China to receive $385m to eliminate HCFCs

CHINA: Up to $385m is to be given to China to end its production of R22 refrigerant.

The money from the Montreal Protocol's Multilateral Fund is designed to help ensure the entire elimination of China's industrial production of ozone depleting substances by the 2030.

China has agreed to retire its current HCFC production capacity and will also retire surplus production capacity that is currently not utilized.

According to the Chinese, the total amount of HCFCs to be eliminated will prevent the emission of over 4,300,000 tonnes of HCFCs, equal to 300,000 tonnes in terms of its ozone depletion potential, and 8 billion tonnes of carbon dioxide equivalent greenhouse gas emissions.

With China being the largest producer and consumer of HCFCs, this is potentially the largest project approved so far under the Multilateral Fund since its inception.

China will close and dismantle its production lines producing only HCFCs for uses controlled under the Montreal Protocol and ensure that any HCFC plants that will receive funding do not switch to producing HCFCs as industrial feedstock, a use not controlled by the Montreal Protocol. China will also coordinate with stakeholders and make best efforts to manage HCFC production and associated by-product production in HCFC plants in accordance with best practices to minimize associated climate impacts.

Over the next four years China will receive US $95m to cover the first stage of its HCFC production phase-out management plan (HPPMP) to assist the country to meet the freeze in HCFC production by 2013 and the reduction by 10% by 2015 as required by the Montreal Protocol's HCFC phase-out programme.

The latest data shows that China produces 92% of the total HCFC production of developing countries.

While the announcement was welcomed by the Environmental Investigation Agency (EIA), there are concerns to ensure that HFC23, a hugely damaging by-product of production, is also destroyed.

EIA is calling on China to formally pledge to destroy the HFC23 from all Chinese HCFC production facilities, including facilities which produce HCFC for feedstock.

"Elimination of China's production of HCFCs over the next 17 years is a great win for the environment," said Mark W Roberts, EIA's senior Policy advisor. "However, it will be a hollow victory unless China adopts measures to prevent HFC23 from being vented into the atmosphere."

   

International Heating and Cooling Product Distributor Please Guilty

International Heating and Cooling Product Distributor Pleads Guilty and

Sentenced for Illegal Purchase and Sale of Smuggled Ozone-Depleting Refrigerant Gas

        Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Maureen O’Mara, Special Agent in Charge, United States Environmental Protection Agency (EPA), Criminal Investigation Division, Atlanta Area Office, and Alysa D. Erichs, Special Agent in Charge, United States Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announced today that defendant, FSD Group, LLC a Florida corporation with its headquarters in Miami, was convicted and sentenced in connection with the illegal receipt, purchase, and sale of ozone-depleting refrigerant gas that had been smuggled into the United States contrary to the Clean Air Act, in violation of Title 18, United States Code, Section 545.

        FSD Group pled guilty to a one count Information filed against it before United States District Court Judge Joan Lenard, for knowingly receiving, buying, selling and facilitating the transportation, concealment, and sale of approximately 65,592 kilograms of the ozone-depleting substance hydrochlorofluorocarbon-22 (“HCFC-22") which had been illegally smuggled into the United States contrary to the Clean Air Act.  HCFC-22 is a widely used refrigerant for residential heat pump and air-conditioning systems.

        Immediately following the guilty plea, FSD Group was sentenced to three years of probation and ordered to pay a $100,000.00 criminal fine.  In addition, as a special condition of probation, FSD Group was ordered to implement and enforce a comprehensive Environmental Compliance Plan.  FSD Group was also ordered to forfeit to the United States $180,051.00, which represents proceeds received as a result of the crime and pay owed duties to the United States Customs and Border Protection for incorrectly classified merchandise.

