UNEP DTIE OzonAction Branch Compliance Assistance Programme HPMP issues Jim Curlin UNEP DTIE...

UNEP DTIE OzonAction BranchCompliance Assistance Programme

HPMP issues

Jim CurlinUNEP DTIE OzonAction Programme

Annual Joint Meeting of the OzonAction Network for Latin America and the Caribbean

Mexico City, Mexico

6-8 October 2010


Overview

HCFC Guidelines - Criteria for funding HCFC phase out in the consumption sector (decison 60/44)

Treatment of HCFC-141b in polyols (decision 61/47)

Transition from NPPs to HPMPs (decision 60/11(b))

HCFC data collection/analysis

Guide for the preparation of HPMPs

Approved template for drafting agreements (decision 61/46)

HPMPs – Status of preparation (decision 61/11)

Issues identified during HPMP submissions


Criteria for funding HCFC phase out in the consumption sector (decision 60/44)

Cut-off dates after which conversions would not be eligible for Multilateral Fund assistance

manufacturing capacity installed before 21 September 2007

Second-stage conversions of enterprises previously funded through the Multilateral Fund

The principles to be applied for 2013 and 2015 control measures – will be reviewed by the end of 2013

Starting points for aggregate reductions in HCFC consumption

Eligible incremental costs of HCFC phase-out projects

Foam sectorRAC sectorRefrigeration servicing sectorAerosol fire extinguisher and solvent sectors


Second-stage conversion

The following principles will be applied for 2013 and 2015 control measures, to be reviewed by the end of 2013:

Full funding of eligible incremental costs of second-stage conversion projects where:

HPMP should clearly show that these projects are needed to comply with the Montreal Protocol HCFC targets up to and including the 35 per cent reduction step by 1 January 2020 ; and/or

these are the most cost-effective projects measured in ODP tonnes that will allow compliance

Projects not covered above will be limited only to funding for installation, trials and training associated with the projects


Starting points for aggregate reductions in HCFC consumption

Starting points to be established at the time of submission of an HCFC investment project or a full HPMP if these are submitted before baselines are knownCountries may choose between most recent HCFC consumption or the average consumption forecast of 2009 and 2010 as their starting pointIf average consumption forecast is chosen as starting point, this may be adjusted where the final calculated HCFC baseline based on Article 7 is different


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To apply the following principles for the first stage of the HPMP, to be reviewed in 2013:

The technical information contained in document UNEP/OzL.Pro/ExCom/55/47 should be used as a guide when preparing HCFC phase-out projects

Current CE threshold values for CFC phase-out projects but measured in metric kilogrammes

Flexibility – between IOC to ICC, and up to 20 percent only between ICC to IOC, as long as original intent of project is not changed

Additional funding up to 25 percent above CE for introduction of low-GWP alternatives

Eligible incremental costs of HCFC phase out projects


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Foam Sector:

• IOC at US$1.6/metric kg for HCFC-141b and US$1.40/metric kg for HCFC-142b

• IOC for systems houses will be calculated on the basis of the total HCFC consumption for all downstream enterprises

• ExCom to fund on a case by case basis a higher IOC than above for the introduction of low-GWP water blown technology



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Refrigeration & air-conditioning manufacturing sector:

IOC for the air conditioning sub-sector will be considered at US$6.3/metric kg

IOC for the commercial refrigeration sub-sector will be considered at US$3.8/metric kg

No IOC will be considered for those projects categorised under the refrigeration equipment assembly, installation and charging sub-sector in line with decision 31/45



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Refrigeration servicing sector:

Countries with HCFC consumption of up to 360 MT must include in their HPMP:

A commitment to meet the 2013 and 2015 control measures or up to the 35 percent reduction in 2020, as well as to restrict imports of HCFC-based equipment if necessary to meet compliance

Mandatory annual reporting on implementation progress;

Description of roles of various stakeholders



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Funding for those with HCFC consumption of up to 360 MT to be provided as follows


Consumption (metric tonnes)* Funding up to 2015 (US$) Funding up to 2020 (US$)

>0 <15 51,700 164,500

15 <40 66,000 210,000

40 <80 88,000 280,000

80 <120 99,000 315,000

120 <160 104,500 332,500

160 <200 110,000 350,000

200 <320 176,000 560,000

320 <360 198,000 630,000


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Countries with consumption of 360 MT both in the manufacturing and consumption sector may submit projects to address the manufacturing sector

Countries with consumption above 360 MT should first address the manufacturing sector to meet 2013 and 2015 measures. If assistance in the servicing sector is needed to meet compliance, it will be calculated at US$4.50 per metric kg and deducted from starting point



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Aerosol, fire fighting and solvent sectors:

Projects in this sector will be considered on a case-by-case basis.



