depleting Substances(Halogen Gases)

Greenhouse Gases

CFCs

HalonsHFCs

HCFCs

HFC-23HFC-134aHFC-125

CO2

CH4

SF6

PFCs

N2O

CFC-113CFC-12CFC-11

H-1211H-1301

Carbon Tetrachloride(CCl4)

Methyl Chloride(CH3Cl)

Methyl Bromide(CH3Br)

Methyl Chloroform(CH3CCl3)

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Many Safer ODS Substitutes Available, More on the Way

• “The ultimate choice of technology to phase out HCFCs will be based on ozone depletion and also climate impact, health, safety, affordability and availability, as Decision XIX/6 requires.”

May 2010 Technology and Economic Assessment Panel (TEAP) Task Force Report : Assessment Of HCFCs

and Environmentally-Sound Alternatives

• 2010 TEAP Progress Report– Substitutes for many sectors and sub-sectors available– Additional substitutes under development– Global acceptance for alternatives strengthening– Potential to skip higher-GWP HFC alternatives, go directly to

lower-GWP alternatives

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ODS Sectors Will Transition at Different Paces

• Various factors influence speed of transition– Domestic and regional requirements

• e.g., European F-Gas rule– Availability of alternatives– Advanced design options that reduce charge size– Global expansion of air conditioning and

refrigeration– Proven technologies, ability to avoid multiple

transitions– Opportunity to focus on sectors instead of

chemicals• Examples follow

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Potential Near-Term Transition: Motor Vehicle Air Conditioning

Passenger Cars & Light-Duty Trucks:

Buses/Trains:

1990s: CFCs to HFC/HCFCs Near future: CO2, HFOs, or lower-GWP HFCs

CFC HFC

CO2

HFO

HFO

HFC

CO2CFC

HFC

HCFC

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Available Options: Commercial Refrigeration

Stand-AloneEquipment

Condensing Unit Systems

Multiplex Rack Systems

CFCs/HCFCs->HFCs->HCs/CO2

HCFCs->HFCs->CO2, ammonia, HCs

CFCs->HCFCs->Blends->CO2, ammonia, HCs, HFOs

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Changing Chemicals Not Only OptionAdvanced refrigeration system designs: • Distributed systems & indirect systems available

– Distributed systems can lower refrigerant charge by 30–50% – Indirect systems can lower refrigerant charge by 50–80%

• Europe: indirect systems are norm• U.S.: distributed systems ~40% of new installations and indirect

systems are gaining significant market share

Supermarkets can reduce HFC use by changing system designs

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Available & Near-Term Options: Unitary A/C

Alternatives to R-407C & R-410A: - lower-GWP HFCs, e.g., HFC-32 - HCs and CO2 - potentially HFOs, blends

HCFC

HFCs

HFC

HC

CO2

HCFCs transitioning to HFCsNear future: CO2, HFOs, or lower-GWP HFCs

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Projected HFC Growth:

PNAS, 2009, Velders, et al U.S. EPA, 2009Historical & Projected HFC Consumption

0

1,000

2,000

3,000

4,000

5,000

2000 2010 2020 2030 2040 2050

Co

ns

um

pti

on

(M

MT

CO

2eq

)

A5Non-A5World

HFC growth linked to ODS phaseout, expanding availability of air conditioning & refrigeration

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Current Measures on HFCs under the UNFCCC

• HFCs are one of six greenhouse gases controlled under the UNFCCC

• However, targeted measures on this group of gases are not required under the UNFCCC

• The CDM issues international offset credits to approved projects that destroy HFC-23 in developing countries, but such projects are voluntary– Projects that earn credits are in developing countries

and are voluntary

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2011 Trilateral Amendment Proposal• Canada, Mexico & United States Proposed Addressing HFC

Production and Consumption• Phasedown, not Phaseout of HFCs

– Phases Down to 15% of Baseline, GWP-weighted

• 2011 proposal includes new HFC baselines: – Non-Article 5 Parties: average 2005-2008 HFC plus 85% of HCFC

consumption/production – Article 5 Parties: average 2005-2008 HCFC consumption/production

• Covers 20 HFCs, including 2 known as HFOs• Limits by-product emissions of HFC-23• Complements but leaves unchanged UNFCCC obligations • Approach is consistent with our supported approach to address

aviation and maritime bunker emissions in ICAO and IMO

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Trilateral Proposal Phasedown Schedule

