Document g2L3NYO2xzak79bbZjMy3nOEJ

Universal PFAS restriction and possible impact on F-gases Ricardo plc 2021 FPP4EU Collaboration Platform 30 March 2023 The European Chemical Industry Council, AISBL - Rue Belliard, 40 - 1040 Brussels - Belgium Transparency Register n64879142323-90 Confidential - Client Only: EFCTC DRAFT - CONFIDENTIAL March 2022 1 Agenda Introduction What do we know about the proposal Impact on F-gases Suggested next steps 2 Agenda Introduction What do we know about the proposal Impact on F-gases Suggested next steps 3 About us The European FluoroCarbons Technical Committee is a sector group of the European Chemical Industry Council (Cefic) and represents the companies Arkema, Chemours, Daikin, Honeywell and Koura. What are fluorinated (F-) gases? Hydrofluorocarbons (HFCs) Hydrofluoroolefins (HFOs) Hydrochlorofluoroolefins (HCFOs) Equipment containing F-gases are safe and energy efficient. Their emissions can have an impact on climate change due to their global warming potential (GWP) They will play a key role in decarbonising critical European industries relying on heating and cooling technology. 5 Target of restriction The 5 countries use the so-called OECD definition * to outline the scope of the proposed ban: meaning fluorinated substances that contain at least one aliphatic carbon atom that is both, saturated and fully fluorinated, i.e., any chemical with at least one perfluorinated methyl group (-CF3) or at least one perfluorinated methylene group (-CF2-), including branched fluoroalkyl groups and substances containing ether linkages fluoropolymers and side chain fluorinated polymers. Many F-gases fall into the current scope of the upcoming proposed restriction * The OECD definition covers thousands of substances, approximately 10 000 6 Agenda Introduction What do we know about the proposal Impact on F-gases Suggested next steps 7 The restriction proposal Submitted to ECHA on 13 Jan 2023 Pre-published on 7 Feb 2023 Conformity Check by ECHA committees (RAC & SEAC) agreed during the March plenaries RESTRICTION OPTION 1 Full ban with no derogations and 18-months transition time RESTRICTION OPTION 2 Full ban with use-specific time-limited derogations (18-month transition period plus either a five- or 12-year derogation period) Proposed derogations for F-gases - strong evidence 6.5 years after EiF refrigerants in low temperature refrigeration below - 50C refrigerants in mobile air conditioning-systems in combustion engine vehicles with mechanical compressors refrigerants in transport refrigeration other than in marine applications Time-unlimited refrigerants in HVACR-equipment in buildings where national safety standards and building codes prohibit the use of alternatives; 13.5 years after EiF refrigerants in laboratory test and measurement equipment maintenance and refilling of existing HVACR equipment put on the market before [18 months after EiF] and for which no drop-in alternative exist refrigerants in refrigerated centrifuges industrial precision cleaning fluids cleaning fluids for use in oxygen-enriched environments clean fire suppressing agents where current alternatives damage the assets to be protected or pose a risk to human health diagnostic laboratory testing Insulating gases in high-voltage switchgear (above 145 kV) Proposed derogations for F-gases - weak evidence 6.5 years after EiF foam blowing agents in expanded foam sprayed on site for building insulation Is any vital application not listed under the proposed derogations? 13.5 years after EiF propellants for technical aerosols for applications where non-flammability and high technical performance of spray quality are required preservation of cultural paper-based materials cleaning and heat transfer: engineered fluids for medical devices use as refrigerants and for mobile air conditioning in vehicles in military applications industrial and professional use of solvent based de-binding systems in 3D printing industrial and professional use of smoothing agents for polymer 3D printing applications Summary of uncertainties at different stages of the assessment. HIGH MODERATE LOW NEGLIGIBLE Availability of alternatives Barriers to introduction of alternatives For each sector/activity, identification of specific applications involving use of PFASs Quantification of emissions in 2020 Identification of alternatives Performance of alternatives relative to PFAS Costs to industry Costs to consumers Social costs Identification of sectors that use PFASs Quantity of material currently placed on the market annually, or held