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The phase-out of HCFC-141b contained in pre-blended polyols that were imported and/or manufactured domestically, and counted as consumption under Article 7, was eligible for assistance according to existing guidelines

For HCFC-141b contained in pre-blended polyols, which had not been counted as consumption under Article 7, to request Article 5 countries that wished to seek assistance for the phase-out of such imports:

To include in their HPMPs a list of all the foam enterprises established prior to 21 September 2007 that used imported polyol systems, including the amount of HCFC-141b contained therein;

HCFC-141b in pre-blended polyols (decision 61/47)


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To include in the starting point for aggregate reduction in HCFC consumption the annual amount of HCFC-141b contained in imported polyol systems during the 2007-2009 period;Provide a cost and funding schedule, accounting for the need for support beyond 2015, for eligible consumption;Provide a commitment to ban HCFC-141b in pre-blended polyol systems after plants are converted;Domestic consumption would be the basis for funding projects for HCFC 141b in pre-blended polyols but that full consumption would be deducted from the starting point for those enterprises manufacturing pre-blended polyol systems.

HCFC-141b in pre-blended polyols (decision 61/47) (continued....)


Final report on the evaluation of terminal phase-out management plans (Source - UNEP/OzL.Pro/ExCom58/8):

Enhancement of ODS data collection and monitoringReview ODS regulations to include HCFC when implementing last tranche of NPP/TPMP: HPMP funding provides for inclusion of HCFC into current ODS regulations (54/39 (e))Include specific modalities in training programmes for assisting technicians without formal trainingEncourage establishing/strengthening refrigeration associations to promote good service practicesAgencies to provide information on feasibility when establishing ODS reclamation and recycling centresEstablishment of monitoring and reporting mechanisms

Funding tranches of NPPs or TPMPs not submitted to the 61st Meeting should be integrated into the relevant HCFC phase-out management plans of the countries concerned (decison 60/11(b))

Transition from NPPs to HPMPs


Section Title Number of Pages/Paragraphs Project Cover Sheet

EXECUTIVE SUMMARY (three to four pages)I. INTRODUCTION I.1 Background information (one paragraph)I.2 ODS policy/legislative/regulatory and institutional

framework

I.2.1 Status of ratification of amendments to the Montreal (one paragraph and/or a table)I.2.2 ODS legislation/regulations (two pages)I.3 Stakeholders (one page)I.4 ODS phase-out programme (three pages)I.4.1 Enterprises converted to an HCFC technology I.4.2 Refrigeration servicing sector II. HCFC CONSUMPTION DATA II.1 Methodology and validation (one page)II.2 HCFC consumption data (four pages, including tables)II.3 Sectoral distribution of HCFC (five pages including tables)II.3.1 HCFC-based manufacturing sector II.3.2 Refrigeration servicing sector

Guide for the Preparation of HPMPs


Guide for the Preparation of HPMPs (cont.)

Section Title Number of Pages/ParagraphsIII. PHASE-OUT STRATEGY

III.1 Overarching strategy (four pages, including tables)

III.2 First stage implementation programme

III.2.1 HCFC manufacturing sector (10 pages, including tables)

III.2.2 HCFC refrigeration servicing sector (10 pages, including tables)

III.2.3 Other impacts on the environment including on the climate

(2 pages)

III.2.4 Co-financing (1 page)

IV. PROJECT COORDINATION AND MANAGEMENT (three pages)

ANNEX: DRAFT AGREEMENT

RELEVANT SOURCES OF INFORMATION

Decisions for funding phase-out of HCFC consumption


Template for draft agreements for HPMPs (decision 61/46)

A template was approved as a reference for the drafting of an Agreement between a country and the Executive Committee regarding HPMPs.

Agreements for HCFC sector plans would be considered on a case by case basis.

Future draft agreements of HPMPs would schedule the submission of final tranches so that HCFC consumption would be reported under Article 7 of the Montreal Protocol for 2013 before approval of the last tranche of the HPMP agreement.


