Options to control synthetic greenhouse gases
If the New Zealand government were to move beyond the existing voluntary controls on SGGs, such as the 'No Loss Campaign' and code of practice discussed below, then there are a range of ways to reduce emissions of SGGs that could be considered. Most of these have been identified as part of the discussions with the New Zealand and Australian industry. Some of these could be implemented as voluntary agreements with different sectors, but most would require some form of regulation to implement them.
The following section sets out some policy options for limiting SGG emissions. They are presented here in no particular order and include questions to guide feedback.
Accreditation of those handling SGGs
An accreditation scheme would establish a programme that requires all those who handle SGGs where they might be released to the atmosphere to have some formal qualification to show they know how to minimise leakage. At its most basic, an accreditation scheme provides a mandatory education programme for those who use the substances covered. In some countries, significant reductions in emissions of ODS were reported after the introduction of such schemes.
New Zealand is probably the only developed country that does not already have a mandatory accreditation scheme for those handling ODS. Most developed-country accreditation schemes for ODS are now being extended to cover SGGs. In this context, regulations being developed under the new Act in Australia include a nationally consistent, mandatory licensing regime for end users of ODS and SGGs in the refrigeration and air conditioning sector. This new mandatory regime will replace a myriad of, at times conflicting, State-level licensing schemes, as well as the voluntary nationwide licensing system known as the "ARCTick" scheme.
The New Zealand refrigeration and air-conditioning industry has long argued for the introduction of a mandatory accreditation scheme for ODS as a means of improving practices in their industry. In response to IRHACE's submissions, the 1995 Ozone Layer Protection Bill was amended at the Select Committee stage to include a clause that allows the Minister for the Environment to require industry to develop an accreditation system to licence those who use ODS in their work. Although a draft scheme was developed by IRHACE at the Minister's request in the late 1990s, it was never implemented in law.
IRHACE's accreditation scheme was eventually launched in April 2002 as a voluntary scheme known as the "No Loss Campaign". Some of the costs of the launch and promotion were met by the Ministry for the Environment (MfE). According to IRHACE, the scheme has not been a huge success. Initially it created a good level of interest, with more than 300 people being certified in the first year. However, since then fewer than 20 people have passed the qualification over and above those who sat the exam as part of their study at the training school. IRHACE has argued in several forums that the voluntary scheme is not working well and that the accreditation scheme should be made compulsory.
In Australia, the ARCTick scheme has at least four types of licences for different sectors of the industry (at a cost of AUS$55 for one or more licences). The scheme also recognises five different skill levels with different levels of licence required for different tasks. The examinations for the licences are 'hands on' and require testing of different levels of practical trade skills (e.g. ability to make joints in pipes) to specified academic course standards. This contrasts with the New Zealand 'No Loss Campaign' which only includes a theory component and tests awareness of environmental issues and good handling practices.
Key questions
1. Should there be a mandatory accreditation scheme for SGGs?
2. What substances should be covered?
a. Should it also include ODS?
3. What sectors of industry should require accreditation?
a. Should it be for all those who handle gas, or just supervisors?
b. Should it include the installation of sealed units, such as window air-conditioners and some heat pumps where emissions are unlikely?
4. Should there be one accreditation exam for all users, or should sectors be able to develop specific schemes?
5. Should a scheme test practical 'hands on" skills, or just theory?
6. Should a licence scheme require ownership of specific tools as is required in Australia?
Development of a Code of Practice
Assuming a licensing/accreditation scheme was developed, it would require the development of a code of practice to set out the 'good practice' that the accreditation process would seek to test. A formally endorsed Code of Practice would also be necessary if it was to be referenced under Compliance schedules in the Building Code.
The NZCCO is contributing funds towards the development of a new code of practice covering all sectors of the refrigeration and air-conditioning industry. The code is being developed jointly with the AGO and the New Zealand and Australian industry under the ANZCAP initiative. It is expected to be completed by late 2004 - early 2005.
