Document 9JLmogd8yM736VkxbrbXxBae6

The Triple Challenge for the RACHP Sector FPP4EU Conference, Federica Rizzo 12 Dec 2022 The voice of the RACHP sector in Europe Full Value Chain of Refrigeration, Air Conditioning and Heat Pump Industry Small - medium - large companies National and sectoral associations Over 200,000 direct employees, over 30bn turnover in Europe Main activities: Promote Decarbonisation of Heating & Cooling Ensure responsible management of all types of Refrigerants Advise on Ecodesign and labelling Corporate members Association members 2 EPEE Members, representing 200K jobs in Europe, make the full product range of refrigeration, air conditioning and heat pump equipment, including ... Residential Heat Pumps, e.g. hydronic Air/Air Heat Pumps for residential and commercial use Large AC and heat pumps (chillers, VRFs, rooftops, ...) Commercial Refrigeration Industrial Refrigeration Transport refrigeration District Heating and Cooling ... which requires a diversity of refrigerants - Fgases (HFCs, HFOs) and natural 3 refrigerants  The Montreal Protocol including the Kigali Amendment is one of the most important tools the world can use to mitigate the emissions of greenhouse gases and thereby ensure that the global temperature return to the "safe" level. The IPCC 6th Assessment Report repeats the estimate that the Montreal Protocol can contribute up to 0.4 C in reduction of global temperature. "It's now or never" Increase in heat pumps sales in selected regions, 2021 relative to 2020. Source: IEA Report, Nov 2022 As highlighted in the IEA 10Point Plan to Reduce the European Union's Reliance on Russian Natural Gas, speeding up the replacement of gas boilers by doubling heat pump installations in the European Union would save 2 bcm of gas use in the first year! It relies on refrigerants that are safe and energy efficient. Fgas emissions have impact on climate change due to their global warming potential (GWP*), which is being gradually lowered. HFCs were developed in the 1990s to replace the ozonedepleting substances (CFCs and HCFCs), which were phasedout in Europe and other developed countries. Since 2014, HFCs are subject to phasedown mechanism.. *GWP= Global Warming Potential RACHP Sector: Fgases This process is carried out under the Montreal Protocol and the 2016 Kigali Amendment. HFOs (and their blends) have a very short atmospheric lifetime and ultra low GWP (Global Warming Potential) values typically below 10 (i.e., significantly reduced compared to conventional (saturated) HFCs The wide EU PFAS definition used in the 2021 REACH Registry of Intentions resulted in unprecedented coverage of chemical substances. RACHP Sector: PFASs The analysis of impacted uses in the RACHP industry requires major and timeconsuming effort within the whole supply chain. The properties of the substances are the main reason for using them. Refrigerants themselves are not water soluble and do not have their fate in water ecosystems. Lower GWP and energy efficient solutions are key for the decarbonization of the sector. State of the art alternatives for fluoropolymers are lacking in functionality, performance and will endanger the efficiency, longevity and reliability of RACHP systems, causing additional leakages. What is at stake? The decarbonization of the H&C sector allows the reduction of 1.5 Gigatonnes of CO2 equivalent by 2030 and 5 Gigatonnes by 2050. Environment - protection from pollution EndofLife measures for refrigerants and to ensure that fluoropolymers are correctly handled and not discarded. Fgases are used in closed systems to avoid emissions. Emissions in the atmosphere are prevented through the Fgas Regulation to ensure safety. Protection of Health of workers and society RACHP Safety of consumers and operators Climate Change mitigation Heat Pumps as key enablers of the decarbonisa tion of H&C Flammability and toxicity are challenges to many alternatives and substitutions. Training and certification of skilled personnel is key The dilemma? Phase down to reduce HFC EPEE supports additional measures to prevent leakages from the use of HFOs, as well as to strengthen Endof life measures. Ultimate objectives: Safety, climate neutrality, environmentally sound and energy efficient solutions. PFAS: Avoid risks to health & the environment. EPEE supports a sciencebased approach and proportionate measures Heat Pump installations: strategic EU objectives (REPowerEU) to reduce the EU dependence on fossilfuel imports and technologies. HFC phasedowns under EU regulation (proposal 2022) & Montreal Protocol Millions tonnes of CO2 equivalent (Mt CO2eq) 200 180 183 170 166 160 140 120 111 101 100 100 Source data: Fgas 2022 proposal & EEA 2021 report Main issue: Dramatic new phase down proposal and product bans while HPs are supposed to take over heating in buildings (support decarbonization and minimize energy exposure) Heat pumps will need all types of refrigerants (HFCs, HFOs, blends, 80 natural refrigerants) depending on 60 62 55 product types, applications and 40 42 37 installations to deliver successfully 18 28 on the decarbonisation of heating. 