        Federal law prohibits dealing in merchandise that is imported contrary to law.  The Federal Clean Air Act regulates air pollutants including ozone depleting substances such as HCFC-22.  The Clean Air Act and its implementing regulations established a schedule to phase out the production and importation of ozone-depleting substances beginning in 2002, with a complete ban starting in 2030.  To meet its obligations under an international treaty to reduce its consumption of ozone-depleting substances, the United States issued baseline allowances for the production and importation of HCFC-22 to individuals and companies.  In order to legally import HCFC-22, you must hold an unexpended consumption allowance. 

        According to court records, FSD Group which also operates under the name Saez Distributors, is an international supplier and distributor of merchandise for heating, ventilation, air conditioning, and refrigerator systems, equipment and products including ozone-depleting substances.  In business for thirty five years, and itself, an original allowance holder under the Clean Air Act, FSD had extensive knowledge regarding the Act’s rules and prohibition against purchasing illegally imported HCFC-22.  During the course of the illegal conduct, in addition to its legal imports, FSD Group made additional purchases of HCFC-22 from various importers, knowing they did not hold the required unexpended consumption allowances, totaling approximately 65,592 kilograms, of restricted HCFC-22, with a fair market value of approximately $733,096.00.  

United States Attorney Wifredo A. Ferrer stated, “The regulatory program here is intended to protect us all from the harmful effects associated with depletion of the earth’s ozone layer.  By aggressively supporting the investigative agencies in their efforts to enforce federal laws that seek to protect our environment, we are both meeting our country’s commitment and responsibility to our future generations and the international community.”

       

        EPA SAC Maureen O’Mara said, “HCFC’s deplete the stratospheric ozone layer, which is critical to life on earth and protecting people from the harmful effects of ultraviolet radiation, including cancer.  EPA will continue working with ICE and other agencies to combat such criminal conduct, preventing these dangerous smuggling and distribution operations, and curbing the world-wide threat of stratospheric ozone depletion.  This plea and sentence, the first of its kind against an allowance holder, sends a strong message that those who jeopardize public safety in order to make illegal profits will be vigorously prosecuted and punished.”

       

        “EPA realizes that as HCFCs are phased out domestically, smuggling is likely to rise, jeopardizing human health and our atmosphere. This is why EPA is working harder than ever, in cooperation with our federal partners, to seek justice against those that not only illegally import R-22, but also knowingly purchase contraband material,” said Drusilla Hufford, Director of EPA’s Stratospheric Protection Division.

       

        “The unlawful importation of goods poses a significant threat to the national security, public safety, and in this particular case, the illegal importation posed a global hazard to our environment,” said Alysa D. Erichs, Special Agent in Charge of HSI Miami.  “We will continue to vigorously investigate those who are determined to line their pockets with the proceeds of crimes against the environment.”

        This matter and others involving the smuggling and distribution of ozone-depleting substances are being investigated through a multi-agency initiative known as Operation Catch-22.  Operation Catch-22 has, to date, including the successful conviction of nearly a dozen individuals and corporations at every level of the refrigerant gas smuggling and distribution chain. 

Mr. Ferrer commended the investigative efforts of the EPA, ICE-HSI, the Florida Department of Environmental Protection, Criminal Investigation Bureau, and the Miami-Dade Police Department.  The case was prosecuted by Special Assistant U.S. Attorney Jodi A. Mazer.

        A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov.

Dave Stirpe
Executive Director
Alliance for Responsible Atmospheric Policy
2111 Wilson Blvd., 8th Floor
Arlington, VA 22201

phone: (703) 243-0344
website: www.arap.org

Price of R-22 Air Conditioner Refrigerant Drastically Increases

Written by Jesse Muench

We are quite concerned about the recent drastic price increase of R-22 (also called Freon), a coolant used in many air conditioners, due to a regulation put into place by the Environmental Protection Agency (EPA) (http://www.epa.gov/ozone/title6/downloads/Homeowner.pdf) that will phase out the use of R-22 completely by the year 2020. R-22 has been shown to release Hydrochlorofluorocarbons (HCFC’s), which are harmful to the ozone, leading the EPA to gradually eliminate it.