in stocks (2020) Forecast of changes in use in Baseline (withdrawal from applications or extension to new applications) Forecast change in the species of PFASs used in Baseline Forecast changes in the quantities of PFASs used in the Baseline for future years Forecast changes in the quantities of PFAS emitted Exposure and sensitive receptors Ecotoxicity and health effects linked to PFAS exposure Chemical hazards of alternatives Non-chemical hazards and other trade-offs of alternatives Costs of alternatives Wider economic impacts Remediation costs Determination of the desired function / properties of PFASs for each application Identification of the PFASs currently used Import and exports Persistence of PFAS emitted Environmental fate of PFAS emitted Agenda Introduction What do we know about the proposal Impact on F-gases Suggested next steps 12 Relevant Provisions of the F-gas Regulation (EU) No 517/2014 OBJECTIVES One of the FGR goals is to prevent additional F-gases emissions through CONTAINMENT = ensuring that there are measures to prevent emissions or leaks throughout the lifecycle of the gases The Regulation: (a) establishes rules on containment, use, recovery and destruction of fluorinated greenhouse gases, and on related ancillary measures; (b) imposes conditions on the placing on the market of specific products and equipment that contain, or whose functioning relies upon, fluorinated greenhouse gases; (c) imposes conditions on specific uses of fluorinated greenhouse gases; and (d) establishes quantitative limits for the placing on the market of hydrofluorocarbons. CONTAINMENT Intentional release is prohibited Operators of equipment shall take precautions to avoid leakages Operators of equipment shall be certified Mandatory leak checks (every 3 / 12 / 24 months depending on quantity of CO2 equivalent in the device) with detailed record keeping Mandatory leakage detection systems (for devices containing 500 tones of CO2 equivalent) RECOVERY Mandatory refrigerant recovery for the following equipment: (a) the cooling circuits of stationary refrigeration, stationary air-conditioning and stationary heat pump equipment (b) the cooling circuits of refrigeration units of refrigerated trucks and trailers (c) stationary equipment that contains fluorinated greenhouse gas-based solvents (d) stationary fire protection equipment (e) stationary electrical switchgear Currently under revision; the proposal includes strengthened provisions to limit leakages further which also cover HFOs F-gas Regulation revision timeline* Expected entry into force: 2024 PRE-PROPOSAL PHASE Today *This timeline is expected to be sped up to allow entry into force on 1 January 2024 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 5 April Commission Legislative Proposal 28 June Environment Council Exchange of Views (Ministerial) Early May Rapporteur & Shadow Appointment Oct. Exchange of Views and Draft Report in Environment Committee 1 March Compromise Amendments & Vote in EP Committee Q2 2023 Q3 2023 Q4 2023 TRILOGUES Q1 2024 Q2 2024 May Member States agree on General Approach June Kick-Off Trilogues 30 March Vote in EP Plenary September Political Agreement in Trilogues March Publication in the OJ January Vote in Plenary Q3 2024 Q4 2024 Review of the F-gas Regulation - current status Expected entry into force: 1 January 2024 European Commission proposal Published on 5 April 2022 Main changes: o Align with Green Deal ambitions (steeper and faster phase-down schedule) o Measures to improve enforcement and implementation (specific customs rules, quota price, standardized penalties) o Improved monitoring and reporting o Streamline with Montreal Protocol (Kigali Amendment): phase-down after 2030 European Parliament Committee position agreed on 1 March plenary vote on 30 March 2023 Main changes proposed be ENVI: All F-gases (not only those higher than 150GWP) to be covered by bans - heat pumps, air conditioning, refrigeration, chillers, transport refrigeration, etc. Commission phase-down schedule slightly modified European Council Most countries support the general objective of the proposal to meet the EU's Green Deal objectives. Some states are more ambitious and are considering a stricter phase down. In light of the current energy crisis, several Member States are concerned about restricting HFCs needed for the expansive heat pump roll out. To maintain existing equipment, the question of availability of alternatives is being asked. Most governments also see a need to improve the provisions of measures to tackle illegal