20 9 8 7 6 5 5 4 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 Issued authorisations to use HFC quotas (EU) Quotarelevant bilk HFCs HFC consumption (Montreal Protocol) Maximum EU Quota (Fgas 2022) HFC consumption limit (Montreal Protocol) EPEE supports the phaseout fossil fuel heating in Europe REPowerEU: "double the yearly rate of heat pump installations" More than 60 million new heat pumps should be installed by 2030 Fossil fuel heating emits some 40 times more CO2 during its lifetime This is put at risk: The Commission proposal for a revision of the Fgas Regulation (and ENVI draft report) is de facto an HFC phaseout from 2027 and imposes unclear and unrealistic product bans. Source: HFC Outlook EU It would make the energy transition much more expensive and impossible in case of a PFAS REACH. A PFAS REACH broad approach would further impact on this difficult scenario by restricting lower GWP refrigerants, that are needed for the refrigerants transition. 12 Markets are growing Heat pump sales in 21 European markets est. +34% Exchange EHPA - MEP Eickhout on Fgas | 8.12.2022 | Fgas Regulation - incompatible with Repower EU targets EU ambitions in numbers Insights EU aims at doubling current deployment rate of individual HPs => cumulative 10 million (hydronic) HPs over 5 years EHPA extrapolation to all technologies 20 million by 2027 & 60 million by 2030 Estimate sales based on REPowerEU Overview of the principles of the Fgas regulation The EU is taking regulatory action to control Fgases, as part of its policy to combat and mitigate climate change The objective of the Fgas Regulation is to reduce emissions of Fgases by addressing the following aspects: Life cycle assessment: The containment, use, recovery and destruction of Fgases (EndofLife measures). Possible extension to alternatives. The control of certain uses of the gases The application of `placing on the market' prohibitions on certain products and equipment Identification: The labelling and disposal of products and equipment containing those gases Better monitoring through the use of electronic Logbooks Compliance: The Reporting of information on those gases, improve data on Recycled and Reclaimed refrigerants. The Training and Certification of personnel and companies involved in activities covered under this Regulation Possible timeline of the Fgas Regulation & PFAS REACH The proposed Fgas Regulation measures are currently being discussed. This includes new stepped phase down scenario and a new set of bans. The industry is faced with two challenges in parallel with "unmatching" timelines, leading to high uncertainties. UNIVERSAL PFAS DOSSIER PREPARATION ECHA COMMITTEES PROCESS COMITOLOGY Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 *Timelines are tentative 13 January 2023 Restriction Dossier Submitted + 30 Days Conformity Check PUBLIC CONSULTATION November RAC Opinion and SEAC draft opinion SEAC CONSULT DELAYS ? April Opinions Sent to COM FGAS REGULATION ONGOING REVISION January SEAC Opinion July REACH Committee Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 5 April 2022 EC Draft Proposal October Exchange of Views and Draft Report in Environment Committee January Compromise Amendments & Vote in EP Committee TRILOGUES July Political Agreement in Trilogues Adoption and publication on the official Journal SCRUTINY? 2025 Publication of PFAS REACH Restriction on the OJ 16 What alternatives are available ? Since 2015, Fgas emissions have started to fall as a result of the EU`s Fgas Regulation + MAC Directive. By 2030, the European Commission expects 65% Fgas emission reductions compared to 2014. This has now been proposed to be a reduction of 85% by 2030. Provided the current scope outlined in the 2021 PFAs ROI is maintained, and restrictions are taken forward, the RACHP industry would be left with extremely few alternatives from 2027 onwards, not at all suitable for all applications, installations and needs. Source: European Environmental Agency Fluorinated Gases 2022 Report Major challenges for the RACHP sector? Potential risk of lack of supply for servicing and maintenance of already existing equipment (lifetime of products is approx. 