Because of this phase out R-22 refrigerant will gradually be produced less and less, thus diminishing supplies and increasing costs of the coolant. The cost for Freon recently doubled, and is anticipated to eventually triple, placing a major burden on air conditioner owners. The recent spikes in price have put HVAC contractors in a state of frenzy. In the South where air conditioners are used more frequently many HVAC companies are buying as much R-22 as possible thus making it even scarcer and making the price even higher in the North.

If you own an air conditioner that uses R-22 there are two primary issues that will affect you. The first is that as time goes on it will become more and more expensive to add Freon to your air conditioner, and eventually it will be completely unavailable. The second issue is that theft of R-22 from your air conditioner becomes much more likely. As Freon becomes more and more scarce and the prices rise it will become much more valuable, and increase the incentive to steal it.

Most air conditioners 5-10 years or older use R-22. If you are uncertain of what type of refrigerant your air conditioning unit uses don’t hesitate to give us call and we can help you determine if this recent price shift will affect you. We are also available for any questions you have about this change or challenges it may present to you. Feel free to give us a call at 262-677-1037 for any of these questions or for more information. There is also a Frequently Asked Question section on the EPA’s website that can help you better understand what this all means for you. We will keep you updated of any major changes in this matter right here on our blog. Also be sure to watch the video attached below in which our owner Steve Holland briefly discusses what to expect with Freon and how it will affect you.

The information contained in this article have been written for the HVAC industry public or private and are not to copied, reproduced or plagiarized without the written consent of the author. News publications and trade organizations interested in using content contained in this blog/article can contact Steve Holland at Holland Home Services at the Contact Us section of this.

Freon For Older Air Conditioners Is Being Phased Out

Written by Patrick Phillippi

Greensboro, NC - Approximately eighty percent of air conditioners across the country are going to have to replaced by 2020, and the price to simply service air conditioners with Freon is going to triple, this as a result of new emission standards from the Environmental Protection Agency.

Air conditioners five to ten years old or older use R22 Freon, which is being phased out for the new Freon, R422.

This phase out is causing the prices for R22 to skyrocket, according to Vicky Maness of Kay Heating and Air. The prices consumers will be pay this summer will be almost triple the price, Manes said,"It is definitely going to be a shock knowing what they paid last year."

The R22 Freon will no longer be produced after 2020, and because older air conditioners only use R22, they will all have to be replaced.

And with the cost of replacing an air conditioner starting at $5,000, many consumers will be faced with a hard reality.

Rodney Smith, a supplier of R22, says of the price rise, "It is like nothing I have ever seen, ever. I think the reaction from consumers is going to bordering on outrage."

As R22 Freon continues to phase out of production, the price of this freon could continue to rise, making it even more expensive to service air conditioners.

And the impact will be widespread, "Apartment complexes, homeowners, businesses, any equipment that has R22 Freon it's going to affect them right now." said Maness.

What’s Going on with R-22

By Charlie McCrudden | January 30, 2012
Recent actions by the U.S. Environmental Protection Agency (EPA) regarding HCFCs have led to uncertainty about the availability of R-22 in the coming months and years. In response, contractors have noticed a ramp-up in the chatter about R-22 and price changes as some manufacturers and importers have amended their sales policies.

This situation is the culmination of several factors, including the continued implementation of the federal government’s policies regarding HCFCs, current market conditions, and delays in the regulatory process.

As most contractors know, the EPA controls the production of HCFCs, including the refrigerant known as R-22, through allowances that limit how much each gas manufacturer and importer can produce or import in a given year. Under the implementation of the Montreal Protocol, the production and use of R-22 is slowly being phased out.

In August 2011, the EPA proposed to adjust the allocations in place for the years 2012-2014. This adjustment was necessary because of a lawsuit filed by two HCFC producers who had completed a legal trade of allocations that EPA had failed to recognize in its allocations released in 2009.