In Australia, some codes of practice can be given force of law and the language used must be carefully considered (i.e. whether clauses use 'must' and 'shall' or 'should' and 'may'). The legal status of the COP under New Zealand law has been raised in discussions as it has clear implications for the language of the new code. In New Zealand, compliance with previous COPs dealing with ODS has been voluntary. The only way by which they were enforceable was to state that compliance with the code was a defence against the Ozone Layer Protection Act's provisions that prohibited the release of ODS. The legal status of the new COP in New Zealand will need to be addressed before its completion.
Key question
7. Should a code of practice in New Zealand be legally enforceable?
Prohibition on the sale of disposable cylinders of refrigerant
In Australia, the government has banned the import of 'disposable' cylinders of HFCs (industry, under a voluntary agreement, has agreed not to import disposable containers of HCFCs). Disposable cylinders are relatively thin-walled cylinders and come in 13.6kg (30 pound) and 22kg (50 pound) sizes. Most refrigerants sold in New Zealand are sold in these cylinders and are known in the industry as 'jugs' or 'DACs' (the origin of the acronym is not clear, but appears to be a contraction of Disposable Cylinders). The disposable cylinders have the advantage of being lightweight and easy to handle. They have the disadvantage that they are designed for only one use and must be disposed of once the gas has been removed. This poses two environmental problems. The first is the disposal of the cylinder and the second is the "heel" [NB if a pump is not used to empty the contents, there will still be a small amount of gas left in the cylinder once the cylinder reaches atmospheric pressure. This residual amount is referred to as the "heel".] of gas left in the cylinder at the time of disposal. The amount of the heel varies with pressure and temperature, but when multiplied by many thousands of cylinders the amount that could be lost to the atmosphere at the time of disposal becomes significant.
Many countries have banned the use of disposable cylinders on environmental grounds. These include the EU and Australia. However, the cylinders remain common in the US and Asia.
In addition to the 13.6 kg DACs there are also small 1 pound/500gm 'DIY' cans. These are primarily sold to car owners to allow them to top up their own car air-conditioning systems. In countries like the US they were a major part of the CFC market prior to their being controlled. The concern is that the use of these cans does not encourage the repair of leaks. The cans also do not allow the charge to be measured. This means there will usually be over-pressurisation (leading to greater leakage in time) or some percentage of the can's charge will be lost to atmosphere at the time of use. There is little, if any use of these cans in New Zealand so any prohibition would primarily be to prevent future growth.
An industry group has been formed to develop an industry position on the ongoing use of all kinds of disposable cylinders. In particular, the group is expected to determine how many cylinders are used in New Zealand, how they are disposed of, and what happens to any gas in them at the time of disposal. Their conclusions will feed into the policy development process.
Key questions:
8. Should there be any restrictions on the import or sale of disposable cylinders of refrigerants?
9. Should the import and sale of small 1 pound/500gm 'DIY' cans be prohibited?
Emissions bans
One of the core provisions of the Ozone Layer Protection Act(s) was to make it an offence for anyone who:
Knowingly or without lawful justification or excuse releases a controlled substance into the atmosphere while -
(i) Installing, operating, servicing, modifying, or dismantling any refrigeration or air-conditioning equipment or other heat-transfer medium; or
(ii) Installing, servicing, modifying, or dismantling any fire extinguisher.
This clause was virtually impossible to enforce in practice, but represented a clear statement of government policy. It was also the legal justification for ensuring industries' compliance with the codes of practice.
Without a similar clear statement of policy from the government on the release of SGGs, the refrigeration and air-conditioning industry representatives have argued that voluntary and industry-based programmes to reduce emissions will have very limited effect, as there is no formal incentive to encourage compliance.