15/20 years) and the manufacture and export of lowerGWP equipment; The discovery and development of alternatives depends on the safe, reliable, energy efficient refrigerant choice, the state of the art of technologies, the chemical compatibility when testing refrigerants and oils. A PFAS REACH approach would cause a series of unintended consequences, where at least 10 years of transition (highly speculative timeline) are needed in view of the bench and functional testing, suppliers and supply chain readiness and field testing. Regrettable substitutions in PFAS Fluoropolymers due to the increase of refrigerant leakages from less effective sealing. In the case of alternative flammable or toxic refrigerants (which are becoming more common as they are ultralow GWP substances), leakages would also cause major safety concerns for users and consumers. The interplay of FGas Regulation and PFAS dossiers it very difficult for EPEE members to commit to a more ambitious HFC phase down in the FGas review, without clarity on the PFAS scope. PFAS in the RACHP sector: an overview of the challenges CRITERIA (letters are reflected in the graph): a) Environmental soundclosed systems / recycling b) Dismantling and sorting SVHC substances c) Avoid SVHC in waste. a) Limited feasibility b) Very limited feasibility: GWP, climate change safety and energy efficiency b) Not reasonable and not possible PFAS Fgas Refrigerants used in the wide majority of RACHP equipment PFAS Fluoropolymers used in Orings, sealings, components, spare parts, used in RACHP compressors etc. 10 or 15 years of lifetime of RACHP closed systems. Mandatory recovery of refrigerants at EoL and when RACHP equipment is serviced or converted to another refrigerant (retrofit). a) In place and can be further strengthened c) Closedsystems avoid emissions into the environment. New SVHC would need to be subject to the Fgas Regulation measures. Adequate wellestablished waste management, through Fgas destruction, Reuse, Recovery and Recycle (RRR). See next slide. COLORS show level of challenge: Not reasonable and not possible or very limited feasibility Limited feasibility or difficult implementation of measures Already in place / can be strengthened Federica R. What do we expect today? An EU broad definition of PFAS would include all Fgases, where only few of commercially used refrigerants would be excluded from scope Competent Authorities should consider the existing risk management measures in place and the safety concerns. Moreover, the ongoing revision of the Fgas Regulation offers the opportunity to further strenghten its successful measures (new products bans and stepped phase down have been proposed). The Upcoming ANNEX XV Universal PFAS should already exclude certain uses or products categories, where alternatives are not available. This would avoid costs and administrative burdens upon the administrative authorities and companies. This would also avoid the fragmentation of the market. A PFAS Reach may fall short of considering all the relevant circumstances. USE Domestic WEE Professional WEEE DISMANTLING Leaks Fgas in WEEE Clients Installer/ maintainer/operator Reuse market Cylind er filling Fgas topup Fgas recycling and topup Fgas reclaim Fgas reclaim COLLECTION Transport Collection centre e.g. Ecological Island, Grouping Places Smuggling Actors Domestic WEEE flows Professional WEEE flows Fgases flows END OF LIFE Official stream RECYCLING WEEE treatment facility Gas treatment facility Unofficial/Illegal stream Material recycling Thermo destruction Fgas recycling Fgas reclamation EPEE`s Key takeaways on an EU PFAS REACH I. Finding a balance among the several policy objectives is key for the decarbonization of the sector and protection of health and the environment. II. Fgases , Fluoropolymers and FluoroElastomers as defined in the broad 2021 EU PFAS scope are vital for the RACHP industry. This is due to various unique technical aspects, state of the art technologies risks of unintended consequences, at expenses of safety, energy efficiency and climate. III. The EU climate targets are seriously threatened especially the roll out of heat pumps may become impossible, unless specific exemptions are introduced. IV. EPEE is strongly supporting best market practice and End of Life targets and enforcement. V. As Downstream Users, EPEE acknowledges that breakdown products are found in nature, e.g. TFA from certain Fgases. We look forward to the conclusion on the competent authorities concerning the scientific evidence and potential mitigating measures. EPEE members are fully cooperating with the authorities and in within the supply chain operators to address any possible risks and prevent emissions in the environment. Q&A session Contact details Federica Rizzo Senior Policy Director EPEE 46 Avenue des Arts 1000 Brussels, Belgium email: @epeeglobal.org Web: www.epeeglobal.or2 Twitter: @EPEESecretariat EPEE ;14`)