EPA consulted with industry stakeholders before proposing to reduce the annual allocations. In gathering information used to develop the August 2011 allocation adjustment, EPA found that there was an oversupply of R-22 in the marketplace, partly evident by a lack of demand, increased reuse of R-22, and low wholesale prices. In fact, in 2010, producers of R-22 only utilized 86% of their allocations. A trade organization representing the manufacturers and importers of R-22 supported these claims, and advocated for a 20% reduction in allocations for 2012-2014.

By the end of 2011, EPA had yet to finalize its adjustment proposal for the 2012-2014 allocations. But EPA did release a subsequent version of the August 2011 adjustment proposal on December 30, 2011, one that proposed to reduce the allocations for 2012-2014 between 11-47%.

Without a finalized adjustment rule, the producers and importers of R-22 were stuck in a legal limbo – on January 1, 2012, they did not have the authority to manufacture or import R-22. Recognizing this problem, on January 20, 2012, EPA sent “non-enforcement” letters to the producers and importers of R-22, alerting them that they could resume the manufacture and import of R-22 in the interim even though EPA had yet to set the new allocation amounts. The non-enforcement letter advised that production would be curtailed by 45% of their last allocation amount, the high end of the allocation adjustment proposal.

It is expected that the EPA adjustment proposal will take at least until the summer of 2012 to be completed. The end result could be a reduction in R-22 allocations somewhere between 11-47%, meaning it is likely the final adjustment proposal will be less than the interim 45% reduction and that more R-22 may be produced or imported.

ACCA has been following this issue to provide contractors with the most up-to-date and precise information available. We will continue to monitor the allocation adjustment rulemaking process and alert members of any progress or actions taken by EPA.

UPDATE: February 2, 2012

The last two weeks have been like no other in the industry.

As a follow-up to the regulatory alert posted last week, I thought I would try to give some further background on what’s driving the uncertainty in the R-22 marketplace.

Two factors make the R-22 market different from a typical open and competitive marketplace where the rules of supply and demand govern.

First, as everyone knows, the use of R-22 is slowly, but actively being phased out by the EPA under the Montreal Protocol. About every five years, the manufacture and import of R-22 is stepped down under a program http://www.epa.gov/ozone/title6/phaseout/hcfc.html designed to phase out the production and use by 2030.

Second, under the phase down, the production and import of R-22 marketplace is tightly controlled through production and consumption allocations granted by the EPA, typically on a five year basis.
In regulating the marketplace and setting the production and import allocations, EPA is making certain assumptions about how much R-22 will be necessary for servicing needs going forward. (Remember that as of 2010, newly manufactured R-22 cannot be used in newly manufactured appliances, only servicing existing equipment.)

During the phase down, EPA has repeatedly tried to make clear that it wants to oversee a smooth transition away from the HCFCs. That’s partly the reason for the allowing the continued manufacture of dry charged R-22 condensing units.

As part of that transition, EPA wants to promote recovery and reclamation of R-22 for continued servicing needs, but also encourage changeover to non-ozone depleting substance alternatives, refrigerants like 410A.

It’s impossible to predict exactly where EPA will decide to set the allocation amounts for 2012-2014. As noted in the regulatory alert, the earliest their decision will come out is this summer. Until then you can expect to see more uncertainty about price and availability.

Charlie McCrudden is ACCA Vice President for Government Relations.

The Alliance for Responsible Atmospheric Policy's Response to the EPA's Allocation of HCFC 22

Some Replacements for CFC-Containing Refrigerants Much More Potent GHGs than CO2

• Aug 03, 2011

While international climate talks remain deadlocked, the Montreal Protocol has been methodically eliminating some of the worst chemicals contributing to global warming.