Key question
10. Should there be a ban on the emissions of synthetic greenhouse gases?
Levy to pay for destruction of synthetic greenhouse gases
There is already a voluntary industry Trust that collects a $1 per kg levy on all ODS refrigerant sold in New Zealand. The levy is collected by a stand-alone private company known as the 'Ozone Protection Company'. The scheme has wide, although not universal, support and it has been well managed. MfE was actively involved in the early '90s in establishing the Trust that oversees the scheme.
Because the company only collects income on ODS refrigerants, it will only pay for the destruction of ODS refrigerants. In order to include SGGs, the Trust would need to be broadened to collect funds on these. There are several impediments to this. The Trust Deed for the existing Company is reported to be inflexible and initial discussions suggest it might be easier to develop a new Trust with a new deed rather than to re-negotiate the existing one. It is also likely that the relative importance of some sectors will be greater (especially that of the MAC sector) and therefore the Trust that oversees the administration of the funds may need a different structure. The refrigeration and air-conditioning industry is reportedly interested in developing a new Trust, but preparatory discussions only commenced in June 2004 on this.
Although various options for making the levy mandatory were considered at the time the original Trust was established, there were no obvious mechanisms to allow any levy collected by the government to not simply be treated as a tax. If the funds collected were treated as a tax, they would likely remain in the government's current account and it would not be possible to guarantee access to the funds for the purpose for which they were collected. There are precedents for the government to be involved in the collection of levies, most noticeably for the former producer boards. However, if the private sector is able to implement the levy on bulk substances without government, there appears to be little need for direct government involvement through regulations.
Key questions
11. Should the government be involved in establishing a fund to pay for destruction of SGG
refrigerants?
12. If a levy system is established, should the government remain involved in the administration of the scheme?
13. Should the government be involved in promoting any industry trust of SGG collection scheme?
'Product stewardship' or 'extended producer responsibility' scheme
One of the possible impediments to the successful introduction of a voluntary levy on the import of bulk refrigerants is the very large amount of HFC being imported in new and second hand cars and in built up heat pumps and other refrigeration and air-conditioning equipment. According to the 2004 CRL report on emissions of SGGs, 17 metric tonnes of HFCs and PFCs may have been imported in refrigeration and stationary air-conditioning products. In addition, calculations based on the number of vehicles registered in 2003 suggest that up to 165 tonnes of HFCs were imported in vehicles in 2003. This estimate compares with the 345 tonnes of HFCs and PFCs imported in bulk.
Under the existing arrangements, finished products such as vehicles or heat pumps do not contribute to the levy for ODS destruction. It is likely that the refrigeration and air-conditioning industry would have very real concerns about the fairness of any voluntary scheme that did not include some way of receiving payment for the gas imported in finished products.
In New Zealand, programmes to manage special wastes such as used oil are increasingly based on the concept of 'extended producer responsibility (EPR)' under which producers should take responsibility for the end of life management of products and materials they put on the market. Extended Producer Responsibility is a key principle in the 2002 New Zealand Waste Strategy.
To overcome the difficulties of getting importers of finished products to contribute to a levy for destruction of the gases, the Australian Regulations require all licence holders (for both pre-charged equipment and bulk substances) to participate in a 'product stewardship' scheme. Product stewardship refers to an obligation on importers and manufacturers to be responsible for their products after the purchaser has finished using them (and is the same concept as an EPR scheme). In the Australian example, importers of products containing SGGs, such as motor vehicles and heat pumps, will contribute to programmes to collect and destroy the SGGs at the end of the product's life. Product stewardship can also cover the responsibility of service companies to ensure service technicians comply with all relevant controls to minimise emissions during warranty repairs.
The new Australian controls will require all importers of products containing SGGs to belong to a government-approved product stewardship scheme. This scheme will be responsible for disposal of the gases imported. As the regulations are still being drafted, there are no approved product stewardship schemes.
Key questions
14. Should the NZ government require importers of finished products containing SGGs to contribute to a fund for destruction of the SGGs at the end of the product's life?
15. If introduced, should all products including aerosols and plastic foam be required to contribute to a fund, or should the levy be only on those where the gas can be recovered under current technologies (i.e refrigeration and air-conditioning equipment)?