trade. F-gases in the PFAS proposal Dossier Submitters acknowledge that for some aspects F-gases are good examples: they have a legal obligation/incentive to be recycled or fully destroyed (FGR) there are already some systems in place to recover the used F-gas to be re-purposed they have reporting mechanisms linked to the UN Framework Convention on Climate Change UNFCCC and FGR F-gases seems to be the largest emitted PFAS unclear how emissions have been calculated in the proposal has the proposal taken into account the latest info on emissions from equipment? For Europe, in recent years, HFC-134a emission estimates from atmospheric monitoring, are about 50% lower than the HFC134a emissions reported to UNFCCC, according to SAP2022 Assessment Report1 1. World Meteorological Organization Scientific Assessment of Ozone Depletion 2022, GAW Report No. 278 What we think should be carefully considered This restriction might have a knock-on effect it covers thousands of substances and hundred of uses; scope not fully clear in the case of the F-gas sector, not only refrigerants are impacted, but also components of the devices o It is important to make sure that the new "PFAS free" devices can still guarantee a high level of efficiency and safety devices on the market today that can use any refrigerant, might not be the same as devices on the market after the restriction enters into force (e. g. leakage rate due to different sealants) "The F-gas Regulation has driven a significant reduction in the supply and emissions of F-gases, in particular the HFCs, predominantly through a switch to gases with lower GWP, but also through the uptake of natural alternatives"1 the F-gas revision proposal extends the containment provisions to HFOs The international transition from high-GWP HFCs and HCFCs under the Montreal Protocol could be severely disrupted through the unavailability of low-GWP alternatives 1. Commission Staff Working Document - Impact Assessment Report Accompanying the document Proposal for the revised F-gas Regulation (part 2/2) EFCTC's position `PFAS' is a big universe of thousands of chemicals. Certain F-Gas (HFCs, HFOs and HCFOs) are a category in `PFAS', but do not share the same chemical properties or uses with other categories of PFAS. EFCTC believes that concerns with F-Gases should be addressed in a sustainable manner, ensuring coherence between relevant pieces of legislation such as the F-gas Regulation and REACH to avoid any conflicts. Assessment of the cost-effectiveness and of the proportionality has not been concluded for many of the sectors covered by the proposal to be carefully considered The assessment on TFA should be strengthened to take into account the latest UNEP assessments, such as "TFA likely has natural geochemical sources" and "available evidence indicates that [TFA] is of minimal risk to human health"1 Assumptions are often based on input of "one stakeholder" can this be considered a realistic picture of the sector? 1. J.F. Bornman, P. Barnes, K. Pandley; Summarry Update 2021 for Policymakers of the UNEP Environmental Effects Assessment Panel [2021] 18 What we are doing Liaising with downstream users and associations to provide support in understanding the possible restriction Cooperation with authorities European Commission; Member States; European Chemicals Agency Funded an independent Socio-economic assessment of F-gases to input into the ECHA process UPCOMING: Regulatory Management Options Analysis (RMOA) on a number of F-gases that might be impacted by the PFAS restriction We aim at providing the authorities with complete sets of information on F-gases Regulatory Management Options Analysis OBJECTIVES To collect additional evidence to submit to ECHA as part of the restriction consultation process Case-by-case analysis for each F-gas in scope of the study with detailed information of: - Hazard profiles, performance, risk considerations to human health and the environment, and socioeconomic assessment of each F-gas and their blends and for each of their uses - Analysis of alternatives for each F-gas/blend in scope in each of their uses - A SEA for each F-gas in scope in each of their uses - The goal is to conclude on the most appropriate regulatory management measure for each of the F-gases in scope in the context of the REACH consultation: E.g., evaluation, CLH, REACH restriction/authorisation, candidate listing, other regulatory measures, etc., and including `no action' as option you can watch the webinar recording here F-gases in scope HFC-125 HFC-134a HFC-143a HFC-227ea