International ozone negotiators meeting in Montreal last week approved country plans to phase out ozone depleting substances (ODS) that are also super greenhouse gases (GHGs) that harm the global climate. By 2015, the reductions approved last week will prevent more than 62 million tonnes of CO2 equivalent (CO2e) emissions.

From 25-29 July, negotiators at the Multilateral Fund, the financial body established to assist developing countries to meet their commitments under the Montreal Protocol, assessed ODS phase-out plans submitted by dozens of countries including China, Brazil, Indonesia and Mexico.

Countries converting from ODS traditionally have chosen to convert to high-GWP hydrofluorocarbons (HFCs), chemicals that do not harm the ozone layer but that are super-greenhouse gasses with global warming potentials (GWPs) hundreds to thousand of times greater than CO2. Developed countries that have already phased out ODS have switched to high-GWP alternatives in about 75 percent of instances. However at last week's meeting, many phase-out plans that proposed to convert to HFC-410A and other high-GWP alternatives were either revised or rejected.

"The rejection of phase-out plans that proposed the use high-GWP alternatives signals that the Montreal Protocol is committed to protecting climate," said Mark W. Roberts, international policy adviser to the EIA, who attended the meeting. He added, "The world is finally recognizing that there's simply no reason to fund transitions to super greenhouse gases when environmentally responsible alternatives are available."

While the majority of conversions were from HCFCs to low-GWP alternatives, several plans were approved that will "phase-in" high-GWP HFCs in refrigeration and air conditioning, primarily as a result of funding constraints that are limiting complete adoption of climate-friendly alternatives. HFC-410A, which is 1,890 times more powerful as a greenhouse gas than CO2, was approved for use in air conditioning in China, Mexico and Lebanon. These conversions will negate millions of tonnes of CO2-equivalent emissions reductions and lock these countries into climate-damaging technologies for decades.

"The decisions being made are a signal to all countries that HFCs are a dead-end technology and that enormous climate benefits are available through the Montreal Protocol's HCFC phase-out,” said Clare Perry, senior campaigner at EIA. "An even greater climate payoff could be achieved by slightly increasing the Multilateral Fund's budget so that HFCs are not unnecessarily phased in," she said.

A second meeting of the Montreal Protocol's began yesterday to discuss wider issues including the next tranche of funding available for the HCFC phase-out, as well as proposals to begin a phase-out of HFCs.

China receives $265-million grant to reduce HCFC use

Thursday, August 04, 2011

The Multilateral Fund, a financial body established to aid developing countries meet their Montreal Protocol commitments, has given China a $265-million grant, to reduce the country’s use of hydrochlorofluorocarbons which contributes to ozone layer degradation. China, the largest producer and consumer of the gas, uses HCFC mainly for air-conditioning refrigerant as well as industrial and commercial refrigeration, foam blowing agents, and as solvents. The country will be using the grant approved by the executive committee to support its commitment on achieving a green economy. This step also represents the first stage of China’s HCFC phase out management plan, which when implemented, will not only eliminate 3,320 tons of HCFC consumption in the country, but will also help the country adopt new technologies that will be used to significantly reduce emissions of greenhouse gases. Under the country’s plan to reduce the use of the gas, they intend to strengthen policy implementation to restrict the growth of HCFC production capacity, and establish the production capacity of alternatives through a series of projects. In addition, the government will also focus on reducing the leakage of refrigerants. Following the plan and with the aid of the grant, China could see an overall reduction of about 17 percent of the country’s total amount of controlled HCFC use. In line with their efforts, United Nations Development Program, U.N. Environment Program, U.N. Industrial Development Organization, the World Bank, and the governments of Germany and Japan will be aiding China. In 2009, China was responsible for over 58 percent of HCFC consumption in developing countries; this was due to the rapidly growing economy. Industries in the country are faced with the fact that they should convert hundreds of their assembly lines in order to stop the consumption of HCFC by 2013 and reduce its consumption from this level by 10 percent by 2015. “The approval of China’s HCFC phase out management plan represents an extraordinary achievement by the Multilateral Fund and its stakeholders to reduce HCFC consumption,” said Maria Nolan, chief officer of the Multilateral Fund. The fund was established in 1991 and has since approved activities including industrial conversion, technical assistance, training and capacity building worth over $2.6 billion. As of April 2011, contributions made by some 45 countries totaled over $2.77 billion. Its main objective is to assist developing country parties to the Montreal Protocol whose annual per capita consumption and production of ozone depleting substances is less than 0.3 kilograms to comply with the control measures of the protocol. Currently, 147 of the 196 parties to the Montreal Protocol meet these criteria. In line with the Montreal Protocol’s phase out of ozone depleting substances starting the last week of July, the U.N. had started giving aid to countries in their transition to a low-carbon economy. It is estimated that by 2015, combined member countries’ plans to reduce ozone depleting substances will prevent more than 62 million tons of carbon dioxide equivalent emissions. (L. J. Polintan) Article obtained from: http://www.ecoseed.org/politics-article-list/article/3-politics/10647-china-receives-$265-million-grant-to-reduce-hcfc-use

