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5 Aerosols and Metered Dose Inhalers

Summary

About 37 tonnes of HFC was emitted from about 4 million metered dose inhalers in 2006 with a further 17 tonnes HFC emitted from using other specialised aerosols in New Zealand.

If a decision was made to implement the ETS with widespread points of obligation covering imported equipment containing HFC, it would be important in terms of equity and emissions coverage to include the aerosols sector. While compulsory market participation would be required for very few importers to cover the major source (metered dose inhalers), there may be a larger number of importers of other aerosols.

The impact of ETS pricing on a New Zealand manufacturer of aerosol cans would be major if its exports were not exempted. The price increase on the average can would be of the order of 50% so the company’s competitiveness against imports would need to be preserved. The basic price impact on inhalers would be smaller – of the order of 10%.

Around 25 million aerosol packages are sold in New Zealand each year. The majority of these are imported, with the balance being produced by at least four aerosol loading companies. HFC propellants are a high-priced alternative to hydrocarbons (approximately 200 times more expensive) and are therefore used in specialist applications. The applications which are most likely to require an HFC-based aerosol are those where low toxicity and flammability are required. Such applications include:

  • metered dose inhalers

  • aerosols used on aircraft (insecticides)

  • aerosol products used in the underground mining industry

  • dust-off agents used for computers, ATM machines, etc

  • freeze spray products used to test electronic circuits

  • solvent cleaning products used in the electronics industry.

Based on Pharmac’s sales statistics, it was determined for the inventory survey that approximately 37 tonnes of HFC was emitted from about 4 million metered dose inhalers in 2006 (CRL Energy 2007).

It was concluded that a further 17 tonnes HFC (with a high uncertainty level) would have been emitted from using other specialised aerosols in New Zealand. It is not possible without access to Customs data to directly contact importers and obtain a more comprehensive estimate.

5.1 Stakeholders and potential points of obligation

If a decision was made to implement the ETS with widespread points of obligation covering imported equipment containing HFC, it would be important in terms of equity and emissions coverage to include the aerosols sector. While compulsory market participation would be required for very few importers to cover the major source (metered dose inhalers) there may be a large number of importers of other aerosols.

Glaxo Smith Kline indicated that it was responsible for about half of the metered dose inhalers so it would be reasonable to conclude that there would be only about three other suppliers to cover the vast majority of inhalers (Puckey 2008).

The number of importers of HFC aerosols is very poorly understood. One known importer would be included if an annual 1000 tonnes CO2 equivalent annual HFC threshold was applied while another would not. There are likely to be very few that would meet such a threshold but Customs data may show there are significant amounts of specialised products that would need to be covered for consistency.

5.2 Export implications

Arandee is a New Zealand aerosol manufacturer that would suffer a major loss of competitiveness if its exported products were not exempted from the ETS price impacts (Greer 2008). The company has grown significantly in recent years by winning overseas contracts to fill insecticide aerosols for use in aircraft and electronic blower sprays. It claims that more than 90% of the cans are exported and the remainder should also be exempted because they are used on aircraft travelling internationally. It should be noted that these emissions are not exempted in the same way as CO2 emissions from international bunker fuels. The national inventory accounts for emissions from aerosols approximately estimated to be used in New Zealand and subtracts the HFC in aerosols exported to other countries.

Arandee stated that it could easily provide its HFC supplier with auditable export information as a basis for ETS exemption and the company believes that the supplier would respect the commercial sensitivity. Some negotiation would be required on whether insecticide aerosols should be exempted if they are used in aircraft that started their journeys in New Zealand.

5.3 Compliance costs

Glaxo Smith Kline indicated that reporting the HFC content of its metered dose inhalers would not be difficult (Puckey 2008) and it is assumed this would be the same for other pharmaceutical suppliers. In contrast, aerosol importers are probably not used to compliance reporting and this may result in relatively high costs. Participation in the market to purchase permits would incur extra costs.

5.4 Potential for alternatives

Glaxo Smith Kline did not know of any alternative propellants for metered dose inhalers. Similarly, Arandee could not see any alternative propellant that would be suitable for aerosol use in aircraft.

5.5 Price impacts

The impact of a $30 per tonne CO2 price on the average inhaler propellant charge (15 g HFC-134a) would be a $0.45 increase to an inhaler that Pharmac purchases for about $4 (for Ventolin – other inhaler prices vary widely). For approximately four million inhalers, such increases would add up to a small but significant increase in Pharmac’s bill for these essential products. However, a price increase of this level would be unlikely to result in reduced usage or a shift to a different propellant.

The impact of a $30 per tonne CO2 price on the average Arandee propellant charge (95 g HFC-134a) would be a $3 price increase to a can that sells for $6–$7 (exclusive of GST). The company competes on the international market for its contracts (including for its local sales) so the impact could be quite severe.

In terms of projected HFC usage and emissions, CRL Energy assesses that there would be minimal impact on inhaler use from the ETS pricing by 2015 compared with BAU. However, imports of aerosol cans (with a much higher proportional price increase) could be reduced by up to 30% compared with BAU.

5.6 Uncertainties

Uncertainties associated with metered dose inhaler quantities would be minimal for any ETS reporting because of the dependence on Pharmac funding. Propellant amounts would need to be checked more rigorously from manufacturer information.

The Aerosol Association of Australia and New Zealand has stated that statistics on New Zealand aerosol manufacture and imports are very poor, leading to uncertain estimates of total usage and very uncertain estimates of the proportion containing HFC. It is recommended that if there is an intention to make aerosol importers points of obligation, a study of the range of importers should be made with access to Customs data.

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