Summary: International agreement was reached on 15 October on an amendment to the Montreal Protocol which commits countries to a phase-down in the consumption of hydrofluorocarbon greenhouse gases. As a result of existing EU regulation, UK-based companies are unlikely to be subject to significant further regulatory tightening in connection with the use and production of HFC-containing products such as air conditioning and refrigeration equipment.

Background to the Montreal Protocol and the rise in use of HFCs

The Montreal Protocol on substances that deplete the ozone layer is an international agreement which aims to phase out the production and use of ozone depleting substances. The Protocol, which entered into force in 1989, has been almost universally ratified and has prompted the phase out of over 98% of the global consumption of ozone-depleting substances.

One group of gases falling under the scope of the Protocol is the chlorofluorocarbons (CFCs). CFCs were historically used in aerosols, air conditioning and refrigeration. In many countries, compliance with Protocol commitments regarding the reduction in use of CFCs has been achieved by implementing a shift to the use of non-ozone depleting hydrofluorocarbon (HFC) alternatives. As a result, the global consumption of HFCs has increased over recent years.

Although HFCs are not harmful to the ozone layer, some have a global warming potential thousands of times greater than that of carbon dioxide. Therefore, whilst the use of HFCs has been integral to many countries’ compliance with their Protocol commitments, the now widespread consumption of these substances has the potential to significantly undermine international efforts to combat climate change. The solution to one problem has become the cause of another.

What was agreed at Kigali?

At the 28th Meeting of the Parties to the Montreal Protocol in Kigali, Rwanda on 15 October 2016, agreement was reached on an amendment committing parties to a gradual phase down of HFCs. The “Kigali amendment” requires that, against a 2011-2013 baseline:

  • developed countries begin reducing consumption of HFCs in 2019, aiming to reduce consumption by 85% by 2036; and
  • developing countries (including China) freeze HFC consumption by 2024, aiming to reduce it by 85% by 2045. This consumption freeze target is delayed to 2028 for a small number of developing countries which have high ambient temperatures and where suitable alternatives to HFCs for air conditioning and refrigeration equipment do not exist (including India, Kuwait, Pakistan, and Saudi Arabia).

The Kigali amendment is due to come into force on 1 January 2019, provided that it is ratified, accepted or approved by at least 20 parties to the Protocol.

How are HFCs currently regulated in the UK?

The EU is somewhat ahead of the curve on this issue. There has been EU legislation governing the phase out of HFCs and other fluorinated greenhouse gases in place since 2006. The regulation currently in force (Regulation 517/2014, known as the F-gas Regulation) aims to cut fluorinated gas emissions by two thirds by 2030 against a 2010 baseline. This emissions reduction target is to be achieved through a regulatory regime which:

  • introduces a staggered prohibition on the placing on the market of certain types of equipment containing fluorinated gases (including HFC-containing domestic and commercial refrigerators, HFC-containing technical aerosols, small scale HFC-containing air conditioning equipment, and fluorinated gas containers used for servicing refrigeration and air conditioning equipment);
  • prohibits the placing on the market of certain types of fluorinated gases (including a number of HFC gases);
  • establishes rules on containment, use and recovery of fluorinated gases;
  • requires operators of existing equipment containing fluorinated gases to take all measures that are technically and economically feasible to minimise leakage; and
  • requires producers of fluorinated gases to take all necessary precautions to limit emissions of fluorinated gases to the greatest extent possible;
  • establishes limits and a transferable quota system for the placing of HFCs on the market by large scale HFC producers and importers.

The F-gas Regulation imposes obligations that apply directly to operators and producers of HFCs/HFC-containing equipment in the UK. These obligations have already prompted a shift towards the use of HFC-alternatives, such as hydro fluoro olefins, ammonia and carbon dioxide.

How will the Kigali Amendment affect operators and producers in the UK?

The Kigali amendment is unlikely to have a direct impact on the activities of operators and producers of air conditioning and refrigeration equipment in the UK, as these are already regulated under the existing F-gas Regulation HFC phase down regime. The amendment merely acts to cement at an international level the EU’s (and UK’s) existing commitment to reducing HFC emissions.

The same will not be true for operators and producers elsewhere, especially in developing countries.

The Brexit question

Given the EU-basis of the regulation of HFCs in the UK, we should finish with the inevitable question – “what about Brexit?”.

Following a Brexit, the F-gas Regulation will not continue to have effect within the UK unless expressly retained. Given the UK’s existing commitments to reduce greenhouse gas emissions (both internationally, under the Kyoto Protocol and domestically under the Climate Change Act 2008), it is probably unlikely that the UK would decide not to retain the existing regulatory regime, or something very similar. Furthermore, as the UK is a signatory to the Montreal Protocol in its own right (as well as via the EU) and is bound by its obligations irrespective of its EU membership, it seems relatively certain that leaving the EU will not herald a loosening of regulation in this area.