Miami Man Sentenced to 18 Months in Prison for Smuggling Refrigerant
WASHINGTON –Today, U.S. District Court Judge Adalberto Jordan sentenced Brendan Clery, 34, to 18 months in prison and ordered him to pay a $10,000 criminal fine and forfeit illegal proceeds in the amount of $935,240. Clery pleaded guilty in April 2011 to knowingly importing approximately 278,256 kilograms of illegal hydrochlorofluorocarbon - 22 (HCFC-22, also known as R-22) into the United States. HCFC-22 is an ozone-depleting substance regulated by EPA under the Clean Air Act (CAA). HCFC-22 depletes the ozone layer, resulting in increased ultraviolet radiation-B (UV-B) reaching the Earth’s surface, which in turn leads to a greater chance of overexposure to UV radiation and the risks of health effects, such as skin cancer, cataracts, and suppression of the immune system.

"EPA takes seriously the smuggling of illegal substances that can harm the ozone layer, which protects us from harmful UVB radiation that can cause skin cancer and cataracts,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s sentencing is an example of EPA’s commitment to aggressively enforce U.S. laws and meet our international obligations."

According to court records and statements, in 2005, Clery formed and served as president of Lateral Investments LLC, a corporation he established in Florida for the purpose of importing merchandise, including refrigerant gas he intended to sell illegally. Between June and August 2007, Clery illegally smuggled approximately 278,256 kilograms or 20,460 cylinders of restricted HCFC-­22 from China, with a market value of $1,438,270, and at no time did Clery or Lateral Investments hold the consumption allowances required to legally import HCFC-22.

EPA established a schedule to phase out the production and importation of ozone-depleting substances, with a complete phaseout starting in 2030. To meet its obligations under the Montreal Protocol, an international treaty designed to protect the ozone layer, EPA issued baseline consumption allowances for the production and importation of HCFC-22 to individuals and companies. To legally import HCFC-22 for consumption, one must hold and expend one consumption allowance for each kilogram of HCFC-22 imported into the United States.

This case was part of a larger criminal investigation known as Operation Catch-22. It was investigated by the Environmental Protection Agency, U.S. Immigration and Customs Enforcement, and the Florida Department of Environmental Protection, Criminal Investigation Bureau, and prosecuted by special assistant U. S. Attorney Jodi A. Mazer.

More information on EPA’s criminal enforcement program: http://www.epa.gov/compliance/criminal/index.html

US Government Successful Prosecution of HCFC-22 Smugglers

ALLIANCE COMMENDS US GOVERNMENT FOR
SUCCESSFUL PROSECUTION AND SENTENCING OF HCFC-22 SMUGGLERS

For more information about this and other HCFC, CFC and HFC regulations call RemTec today!

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