16. Should importing companies be allowed to establish their own schemes, or should there only be one government-approved scheme?
Licences to import synthetic greenhouse gases
At present, the collection of data for imports and emissions of SGGs is by survey. If controls are to be introduced on SGGs, then it may be appropriate to extend the requirement for import permits that currently apply to ozone depleting substances to include all of the SGGs (including SF6). Permits could be issued on demand and at low, or no cost. The main advantage of requiring import permits is that it would provide an official record of all importers, ensuring greater reliability of the data collection required under the United Nations Framework Convention on Climate Change (UNFCCC). Because data is currently collected by survey of importers, it is clearly only possible to collect information from importers which are already known to the NZCCO. By creating an official record of importers, the accuracy of surveys would be improved.
In Australia the government has agreed to charge substantial fees for SGG import permits (AUS$15,000 per licence valid for two years for import of bulk substances, and AU$3,000 per licence for two years to import equipment pre-charged with HFCs or HCFCs) and a small fee per kg of substance as well. The fee is set to recover costs of implementing the licensing system, but is clearly a disincentive to small and 'one-off' imports. At this stage, such a high level of fees is not being proposed for New Zealand, but it remains an option that could be considered.
Regulations could also be used to require permitted importers to report to the NZCCO on amounts of gases actually imported. [The NZCCO already has the power to legally require importers to provide information on greenhouse gases under the Climate Change Response Act 2002. It must be noted though, that specific regulations to create the power to collect data on SGGs do not exist at this time. Regulations would still be necessary if legal authority was required.] This may be important in the future as is it is not practical to use the Tariff Code to monitor imports of mixtures. In the Tariff Code, refrigerant mixtures are all classified under one heading and cannot be identified separately. As most of the replacements for the ozone-depleting substances are two- and three-part mixtures of SGGs (for example R404A and R410A) the identification of these products will be increasingly important. Import permits would ensure the collection of more accurate data on the import of mixtures.
Key questions
17. Should the government require import permits for SGGs in bulk form?
18. Should it be a requirement of an import permit to report data on actual imports to the NZCCO?
19. Should the government charge a fee for an import permit? If so, how much?
Licences to import products containing synthetic greenhouse gases
In addition to requiring information on the amount of SGGs imported in bulk, the reporting methodologies and guidelines used under the UNFCCC also require countries to monitor imports of SGGs in finished products.
It would be possible to require products containing SGGs to have an import licence. Import licences would provide a more accurate method of determining the level of imports of finished products. The licences could also be used as a way to enforce contributions to any 'product stewardship' scheme. If introduced, licences would be issued on demand and there is no intention that they would be used to restrict or prohibit the import of products at this time.
There are obvious difficulties to requiring import permits for finished products. In particular, the costs, both to Government and to the private sector, of implementing a licensing scheme may be significant. There are also practical difficulties as it can be difficult to determine at the border what, if any, SGGs are contained in a product. In most cases refrigeration and air-conditioning equipment has a label on it that identifies the refrigerant (to allow future servicing) but other equipment, especially plastic foam, may require destructive testing to determine if it contains an SGG.
As with permits to import bulk substances, it is suggested that if a permit was required it would be available at low or no cost. However, charging a high fee as a disincentive for imports remains an option.
An alternative approach to requiring import permits for products would be to look at creating new statistical keys in the Tariff of New Zealand (HS codes) to more accurately specify which products do or do not contain SGGs. Amending the Tariff of New Zealand would assist with reporting obligations under the UNFCCC, but is not likely to assist with ensuring compliance with any 'product stewardship' or 'extended producer responsibility' schemes.
Key Questions
20. Should the government require import permits for all SGGs in finished products?
21. Should some types of products, such as plastic foams, not require import permits?
22. Should it be a requirement of an import permit to report data on the quantity of SGGs imported in the equipment to the NZCCO?