HFO-1234yf HFO-1234ze HFO-1336mzz(Z) HCFO-1233zd More info 20 rice-rn SOCIO-ECONOMIC ANALYSIS BACKGROUND El-nt. commissioned Fticardo Energy & Environment to conduct a study on the possible impact of a REACH restriction of PEAS as the F-gas sector in the EEA in anticipation at at that time, the expected possible inclusion of F-gases in the scope of the proposal The scope of this assessment cowers a set of 10 F-gases (and their blends), which have been identified as meeting the proposal definition of PEAS at risk of a potential REACH restriction and are within the scope of the EFCTC work HFC-125 HFC-13da HEOldia F-GASES HEC-ZinFea HFC-Zeib. HFU-36fimic IlFO-123O FIR3-1234ze HR3-133emop HCF13-1.133th SCENARIOS BASELINE SCENARIO Business-as-usual situation, ie., a situation with I20 rtStliCti013 in place. It incorporates effects from the existing F-gas Regulation (EU No 517/2014). POLICY I The proposed PEAS restriction enters into force, restricting the F-gases in scope. SCENARIO The policy scenario is further broken down in two scenarios: Scenario Proposed restriction into force in 2025 + businesses are able to place a range of substitutes and/or reformulated products on the market instantaneously. Scenario Proposed resection info force in 2025 + businesses may need on average 5 years to adjust operations and place their substitutes and/or reiormulated products on the market istan tak EFCTC More info ESTIMATED ECONOMIC AND SOCIAL IMPACT OF A RESTRICTION 0 0 IMPACT ON DOWNSTREAM USERS > Revenue losses estimated between 2.2 and 4.1 billion per year between 2025 and 2040. IMPACT ON PRODUCERS Turnover losses estimaledlietween 550 and 540 million per year on simagebetaseen 2025 and 2040. Job losses estimated 5,100 by 2040, almost 4% of the hsseiine vrorkkirce in 2040. Knock-on effects: losses could reach between 6,000 and 27,000 fewer jobs, on average: by 2040. > Around 80-90 jobs would be lost by 2040, which is equivalent to around 1% of the baseline workforce in 2040. Knock-on effects: losses could reach around 300 fewer jobs by 2040 REGULATORY MEASURES RECOMMENDATIONS BY RICARDO Option DEROGATION/ EXEMPTION tar the low GWP F-gases in scope fie., H{C}FOs} and their blends. > Would allow the sector to meet the EU climate targets and maintain operations. > Could work alongside the phase down of the F-gas Regulation, ensuring compliance through transparency and coherence of objective. 4 TRANSITIONAL AGREEMENT to avow for continued use of F-gases in scope within a certain linedrame. Option > Would encourage R&D into non-PEAS alternatives (chemical or technical and allow business to respond to the changes required_ Would need to be in line with the phase-down of the F-gas Regulation to prevent double regulation and non-compliance due to lack of coherence. 21 Agenda Introduction What do we know about the proposal Impact on F-gases Suggested next steps 22 What are the next steps? Check that the information in the proposal is correct and provides an accurate overview of your sector remember about PFAS in components and in the production line! Verify the feasibility of the proposal based on your knowledge of the sector safety + availability + workable timeline Proposed derogations should not be taken for granted! Provide any additional information to correct possible inaccurate statements Consultation starting on 22 March with final deadline on 25 September EFCTC ready to support DSUs and other associations throughout the process consider becoming an occasional stakeholder in ECHA 23 Thank you. About Cefic Cefic, the European Chemical Industry Council, founded in 1972, is the voice of large, medium and small chemical companies across Europe, which provide 1.1 million jobs and account for 15% of world chemicals production. Cefic members form one of the most active networks of the business community, complemented by partnerships with industry associations representing various sectors in the value chain. A full list of our members is available on the Cefic website. Cefic is an active member of the International Council of Chemical Associations (ICCA), which represents chemical manufacturers and producers all over the world and seeks to strengthen existing cooperation with global organisations such as UNEP and the OECD to improve chemicals management worldwide The European Chemical Industry Council, AISBL - Rue Belliard, 40 - 1040 Brussels - Belgium Transparency Register n64879142323-90 Contact: cefic.be https://www.fluorocarbons.org/ https://www.refrigerantanswers.eu/ @EFCTC_cefic linkedin.com/company/fluorocarbons