(MP designations)

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Substantial Climate Benefits Possible

• Trilateral Proposal global cumulative benefits:– ~3,000 MtCO2eq through 2020

• Developed country Parties = 3,000 MtCO2eq

• Developing country Parties = 150 MtCO2eq

– ~88,000 MtCO2eq through 2050

• Developed country 5 Parties = 43,000 MtCO2eq

• Developing country Parties = 45,000 MtCO2eq

– ~ 11,600 MtCO2eq through 2050 from HFC-23 byproduct emissions controls

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0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

North AmericanProposal (2014-

2050)

MicronesiaProposal (2013-

2050)

MontrealProtocol (1990-

2010)

AcceleratedHCFC Phaseout

(2010-2039)

Kyoto Protocol(2008-2012)

CopenhagenAccord (2012-

2020)

Annex IEmissions in

2007

consumptionreductions emission reductions emissions

Trilateral Proposal Benefits in Context

MM

TC

O2e

q

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Montreal Protocol History: Considers HFCs and Other ODS Substitutes

• Given HFC growth stems from ODS phaseout, Montreal Protocol has special responsibility to address HFCs

• Long history of concern:– Decision X/16 (1998): convened workshop with UNFCCC,

establishing information on HFCs & PFCs, ways to limit emissions

– Decision XIV/10 (2002): TEAP collaborates with IPCC to develop report: Safeguarding the Ozone Layer and the Global Climate System; Issues Related to HFCs and PFCs

– Decision XX/8 (2008): report and workshop on high-GWP alternatives to ODS, principally HFCs

– ExCom Decision 60/44 (2010): allows 25% funding increment, above cost-effectiveness thresholds, when needed for climate benefits, mainly to avoid high-GWP HFCs

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Moving Beyond Concern, Taking Action for Safer ODS Phaseout

• Historically, Montreal Protocol has not controlled HFCs, but has taken steps to develop information and understanding on HFC use & emissions at global level

• Montreal Protocol built world’s widest body of experience and expertise on sectors using HFCs

• Vienna Convention Article 2 provides scope– HFCs create adverse effects as a result of ozone layer protection, so

harmonizing approaches reduces overall impacts

• Therefore, it is appropriate and incumbent on Montreal Protocol to take action on HFCs in collaboration with UNFCCC

• Atmosphere will not care about the forum: Montreal Protocol, UNFCCC, or both together

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Financial Assistance for Transition • Ensure timely financial assistance through Montreal

Protocol’s Multilateral Fund (MLF) to address HFCs before huge growth occurs– Longer we wait, more difficult and costly to transition sectors to

low-GWP substitutes

– Waiting increases damage to climate system

• Effective incremental cost model of MLF can address HFCs used as ODS substitutes

• Proposal allows short-term HFC growth to replace ODS when no other cost-effective alternatives are available

• Developing countries are provided with a significant grace period to comply with proposed control measures– Recognizes short-term focus must be on ODS phase-out

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HFC-23 By-Product Emissions• Background:

– HFC-23 is a by-product of producing HCFC-22– HFC-23 has highest GWP of all HFCs– HFC-23 emissions controlled under the CDM are decreasing, but

uncontrolled HFC-23 emissions are increasing in developing countries (Montzka, et al)

– CDM projects cover <50% HFC-23 emissions in developing countries

• Proposal would control by-product emissions – Covers emissions from HCFC-22 production facilities– Makes by-product obligations eligible for MLF funding

• Would cover facilities not covered by CDM

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Proposed Separate Decision on HFC-23 By-Product Emissions

• Recognized HFC emissions covered by Kyoto Protocol to UNFCCC

• Requested Executive Committee of MLF to:– Update information on HCFC-22 facilities, including

whether CDM-covered– Formulate funding guidelines for un-covered

facilities– Approve funding for implementation of projects to

reduce HFC-23 by-product emissions

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Summary• Suite of known alternatives, technologies, and better

handling can significantly reduce HFC consumption in near and long term

• Considering ODS and HFCs together allows for focus on sectors, rather than chemicals

• HFC amendment proposals provide meaningful real opportunities for near-term climate benefits

• Montreal Protocol appropriate vehicle– HFCs use tied to ODS phaseout– Successful experience– Effective financial mechanism– Sector expertise