23. Should the government charge a fee for an import permit? If so, how much?
24. Are there other options, such as introduction of new statistical keys in the Tariff of New Zealand that could provide information on imports of finished products containing SGGs?
Manufacture and import prohibitions
One possible option to reduce emissions of SGGs would be to ban imports (and manufacture where appropriate) of specific products that contain SGGs. This option was used when CFCs were phased out. Because New Zealand is primarily a technology 'taker' it is not likely that New Zealand could ban imports of products before other industrial economies had made the investment in alternatives. As of 2004, it is not clear that there are commercially available alternatives for SGGs in many applications.
It is likely that any import bans in New Zealand would be of symbolic value, and would be unlikely to lead to changes in global production or consumption of SGGs. It is also likely that bans could have very high economic costs, but low environmental gains if there were no commercially viable alternatives, or they resulted in increased energy consumption.
No import or manufacture bans are suggested at this time. Should these circumstances change and alternatives to SGGs become widely available, the issue could be investigated again.
Key question
24. Should New Zealand be prohibiting the import of any products that are made with, or contain synthetic greenhouse gases?
a. If so, which products should be considered for bans?
No controls on SGGs in plastic foam manufacture at this time
At present, most plastic foam in New Zealand is manufactured using hydrocarbons as the 'blowing' agent. A relatively small amount uses HCFC-141b or HCFC 142b as the blowing agent. As the Montreal Protocol and New Zealand legislation is phasing out the supply of the HCFC gases, manufacturers are again looking for alternatives. These are likely to include synthetic greenhouse gases. In particular, HFC-134a, HFC-245fa and HFC-365mfc have been suggested as possible replacements. It is also possible that some of the PFCs could be used in specific circumstances. All of the HFCs mentioned have relatively high GWPs. [HFC-134a = GWP 1,300, HFC-245fa = GWP 950 and HFC-365mfc = GWP 890 over 100 years. (Source Chapter 4 of the Working Group I report of the IPCC Third Assessment Report)]
At this time, there is no international consensus of the likely demand for HFCs as blowing agents in the next 10-15 years. The industrial processes that utilise the gases are too new for the industry to have established what the best practices are, or where non-ODS and no- or low-GWP alternatives are, or are not, available. It is reasonable to assume that because the HFCs being suggested are significantly more expensive than hydrocarbons, the HFCs will only be used where there are good technical reasons. These reasons are likely to include situations where insulation properties are important (a possible example is in the walls of hot water cylinders) or where there are technical constraints to using a flammable gas at the foam-manufacturing site.
It is possible that if other controls are introduced that would apply to all SGGs users, such as a requirement for import permits to import bulk SGGs and possibly a requirement to produce codes of good practice, then these would apply to the foam sector. However, because it is not possible to predict the level of demand for SGGs in foam manufacturing and because there is little or no consumption at this time, no controls are proposed specifically for the sector. The need for specific controls should be reviewed again in four or five years, once options and alternatives are better understood.
Key question
25. Should the use of SGGs to manufacture plastic foams be controlled?
a. If yes, what type of controls would be appropriate for the foam-manufacturing sector?
Legislative options to reduce synthetic greenhouse gas emissions
If the government were to introduce legislative controls on SGGs, several possible Acts could be used. The most obvious of these are the Ozone Layer Protection Act 1996, the Building Bill 2003 and the Climate Change Response Act 2002.
Ozone Layer Protection Act 1996
The Ozone Layer Protection Act 1996 does not cover SGGs and was not intended to cover them. The Act allows regulations to be made controlling most aspects of the import, handling and release of ODS. It also allows for the Minister for the Environment to request organisations or individuals to prepare codes of practice and accreditation schemes. Because there is a complete overlap between the uses of ODS and SGGs (excluding SF6 in the electricity industry and PFCs emitted from the aluminium smelter), the structure, provisions and regulation making powers could be amended to apply controls on SGGs with only minor changes to the Act.