Appendix Subject

1-A Substances

2-A Targets and Funding

3-A Funding Approval Schedules

4-AFormat of Tranche Implementation Reports and Plans

5-A Monitoring Institutions and Roles

6-A Role of Lead Implementing Agency

6-B Role of Cooperating Implementing Agencies

7-A Reductions in Funding for Failure to Comply

8-A Sector Specific Arrangements

Template (cont.) - Standard clauses referring to data in appendices


• ExCom noted with concern, that for the second consecutive year HPMP preparation activities were taking longer than had been planned and urged bilateral and implementing agencies to complete HPMP development as soon as possible, in close consultation with NOUs

• In view of the delays occurring in many of the chiller projects approved by the Executive Committee, to encourage implementing agencies to apply lessons learned from chiller activities in future HCFC projects

• To request bilateral and implementing agencies to advise all countries that they could seek co-financing for maximizing climate co-benefits within the HPMP, although doing so should be without prejudice to the timely submission of the HPMP

Status of preparation of HPMPs (decision 61/11)


Lead agencies to provide information on the latest status of preparation of HPMPs to the 62nd Meeting that:

Verifies the status of implementing agencies’ efforts and progress towards establishing and modifying relevant HCFC licensing systemsSpecifies actions to endeavour to obtain co-financing

Status of preparation of HPMPs (decision 61/11) (continued)


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Agencies urged to submit HPMPs and HCFC sector plans to the 62nd and 63rd Meetings

the first HCFC control measures would come into force in less than three years

Status of preparation of HPMPs (decision 61/11) (cont.)


Issues identified HPMP submissions 1/7HCFC consumption

There is general concern on the rapid growth of HCFC-based equipment and HCFC consumption in the servicing sector.Submitted HPMPs show marked increase in HCFC consumption in many countries - increasing 10-30% from 2009In many instances, there were no clear reasons for the high increase in consumption and most were estimates.Excessive growth rates in consumption reported in recent yearsForecasted 2010-2012 consumption - some estimates are hypothetical based on broad assumptionsUNEP encourages ODS Officers to consider introducing import quota as early as possible provided the impacts to the industry are acceptable


Issues identified HPMP submissions 2/7Project documentation

Completeness of documentation CFC phase out experience not fully taken into account Limited information provided at sector/enterprise level (no base line equipment, no technical review, etc.)HPMPs page documents that could be done in 50-60 pages. Put effort on making a good Executive SummaryInsufficient quality review of data provided in many of the HPMPsLack of internal consistency of the projects (e.g. consumptions, details on projects in the same document, etc)


Issues identified HPMP submissions 3/7HPMP for low volume consuming countries

Experiences & lessons learnt from implementation of TPMPStatus of HCFC legislation and licensing/quota systemsHCFC uses in the servicing sectorLevels of funding above agreed guidelines

HPMP for non LVCs Priority of HCFC-141b over HCFC-22 and/or HCFC-142b Approaches followed in calculation of costs of sectoral plansCounterpart fundingTechnical assistance, training, contingency and project management unitPhase-out activities in the servicing sector


Issues identified HPMP submissions 4/7Policy components

HCFC legislation should be addressed during HPMP preparation. Additional funding for enforcement would be considered for legislation already prepared.

Infrastructure established under TPMPsInfrastructure established under TPMPs/RMPs not described or not related to HPMP plans. New activities are needed but a connection and justification should be provided


Issues identified HPMP submissions 5/7Accelerated phase out

“Accelerated” means country wishes to phase out faster than MP schedule.No additional funding will be available for accelerated phase out in non-LVCs Requests for accelerated phase out (with no additional funding) can however be considered on a case-by-case basis (only for LVCs)

Lead Agency (LA) and monitoring function Insufficient coordination among the lead and cooperating agency(ies)The LA is responsible for monitoring and should identify any reasons for failure of any HPMP components and bring it to the attention of the MFS or the ExCom


Issues identified HPMP submissions 6/7Inclusion of IS into HPMP (Decision 61/43)

Decision gives countries a choice: submit IS as part of the HPMP, or continue submitting it separately MFS has advised that inclusion of IS into HPMP:

Makes it subject to a performance based evaluation in relation to the targets to be met by the HPMPAny failure in meeting these targets for a specific tranche would mean that IS funds included in that tranche may be delayed as wellFrom then onwards, it will be calculated as part of the HPMP, not as a separate IS.


Issues identified HPMP submissions 7/7Climate co-benefit and co-funding

HPMPs must include information on co-financing which is a requirement of decision 54/39Country and IA need to include section on co-funding in the HPMP which should explore opportunities for co-funding for applicable HPMP activitiesCo-funding source could be from many sources such as GEF, carbon funds and can even be from the industry/company itself.Since securing co-funding could take time, it was not required at the time of HPMP submission.Be innovative & link to other initiatives: energy efficiency, energy labelling schemes, Green Buildings


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UNEP DTIE OzonAction Branch Compliance Assistance Programme HPMP issues Jim Curlin UNEP DTIE...

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