The use of the OLPA would ensure consistency of controls between ODS and SGGs and reduce any possibility for conflicting requirements. It could also provide an opportunity to achieve some additional reductions in emissions of ODS through improved practices in all aspects of handling refrigerant gases.
As noted above, after extensive consultation, the Australian government decided to modify their Ozone Act, rather than create a new Act to manage synthetic greenhouse gas emissions.
Building Act 1991/Building Bill 2003
The new Building Bill, which is expected to come into law in late 2004, could cover the use of synthetic greenhouse gases in the building industry. According to a Ministry of Economic Development (MED) discussion document:
"The government is proposing to amend the Building Act to introduce a licensing system for building practitioners. Licensed building practitioners will be required to undertake or supervise critical building activities."
Some have suggested the Bill provides an opportunity to control SGGs (and presumably ozone depleting substances) within the building industry.
The new Bill's definition of "building" is very clear that it does not cover motor vehicles and other forms of transport such as trains and boats which may have both refrigeration and air-conditioning systems installed. As these other sectors are possibly larger users of SGGs than the building sector, their omission is too large to ignore. While there is clearly scope to work with the building industry, the Building Bill/Act does not provide enough coverage of SGG users to be useful on its own.
The Building Bill envisages the development of "Compliance Schedules".
"A Compliance Schedule is a document issued by the Territorial Authority listing the inspection, maintenance and reporting procedures for certain systems and features in a building (such as lifts, fire alarms, air conditioning ) to ensure their continued safety of operation. (Not required for single residential dwellings.)"
Compliance Schedules may provide a framework for ensuring that once installed, refrigeration and air-conditioning equipment that contain SGGs are properly serviced and thus reduce emissions. These will be dealt with under the Building Code, which is currently being reviewed. It is possible that the Building Code could include reference to the soon to be developed Code of Good Practice on reducing emissions of SGGs in the refrigeration and air-conditioning industries and possibly to any licensing/accreditation scheme for those handling SGGs.
Climate Change Response Act 2002
The Climate Change Response Act (CCR) 2002's stated purpose is:
(1)The purpose of this Act is to enable New Zealand to meet its international obligations under the Convention and the Protocol, including, but not limited to -
(a) its obligation under Article 3.1 of the Protocol to retire units equal to the number of metric tonnes of carbon dioxide equivalent of human-induced greenhouse gases emitted from the sources listed in Annex A of the Protocol in New Zealand in the commitment period; and
(b) its obligation to report to the Conference of the Parties via the Secretariat under Article 7 of the Protocol and Article 12 of the Convention.
The CCR Act can therefore be used to collect data on consumption and emissions of SGGs. However, it does not contain any regulation making power that could be used, for example, to prohibit the use of disposable refrigerant cylinders, or to require those handling SGGs to undergo appropriate training.
Any efforts to use the CCR Act would require a significant amendment to incorporate SGGs. This is an option, but does not appear to have any immediate advantages over amendments to the Ozone Layer Protection Act.
Other legislative options
There are other acts, such as those controlling workers in the electrical industry, those controlling dangerous goods (i.e pressure vessels) and more general regulation making powers to control imports, such as the Imports and Exports (Restrictions) Act 1988 that could be used to control either those handling SGGs or the import of the gases themselves. There also remains the option of an entirely new Synthetic Greenhouse Gas Control Act. These more general controls have not been considered here, as they do not appear to offer any advantages over amendments to the above Acts.
Key question
26. If New Zealand is going to introduce regulations to reduce emissions of SGGs, should it amend the Ozone Layer Protection Act, create a new Synthetic Greenhouse Gas Emissions Control Act, or use other existing regulation making powers?
Please send your feedback to:
Iain McGlinchy
NZ Climate Change Office
Ministry for the Environment
PO Box 10-362
Wellington
New Zealand
Ph: 04 916 7632
iain.mcglinchy@mfe.govt.nz
